TIDMPRO
RNS Number : 8382A
Progressive Digital Media Group PLC
26 March 2013
Progressive Digital Media Group Plc
Notice of Annual General Meeting and Annual Financial Report
and
Proposed Capital Reduction and Consolidation and Sub-Division of
Ordinary Shares
Progressive Digital Media Group Plc ("Progressive" or the
"Company"), a content driven media company producing premium
business information, announces that the Annual General Meeting of
the Company will be held at John Carpenter House, John Carpenter
Street, London, EC4Y 0AN at 12.00 p.m. on 24 April 2013. The report
and accounts for the year ended 31 December 2012 will today be
posted to Shareholders together with the Notice of Annual General
Meeting.
In addition, the Company is today posting to Shareholders a
circular (the "Circular") containing details of a proposed
reorganisation of the Company's share capital (the
"Reorganisation"), together with formal notice of the requisite
general meeting (the "General Meeting"), to be held on 24 April
2013 at 12.30 p.m. (or, if later, immediately following the
conclusion of the Annual General Meeting). The Notice of AGM,
Annual Financial Report, Circular and Notice of General Meeting to
consider the Reorganisation will shortly be available for
inspection at www.progressivedigitalmedia.com.
Highlights:
-- In order to support the Company's ability to pay future
dividends (should circumstances in the future make it desirable to
do so), the Company is proposing to increase its distributable
reserves by approximately GBP71,393,250 by the cancellation of the
Company's share premium account. If approved by the Shareholders,
the cancellation will require subsequent confirmation by the
Court.
-- As at 22 March 2013 (being the latest practicable date prior
to the publication of the Circular), the Company had 532,047,686
Ordinary Shares in issue, having a mid-market price per Ordinary
Share at the close of business on such date of GBP0.32. The Board
is of the view that it would benefit the Company and Shareholders
to reduce the number of Ordinary Shares in issue with a resulting
adjustment in the market price of such shares, by consolidating the
Existing Ordinary Shares on the basis of 1 Consolidated Ordinary
Share of 10 pence each for every 1,000 Existing Ordinary Shares of
0.01 pence each, and immediately following the Consolidation,
subdividing each Consolidated Ordinary Share into 140 New Ordinary
Shares.
-- The purpose of the Consolidation and Sub-Division is to
create a capital base which is more consistent with the Company's
peers and which is designed to encourage greater liquidity in the
Company's shares.
-- The proportion of the issued ordinary share capital of the
Company held by each Shareholder immediately before and after the
Consolidation and Sub-Division will, save for fractional
entitlements, remain unchanged.
-- Apart from the change in nominal value, the New Ordinary
Shares arising on implementation of the Consolidation and
Sub-Division will have the same rights as the Existing Ordinary
Shares, including voting, dividend and other rights.
The Directors consider the Reorganisation to be in the best
interests of the Company and its Shareholders as a whole and
accordingly unanimously recommend Shareholders to vote in favour of
the Resolutions to be proposed at the General Meeting as they
intend to do so in respect of their beneficial holdings amounting,
in aggregate, to 366,047,464 Ordinary Shares, representing
approximately 68.8 per cent. of the existing issued ordinary share
capital of the Company.
Resolution 1, which will be proposed as a special resolution, is
to approve the Capital Reduction.
Resolution 2, which will be proposed as an ordinary resolution,
is to approve the Consolidation and the Sub-Division.
Expected timetable of principal events in relation to the
Reorganisation
Latest time and date for receipt 12.30 p.m. on 22 April
of Form of Proxy
General Meeting 12.30 p.m. on 24 April
Record Date for the Consolidation 6.00 p.m. on 24 April
and Sub-Division
Effective time in respect of 8.00 a.m. on 25 April
the Consolidation and Sub-Division.
