Issue of Circular and Notice of General Meeting

 

TIDMEFD 
 
RNS Number : 7891T 
Eatonfield Group plc 
04 October 2010 
 

Eatonfield Group plc 
 
4 October 2010 
 
FINAL 
 
 
 
                              Eatonfield Group plc 
                Issue of Circular and Notice of General Meeting 
 
 
The board of Eatonfield confirms that a circular ("the Circular") convening a 
general meeting regarding a Capital Reorganisation, Directors' authority to 
allot Ordinary Shares for cash and disapplication of pre-emption rights was 
posted to Shareholders on 1 October 2010. The General Meeting will be held at 
11.00 a.m. on 18 October 2010 at Haycroft Farm, Peckforton Hall Lane, Spurstow, 
Tarporley, Cheshire CW6 9TF. 
 
The Circular includes a letter to the Shareholders from Brian Corfe, the 
Company's Executive Chairman, the full text of which is reproduced below: 
 
"Dear Shareholder 
Notice of General Meeting regarding Capital Reorganisation, Directors' authority 
to allot Ordinary Shares for cash and disapplication of pre-emption rights. 
 
Introduction 
 
A General Meeting of the Company is to be held on 18 October 2010 at 11.00 a.m 
at the Company's registered office, Haycroft Farm, Peckforton Hall Lane, 
Spurstow, Tarporley, Cheshire CW6 9TF. The Notice of General Meeting is set out 
at the end of this letter. 
 
The purpose of this document is to provide Shareholders with details of the 
matters to be considered at the General Meeting, to explain why the Directors 
believe the proposals as set out in this letter are in the best interests of the 
Company and Shareholders as a whole and to recommend that you vote in favour of 
the Resolutions to be proposed at the General Meeting, as the Directors intend 
to do in respect of 85,800,000 Ordinary Shares in which, in aggregate, they are 
beneficially interested, representing approximately 24.32 per cent of the issued 
share capital of the Company. 
 
Background to the General Meeting 
 
As previously notified on 16 September 2010, the Board is seeking to raise 
additional equity funding, which due to Eatonfield's current share price being 
below the nominal value of one penny per Ordinary Share, will require a capital 
reorganisation. Company law prohibits the issue of shares at a price below their 
nominal value and accordingly, a share capital reorganisation will be necessary 
in order to undertake an issue of equity. The Directors also require sufficient 
authority to allot Ordinary Shares and disapply pre-emption rights. The 
Resolutions proposed below are therefore required to facilitate an issue of New 
Ordinary Shares in the future. 
 
Details of the Capital Reorganisation 
 
At the General Meeting, resolutions will be proposed to (i) sub-divide and 
convert each of the Existing Ordinary Shares into one New Ordinary Share of 0.1 
pence and one Deferred A Share of 0.9 pence; and (ii) the reclassification of 
the Existing Deferred Shares into Deferred B Shares. 
 
Each New Ordinary Share will have the same rights (including voting and dividend 
rights and rights on a return of capital) as each Existing Ordinary Share had 
prior to the Capital Reorganisation. Certificates for Existing Ordinary Shares 
will remain valid for the same number of New Ordinary Shares arising on the 
Capital Reorganisation and no new certificates will be issued nor will CREST 
accounts be credited in respect of the New Ordinary Shares arising as a result 
of the Capital Reorganisation. 
 
The Deferred A Shares, created on the Capital Reorganisation becoming effective, 
will have the same rights as the Existing Deferred Shares. That is, they will 
have no voting or dividend rights and on a return of capital, will have the 
right to receive the amount paid up thereon only after the holders of the New 
Ordinary Shares have received, in aggregate the amount paid thereon, together 
will the sum of GBP10,000,000 per New Ordinary Share. 
 
No share certificates will be issued in respect of the Deferred A Shares, nor 
will CREST accounts of Shareholders be credited in respect of any entitlement to 
Deferred A Shares, nor will they be admitted to trading on AIM or any other 
investment exchange. The rights of the Existing Deferred Shares, to be 
reclassified as Deferred B Shares following the Capital Reorganisation, will 
remain unchanged as part of these proposals. There are no immediate plans for 
the Company to purchase or to cancel the Deferred A Shares or Deferred B Shares, 
although the Directors propose to keep the situation under review. 
 
The effect of the Capital Reorganisation will mean that each New Ordinary Share 
will have a nominal value of 0.1 pence and the number of shares admitted to 
trading on AIM will remain the same. Consequently, the market price of a New 
Ordinary Share immediately after completion of the Capital Reorganisation 
should, theoretically, be the same as the market price of an Existing Ordinary 
Share immediately prior to the Capital Reorganisation. 
 
On completion of the Capital Reorganisation, each Shareholder will hold one New 
Ordinary Share of 0.1 pence and one Deferred A Share of 0.9 pence for each 
Ordinary Share currently held. 
 
If Shareholders approve the Capital Reorganisation, the Company's equity capital 
structure prior to any further equity issuance, will be as follows: 
 
+--------------------+--------------------+--------------------+ 
|                    | Nominal value per  | Number of shares   | 
|                    | share              |                    | 
+--------------------+--------------------+--------------------+ 
| Ordinary Shares    | 0.1 pence          | 352,836,925        | 
+--------------------+--------------------+--------------------+ 
| Deferred A Shares  | 0.9 pence          | 352,836,925        | 
+--------------------+--------------------+--------------------+ 
| Deferred B Shares  | 9.0 pence          | 23,414,775         | 
+--------------------+--------------------+--------------------+ 
 
Details of the Authority to Allot 
 
At the General Meeting, resolutions will be proposed to give the Directors 
authority, following the Capital Reorganisation, to allot New Ordinary Shares 
with a total nominal value of GBP500,000 and disapply pre-emption rights. The 
Directors will require these authorities when undertaking a future issue of 
equity to investors. 
 
