Information  X 
Enter a valid email address



Wednesday 19 September, 2001


Proposed Capital Reduction

19 September 2001

J2C plc ('the Company') - Proposed Capital Reduction

On 29 June 2001, in conjunction with the publication of the Company's
half-yearly report for the six months ended 31 March 2001, the board
announced that it had resolved to allow shareholders to decide whether a
capital reduction scheme should be implemented in order to return surplus
cash assets of the Company to shareholders.

The announcement on 29 June 2001 followed earlier announcements on 1 February
and 9 February 2001 in which the directors indicated that they were seeking a
major transaction for the group and that if a major transaction could not be
achieved, they would consider giving shareholders the opportunity to decide
whether a capital reduction scheme to return surplus cash assets of the
Company should be implemented. The directors have not found a transaction
which they considered appropriate to recommend to shareholders.

As a result, a capital reduction is proposed on the terms set out in a
document to be posted to shareholders today, which, if implemented, would
return £32.97 million to shareholders, equivalent to approximately 35.5p per
share issued as at 18 September 2001 (the latest practicable date prior to
this announcement). This represents a premium of 26.8 per cent. to the
closing mid-market price of the shares of 28.0p on 28 June 2001 (the date
preceding the announcement of a proposed capital reduction) and a premium of
10.9 per cent. to the closing mid-market price of the shares of 32p on 18
September 2001 (the latest practicable date prior to this announcement).

With effect from 1 April 2001, Karl Watkin agreed to waive his salary
entitlement from the Company and Sir Michael Bett, Alan Donnelly and Luke
Johnson each agreed to waive their entitlement to receive director's fees
from the Company. These directors have further confirmed that they will waive
their entitlements to payments in lieu of notice when they cease to be
directors of the Company.

Details of Proposed Capital Reduction

The capital reduction takes the form of a reduction of the Company's share
premium account by £32.97 million. It is a requirement of the capital
reduction that shareholders pass a special resolution ('the Resolution') at
an EGM to be held on 15 October 2001. The capital reduction is also
conditional on Court approval as described below.

The board considers that if shareholders were to decide not to approve the
capital reduction, a strategic review of the options available to the Company
should be undertaken, bearing in mind that the group has no trading

Due to their personal interests in the Company, the directors are making no
recommendation to shareholders with respect to the capital reduction and have
undertaken not to exercise the votes attached to their personal shareholdings
at the EGM.

Shareholders holding 29,918,181 shares, representing approximately 32.2 per
cent. of the issued share capital of the Company (and 38.0 per cent. of the
issued share capital of the Company excluding the shares in respect of which
the directors have undertaken not to vote) have indicated that it is their
intention to vote in favour of the Resolution.

The £32.97 million proposed to be returned to shareholders represents the
amount of the Company's cash which, in the board's opinion, may at present
prudently be regarded as surplus to the Company's requirements having regard
to its actual and contingent liabilities and the requirements of the Court in
connection with the capital reduction.

The capital reduction will only take effect on registration by the Registrar
of Companies of the Court Order. This is currently expected to be on or about
14 November 2001, but is subject to the progress of the Court process.

Cheques for amounts due to shareholders pursuant to the capital reduction
will be despatched to shareholders as soon as practicable following the
effective date of the Court Order.

Proposals for the Company following the Capital Reduction

If the capital reduction is implemented, it is the board's intention that the
settlement of all outstanding liabilities and realisation of assets of the
group should then be effected. No decision has been taken as to how this will
be achieved but at the conclusion of the process there may be a further cash
distribution to shareholders. It is also the intention of the board to apply
for the Company's shares to cease trading on AIM at an appropriate time
following the return of cash to shareholders.

Further Information

Your attention is drawn to the further information contained in the document
to be posted to shareholders today. Copies of that document will be available
at the registered office of the Company and from the offices of Brown
Shipley, Founders Court, Lothbury, London EC2R 7HE, during normal office
hours, Saturdays and Sundays excepted, from the date of this announcement
until the EGM.

The total issued share capital as at 18 September 2001 includes 1,435,766 J2C
shares issued and allotted on 18 September 2001 as deferred consideration in
respect of the acquisition of the business of Tradezone International
Limited, which was completed on 28 April 2000. Application has been made for
these shares to be admitted to trading on AIM and it is expected that
dealings will commence on 24 September 2001.

Expected timetable of principal events

  Extraordinary General Meeting                    1.30pm on 15 October 2001
  Court hearing of the petition to confirm the
  capital reduction                                7 November 2001
  Effective date of the capital reduction          14 November 2001
  Record date for the capital reduction            5.00pm on 14 November 2001
  Cheques posted to shareholders or CREST
  accounts credited                                by 21 November 2001

  Note: These dates are dependent on, inter alia, the date upon which the
  Court confirms the capital reduction.

Contact details:

J2C plc
Alan Davidson, 0191 226 0057

Brunswick Group Ltd
Gavin Partington, 020 7404 5959


a d v e r t i s e m e n t