Admission and dealings in the
New Ordinary Shares expected
to commence on AIM
CREST accounts credited with 25 April
New Ordinary Shares
Certificates in respect of New By 10 May
Ordinary Shares despatched
Court hearing to confirm the 22 May
Capital Reduction
Registration of Court order and 23 May
effective date of the Capital
Reduction
Terms defined in this announcement have the meanings given to
them in the Circular.
Enquiries:
Progressive Digital Media Group plc 0207 936 6400
Mike Danson, Chairman
Simon Pyper, Group Managing Director
N+1 Singer 0207 496 3000
James Maxwell
Nick Donovan
Hudson Sandler 0207 796 4133
Nick Lyon
1. Introduction and summary
Your Board announces today that it proposes to undertake a
reorganisation of the Company's share capital, comprising:
(a) the Capital Reduction;
(b) the Consolidation; and
(c) immediately following the Consolidation, the
Sub-Division.
The Reorganisation is conditional upon, amongst other things,
shareholder approval at the General Meeting.
The purpose of this announcement is to provide you with
information about the background to and the reasons for the
Reorganisation, to explain why the Board considers the
Reorganisation to be in the best interests of the Company and its
Shareholders as a whole and why the Board unanimously recommend
that you vote in favour of the Resolutions to be proposed at the
General Meeting, notice of which is being posted to Shareholders
today.
2. Background to and reasons for the Capital Reduction
In order to support the Company's ability to pay future
dividends (should circumstances in the future make it desirable to
do so), the Company is proposing to increase its distributable
reserves by approximately GBP71,393,250 by the cancellation of the
Company's share premium account. In addition to facilitate any
future dividend payments, the Capital Reduction will normalise the
Company's capital base, having regard to the fact that the trading
operations of the Group are largely carried on by subsidiary
companies who are themselves appropriately capitalised.
As at 31 December 2012, the Company had a profit and loss
account deficit of GBP22,970,858.87 and the balance standing to the
credit of the Company's share premium account was GBP71,393,250.69.
The Company is therefore seeking the approval of the Shareholders
to cancel its share premium account, which will increase the
Company's distributable reserves by approximately GBP71,393,250,
subject to the discharge of any undertakings required by the Court
as explained below. If approved by the Shareholders, the
cancellation will require subsequent approval by the Court.
In seeking this approval, the Company will be required to give
such undertakings or other form of creditor protection as the Court
may require for the benefit of the Company's creditors at the date
on which the cancellation of the share premium account becomes
effective. These may include seeking the consent of the creditors
to the cancellation or the provision by the Company to the Court of
an undertaking to deposit a sum of money into a blocked account
created for the purpose of discharging creditors of the Company.
The consent of the Company's main creditors, being the landlord of
the Company's leasehold properties and the Company's bankers, has
been obtained. It is anticipated that the initial directions
hearing in relation to the cancellation will take place on 8 May
2013, with the final hearing taking place on 22 May 2013 and the
cancellation becoming effective on 23 May 2013, following the
necessary registration of the Court order at Companies House.
3. Background to and reasons for the Consolidation and
Sub-Division
As at 22 March 2013 (being the latest practicable date prior to
the publication of the Circular), the Company had 532,047,686
Ordinary Shares in issue, having a mid-market price per Ordinary
Share at the close of business on such date of GBP0.32. The Board
is of the view that it would benefit the Company and Shareholders
to reduce the number of Ordinary Shares in issue with a resulting
adjustment in the market price of such shares, by consolidating the
Existing Ordinary Shares on the basis of 1 Consolidated Ordinary
Share of 10 pence each for every 1,000 Existing Ordinary Shares of
0.01 pence each, immediately followed by a sub-division of the
Consolidated Ordinary Shares on the basis of 140 New Ordinary
Shares for each Consolidated Ordinary Share.
