[15.11.2004]
Alphameric Plc (“Alphameric”
or “the Group”) PROPOSED
DISPOSAL OF THE RETAIL BUSINESS
Financial effects of the Disposal
and use of the proceeds
On completion
of the Disposal the cash element of
the Initial Consideration, approximately
£9 million, after expenses arising
on the Disposal, of approximately
£1 million, will be placed on
bank deposit. The Torex Ordinary Shares
issued as part of the Initial Consideration
will not be able to be sold before
the announcement of Torex’s
preliminary results for the year ending
31 December 2004, or, if earlier,
31 March 2005, without the consent
of Torex. It is the Board’s
current intention to sell the shares
at a time that makes good commercial
sense.
A number
of potential acquisitions have already
been identified which represent significant
strategic opportunities for the Continuing
Group in both the leisure and hospitality
markets. It is anticipated that a
significant proportion of the initial
cash proceeds will be applied to exploit
these opportunities in the near future.
The Board will keep under review the
use to which any of the future proceeds
of the Disposal will be put and Shareholders
will be kept informed of developments
as appropriate.
The Disposal
will not result in a tax charge to
Alphameric. The Board has estimated
that due primarily to the write down
to the carrying value of the investment
within Alphameric there will be an
exceptional loss on Disposal before
taxation of approximately £53
million.
The
Board has been advised that the effect
of this exceptional loss on the Group’s
results will lead to a deficit in
distributable reserves that will limit
the Company’s ability to pay
a final dividend for the year ending
30 November 2004. It is the Board’s
intention to seek Shareholder approval
to apply to the Court to carry out
a capital reconstruction that will
extinguish the deficit of reserves.
A Circular will be sent to Shareholders
in due course, setting out the proposal.
Subject to the gaining of the Court
approval and satisfactory future trading
by the Group, the Board will consider
paying a special interim dividend
in the year to 30 November 2005 equal
to the final dividend that would have
been proposed for the year to 30 November
2004 if sufficient reserves are available.
In the event that Shareholders do
not approve the Disposal, the annual
review of goodwill is also likely
to result in a write down to the carrying
value of the investment within Alphameric
with a similar consequential effect
on the Company’s ability to
pay a dividend.
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