Amd Commo Exagr Regulatory News (COMG)

25 Oct 2005 16:09

Europasia Education PLC25 October 2005 25 October 2005 Fund Raising Consolidation and Reduction of Capital Introduction The Company is currently raising funds via the issue of a Loan Note ("the LoanNotes"), convertible, during the next five years, at 1p (5p following the shareconsolidation proposed at the EGM), with a 10 per cent coupon and 100 per centwarrant coverage. The warrants are over twenty million shares (following theshare consolidation at the EGM) and are exercisable at 1p (5p following proposedconsolidation) at any time until five years from the date of issue. Thedirectors of the Company intend that the proceeds from the issue of the LoanNotes will be used for purchasing shares in China Education Group Limited ("CEG"), additional acquisitions and general working capital. It has come to the Directors' attention that the Notice of Annual GeneralMeeting ("AGM") of the Company, held on 25 July 2005 contained an error in thatResolution 6 (Special Business) referred to the expiry of the power to allotrelevant securities in accordance with section 80 of the Companies Act 1985 "...either eighteen months after passing of this Resolution or on conclusion ofthe Annual General Meeting of the Company to be held in 2005 (whichever is theearlier)...". In fact, this Resolution should have referred to the AnnualGeneral Meeting to be held in 2006. The proposed EGM will, inter alia,re-propose this amended resolution. In addition, the EGM will consider a consolidation and reduction of the capitalof the Company which would, if passed, reduce the deficit on the profit and lossaccount and could, should distributable reserves exist in the future, enable thepayment of dividends. Background The Company has made good progress to date in its goal of building a portfolioof integrated European and Asian education businesses, with three investmentsmade to date and a number of potential investment opportunities identified inthe UK and China. Our investments so far in the sector are: * Bournemouth Education Centre Ltd - a UK based language and workexperience college, where we own 100%; and * Columbia International Investments Ltd - a UK based educationalservices business, which we own 100 per cent of, providing work experienceprograms and consulting services, primarily aimed at clients in the EuropeanUnion. The Directors anticipate a period of accelerated growth for the Company in thenext 24 months, as we take advantage of the fall off in profits in severalsectors of the UK education industry as students numbers are hit by visaproblems, which has resulted in a fall in profits, and therefore, the opening upof the education market in China to private enterprise, and recognition ofEnglish within China as the core business language, creating a market for theprovision of UK educational services in China. CEG Details of CEG can be obtained from CEG's Corporate Adviser, London AsiaCorporate Finance Ltd, via its web site www.londonasiacf.com, or by sending anemail to ceg@londonasiacf.com Extraordinary General Meeting A notice convening an EGM of the Company to be held at the offices of theNominated Adviser to the Company at 10.30am. on 16 November 2005 is set out asPart II of this document. Resolutions will be proposed at the EGM disapplyingstatutory pre-emption rights so as to authorise the directors to issue sharesgenerally, to allot shares for cash consideration, and for the exercise ofrights attached to the Loan Notes. In addition, the Directors are proposing that the number of shares be reduced bya consolidation of the number of shares by consolidating every five OrdinaryShares of £0.01 in the capital of the Company for one Ordinary Share of £0.05. We are also proposing a transfer of the surplus from the share premium accountto the Profit and Loss reserve which could, should distributable reserves existin the future, enable us to pay dividends going forward. As at 31 December 2004there was standing to the credit of the share premium account the sum of£3,004,812. The Company is proposing to effect a reduction of the share premiumaccount subject to approval by the Shareholders and the sanction on the HighCourt. It is proposed that the said share premium account balance is to bereduced by £2,800,000. As a result of this reduction a separate special reserveaccount of £2,800,000 will be created. It is then proposed that the specialreserve account of £2,800,000 will be used to increase the profit and lossaccount by £2,800,000. Before the proposed reduction of the share premium account may take effect itwill be necessary to obtain an order of the High Court confirming suchreduction. Accordingly, as soon as practical after the passing of the SpecialResolutions, the Company will apply to the High Court for an Order confirmingthe reductions. The capital reductions are then to be registered with theRegistrar of Companies. The Company will be representing to the High Courtthat protection of the creditors is not required in these circumstances. Action to be taken in respect of the EGM A form of proxy is enclosed with this document to be used at the EGM. Whetheror not you intend to be present at the EGM, you are requested to complete andreturn the form of proxy, in accordance with the instructions thereon, to Capita(Proxies), PO Box 25, Beckenham, Kent BR3 4BR, as soon as possible but in anyevent to arrive not later than 10.30 a.m. on 14 November 2005. The completionand return of a form of proxy will not preclude a shareholder attending the EGMand voting in person should he or she so wish. Recommendation The Directors consider that the proposed resolutions are in the best interestsof the Company and its Shareholders as a whole. Accordingly, the Directorsrecommend that you vote in favour of the resolutions. Yours faithfully, James Holmes Chairman This information is provided by RNS The company news service from the London Stock Exchange