JOHANNESBURG (miningweekly.com) – Aim-listed Edenville Energy is planning to restructure its share capital to unlock the issue of further equity to continue the development of a coal-to-power project in south-west Tanzania.
A general meeting will be held on August 30 to propose to shareholders the resolutions to subdivide and consolidate the company’s issued share capital, effectively reducing the number of issued ordinary shares by a multiple of around 20.
Edenville on Friday said its board believed that, in order to continue the significant progress made on its Rukwa coal-to-power project and to deliver shareholder value over the coming years, it needed to take appropriate steps to restructure the company's share capital.
At 12.4-billion, the number of existing ordinary shares currently in issue is an excessive number for a company of the size of Edenville, the company explained in an update to shareholders.
Further, the issue of new shares by a company incorporated in England and Wales at a price below their nominal value is prohibited by the Companies Act and the existing ordinary shares of £0.0002 have, in recent months, frequently been trading on Aim at a price close to their nominal value.
The company proposed a three-subdivision reorganisation, which would, with the creation of the subdivided new deferred shares, leave the aggregate par value of the ordinary shares, once subdivided and consolidated, at £0.0002.
Edenville proposed subdividing just over 64-million existing deferred shares of £0.0008 each into 5.1-billion deferred shares of £0.00001 each during the first subdivision.
Next, the existing ordinary shares will be subdivided into two share classes, namely ordinary shares of £0.00001 each and deferred shares of £0.00019 each.
The 12.4-billion new deferred shares will then be subdivided into 236-billion of £0.00001 apiece, while the subdivided ordinary shares will be consolidated into 621-million ordinary shares of £0.0002 each.
Neither the subdivided new deferred shares nor the subdivided existing shares will be quoted and no share certificates will be issued.
Edenville assured shareholders that the reorganisation would not lead to the dilution of existing ordinary shares.