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National Milk Records Plc - Notice of General Meeting

16/05/18 04:30PM by ukcitymedia.co.uk about : - 0 Comments - 2046 words


16 May 2018

NATIONAL MILK RECORDS PLC

(“NMR”, the “Company”, or, together with its subsidiaries, the “Group”)

Proposed Reduction of Capital, Adoption of New Articles and Notice of General Meeting

NMR, the leading UK supplier of dairy and livestock services, is today posting a circular to the Company’s shareholders setting out proposals for a Reduction of Capital and the adoption of New Articles and convening a General Meeting of the Company to be held at 11.00 a.m. on 4 June 2018 at the offices of Gowling (WLG) UK LLP.

Background to and reasons for the Reduction of Capital

The Deficit that has appeared between 31 March 2016 and 30 June 2017 in the Company’s profit and loss account is due to the exit from the Milk Pension Fund of the Company and its subsidiary, NML (which were previously participating employers in the Fund). The Directors believed that continued participation in the Fund imposed a severe cost burden on the Group and also constrained its future operations by limiting its ability to raise funds. The aggregate cost of exiting the Fund amounted to approximately £10,793,000 after a credit for deferred tax and details of the arrangements were set out in a circular published by the Company on 1 June 2017.

As at 30 June 2017, the Company had a profit and loss account deficit of approximately £11,453,000 and the balance standing to the credit of the Company’s share premium account was circa £7,426,000. The Deferred Shareholder has consented, subject to the passing of the Reduction Resolution, to the cancellation and extinguishing of the Deferred Shares in issue and the Company is therefore seeking the approval of the Ordinary Shareholders to cancel £0.0975 of the nominal value of its Existing Ordinary Shares, to cancel and extinguish the Deferred Shares in issue and to cancel its share premium account (in its entirety) creating realised profits of approximately £9.5 million (representing the aggregate nominal amount of the cancelled nominal value of the Ordinary Shares (£2,070,870.945), the aggregate amount of the cancelled Deferred Shares (£90) and the amount of the cancelled share premium account), which will, subject to the discharge of any undertakings required by the Court as explained below, be sufficient to substantially reduce the Deficit. If approved by the Ordinary Shareholders, the Reduction of Capital will require subsequent approval by the Court.

As a result of the Reduction of Capital and the elimination of the Deficit, the availability of any future positive distributable reserves of the Company would give the Company the flexibility to pay dividends and make other returns of capital and/or distributions to the Ordinary Shareholders, should it be considered appropriate to do so in the future.

Reduction of Capital

It is proposed that the Reduction of Capital will involve:

  1. the cancellation of part of the nominal value of each Existing Ordinary Share, namely of £0.0975 on each issued Ordinary Share of £0.10 each;

  2. the cancellation and extinguishing of the Deferred Shares in issue; and

  3. the cancellation of the full amount standing to the credit of the Company’s share premium account (such amount being, as at 30 June 2017, approximately £7,426,000).

    The Reduction of Capital, if approved by the Court, will create realised profits sufficient to substantially reduce the accrued Deficit.

    The Reduction of Capital is conditional on:

  4. the passing of the Reduction Resolution;

  5. the Reduction of Capital being approved by the Court; and

  6. the Court Order being registered by the Registrar of Companies.

    It is anticipated that the initial directions hearing in relation to the Reduction of Capital will take place on 13 June 2018, with the final hearing taking place on 26 June 2018 and the Reduction of Capital becoming effective on that day, following the necessary registration of the Court Order by the Registrar of Companies.

    The Court will need 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 therefore put into place such form of creditor protection (if any) as the Court may require. This may include seeking the consent of the Company’s creditors to the Reduction of Capital 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 purposes of discharging the non-consenting creditors of the Company.

    Following completion of the Reduction of Capital, there will be no change in the number of Ordinary Shares in issue (only to their nominal value) and the Deferred Shares will no longer form part of the share capital of the Company. The Ordinary Shares will be traded on the NEX Exchange Growth Market in the same way as they currently are and will be equivalent in all other respects, with the exception of the difference in nominal value. Existing share certificates for Ordinary Shares will continue to be valid following the Reduction of Capital, and no new certificates will be issued following the Reduction of Capital. In addition, the ISIN of the Ordinary Shares will not change. The market price of NMR shares is not directly affected by any change in their nominal value.

    The Deferred Shareholder has consented, subject to the passing of the Reduction Resolution, to the cancellation and extinguishing of the Deferred Shares and accordingly the Reduction of Capital requires the approval of Ordinary Shareholders of the Reduction Resolution, which will be sought at the General Meeting.

    In the event that the Court does not confirm the Reduction of Capital, the Ordinary Shares will retain their current nominal value of £0.10 each, the Deferred Shares will continue to form part of the issued share capital of the Company and the Deficit will not be reduced accordingly.