General Meeting 
 
The notice convening the General Meeting of the Company to be held at the 
Company's registered office, Haycroft Farm, Peckforton Hall Lane. Spurstow, 
Tarporley, Cheshire CW6 9TF on 18 October 2010 at 11.00 a.m., is enclosed at the 
end of this document. The purpose of this meeting is to seek Shareholders' 
approval of the Resolutions set out in the notice of the General Meeting. 
 
The Resolutions to be proposed at the General Meeting (and the Directors' 
reasons for them) are as follows: 
 
Resolution 1 
 
Resolution 1 will be proposed as a special resolution. The special resolution 
will be passed if 75 per cent or more of the votes cast are in favour. 
 
A special resolution to: 
 
·              enable the Directors to complete the Capital Reorganisation by 
reducing the nominal value of each Ordinary Share from 1 penny to 0.1 pence; and 
·              make amendments to the Company's articles of association to 
reflect the change in share capital pursuant to the Capital Reorganisation and 
to set out the rights attaching to the Deferred A Shares. 
 
Resolution 2 
 
Resolution 2 will be proposed as an ordinary resolution. The ordinary resolution 
will be passed if more than 50 per cent of the votes cast are in favour. 
 
An ordinary resolution to grant the Directors general authority, in replacement 
of the authority granted at the general meeting of the Company held on 28 May 
2010, to allot Ordinary Share up to an aggregate nominal amount of GBP500,000. 
 
Resolution 3 
 
Resolution 3 will be proposed as a special resolution. The special resolution 
will be passed if 75 per cent or more of the votes cast are in favour. 
 
A special resolution to grant the Directors general authority in replacement of 
the authority granted at the general meeting of the Company held on 28 May 2010, 
to allot equity securities for cash as if Section 561(1) of the Companies Act 
2006 did not apply to such allotment, provided that such power shall be limited 
to the allotment of equity securities to facilitate rights issues and open 
offers and otherwise limited to an aggregate nominal amount of GBP500,000. 
 
Action to be taken 
 
You will find enclosed with this document a Form of Proxy for use at the General 
Meeting or at any adjournment thereof. Whether or not you intend to be present 
in person at the General Meeting, you are requested to complete and sign the 
Form of Proxy in accordance with the instructions printed on it and return it as 
soon as possible, but in any event so as to be received no later than 11.00 a.m. 
on 16 October 2010 by Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent 
BR3 4TU. The lodging of the Form of Proxy will not preclude you from attending 
and voting at the General Meeting in person if you so wish. 
 
Importance of the Vote 
 
As previously notified, the Directors expect the existing financial resources 
will provide Eatonfield with sufficient working capital funding until the end of 
October 2010. In the meantime, the Directors are seeking to raise additional 
equity funding for the Company. The approval of the Resolutions will enable the 
Directors to issue further equity, should such investment be forthcoming. If 
Shareholders however, do not approve the Resolutions, the Directors will not be 
able to raise the additional equity required and it is possible that the Company 
would be required to cease trading shortly after the General Meeting and enter 
into administration. Accordingly, it is extremely important that Shareholders 
vote in favour of the Resolutions. 
 
Recommendation 
 
The Directors believe that the Resolutions are in the best interests of the 
Company and Shareholders as a whole. The Directors unanimously recommend that 
Shareholders vote in favour of the Resolutions as they intend to do in respect 
of their own beneficial shareholdings amounting in aggregate to 85,800,000 
Ordinary Shares, representing approximately 24.32 per cent of the current issued 
share capital of the Company. 
 
Yours sincerely 
Brian Corfe 
Executive Chairman" 
The Circular is available to view on the Company's website www.eatonfield.co.uk. 
Capitalised terms used, but not defined, in this announcement have the same 
meanings as given to them in the Circular. 
 
For further information please contact: 
 
+-------------------------------------+------------------------------+ 
| Eatonfield Group plc                | Tel: [phone]     | 
+-------------------------------------+------------------------------+ 
| Brian Corfe (Executive Chairman)    |                              | 
+-------------------------------------+------------------------------+ 
| Rob Lloyd (Group Chief Executive)   |                              | 
+-------------------------------------+------------------------------+ 
| Duncan Syers (Group Finance         |                              | 
| Director)                           |                              | 
|                                     |                              | 
+-------------------------------------+------------------------------+ 
 
+-------------------------------------+------------------------------+ 
| Evolution Securities Limited        | Tel: [phone]     | 
+-------------------------------------+------------------------------+ 
| Joanne Lake/Casper Kaars            |                              | 
+-------------------------------------+------------------------------+ 
 
+-------------------------------------+------------------------------+ 
| Orbis Equity Partners Limited       | Tel: [phone]     | 
+-------------------------------------+------------------------------+ 
| Jeremy King                         |                              | 
+-------------------------------------+------------------------------+ 
 
+-------------------------------------+------------------------------+ 
| Threadneedle Communications         | Tel: [phone]     | 
+-------------------------------------+------------------------------+ 
| Graham Herring/John Coles           |                              | 
+-------------------------------------+------------------------------+ 
 
 
 
 
                                      End 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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