Notice of Meeting to cancel t

RNS Number : 4079U

Cenkos Securities PLC

14 October 2010

 



14 October 2010

Cenkos Securities plc (the "Company" or "Cenkos")

Proposal to cancel the share premium account of the Company and notice of General Meeting

1. Introduction

Cenkos today announces that it has posted a circular to Shareholders setting out details of the Board's proposal to cancel the entire amount standing to the credit of the Company's share premium account, being £22.7 million (the "Cancellation"). Shareholder approval is required for the Cancellation and accordingly the circular contains a notice convening a General Meeting to be held at 11.00 a.m. on 1 November 2010 at 6.7.8 Tokenhouse Yard, London EC2R 7AS. 

2.  Background to and reasons for the Cancellation

On 30 September 2010, the Company declared an interim dividend of 2p per Share that will be payable on 4 November 2010 to all Shareholders on the register on 8 October 2010.  Subject to Shareholder and Court approval of the Cancellation, the Company also announced an intention to declare a second interim dividend of 2p per Share.  In order to create sufficient distributable reserves to permit the payment of the second interim dividend and to allow the Board to have greater flexibility in the determination of the Company's dividend policy in following years, the Directors are proposing that the Company cancels the entire amount standing to the credit of the Company's share premium account.

The Company's current stated policy is to only retain sufficient capital and reserves to meet the Group's regulatory capital and cash requirements (after taking account of the likely working capital requirements of the Group). The Cancellation allows the Company to continue this policy and reduces its capital to a level that is in line with its requirements.

The Cancellation is conditional on the passing of the resolution set out in the notice of General Meeting and Court approval.  If the resolution is not passed and/or the Court confirmation is not obtained, the Company will be unable to complete the Cancellation and, as a consequence, it will not be able to declare the proposed second interim dividend of 2p per Share.

In accordance with FSA rules, the Company has notified the FSA of the proposed Cancellation. The Cancellation is not conditional on FSA approval.

3. Cancellation

The Cancellation will not become effective unless it is approved by the Court.  If the resolution is passed at the General Meeting, the Company intends to seek the approval from the Court for the Cancellation at a hearing on 17 November 2010, and, if such approval is obtained, the Cancellation is expected to become effective on the same day.

Prior to confirming the Cancellation, the Court will need to be satisfied that the interests of the Company's creditors are not adversely affected. The Company will put in place such form of creditor protection undertakings as it may be advised is appropriate to secure the Court's confirmation, the effect of which will be that only when such creditors have been satisfied, settled or otherwise provided for, will the reserve created as a result of the Cancellation become available for distribution. This may include the Company placing into a blocked trust bank account an amount of cash in respect of such creditors who do not consent to the Cancellation.  

The Cancellation itself will not involve any distribution or repayment of share premium by the Company and will not reduce the underlying net assets of the Company.

For further information contact:

Simon Melling

Chief Executive Officer        020 7397 8900

David Rydell

Pelham Bell Pottinger          020 7861 3886

 

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