    Adoption of the New Articles

    The principle purpose of the adoption of the New Articles is to adopt new procedures relating to untraced shareholders and unclaimed funds.

    The Company is proposing two alternative drafts to be adopted as the New Articles. New Articles Model A will be adopted in the event that that the Reduction Resolution is passed and the Reduction of Capital becomes effective and will (i) refer to the par value of the Ordinary Shares as being £0.0025 and (ii) remove the reference to and the rights attaching to the Deferred Shares. New Articles Model B will be adopted in the event that the Reduction Resolution is not passed or if the Reduction Resolution is passed but the Reduction of Capital does not become effective and will refer to the par value of the Ordinary Shares being £0.10 and will continue to refer to and reference the rights attaching to the Deferred Shares. That is the only difference between New Articles Model A and New Articles Model B.

    Other Matters

    In addition, approval will also be sought at the General Meeting of resolutions to:

  7. renew the Directors’ authority to allot shares pursuant to section 551 of the Act and to disapply section 561 of the Act, in each case to take account of the Reduction of Capital; and

  8. grant authority to the Company to make market purchases of Ordinary Shares, such authority being limited to the purchase of 10 per cent. of the Ordinary Shares in issue as at 16 May 2018.

    EXPECTED TIMETABLE OF KEY EVENTS

Publication of the circular 16 May 2018
Latest time and date for receipt of Form of Proxy for the General Meeting 11.00 a.m. on 31 May 2018
General Meeting 11.00 a.m. on 4 June 2018
Court hearing to confirm the Reduction of Capital 26 June 2018
Effective date for Reduction of Capital 26 June 2018

These dates are subject to change. Any change will be notified by an announcement via an RIS.

DEFINITIONS

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

“Act” the Companies Act 2006, as amended from time to time
“Adoption of New Articles” the proposed adoption of the New Articles pursuant to Resolution 2 of the Notice of General Meeting
“Current Articles” the articles of association of the Company in force as at the date of this announcement
“Court” the High Court of Justice in England and Wales
“Court Order” the order of the Court confirming the Reduction of Capital
“Deferred Shareholder” the holder of the Deferred Shares
“Deferred Shares” the 90 deferred shares of £1.00 each in the capital of the Company
“Deficit” the accumulated deficit on the Company’s profit and loss account
“Directors” the directors of the Company
“Existing Ordinary Shares” the ordinary shares of £0.10 each in the capital of the Company
“Fund” the Milk Pension Fund, a multi-employer defined benefit pension fund of which the Company and NML were formally participating employers
“General Meeting” the General Meeting of the Company to be held at 11.00 a.m. on 4 June 2018 (or any adjournment thereof)
“New Articles” the proposed articles of association of the Company to be adopted as the new articles of the Company in substitution for, and to the exclusion of, the Current Articles by way of the Adoption of New Articles
“New Articles Model A” the proposed form of articles of association of the Company to be adopted as the New Articles in the event that the Reduction Resolution is passed, and the Reduction of Capital becomes effective
“New Articles Model B” the proposed form of articles of association of the Company to be adopted as the New Articles in the event that the Reduction Resolution is not passed or if the Reduction Resolution is passed but the Reduction of Capital does not become effective
“New Ordinary Shares” ordinary shares of £0.0025 each in the capital of the Company which will result from the reduction of the par value of the Existing Ordinary Shares to be effected by way of the Reduction of Capital
“NEX Exchange” NEX Exchange Limited, a recognised investment exchange under section 290 of FSMA
“NEX Exchange Growth Market” the primary market for unlisted securities operated by NEX Exchange
“NML” National Milk Laboratories Limited, a company registered in Scotland with company number SC145660, being a wholly owned subsidiary of the Company
“Notice of General Meeting” the notice convening the General Meeting
“Ordinary Shareholders” the holders of Ordinary Shares
“Ordinary Shares” the Existing Ordinary Shares or the New Ordinary Shares, as the context permits
“Reduction of Capital” the proposed cancellation of: (i) of £0.0975 of the nominal value of each issued Existing Ordinary Share; (ii) the Deferred Shares in issue; and (iii) the entire balance of the share premium account
“Reduction Resolution” the Resolution to approve the Reduction of Capital

A copy of the circular will be available on the NMR website at www.nmr.co.uk.

The Directors of the Company are responsible for the contents of this announcement.

For further information please contact:

NMR plc
Andy Warne, Managing Director


Mark Frankcom, Finance Director

+44-7970-009141
andyw@nmr.co.uk

+44-7458-002444
markf@nmr.co.uk
Peterhouse Capital Limited
Duncan Vasey
Mark Anwyl
+44-20-7220-9796
Blytheweigh (Financial PR)
Megan Ray
Rachael Brooks
+44-20-7138-3204

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.




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