Listing Reclassification

RNS Number : 9863O

Kenmare Resources PLC

07 July 2010

 

7 July 2010

Kenmare Resources plc

Reclassification of Irish Listing of Ordinary Shares

The Board of Kenmare Resources plc ("Kenmare" or the "Company") announces the Reclassification of its Ordinary Shares on the Main Securities Market of the Irish Stock Exchange from the current primary listing to a secondary listing (the "Reclassification"). Kenmare also advises that it has been in discussions with the FTSE to obtain a UK Nationality classification and, subject to the Reclassification of its Irish Stock Exchange listing, admission to the FTSE UK index is expected in September 2010.

Trading in the Ordinary Shares will continue to be conducted on the respective main markets for listed securities of the Irish Stock Exchange and the London Stock Exchange, on a secondary listing and premium listing basis respectively. The Company will continue to maintain its head office and registered office in Ireland, and to be domiciled in Ireland. It is expected that the Reclassification will become effective on or around 6 August, 2010.   

Background to and reasons for the Reclassification

As Shareholders are aware, in March 2010 the Company completed a firm placing and placing and open offer to raise gross proceeds of £179.6 million (approximately US$270 million) through the issue of 1,497,030,066 Ordinary Shares at an issue price of 12 pence per Ordinary Share in order to finance the expansion of its existing mining operation at Moma in Mozambique. This significant fundraising, together with previous smaller fundraisings in 2008 and 2009, has resulted in a gradual migration of the shareholder base to the UK. Based on the share register as of 30 June, 2010 approximately 95% of shares in issue are registered as being held at an address in the UK. Analysis of the beneficial ownership of the Company also indicates a concentration in the UK, with Shareholders having a notifiable interest in the Company (that is a voting interest in excess of 3%) representing in aggregate approximately 35% of the existing issued share capital being UK investment institutions. Conversely, only approximately 4% of the existing issued share capital of the Company is known to be beneficially held by Irish resident shareholders. Consistent with this trend, trading in the Company's shares has also migrated to the London Stock Exchange with approximately 96% of total volume in the period 1 January, 2010 to 30 May, 2010 occurring on the London Stock Exchange. In addition, whilst Kenmare has its head office and registered office in Ireland, the Company does not have any source of revenue generation in the country (all of its operations being in Mozambique).

These combined factors have a number of potential consequences:

-       Kenmare can qualify under the strict criteria imposed by the Irish Stock Exchange under paragraph 11.4 of the Irish Listing Rules to be treated as an overseas company with a secondary listing in Ireland; and

-       in the event that Kenmare does change its listing status in Ireland to that of an overseas company, this increases the possibility that Kenmare could qualify for admission to the FTSE UK Index Series.

Kenmare has applied to the Irish Stock Exchange to have its listing status changed so that it is classified as an overseas company with a secondary listing in Ireland. It is expected that the Reclassification will be effective on or around 6 August, 2010.

Kenmare has also had discussions with FTSE in relation to its potential categorisation and, subject to the Reclassification, it is expected that Kenmare will be approved for a FTSE UK Nationality classification, with admission to the FTSE UK index envisaged in September 2010.

The Board believes that the proposed Reclassification is in the best interests of the Company and its Shareholders for the following reasons:

-       it is commensurate with, and reflective of, the shareholder and share trading profile of the Company;

-       by retaining the premium listing on the Official List of the UK Listing Authority, Shareholders are assured that substantially the same regulatory regime and protections continue to apply (see "Regulatory Impact of the Reclassification" below);

-       through retaining a secondary listing on the Irish Stock Exchange, Irish and other Eurozone Shareholders will continue to have access to a Euro currency quote and Kenmare Shares are expected to continue to form part of the ISEQ Indices. It is not therefore expected that the change in listing will have any material impact on trading or liquidity in the Company's Shares in Ireland. Kenmare maintains its commitment to Ireland and to its Irish Shareholders, will continue to maintain its head office and registered office in Ireland, and will retain its Irish tax domicile status; and

-       admission to the FTSE UK Index Series would, the Board believes, be in the immediate and longer term interests of the Company and its Shareholders as FTSE membership would be expected to attract additional investment in the Company's Shares from UK index tracker funds, thereby further enhancing liquidity, while the additional credibility and profile which FTSE membership may result in should further improve Kenmare's position with its customers, suppliers and other organisations with whom it conducts business. 

Regulatory Impact of the Reclassification

A premium listing in the UK (which prior to 6 April, 2010 was known as a primary listing) imposes all of the super-equivalent regulatory obligations which are also imposed as a consequence of a primary listing in Ireland. These include observance by Directors of a code of dealing no less prescriptive that the Model Code, compliance with the Combined Code (on a comply or explain basis), compliance with the UKLA Listing Rules in relation to, inter alia, rules relating to share buy backs and treasury shares, rules relating to equity issues, and requirements to announce and/or obtain shareholder approval for certain transactions (due to their size and nature and/or when involving certain related parties). Accordingly, the Reclassification will not result in any material change or diminution in the shareholder rights and investor protections currently applicable to Kenmare Shareholders under the Irish Listing Rules.

In addition, Kenmare will remain subject to the Market Abuse Regulations, the Transparency Regulations and the Prospectus Regulations and their respective rules. Ireland will continue to be the home country of the Company for the purposes of compliance with EU directives and the Financial Regulator will continue to be the Company's competent authority for these purposes. The Company will also remain subject to the remit of the Irish Takeover Rules. 

Conclusion

Given the concentration of Kenmare Shareholders in the UK and the associated increase in liquidity of trading in the Ordinary Shares on the London Stock Exchange, the Board believes that the Reclassification is in the best interests of the Company and its Shareholders as a whole.

A circular detailing the Reclassification will be sent to shareholders in due course and once posted will be available on the Company's website www.kenmareresources.com.

For further information please contact:

Kenmare Resources plc

Tony McCluskey, Financial Director Tel: [phone] Mob: + 353 87 674 0346

J.P. Morgan Cazenove Laurence Hollingworth Neil Passmore Tel: [phone]

Davy Hugh McCutcheon Eugenée Mulhern Tel: [phone]

Murray Consultants Joe Heron Tel: [phone] Mob: + 353 87 690 9735

Conduit PR Ltd Charlie Geller /Leesa Peters Tel: [phone] Mob: [phone]

In this announcement terms not otherwise defined shall have the same meaning as in the circular to be posted to Shareholders. The circular is being sent to Shareholders for information purposes only.

 

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