Notice of General Meeting

RNS Number : 6273R

Braveheart Investment Group plc

18 June 2018

 

18 June 2018

Braveheart Investment Group plc

("Braveheart", the "Company" or the "Group")

Notice of GM

Proposed Reduction of Share Capital

Braveheart Investment Group plc (AIM: BRH), the fund management and strategic investor group, announces that it proposes to carry out a capital reduction by cancelling the whole of its share premium account thereby enabling the Directors to consider the payment of dividends to its shareholders as a means of returning income to shareholders should the Directors consider it is appropriate to do so.

A General Meeting is being convened to be held on 19 July 2018 at 11.30 a.m. (or immediately following the conclusion or adjournment of the Annual General Meeting called at 11.00 a.m. on that date) at the offices of Edwin Coe, 2 Stone Buildings, Lincoln's Inn, London WC2A 3TH ("the General Meeting") in order to consider, and if thought fit, pass the resolution necessary to implement the proposal.

The Company's 2018 Annual Report and Accounts show its total liabilities as at 31 March 2018 as £1,434,382, and its retained earnings as at that date as £33,293. However, the retained earnings include unrealised profits of circa £270,000 and do not include contingent liabilities of £147,982. Consequently, the Company does not have any distributable profits and is unable to declare dividends.

At the same time, the Company's accounts show a sum of £1,567,615 standing to the credit of its share premium account.  The share premium account is an undistributable reserve and, accordingly, the purposes for which a company can use the sums credited to this reserve are very limited. However, with the consent of its shareholders and the approval of the Court, a company may reduce or cancel its share premium account and the reserve arising on such a reduction of capital may be used in diminishing or extinguishing a deficit or maximising returns to shareholders.

The Company therefore proposes to cancel the whole of its share premium account in order to generate distributable reserves of approximately £1.295 million, which would enable the Company to pay dividends (should circumstances in the future make it desirable to do so) to the extent of the distributable reserves created but subject to the financial position of the Company and its prospects at the relevant time and any undertakings given to the Court for the protection of the Company's creditors at the date that the Capital reduction becomes effective.

The cancellation of the Company's share premium account will only take effect if sanctioned by the  Shareholders at the General Meeting and confirmed by the Court and upon the appropriate documents being lodged with the Registrar of Companies.

An application to the Court will be made as soon as practicable after the passing of the required shareholder resolution and the procedure is expected to be completed within six to eight weeks following the passing of the required shareholder resolution.

The Directors have been advised that, having regard to the circumstances at the date of this document, the Court is expected to confirm the Capital Reduction. The Directors are not, however, able to guarantee the Court's confirmation of the Capital Reduction. It is important to note that the Capital Reduction will not take effect unless it is confirmed by the Court.

The Directors have also been advised that the Court may require that the Company give undertakings for the protection of the Company's creditors at the date that the Capital Reduction becomes effective.

As at 31 March 2018, the Company's liabilities (including contingent liabilities) amounted to a total of approximately £1,582,274, of which (i) £147,892 relates to contingent liabilities arising under the guarantees provided by the Company pursuant to section 479 of the Companies Act and (ii) the balance of £1,434,382 relates to debts owed by the Company. The majority of its creditors consist of subsidiaries of the Company, in respect of which there are debts of £1,371,373 and contingent liabilities of £105,841.  The relevant subsidiaries of the Company have indicated that they will consent to the Capital Reduction to generate distributable reserves and agree not to seek repayment of the sums due to them until such time as the sums due to the balance of the creditors (the "Remaining Creditors") at the date on which the capital reduction takes effect (the "Effective Date") have been repaid in full.  The Remaining Creditors at the Effective Date are due to be paid a total amount of approximately £63,000 and there are contingent liabilities to Remaining Creditors of approximately £42,000.

The Company will if required give an undertaking to the Court that the part of the distributable reserves created by the Capital Reduction equal to the sums due to the Remaining Creditors at the Effective Date will not be used for any other purposes without paying those Remaining Creditors the sums due to them on the Effective Date, except to the extent that the Remaining Creditors consent to those distributable reserves being used for other purposes. 

A notice convening a General Meeting to consider and, if thought fit, pass the necessary resolution will be set out in a Circular which will be sent to shareholders shortly and will be available on the Company's website www.braveheartgroup.co.uk.

For further information:

Braveheart Investment Group plc                                                                            [phone]

Trevor Brown, Chief Executive

Allenby Capital Limited (Nominated Adviser and Broker)                                  [phone]

David Worlidge / Nicholas Chambers

 

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