Falklands : ROCKHOPPER PROPOSES CANCELLATION SHARE PREMIUM ACCOUNT AND TO PURCHASE ITS OWN SHARES
Submitted by Falkland Islands News Network (Juanita Brock) 05.05.2013 (Article Archived on 02.06.2013)
Rockhopper Exploration has posted a Circular to Shareholders to seek their approval at a General Meeting to be held on 4 June 2013, for the Company to cancel its Share Premium Account and for the Directors to be given the authority for the Company to purchase its own Ordinary Shares.
ROCKHOPPER PROPOSES CANCELLATION SHARE PREMIUM ACCOUNT AND TO PURCHASE
ITS OWN SHARES
By J. Brock (FINN)
Rockhopper Exploration has posted a Circular to
Shareholders to seek their approval at a General Meeting to be held on 4 June
2013, for the Company to cancel its Share Premium Account and for the Directors
to be given the authority for the Company to purchase its own Ordinary Shares.
The Directors believe it is important that the
Company has the flexibility to pay dividends to Shareholders and to make
purchases of its own shares where to do so would benefit the Company. However,
as at 31 March 2013, the Company had, on the basis of its unaudited management
accounts, retained losses of US$29,370,466 and is therefore prohibited from
paying dividends or purchasing its own shares. The proposed cancellation of the
Share Premium Account is expected to create distributable reserves of
US$549,383,668 if the cancellation is approved by the Court. These distributable
reserves would then be available (subject to the approval of the Court), for
any corporate purposes which the Directors may consider appropriate including
the funding of dividends and to facilitate any buy-back of the Company's own
ordinary shares. In order to approve the proposed cancellation, the
Court will need to be satisfied that the interests of the Company's creditors
will not be prejudiced as a result of the cancellation.
A resolution is being proposed at the General
Meeting which will, if passed and provided that the Court approves the
cancellation of the Company's Share Premium Account and the distributable
reserve arising is available to be distributed, allow the Company to make
purchases of its own Ordinary Shares in the market on such terms and in such
manner as the Directors may determine.
However, in accordance with IPC Guidelines the
authority sought will be limited to 10 per cent of the Company's issued
Ordinary Shares and the minimum price that may be paid for each Ordinary Share
is 1 pence and the maximum price that may be paid for each Ordinary Share is an
amount equal to 105 per cent of the average of the middle market quotations for
the Ordinary Shares as derived from the Daily Official List of the London Stock
Exchange plc for the five business days immediately preceding the day on which
such share is contracted to be purchased.
While the Directors have no immediate plans to
make any purchase of the Company's own Ordinary Shares they would like to have
the ability to act swiftly if circumstances arise where they consider that any
such purchase would be desirable and appropriate. In addition, the
Directors wish to avoid a situation where they feel able from a commercial
standpoint to recommend the payment of or to declare a dividend but are
precluded from doing so because the Company has insufficient distributable
reserves. It is the Directors current intention that no decision for the
Company to make dividend payments or to purchase its own shares would be made
before the Company has completed an evaluation of its medium-term funding
requirements. Concept Selection for the Sea Lion development, which is anticipated
to take place in mid-2013 will be a key part of this evaluation as the choices
made are expected to provide greater clarity on the expected cost and schedule
of the project.
Notice of a General Meeting of the Company at
which resolutions will be proposed by the Company to cancel the Share Premium
Account and for the Directors to be given the authority for the Company to
purchase its own Ordinary Shares is attached to the Circular.
The Circular was posted on 30 April 2013 and the
latest time for the receipt of proxy forms for the general meeting is 1000hrs
on 02 June 2013. The annual General
Meeting will be held at 1000hrs on 04 June 2013; with a Court hearing to confirm cancellation of Share Premium Account to be
held on 03 July 2013. The effective date
will be on or about 04 July 2013, unless mitigating circumstances alter the schedule.