The Consolidation
As at 22 March 2013 (being the latest practicable date prior to
the publication of the Circular) the Company had 16,788
Shareholders, of which 16,128 Shareholders represented in aggregate
approximately 96 per cent of the total number of Shareholders but
only approximately 0.5 per cent. of the total issued share capital
of the Company. Each of these 16,128 Shareholders held fewer than
1,000 Ordinary Shares having a maximum value of approximately
GBP320 (based upon the closing mid market share price of an
Ordinary Share on 22 March 2013), and the average holding of these
Shareholders was approximately 166 Ordinary Shares with an average
value of approximately GBP53.
As explained further below, Shareholders holding fewer than
1,000 Existing Ordinary Shares at the Record Date will receive cash
in lieu of their fractional entitlements and will cease to be
shareholders of the Company. The Board is conscious that the
ancillary dealing costs which would be incurred by Shareholders in
individually realising investments of this size through market
sales, coupled with the current limited liquidity of the Ordinary
Shares, would be prohibitive in many circumstances. Accordingly,
the Consolidation provides a realisation event for such
Shareholders which benefits from significantly reduced dealing
costs given the centralised administration of the sale of
Fractional Entitlement Shares by the Company's brokers.
Furthermore, the current size of the Shareholder register places
an unwarranted financial and administrative burden on the Company.
Although the Company has taken advantage of the provisions of the
Act which enable it to communicate with its Shareholders by
electronic means (including by way of website), the Act requires
Shareholders to be notified in writing when any notice or other
documents, such as the Company's annual report, is posted on the
website. Your Board believes that the cost of administering the
Company's Shareholder register and communicating with such a large
number of Shareholders (many of whom have a small interest in the
Company) is to the detriment of the Company and its current
Shareholders taken as a whole.
The Sub-Division
Immediately following the Consolidation, it is proposed that
each Consolidated Ordinary Share will be subdivided into 140 New
Ordinary Shares. The purpose of the Sub-Division is to create a
capital base which is more consistent with the Company's peers and
which is designed to encourage greater liquidity in the Company's
shares.
In addition, the existence of a disproportionately high number
of Ordinary Shares relative to the earnings of the Company results
in a mathematically small "earnings per share" (EPS) figure. EPS
figures are routinely used by professional investors as a tool to
measure corporate performance, and increasing EPS by normalising
the Company's capital base in line with the Company's peers through
the Consolidation and Sub-Division may encourage greater investor
appetite for, and accordingly liquidity in, the New Ordinary
Shares.
4. The Consolidation and Sub-Division
The Consolidation
Upon implementation of the Consolidation, Shareholders on the
register of members of the Company on the Record Date of the
Consolidation and Sub-Division (which is 6.00 p.m. on 24 April
2013), will exchange every 1,000 Existing Ordinary Shares that they
hold for 1 Consolidated Ordinary Share. For example, if a
Shareholder holds 12,000 Existing Ordinary Shares each with a
nominal value of 0.01 pence each at the Record Date, such
Shareholder will, following the implementation of the
Consolidation, hold 12 Consolidated Ordinary Shares each with a
nominal value of 10 pence each.
As all existing ordinary shareholdings in the Company are
proposed to be consolidated, the proportion of the issued ordinary
share capital of the Company held by each Shareholder immediately
before and after the Consolidation will, save for fractional
entitlements, remain unchanged.
No Shareholder will be entitled to a fraction of a Consolidated
Ordinary Share and where, as a result of the Consolidation, any
Shareholder would otherwise be entitled to a fraction only of a
Consolidated Ordinary Share in respect of their holding of Existing
Ordinary Shares on the Record Date (a "Fractional Shareholder"),
such fractions will be aggregated with the fractions of
Consolidated Ordinary Shares to which other Fractional Shareholders
of the Company may be entitled so as to form full Consolidated
Ordinary Shares ("Fractional Entitlement Shares") and, following
the Sub- Division, sold in the market on behalf of the relevant
Fractional Shareholders, as explained below. This means that any
such Fractional Shareholders will not have a resultant
proportionate shareholding of Consolidated Ordinary Shares exactly
equal to their proportionate holding of Existing Ordinary Shares,
and as noted above, Shareholders with only a fractional entitlement
to a Consolidated Ordinary Share (i.e. those Shareholders holding
fewer than 1,000 Existing Ordinary Shares at the Record Date) will
cease to be a shareholder of the Company and will receive cash in
lieu of their fractional entitlements. Accordingly, Shareholders
currently holding fewer than 1,000 Ordinary Shares who wish to
remain a shareholder of the Company following the Consolidation
would need to increase their shareholding to at least 1,000
Ordinary Shares prior to the Record Date. Shareholders in this
position are encouraged to obtain independent financial advice
before taking any action.
