Business
Proposed Capital Reduction and Notice of Extrao...
Proposed Capital Reduction and Notice of Extrao....
About this update from Kenmare Resources Plc
[{"type":"text","content":"\n Proposed Capital Reduction and Notice of Extraordinary General MeetingKenmare Resources plc (“Kenmare” or “the Company”)6 November 2018Proposed Capital Reduction andNotice of Extraordinary General MeetingKenmare 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 reductionFollowing 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 ...