Kenmare Resources Proposed Capital Reduction And Notice Of Extraordinary General Meeting
06 November 2018 - 6:00PM
UK Regulatory
TIDMIRSH
Kenmare Resources plc ("Kenmare" or "the Company")
6 November 2018
Proposed Capital Reduction
and
Notice of Extraordinary General Meeting
Kenmare Resources plc ("Kenmare" or the "Company") announces that it
will later today post a circular (the "Circular") to shareholders of the
Company ("Shareholders") detailing a proposed capital reduction of the
Company's share premium account (the "Capital Reduction") and convene a
general meeting of the Company (the "General Meeting"), the purpose of
which is to enable shareholders to approve the Capital Reduction.
The General Meeting will be held at Conrad Dublin, Earlsfort Terrace,
Dublin 2, D02 V562 on Wednesday, 5 December 2018 at 12.30 p.m.
Background to and reasons for the proposed capital reduction
Following a period of continued growth and operational development,
Kenmare announced on 16 October 2018 a dividend policy to return a
minimum of 20% of profit after tax on an annual basis to Shareholders as
part of our objective to create and deliver shareholder value. This
policy is subject to prevailing product market conditions and ensuring
that the Company retains a prudent level of cash to fund debt and
capital requirements.
In light of the capital required for development projects, the Company
expects (subject to Shareholder and High Court approval of the Capital
Reduction) to pay modest dividends during the next two years, starting
with an interim dividend based on H1 2019 results, payable in H2 2019.
Following completion of these development projects, the Company expects
to be in a position to make higher capital returns from 2021.
As we stated in our October announcement, the Company, in order to be in
a position to pay any dividend, must first eliminate its historic losses
by reduction of its capital. The Company carries an accumulated deficit
on its balance sheet (US$185,252,950 at 30 June 2018) reflecting
accumulated losses on its activities since its incorporation. Under
Irish company law, the Company is precluded from paying dividends, or
(subject to certain exceptions) redeeming or repurchasing its shares,
while it carries an accumulated deficit. A reduction of the Company's
capital to eliminate historic losses requires the approval of
Shareholders and the consent of the High Court.
Accordingly, the Board proposes the Capital Reduction to eliminate that
deficit and to provide the Company with the flexibility to pay dividends,
or to redeem or repurchase its shares, in the future and in line with
its dividend policy.
The Capital Reduction will not, of itself, create distributable reserves
that would allow the Company to pay a dividend (or redeem or repurchase
its shares). However, it would put the Company in a position to pay a
dividend (or redeem or repurchase its shares) in circumstances where
distributable reserves are created in future financial years and the
Board determines that such reserves, when assessed alongside the ongoing
financial performance of the Company and the interests of the Company
generally at such time, are of such an amount as to justify payment of a
dividend or other distribution.
If approved by Shareholders, and subsequently confirmed by the High
Court of Ireland, the Capital Reduction will result in the partial
cancellation of the Company's share premium account and will eliminate
the deficit on the Company's profit and loss account as at 30 June 2018.
The Circular (including the notice of EGM) will be shortly available on
the Company's website, www.kenmareresources.com.
Copies of the Circular (including the notice of EGM) have been submitted
to Euronext Dublin and the National Storage Mechanism from where it may
also be obtained.
Capitalised terms used but not otherwise defined in this announcement
will have the same meanings given to them within the Circular.
For further information, please contact:
Kenmare Resources plc
Michael Carvill, Managing Director
Tel: +353 1 671 0411
Tony McCluskey, Financial Director
Tel: +353 1 671 0411
Jeremy Dibb, Corporate Development and Investor Relations Manager
Tel: +353 1 671 0411
Mob: + 353 87 943 0367
Murray
Joe Heron / Aimee Beale
Tel: +353 1 498 0300
Mob: +353 87 690 9735
Buchanan
Bobby Morse / Chris Judd
Tel: +44 207 466 5000
Forward Looking Statements
This announcement contains some forward-looking statements that
represent Kenmare's expectations for its business, based on current
expectations about future events, which by their nature involve risks
and uncertainties. Kenmare believes that its expectations and
assumptions with respect to these forward-looking statements are
reasonable. However, because they involve risk and uncertainty, which
are in some cases beyond Kenmare's control, actual results or
performance may differ materially from those expressed or implied by
such forward-looking information.
(END) Dow Jones Newswires
November 06, 2018 02:00 ET (07:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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