The Sub-Division
Immediately following the Consolidation, each Consolidated
Ordinary Share will be subdivided into -- New Ordinary Shares.
The New Ordinary Shares arising from the Fractional Entitlement
Shares following the Sub-Division will be sold in the market on
behalf of the relevant Fractional Shareholders. In the event that
the net proceeds of sale are three pounds (GBP3.00) or more per any
entitled Fractional Shareholder, then such proceeds of sale will be
paid to the relevant Fractional Shareholder. However, if such net
proceeds of sale amount to less than three pounds (GBP3.00) per any
entitled Fractional Shareholder, the costs, including the
associated professional fees and expenses, that would be incurred
in distributing such proceeds are likely to exceed the total net
proceeds distributable to such Fractional Shareholders. The Board
is therefore of the view that, as a result of the disproportionate
costs in such circumstances, it would not be in the Company's best
interests to distribute such proceeds of sale and the proceeds will
instead be retained for the benefit of the Company in accordance
with the Company's articles of association and Resolution 2.
Resulting share capital
The issued share capital of the Company on Admission immediately
following the Consolidation and Sub-Division (assuming no further
issues of Ordinary Shares between the date of this announcement and
the date of Admission) is expected to comprise 74,486,676 New
Ordinary Shares of 1/14 pence each.
For illustrative purposes only, examples of the effects of the
Consolidation and Sub-Division in respect of certain holdings of
Existing Ordinary Shares are set out below. These examples do not
show cash proceeds of the sale of Fractional Entitlement Shares,
the value of which will depend on the market value of New Ordinary
Shares at the time of sale, as detailed above.
Existing Ordinary Shares of 0.01 New Ordinary Shares of 1/14 pence
pence each each
held at the Record Date
1,000 140
7,500 980
15,000 2,100
Rights attaching to the New Ordinary Shares
Apart from the change in nominal value, the New Ordinary Shares
arising on implementation of the Consolidation and Sub-Division
will have the same rights as the Existing Ordinary Shares,
including voting, dividend and other rights.
Effect on options etc.
The entitlement to Existing Ordinary Shares of holders of
securities or instruments convertible into Ordinary Shares (such as
options) shall be adjusted in accordance with the terms of such
securities or instruments upon implementation of the Consolidation
and Sub-Division.
5. Settlement
As outlined above, in the event that the net proceeds of sale of
New Ordinary Shares arising from Fractional Entitlement Shares to
which Fractional Shareholders may be entitled, are three pounds
(GBP3.00) or more per any entitled Fractional Shareholder, then
such proceeds of sale shall be paid to the relevant Fractional
Shareholder. In respect of Fractional Shareholders holding their
Existing Ordinary Shares in certificated form, any monies will be
paid by cheque to the relevant Fractional Shareholders entitled
thereto (at such Fractional Shareholder's risk) and such cheques
are expected to be dispatched by no later than 8 May 2013. In the
case of Shareholders who hold Existing Ordinary Shares in
uncertificated form, any cash entitlements will be dispatched by
means of CREST by procuring the creation of an assured payment
obligation in favour of the Shareholder's payment bank, in
accordance with the CREST assured payment arrangements. All cash
payments will be made in pounds sterling and, for certificated
Shareholders, by cheque drawn on a branch of a UK clearing branch
and dispatched by first class post. However, as detailed above, if
such net proceeds of sale amount to less than three pounds
(GBP3.00) per any entitled Fractional Shareholder, such net
proceeds will, as a result of the disproportionate costs of
distributing such net proceeds to relevant Fractional Shareholders,
instead be retained for the benefit of the Company in accordance
with the Company's articles of association and Resolution 2.
