Proposed Return of Cash (1793D)

TIDMDSN

RNS Number : 1793D

Densitron Technologies PLC

18 March 2011

Densitron Technologies plc ("Densitron" or the "Company")

Proposed Return of Cash

1. Introduction

Further to the announcements made by the Board on 23 November 2010 and 25 February 2011, the Board announces that it has today sent to Shareholders the Circular, Notice of General Meeting and Form of Proxy relating to the proposed return of approximately GBP3.5 million of cash in aggregate to Shareholders, representing 5 pence per Ordinary Share, pursuant to the Proposals. Terms used in this announcement have the meaning set out in Appendix 1 below.

2. Summary of the Proposals

The implementation of the Proposals involves the following steps, all of which are subject to the approval of Shareholders at the General Meeting:

-- Subject to the confirmation of the Court, the Company will reduce the nominal value of each Ordinary Share from 5 pence to 1 penny. Shareholders will receive the proceeds of the Reduction of Capital by way of repayment of capital, being, in respect of every Ordinary Share held at the Record Time, the sum of 4 pence in cash.

-- Subject to the Reduction of Capital becoming effective, Shareholders will also receive at the same time as the Return of Capital, in respect of every Ordinary Share held at the Record Time, the sum of 1 penny in cash pursuant to the Special Dividend.

-- The Court will require to be satisfied that the interests of the Company's creditors will not be prejudiced as a result of the Reduction of Capital. The Company will put into place such form of creditor protection (if any) as the Court may require.

Full details of the Proposals are set out in the Circular.

3. Background to the Proposals

Following the receipt of approximately GBP3.4 million in cash from the disposal of the Group's stake in Evervision, as announced on 4 October 2010, and further to a strategic review completed in November 2010, the Board has concluded that the Group can achieve its growth targets from the cash being generated from operations and accordingly the proceeds from the disposal of Evervision should be returned to Shareholders.

The Board believes that the implementation of the Proposals is the most suitable method of returning cash reserves to Shareholders. Shareholders will retain their proportionate equity interests in the Company following completion of the Proposals.

4. The Return of Capital

The proposed Return of Capital has been structured so that Shareholders will receive their return in the form of a capital repayment following a Court approved reduction of capital of the Ordinary Shares. Under the Reduction of Capital, subject to the approval of Shareholders at the General Meeting and the confirmation of the Court, the Company will reduce the nominal value of each Ordinary Share from 5 pence to 1 penny. The Return of Capital will involve the repayment to Shareholders of 4 pence per issued Ordinary Share.

The Reduction of Capital will take effect only if confirmed by the Court and upon the Court Order being lodged with and registered by the Registrar of Companies, which is expected to take place on 12 May 2011.

It is expected that cheques in respect of the Return of Capital will be despatched on or around 26 May 2011 to Shareholders who hold their Ordinary Shares in certificated form and the CREST accounts of Shareholders who hold their Ordinary Shares through CREST will be credited on the same day.

Further information on the Return of Capital is set out in paragraphs 1 and 2 of Part 3 of the Circular.

5. The Special Dividend

If the Reduction of Capital becomes effective, a Special Dividend of 1 penny in cash will be paid in respect of each Ordinary Share held at the Record Time.

It is expected that cheques in respect of the Special Dividend will be despatched on or around 26 May 2011 to Shareholders who hold their Existing Ordinary Shares in certificated form and the CREST accounts of Shareholders who hold their Existing Ordinary Shares through CREST will be credited on the same day.

Further information on the Special Dividend is set out in paragraph 3 of Part 3 of the Circular.

6. General Meeting

Implementation of the Proposals requires the approval of Shareholders. Accordingly, a General Meeting will be held at the offices of K&L Gates LLP, 110 Cannon Street, London EC4N 6AR at 12.30 p.m. on 12 April 2011.

7. Expected Timetable of Principal Events

 
 Latest time and date for receipt of Forms      12.30 p.m. on 10 April 
  of Proxy                                       2011 
 General Meeting                                12.30 p.m. on 12 April 
                                                 2011 
 Record Time for determining entitlements       5.00 p.m. on 11 May 
  to the Return of Capital and the Special       2011 
  Dividend 
 Expected date of Court Hearing to confirm      11 May 2011 
  the Reduction of Capital 
 Expected effective date for the Reduction      12 May 2011 
  of Capital 
 Credit CREST accounts with or despatch         On or around 26 May 
  cheques in respect of the Return of Capital    2011 
  and the Special Dividend 
 

Notes:

(1) References to times and dates in this document are to London times and dates.

(2) If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement on a Regulatory Information Service.

(3) All events in the above timetable following the holding of the General Meeting are conditional upon: (i) the passing of the Resolution; (ii) approval of the Reduction of Capital and the Return of Capital by the Court; and (iii) registration of the Court Order confirming the Reduction of Capital and the Return of Capital with the Registrar of Companies.

8. The Circular

The Circular will be posted to Shareholders today and will be available later today on the Company's website, http://www.densitron.com.

Enquiries

Densitron

Grahame Falconer or Tim Pearson

Tel: [phone]

Westhouse Securities Limited

Tom Price or Martin Davison

Tel: [phone]

Appendix 1

The following definitions apply throughout this announcement unless the context otherwise requires:

"Board" or "Directors" means the directors of the Company;

"Circular" means the circular to be sent to Shareholders in connection with the General Meeting;

"Court" means the High Court of Justice in England and Wales;

"Court Hearing" means the effective hearing of the Company's petition seeking the Court's confirmation of the Reduction of Capital, expected to be held on 11 May 2011;

"Court Order" means the order of the Court confirming the Reduction of Capital;

"CREST" means the relevant system (as defined in the Uncertificated Securities Regulations 2001) in respect of which Euroclear is the Operator (as defined in such regulations);

"Densitron" or the "Company" means Densitron Technologies plc, a public limited company incorporated in England and Wales with registered number 1962726;

"Evervision" means Evervision Electronics Co Ltd;

"Form of Proxy" means the form of proxy enclosed with the Circular for use by Shareholders in connection with the General Meeting;

"General Meeting" means the General Meeting of the Company (or any adjournment thereof) to be held at the offices of K&L Gates LLP, 110 Cannon Street, London EC4N 6AR at 12.30 p.m. on 12 April 2011;

"Group" means the Company and its subsidiaries and subsidiary undertakings;

"Ordinary Shares" means the ordinary shares of 5 pence each in the capital of the Company or, as the case may be, issued ordinary shares of 1 penny each resulting from the Reduction of Capital;

"Proposals" means the Reduction of Capital, the Return of Capital and the Special Dividend;

"Record Time" means 5.00 p.m. on 11 May 2011 (or such other date as the Directors may determine);

"Reduction of Capital" means the proposed reduction of capital of the Company pursuant to section 641 of the Companies Act 2006 as set out in the Circular;

"Registrar" means Capita Registrars, (a trading name of Capita IRG Plc);

"Resolution" means the resolution set out in the notice of the General Meeting contained in Part 6 of the Circular;

"Return of Capital" means the proposed repayment of 4 pence per Existing Ordinary Share following the Reduction of Capital;

"Shareholders" means holders of Existing Ordinary Shares; and

"Special Dividend" means a special interim dividend payable to Shareholders of 1 penny in cash per Ordinary Share.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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