from the notice of agm... note the timetable at the bottom
RESOLUTION 6 - CONSOLIDATION OF CAPITAL
Background to and Reasons for the Proposed Share Consolidation. Resolution 6 seeks approval for the Company to consolidate its ordinary share capital on a one for ten basis (1:10). The Board considers that it is desirable to consolidate the Ordinary Shares as this should assist in reducing the volatility in the Company’s share price, enabling a more consistent valuation of the Company. With shares of low denominations and the levels of trading, small absolute movements in the share price can represent large percentage movements resulting in volatility. The Board also believes that the bid-offer spread on shares priced at low absolute levels can be disproportionate to the share price, to the detriment of the Shareholders The consolidation is proposed in order to reorganise the Company’s issued share capital and better position the Company to raise further working capital, as required from time to time. The consolidation will not result in any change to the substantive rights and obligations of the Shareholders, nor any change to the balance sheet or tax position of the Company.
Details of the Proposed Share Consolidation. Upon implementation of the Share Consolidation, Shareholders on the register of members of the Company at the close of business on the Record Date, which is expected to be 8 December 2011, will exchange 10 Ordinary Shares for 1 Consolidated Ordinary Share and so on in proportion for any other number of Ordinary Shares then held. The proportion of the issued ordinary share capital of the Company held by each Shareholder following the Share Consolidation will, save for fractional entitlements, be unchanged. The capital structure of the Company following the Share Consolidation is set out in Schedule 4. Apart from the change in nominal value, the Consolidated Ordinary Shares arising on implementation of the Share Consolidation will have the same rights as the Ordinary Shares, including voting, dividend and other rights. No Shareholder will be entitled to a fraction of a Consolidated Ordinary Share and where, as a result of the consolidation of Ordinary Shares described above, any Shareholder would otherwise be entitled to a fraction of a Consolidated Ordinary Share in respect of their holding of Ordinary Shares at the Record Date (a "Fractional Shareholder"), such fractions shall be aggregated with the fractions of Consolidated Ordinary Shares to which other Fractional Shareholders of the Company may be entitled so as to form full Consolidated Ordinary Shares and sold. This means that any such Fractional Shareholder will not have a resultant proportionate shareholding of Consolidated Ordinary Shares exactly equal to their proportionate holding of Ordinary Shares. Any Shareholder not holding a number of Ordinary Shares which is exactly divisible by 10 on the Record Date will be entitled to receive part of the proceeds of this sale in respect of his fractional entitlement. The Directors will be authorised to sell Consolidated Ordinary Shares arising from fractional shareholdings on behalf of Fractional Shareholders as soon as reasonably practicable after trading in the Consolidated Ordinary Shares starts. However, in accordance with the Share Consolidation Resolution, cash proceeds of less than $1 will not be distributed to Fractional Shareholders but will be retained for the benefit of the Company. In view of the current share price, the Directors do not consider it likely that the due proportion of the proceeds of the sale of any fractional entitlements to be paid to the Fractional Shareholders concerned will be $1 or more. It is intended that, prior to the Record Date, the Company shall issue to Mac Equity (an unrelated party to the Company) such number (not to exceed 9) of new Ordinary Shares as are required to increase the issued share capital of the Company on the Record Date to a number divisible by 10. These shares will be issued at a price no less than their mid-market value on the date preceding the date of issue and will rank pari passu with all existing ordinary shares in the Company. The entitlement to ordinary shares of holders of securities or instruments convertible into ordinary shares (such as options, warrants and convertible loan notes) shall be adjusted in accordance with the terms of such securities or instruments upon implementation of the Share Consolidation.
Settlement.
If you hold a share certificate in respect of your Ordinary Shares in the Company, your certificate will no longer be valid from the time that the proposed Share Consolidation becomes effective. If you hold 10 or more Ordinary Shares in certificated form on the Record Date you will be sent a new share certificate evidencing the Consolidated Ordinary Shares to which you are entitled under the Share Consolidation. Such certificates are expected to be dispatched no later than 15 December 2011 by first class post at the risk of the Shareholder. Upon receipt of the new certificate, you should destroy any old certificates. Pending the dispatch of the new certificates, transfers of certificated Consolidated Ordinary Shares will be certified against the Company’s share register. If you hold a holding statement in respect of your CDIs (for your Ordinary Shares) and/or Options in the Company, trading in the CDIs (for the Consolidated Ordinary Shares) will be on a deferred settlement basis after the proposed Share Consolidation becomes effective. Deferred settlement trading will end when the Company sends to you a new holding statement. Please see the proposed timetable in respect of trading on ASX, which is set out below. You will be sent a new holding statement evidencing the CDIs (for Consolidated Ordinary Shares) and Options to which you will be entitled after the Share Consolidation. Such holding statements are expected to be dispatched not later than 15 December 2011. It is the responsibility of each Shareholder and Option holder to check the number of CDIs (for Consolidated Ordinary Shares) and Options held prior to any sale or transfer Any monies payable to Shareholders in respect of the sale (on behalf of Fractional Shareholders) of Consolidated Ordinary Shares arising out of the Share Consolidation will be paid by cheque to the Shareholders entitled thereto (at such Shareholder’s risk) and such cheques are expected to be dispatched by no later than 31 December 2011. In the case of CDI holders, any cash entitlements will be paid by cheque (at such CDI holder’s risk) in the manner described above. All cash payments will be made in pounds sterling by cheque drawn on a branch of a UK clearing bank and dispatched by second class post. Taxation. If Shareholders and/or Option holders are in any doubt as to their tax position post Share Consolidation, they should consult their duly authorised professional adviser without delay. None of the Company, the Directors or the Company’s advisers accept any responsibility for the individual taxation consequences arising from the Share Consolidation.
Adjustments to Options and ASX Listing Rule 7.20
The ASX Listing Rules require that the number of options on issue be consolidated in the same ratio as the ordinary share capital and the exercise price be amended in inverse proportion to that ratio. The Company will round up any resultant fractional entitlements to Options resulting from the consolidation.
This means that the following adjustments will be made to the existing Options on issue:
• Options (ASX code "SMNOA"): the number of Options will be consolidated from 143,318,731 Options on issue to 14,331,873 Options and the exercise price will be increased from $0.0085 to $0.085 cents.
• Options (ASX code "SMNOB"): the number of Options will be consolidated from 94,452,784 Options on issue to 9,445,278 Options and the exercise price will be increased from $0.0085 to $0.085 cents.
The capital structure of the Company following the Share Consolidation is set out in Schedule 4.
ASX Listing Rule 7.20 states that if an entity proposes to reorganise its capital, it must inform equity security holders in writing of each of the following: • The effect of the proposal on the number of securities of the Company and the amount unpaid, if any, on the securities. • The proposed treatment of any fractional entitlements arising from the reorganisation, and • The proposed treatment of any convertible securities on issue.
Indicative Timetable
Set out below is an indicative timetable relating to the Share Consolidation.
Announce the proposed Share Consolidation to ASX
Shareholder meeting. Notify ASX that Shareholders have approved the Share Consolidation 30 November 2011 Last day for trading in securities on a pre-consolidation basis 1 December 2011 Trading in securities on an "ex consolidation of capital" basis. Deferred settlement trading in securities 2 December 2011
Record Date. Last day for Company to register transfers on a pre-consolidation basis 8 December 2011 Company to send notice to Shareholders
First day for Company to register transfers on a post-consolidation basis and first day for issuing holding statements 9 December 2011 Despatch date and deferred settlement trading ends 15 December 2011 Normal T+3 trading 16 December 2011
SMN Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
(20min delay)