HAR Harvard

RNS Number:4318Z
Hartford Group PLC
07 March 2006

                               Hartford Group plc
                                                                    7 March 2006
                      Capital Reduction and Reorgansation


Hartford Group plc has issued its notice of Annual General Meeting to be held at
Jamies Bar, 34 Ludgate Hill, London EC4M 7PE on 30 March 2006 at 10.30 a.m.

In addition to the usual business of the AGM, at the AGM the Company will also
consider approving a reduction of the Company's share capital, capital
reorganisation and changing its name to "The Food & Drink Group plc". The
reasons for the proposals are set out below.


Reduction of Capital and Related Matters

As a result of the Company's Group of Companies' (the "Group") historical
performance, the Company's distributable reserves are negative and the Company
is therefore currently unable to make dividend payments or purchase shares to be
held in treasury, even if it wished to do so. The Group was created by the
merger of Montana Plc, an operator of fine dining neighbourhood restaurants,
with Bluelodge Ltd, operator of the Pharmacy Restaurant and Bar. Following a
number of years of unacceptable financial performance, the Group's Board and
senior management was changed and a strategic decision was made to move away
from fine dining restaurants to bars. The deficit in the Company's profit and
loss account is the result of significant trading losses and charges arising out
of subsequent disposals of sites and goodwill.

The Company's accounts for the 52 weeks to 24 September 2005  (the "2005
Accounts") show that the Company had an accumulated deficit on its profit and
loss reserve account of #14,964,000 as at 24 September 2005. This deficit has
not changed since that date.

The Board has been actively considering options for addressing the Company's
distributable reserves position. Having considered the options available, the
Board is now seeking approval for a number of measures which will enable the
Company to eliminate the deficit on its profit and loss account and create
distributable reserves so that in future the Company will be able to pay
dividends and, if thought desirable, purchase its own shares to be held in
treasury or cancelled.

In summary the proposals are as follows:
     
(1)  It is proposed that, with effect from 5.01 p.m. on 30 March 2006,  every
     109.145058 issued ordinary shares of 1p each registered in the name of a
     shareholder at 5.00 p.m. on 30 March 2006 are consolidated, divided and
     converted into 1 ordinary share of 1p and 1 A Deferred Share of 108.145058
     pence. Following this consolidation, division and conversion the Company
     proposes to reduce its issued share capital by #5,407,252.90 by cancelling 
     all the issued A Deferred Shares.

(2)  The 2005 Accounts show that #8,104,000 stood to the credit of the Company's 
     Share Premium Account at 24 September 2005. This credit has not changed 
     since that date. It is proposed to cancel this Account.

(3)  The 2005 Accounts show that #5,440,000 stood to the credit of the Company's 
     Capital Redemption Reserve at 24 September 2005. This credit has not 
     changed since that date. The Company proposes to cancel this Reserve.

(4)  The 2005 accounts also show that the Company has a merger reserve of
     #2,060,000 It is proposed to capitalise as much of this reserve as possible 
     and apply the sum in paying up B Deferred Shares to be issued as bonus 
     shares to the shareholders on the register at 5.00 p.m. on 30 March 2006 on 
     the basis of 1 B Deferred Share for every 1 ordinary share held. Following 
     the issue of such bonus shares it is proposed that the Company's capital is 
     further reduced by #2,059,999.99 by cancelling all the issued B Deferred 
     Shares.

The proposed reductions of capital described in (1) and (4) above and the
cancellation of the Company's Share Premium Account and Capital Redemption
Reserve (together "the Capital Reduction") will result in a reserve of
#21,011,252.89 arising, which the Company will use in part to eliminate the
deficit on its profit and loss account, which as shown in the 2005 Accounts
stood at #14,964,000 as at 24 September 2005. The balance will be available to
pay dividends (or to purchase the Company's shares), subject to any undertakings
required by the Court as part of the capital reduction process.

If the necessary Resolution is passed, the proposal described at (1) above would
take effect from 5.01 p.m. on the day of the AGM and will have the effect of
reducing the number of shares in issue from 545,725,290 ordinary shares of 1p
each to 5,000,000 ordinary shares of 1p each. Trading in the new ordinary shares
of 1p arising from the consolidation will commence on the following day. The
Directors had previously considered proposing a consolidation and reduction of
capital that reduced the number of shares in issue to 4,000,000 ordinary shares
of 1p each. However, this is not possible because the Company, as a public
limited company, is required to have an allotted share capital of a nominal
value of at least #50,000. The reduction in the number of issued shares to
5,000,000 will greatly increase the market value of each share which remains in
issue. The Board considers that the increase in market value of each share is in
the best interests of the Company as they believe it will enhance the Company's
credibility and standing significantly in the eyes of investors and those
dealing with the Company.