The Consolidation and Sub-Division is conditional upon the New
Ordinary Shares being admitted to trading on AIM. Application for
such Admission will be made so as to enable the New Ordinary Shares
to be admitted to trading on AIM as soon as practicable following
the Record Date. It is expected that Admission will occur at 8.00
a.m. on 25 April 2013, whereupon the Consolidation and Sub-Division
will become effective.
If you hold a share certificate in respect of your Existing
Ordinary Shares in the Company, your certificate will no longer be
valid from the Record Date. If you hold 1,000 or more Existing
Ordinary Shares on the Record Date you will be sent a new share
certificate evidencing the New Ordinary Shares to which you are
entitled under the Consolidation and Sub- Division. Such share
certificates are expected to be dispatched no later than 10 May
2013 by first class post at the risk of the relevant Shareholder,
to the registered address of that Shareholder or, in the case of
joint Shareholders, to the one whose name appears first on the
register of members. Upon receipt of the new share certificate, you
should destroy any old share certificates. Pending the dispatch of
the new share certificates, transfers of certificated New Ordinary
Shares will be certified against the Company's share register.
Shareholders holding fewer than 1,000 Existing Ordinary Shares on
the Record Date should likewise destroy their share
certificates.
If you hold your Existing Ordinary Shares in uncertificated
form, you should expect to have your CREST account credited with
the New Ordinary Shares to which you are entitled upon
implementation of the Consolidation and Sub-Division as soon as
practicable after the Record Date.
Following the Consolidation and Sub-Division, the Company's new
SEDOL code with be B87ZTG2 and its new ISIN code will be
GB00B87ZTG26.
6. Taxation
Introduction
The following statements are intended only as a general guide to
the current tax position under UK taxation law and practice.
Taxation law (including, without limitation, taxation levels, bases
and reliefs) or its interpretation or application may change after
the date of this announcement. These statements relate only to the
UK taxation treatment of the Consolidation and Sub-Division and
certain limited aspects of the UK tax position of Shareholders who
are the beneficial owners of Existing Ordinary Shares and who are
resident or (in the case of individuals) ordinarily resident in the
UK for tax purposes and who hold their shares in the Company
beneficially as an investment (and not as securities to be realised
in the course of a trade). Certain holders of Existing Ordinary
Shares, such as dealers in securities, insurance companies,
collective investment schemes and persons who have acquired their
shares by reason of their or another's employment may be taxed
differently and are not considered. The following is not, and is
not intended to be, an exhaustive summary of the tax consequences
of acquiring, holding and disposing of Existing Ordinary Shares or
New Ordinary Shares. A Shareholder who is in any doubt as to his or
her tax position or is subject to tax in any jurisdiction other
than the UK should consult his or her duly authorised professional
adviser without delay.
CGT treatment of the Capital Reduction
The Shareholders should not be treated as making any disposal of
their Existing Ordinary Shares as a result of the Capital Reduction
and should not therefore be subject to any capital gains tax charge
at this stage of the Reorganisation.
CGT treatment of the Consolidation and Sub-Division
The proposed Consolidation and Sub-Division should constitute a
reorganisation of the Company's share capital for UK capital gains
tax purposes. Therefore, to the extent that a Shareholder receives
Consolidated Ordinary Shares in exchange for his Existing Ordinary
Shares under the proposed Consolidation, he should not generally be
treated as making a disposal of any of his Existing Ordinary
Shares. Similarly, to the extent that he receives New Ordinary
Shares in exchange for his Consolidated Ordinary Shares under the
proposed Sub-Division, he should not generally be treated as making
a disposal of any of his Consolidated Ordinary Shares. Ultimately
the New Ordinary Shares should (for UK capital gains tax purposes)
be treated as the same asset as, and as having been acquired at the
same time and for the same aggregate cost as, the holding of
Existing Ordinary Shares from which they derive.
