share capital reorganisation?

nsabournemouth

I purchased 11834 of shares back in 2010 for under a penny a share and have had this letter sent out re an agm and not that sure what it means, can anyone help, the company in question is pan pacific aggregates and here is the bit that stumps me:

Under English law, the Company is unable to issue ordinary shares at a price below their nominal value, therefore the Share Capital Reorganisation has been proposed to enable the Company to issue new Ordinary Shares pursuant to the SEDA. The Company would not be able to utilise the SEDA until the Share Capital Reorganisation has been implemented. The Share Capital Reorganisation will also reduce the total number of ordinary shares in issue.

Pursuant to the Share Capital Reorganisation every 100 Existing Ordinary Shares of 0.1p each will be consolidated into 1 ordinary share of 10p each, following which, such ordinary shares of 10p each in the capital of the Company will be sub-divided into 1 Ordinary Share of 0.1p each and 99 Deferred Shares of 0.1p each. The value of the Deferred Shares will effectively be zero. To the extent that the number of Existing Ordinary Shares held by a Shareholder is not a multiple of 100, such Existing Ordinary Shares will not be consolidated as set out above, but will instead each be redesignated as a new Deferred Share. The maximum potential loss by each Shareholder as a result of the Share Capital Reorganisation is up to 99 Existing Ordinary Shares.

Three examples are set out below to demonstrate the effect on a Shareholder’s holding of Existing Ordinary Shares in the Company if the Share Capital Reorganisation is implemented:


Number of Existing Ordinary Shares held prior to the Share Capital Reorganisation

Number of Ordinary Shares held immediately after the Share Capital Reorganisation

Number of Deferred Shares held immediately after the Share Capital Reorganisation

Example 1
100 ordinary shares of 0.1p each

1 ordinary share of 0.1p

Nil

Example 2
199 ordinary shares of 0.1p each

1 ordinary share of 0.1p

198 deferred shares of 0.1p each

Example 3
250 ordinary shares of 0.1p each

2 ordinary shares of 0.1p each

248 deferred shares of 0.1p each

Thrugelmir

What's your question?

nsabournemouth

Thrugelmir wrote: »

What's your question?

What does it mean? Are my shares now worthless?

Vortigern

nsabournemouth wrote: »

What does it mean? Are my shares now worthless?

The AGM has been and gone. Looks like the company has done a 1 for 100 consolidation (not sure if this is the correct term)

You used to have 11834 shares worth a fraction of a penny each, you now have only 118 shares, but they're worth nearly 5p each (at close on 31/01/12)

See charts and discussion at link below:

http://www.iii.co.uk/investment/detail?code=cotn:PPA.L

nsabournemouth

Vortigern wrote: »

The AGM has been and gone. Looks like the company has done a 1 for 100 consolidation (not sure if this is the correct term)

You used to have 11834 shares worth a fraction of a penny each, you now have only 118 shares, but they're worth nearly 5p each (at close on 31/01/12)

See charts and discussion at link below:

http://www.iii.co.uk/investment/detail?code=cotn:PPA.L

Thanks for your reply. Cheers