Proposed Capital Reduction

RNS Number:0250P
TripleArc PLC
05 January 2007


5 January 2007

                  TripleArc Plc ('TripleArc' or the 'Company')

                          Proposed Capital Reduction
                             
           
Introduction

The Board of TripleArc (the 'Board') announces that it has today posted a
circular to its Shareholders (the 'Circular') containing notice of an
extraordinary general meeting (the 'EGM') at which a resolution will be proposed
to seek, shareholder approval for the proposed cancellation of the Company's
share premium account (the "Capital Reduction").

Background to and reasons for the Capital Reduction:

In November 2003, the Company completed the acquisition of Access Plus PLC, a
transaction which resulted in the creation of a significant share premium
reserve.

Since this acquisition, the Company has restructured its operations in order to
build a solid platform for future growth. However, this restructuring has
resulted in the Company incurring substantial exceptional charges that, along
with prior year losses, have negatively impacted its balance sheet, in
particular, its profit and loss reserve. As a result, the Company has a
significant deficit to its distributable reserves and, therefore, despite a
positive trading environment, the Board is unable to recommend the payment of
dividends.

As at 31st December 2005, the profit and loss account of the Company stood in
deficit to the sum of #10.095 million. As at the same date, the share premium
account of the Company stood at #20.175 million. In order to eliminate the
deficit on the Company's profit and loss account, the Board is proposing the
Capital Reduction pursuant to which the Company's share premium account will be
reduced to zero and such proportion of the sum released as is sanctioned by the
Court will be credited to its profit and loss account.

Following completion of the Capital Reduction, the deficit on the Company's
profit and loss account will be eliminated which, it is hoped, will enable the
Company to generate positive distributable reserves in future periods.

The Board believes that without the proposed Capital Reduction, it is unlikely
that the Company will regain a positive balance on its distributable reserves or
be in a position to pay its Shareholders a dividend for a significant period of
time. In addition the Board does not feel that the current state of the
Company's balance sheet truly reflects the underlying commercial position of the
Group and believes that the Group's current capital structure could have a
negative impact on its future contract tendering activity.

The Capital Reduction

Share premium arises on the issue by a company of shares at a premium to their
nominal value. The premium is credited to the share premium account of that
company. This reserve is treated by statute as a non-distributable capital
reserve except to the extent that it is reduced or cancelled. Any such reduction
or cancellation must be authorised by a company's shareholders by the approval
of a special resolution proposed at a general meeting, and subsequently
confirmed by order of the High Court on the application to the Court by the
company.

The Board believes that the Capital Reduction will be beneficial to Shareholders
and are convening an Extraordinary General Meeting for the purpose of proposing
a special resolution to approve the Capital Reduction (the "Resolution"). If the
Resolution is duly approved, it is the intention of the Board that the Company
will thereafter apply to the Court for confirmation of the Capital Reduction.

In order to obtain the Court's confirmation of the Capital Reduction, the
Company will need to demonstrate to the satisfaction of the Court that none of
its creditors (other than those who have consented to it) will be prejudiced by
the Capital Reduction. The Capital Reduction takes effect upon the confirming
order of the Court being registered by the Company with the Registrar of
Companies.

The Company has already begun enquiries of those of its major creditors whose
consent would be required if the Capital Reduction is to achieve its desired
objective and is of the view that all of those from whom it would be desirable
to have such consent will duly consent and, indeed, a number have already
formally done so. For those creditors from whom no consent is available or to
whom no approach for consent has been made, the Company may be obliged to
provide security acceptable to the Court in order that the Capital Reduction can
be confirmed on the basis of the amount of the reduction of the share premium
account being credited to the profit and loss account.

If, in the timetable proposed, the Company is unable to obtain either consent
from, or provide security to, all such creditors, then an amount of the Capital
Reduction, when confirmed by the Court, will remain non-distributable until any
outstanding consents have been obtained or the relevant obligations have been
discharged.

The Board reserves the right to abandon or discontinue any application to the
Court and hence the Capital Reduction if it believes that the terms required to
obtain confirmation from the Court are unsatisfactory to the Company and its
Shareholders.

The Capital Reduction will not affect the voting or dividend rights on a return
of capital to Shareholders.

EGM

The Circular contains a notice convening the EGM, to be held at the offices of
Hammonds, 7 Devonshire Square, Cutlers Gardens, London EC2M 4YH on 30th January
2007 at 10 am at which the Resolution will be proposed to approve the Capital
Reduction.

To become effective, the Resolution requires the approval of 75 per cent. of
Shareholders voting at the EGM, in person or by proxy.

The Board considers that the Capital Reduction is in the best interests of the
Company and Shareholders as a whole and, accordingly, is unanimously
recommending that Shareholders vote in favour of the Resolution to be proposed
at the EGM, as they intend to do so in respect of their own beneficial holdings
which in aggregate amount to 5,817,127 Ordinary Shares, representing
approximately 2.8 percent of the Company's issued share capital.

Expected Timetable of Principal Events

The latest time and date for receipt of Form of Proxy to be valid at the 
Extraordinary General Meeting is 10am on 26th January 2007.  

The Extraordinary General Meeting itself will take place at 10am on 30th January
2007.

                                    - ENDS -

Enquiries

TripleArc Plc                                                      0117 933 1000
Jason Cromack (Chief Executive Officer)
Richard Hodgson (Chief Financial Officer)



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

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