Purchase of own securities

 

TIDMMOLE 
 
RNS Number : 0533O 
Molectra Group Ltd 
27 February 2009 
 

 
 
 
 
Molectra Group Limited 
 
 
(the "Company") 
 
 
Purchase of own securities 
 
 
The Company has today published a circular convening an extraordinary general 
meeting to seek the consent of shareholders to repurchase 30,000,000 Shares in 
the Company. These Shares are currently registered in the name of Oakwood 
Nominees Limited and the Company has been informed that they are beneficially 
owned by Andrew Dickson and Peter Dickson (the Vendors) (the Share Repurchase). 
The Company is also seeking shareholder consent for a general authority to buy 
back shares in the market up to 14.99 per cent. of the Company's issued share 
capital following the Share Repurchase (the General Authority).  If granted, the 
General Authority will expire at the end of the Company's annual general meeting 
later this year. 
Details of the Share Repurchase 
On 5 February 2009 Oakwood informed the Company that it had acquired 39,000,000 
Shares, which increased its total shareholding in the Company to 42,500,000, 
20.9 per cent. of the Company's issued share capital. 30,000,000 of the Shares 
were acquired from Hydrodec Group plc, which announced on 5 February 2009 that 
it had disposed of its entire shareholding in the Company. 
The Company has been informed that Andrew Dickson and Peter Dickson each 
beneficially own 19,500,000 of the Shares registered in Oakwood's name. The 
remaining 3,500,000 Shares are held by Oakwood on behalf of another client. 
Oakwood, the Vendors and the Company have today entered into the Share 
Repurchase Agreement under which the Vendors have irrevocably agreed to sell, 
subject to the passing of the relevant resolution by the requisite majority, 
30,000,000 Shares to the Company. The aggregate purchase price to be paid to 
Oakwood is GBP300,000, representing a price of 1p per Share. The closing middle 
market price on 26 February 2009 (being the last practicable date before 
publication of this announcement) was 1.25 pence per Share. 
The Company will fund the Share Repurchase from its existing cash resources. 
Under Jersey law the Company is permitted to fund the payment of the purchase 
price from its stated capital account, notwithstanding that the Company's most 
recent accounts do not show sufficient distributable reserves. 
Assuming the resolution to approve the Share Repurchase is passed by the 
requisite majority and the Share Repurchase is completed, the Company will have 
173,225,000 Shares in issue each carrying the right to one vote per Share. 
Shareholders should use this number when calculating the percentage of voting 
rights that they are interested in for the purposes of the disclosure of 
significant interests. 
If the Share Repurchase is completed, Oakwood's shareholding would fall to 
12,500,000 Shares (approximately 7.2 per cent. of the Company's reduced issued 
share capital), of which, the Company understands, 9,000,000 (approximately 5.2 
per cent. of the reduced issued share capital) would be beneficially owned by 
the Vendors. The Vendors have confirmed to the Company that they have no present 
intention of disposing of their remaining Shares. 
Reasons for the Share Repurchase 
The prevailing economic climate has contributed to a substantial fall in the 
price of the Company's shares in recent months. Given the current historically 
low share price, the Share Repurchase is, in the opinion of the Directors, a 
good opportunity to acquire a substantial block of shares on attractive terms. 
In addition: 
i) if not acquired, the market may perceive this block of Shares to be an 
'overhang', thus potentially stifling any upward share price movement in the 
future; and 
ii) the GBP300,000 purchase price can be met by the Company without prejudice to 
the Company's ability to fund the development of the business. 
Related party transaction 
As Oakwood currently holds 20.9 per cent. of the Company's voting rights, the 
Share Repurchase is classified as a related party transaction for the purposes 
of the AIM Rules.  Oakwood's interest is limited to being the registered holder 
of the 30,000,000 Shares to be sold pursuant to the Share Repurchase Agreement. 
If the resolution to approve the Share Repurchase is passed the consideration of 
GBP300,000 payable by the Company under the Share Repurchase Agreement will be 
satisfied by the Company in cash on the Effective Date. 
Under Jersey law Oakwood and the Vendors are prohibited from exercising any 
right to vote on the resolution relating to the Share Repurchase in respect of 
the 30,000,000 Shares that are the subject of the Share Repurchase Agreement. 
Oakwood is entitled to vote all of the Shares registered in its name in relation 
to the resolution relating to the General Authority. 
The Directors of the Company consider, having consulted with Matrix, the 
Company's nominated adviser, that the terms of the transaction are fair and 
reasonable insofar as the Company's shareholders are concerned. 
The General Authority 
The Company is proposing to take the General Authority to give the Company the 
ability to take advantage of opportunities to buy back Shares at favourable 
prices in the future. There is no guarantee that any such opportunities will 
arise but the Directors consider that it would be beneficial to have such 
flexibility in the future. The General Authority will cover up to 25,966,427 
Shares, representing approximately 14.99 per cent. of the Company's reduced 
issued share capital assuming the Share Repurchase is completed. 
The price at which any Shares bought back under the General Authority are 
purchased will not exceed the higher of (i) 5 per cent. above the average of the 
middle market quotations for the 5 consecutive dealing days ending on the 
dealing day immediately preceding the date on which the purchase is made and 
(ii) the higher of the price quoted for (a) the last independent trade of, or 
(b) the highest current independent bid for, any number of Shares on the trading 
venue where the purchase is carried out. 
The General Authority may not be exercised at any time when the Company is in a 
close period, as required by the AIM Rules. The Company will be in a close 
period at any time during which it or any of the Directors possess unpublished 
price sensitive information as well as for the period of two months prior to the 
publication of its annual or interim accounts. 
The General Authority will expire at the conclusion of the Company's annual 
general meeting later in 2009 unless it is renewed or replaced prior to that 
time. 
Extraordinary General Meeting 
Both the implementation of the Share Repurchase and the granting of the General 
Authority require the approval of the Company's shareholders.  The Board has 
therefore convened an Extraordinary General Meeting to be held at 12 
noon on Wednesday 18 March 2009 at which special resolutions will be proposed to 
(i) approve the Share Repurchase on the terms of the Share Repurchase Agreement; 
and (ii) grant the General Authority. To be effective, each resolution must be 
approved by at least two-thirds of the votes cast at that meeting. 
Availability of Circular 
The circular convening the extraordinary general meeting will be available on 
the Company's website at www.molectragroup.co.uk. 
 
 
For further information please contact: 
 
 
+-------------------------------------+-------------------------------------+ 
| Molectra Group Limited              |                                     | 
+-------------------------------------+-------------------------------------+ 
| Paul Gazzard                        |                      01725 510 383  | 
+-------------------------------------+-------------------------------------+ 
| Rodger Sargent                      |                       020 7355 7660 | 
+-------------------------------------+-------------------------------------+ 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
| Matrix Corporate Capital LLP        |                                     | 
+-------------------------------------+-------------------------------------+ 
| Stephen Mischler                    |                       020 3206 7203 | 
+-------------------------------------+-------------------------------------+ 
| Tim Graham                          |                       020 3206 7206 | 
+-------------------------------------+-------------------------------------+ 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
| Threadneedle Communications Ltd     |                                     | 
+-------------------------------------+-------------------------------------+ 
| Graham Herring                      |                       020 7653 9850 | 
+-------------------------------------+-------------------------------------+ 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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