CGT treatment of fractional entitlements
Any entitlements to fractions of Consolidated Ordinary Shares
arising as a result of the Consolidation will be consolidated and
sold in the market on behalf of the Fractional Shareholders
entitled to the same.
If a Shareholder holds fewer than 1,000 Existing Ordinary Shares
at the time the Consolidation takes effect, he will only be
entitled to receive cash under the Consolidation. As a result, he
will be treated as having disposed of such Existing Ordinary Shares
for UK capital gains tax purposes and he may, depending on his
individual circumstances, realise a chargeable gain or an allowable
loss for tax purposes.
If and to the extent that a Shareholder receives cash and New
Ordinary Shares under the proposed Consolidation and Sub-Division
as a result of the sale of fractional entitlements, he should not
in practice be treated as having made a part disposal of his
holding of Existing Ordinary Shares. Instead, he should be able to
treat the cash received as a deduction from any base cost he may
have in his Existing Ordinary Shares (and, accordingly, the New
Ordinary Shares held after the proposed Consolidation and
Sub-Division) rather than as consideration for a disposal of the
Existing Ordinary Shares held representing such fractional
entitlement. HMRC will generally apply this practice provided that
either the cash receipt is less than GBP3,000 or it does not
constitute more than 5 per cent. of the value of the Existing
Ordinary Shares. However, this treatment is based only on current
HMRC practice and may vary depending on a Shareholder's personal
circumstances.
Shareholders with cash proceeds of less than three pounds
(GBP3.00) will not receive any payment from the Company for their
fractional entitlement. Such Shareholders should be treated as
having disposed of their fractional entitlement for nil
consideration and accordingly do not need to deduct any amount from
the base cost on their Existing Ordinary Shares.
On a subsequent disposal of the whole or part of the holding of
New Ordinary Shares, holders may, depending on their circumstances,
be subject to tax on the amount of any chargeable gain
realised.
Stamp taxes
No liability to stamp duty or stamp duty reserve tax will be
incurred by a holder of Existing Ordinary Shares as a result of the
proposed Consolidation and Sub-Division.
7. The General Meeting
Set out at the end of the Circular is a notice convening the
General Meeting to be held on 24 April 2013 at the offices of the
Company at John Carpenter House, John Carpenter Street, London EC4Y
0AN at 12.30 p.m. (or, if later, immediately following the
conclusion of the annual general meeting of the Company), at which
the Resolutions will be proposed for the purposes of implementing
the Reorganisation.
Resolution 1, which will be proposed as a special resolution, is
to approve the Capital Reduction.
Resolution 2, which will be proposed as an ordinary resolution,
is to approve the Consolidation and the Sub-Division.
8. Action to be taken
A Form of Proxy for use at the General Meeting accompanies the
Circular. The Form of Proxy should be completed and signed in
accordance with the instructions thereon and returned to the
Company's registrars, Capita Registrars, PXS, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible, but in
any event so as to be received by no later than 12.30 p.m. on 22
April 2013. The completion and return of a Form of Proxy will not
preclude Shareholders from attending the General Meeting and voting
in person should they so wish.
9. Recommendation
The Directors consider the Reorganisation to be in the best
interests of the Company and its Shareholders as a whole and
accordingly unanimously recommend Shareholders to vote in favour of
the Resolutions to be proposed at the General Meeting as they
intend to do so in respect of their beneficial holdings amounting,
in aggregate, to 366,047,464 Ordinary Shares, representing
approximately 68.8 per cent. of the existing issued ordinary share
capital of the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
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