TIDMPHU
Pactolus Hungarian Property plc ("the Company")
Posting of Circular
The Board of the Company announces that, on 14 August 2009, it has sent a
circular to all shareholders. A copy of this circular is available on the
Company's website, www.pactolus.co.uk.
Following shareholder resolution on 5 January 2009, the Company has been buying
back shares from cash resources raised from the sale of assets and by utilising
a gearing facility currently in place. The Company currently has 9.4 per cent
of this facility unused.
The Board of directors ("the Board") recognise that a number of shareholders
may wish to continue to have the opportunity to realise their investment in the
Company. The Board is also aware that certain shareholders wish to continue
their investment in the Company and the following proposals have been
formulated to address the differing views of shareholders.
The Board proposes renewing and increasing the share buy back facility to allow
the Company to purchase and cancel up to a further 40 per cent. of the shares
currently in issue. As at the date of this announcement, the current number of
shares in issue is 18,304,733.
A further buy back of shares is conditional on shareholder approval and
the Company announces that it has today posted a circular to shareholders
providing further details of the proposals. Notice convening the meeting is set
out in the circular. The Board, which represents approximately 0.34 per cent
of the ordinary issued share capital is unanimously recommending that
shareholders vote in favour of the resolutions to be proposed at the meetings.
In summary the resolutions are to:
1. Provide for further share buy backs up to 40 per cent. of the current
issued share capital; and
2. As a consequence, whitewash the requirements under Rule 9 of the Takeover
Code for Midas Investment Management Ltd ("Midas") and its associates to
make an offer for the Company as a consequence of the Company purchasing
its own ordinary shares.
Midas and its associates currently own 27.71 per cent. of the issued share
capital of the Company and the Company has already sought the permission from
The Takeover Panel seek a whitewash from shareholders which has been granted.
The repurchase of Shares by the Company will be funded from the Company's cash
resources and by the sale of investments within the Company's portfolio.
Ordinary Shares repurchased by the Company will be cancelled upon settlement.
Commenting on the proposals Chris Bennett chairman said:
"Since our final results were announced on the 3 April 2009, consensus
estimates for 2009 GDP in Hungary has worsened from at the most minus 4.5 to
minus 6.5 per cent. The government deficit will be almost HUF350 billion
higher than originally planned representing approximately 3.9 per cent of GDP
and unemployment is forecast to be 10.5 per cent by the year end.
It is important to note that it has been commented on by analysts that a
proportion of this reduction in the labour force has been in the ex-patriate
community. So overall conditions could be described as difficult and in such
circumstances we wish to offer shareholders the continuing option to exit their
shareholding should they so wish via the proposed share buy back process.
Despite all the above I personally remain quite confident that our basic
business plan is sound and will prove robust enough to see us through to easier
times."
The Company has received letters of intent from shareholders representing 22.71
per cent of its current issued share capital, who have indicated that they will
vote in favour of both resolutions. In addition Midas and its associates have
provided a letter stating they will vote in favour of the resolution to
undertake further buy backs in respect of their shares representing a further
27.71 per cent. of the issued share capital.
For further information, please contact:
Mark Sheppard
Asset Manager
Midas Investment Management Limited
Tel: +44 (0) 207 225 1836
Liam Murray or Jo Turner
Nominated Adviser
Dowgate Capital Advisers Limited
Tel: +44 (0) 20 7492 4777
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