Fractional entitlements to ordinary shares of 1p and to A Deferred Shares will
arise on the consolidation, division and conversion. The Directors propose to
aggregate fractional entitlements to the 1p ordinary shares into 1p ordinary
shares and to sell such shares as soon as practically possible pursuant to the
authority conferred upon them by Article 51 of the Company's Articles of
Association. However, the sums likely to be realised on the sale of such 1p
shares are likely to be small and the Directors consider that the expense of
paying shareholders their proportionate shares of the net proceeds of sale is
likely to be greater than the sums due to such shareholders. The Directors
therefore propose that Article 51 be altered by allowing the Company to retain
the net proceeds of sale where a shareholder's proportionate entitlement to the
net proceeds of sale would be less than #3.00 (as will almost certainly be the
case here). If the proposed alteration to Article 51 is approved, the likelihood
would be that no shareholder will receive any sum of money in respect of any
fractional entitlement he may have to an ordinary share of 1p.

As regards fractional entitlements to the A Deferred Shares, it is proposed that
Article 51 be altered to permit the Directors to aggragate fractional
entitlements into whole A Deferred Shares and register these in the name of a
nominee to hold for the shareholders entitled. The A Deferred Shares will be
worthless and will be cancelled upon the confirmation of the reduction of
capital.

One further effect of the consolidation and reduction is that a shareholder
holding fewer than 110 ordinary shares at 5.00 p.m. on 30 March 2006 will cease
to hold any shares once the Capital Reduction takes effect. If you currently
hold fewer than 110 ordinary shares and wish to retain an interest in the
Company following the Capital Reduction, you would need to ensure that at 5.00
p.m. on 30 March 2006 your holding is in excess of 110 ordinary shares. This
could be achieved by buying further ordinary shares on the market. You should
not however regard this letter as an encouragement or recommendation to deal in
the Company's ordinary shares and you should seek your own advice in this regard
from your stockbroker, bank manager, solicitor, accountant, fund manager or
other independent financial advisor authorised by the Financial Services
Authority.

It is anticipated that new share certificates in respect of holdings of ordinary
shares, as adjusted pursuant to the Capital Reduction, will be issued by 6 April
2006.

The proposed Capital Reduction does not involve the return of any capital to
shareholders or the payment to shareholders of any sum standing to the credit of
the Share Premium Account or the Capital Redemption Reserve. It will instead
have the effect of eliminating the accumulated deficit on the Company's profit
and loss account and creating a reserve, which will enable the Company, subject
to any undertakings required by the Court as part of the capital reduction
process, to pay dividends in the future or to purchase shares of the Company to
be held in treasury or cancelled.

The Capital Reduction will be subject to the approval of the Court, which will
be concerned to protect the interests of creditors of the Company as at the date
on which the Capital Reduction becomes effective (i.e. the date on which the
Order confirming the Reduction is registered with the Registrar of Companies).
The Directors are expecting to obtain the consent of all its creditors to the
Capital Reduction. However, if this is not possible, the Company intends to give
any necessary undertakings to the Court as it is advised are appropriate for the
protection of creditors.

The Company intends to seek court confirmation of the Capital Reduction as soon
as practicable after the AGM and the reduction is expected to become effective
in May 2006.


Change of Name

The Company has completed a period of fundamental reorganisation and
transformation of its business and wishes to accelerate its expansion. To
underline the Group's transformation into a focussed licensed drinks retailing
business, the Directors recommend that the Company's name be changed to The Food
and Drink Group Plc.


Capital Reduction Timetable of Principal Events


Event                                            Date

Annual General Meeting                           30 March 2006

Close of Register                                5.00 pm on 30 March 2006

Admission of new ordinary shares to trading      31 March 2006

Crest Accounts credited                          31 March 2006

Despatch of new share certificates               Anticipated 6 April 2006

Court Directions Hearing                         Anticipated 20 April 2006

Court Final Hearing                              Anticipated 3 May 2006


A full copy of the stautory accounts for year ended 24 September 2005 and the
circular are available on our website, www.hartfordgroup.co.uk, alternatively
available from the registered office, 115 Chancery Lane, London, WC2A 1PP.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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