Reduction of Capital - Update
i3 Energy PLC (AIM:I3E) (TSX:ITE), an independent oil and gas company with assets and operations in the UK and Canada, announces the following update to its proposed reduction of capital.
Proposed Capital Reduction
At the AGM held on 30 June 2023 the shareholders approved a resolution to allow the cancellation of the Company's share premium account (the "Capital Reduction). The proposed Capital Reduction is intended to increase retained earnings by an amount equal to the amount standing to the credit of the Company's share premium account in order to create further distributable reserves in the Company to facilitate the future payment of dividends (in cash or otherwise) to Shareholders, where justified by the profits of the Company, or to allow the redemption or buy-back of the Company's shares (or other distributions to Shareholders).
The proposed cancellation of the Company's share premium account is subject to the scrutiny of, and confirmation by, the High Court of England and Wales (the "High Court") which will take due account of the protection of creditors. Subject to that confirmation and registration by the Registrar of Companies in England and Wales of the order of the High Court, the Capital Reduction is expected to take effect as per the timetable below.
The Board anticipates that the cancellation of the Company's share premium account will result in the creation of further distributable reserves. However, this is subject to: (i) there being no materially negative change in the financial position or prospects of the Company; and (ii) any provision that the court requires the Company to make for the protection of its creditors (although the Board does not expect any undertakings or similar measures to be required). This will give the Company the maximum flexibility to consider the payment of dividends and otherwise return value to the Shareholders, should the Board consider it appropriate. It should however be noted that if the Company is required to give undertakings to the High Court, this may delay the Company's ability to pay dividends and otherwise return value to Shareholders.
Following the implementation of the Capital Reduction, there will be no change in the nominal value of the Company's shares or the number of shares in issue. The Capital Reduction in itself will not involve any distribution or repayment of share premium by the Company and will not reduce the underlying net assets of the Company.
The Directors reserve the right to abandon or discontinue any application to the High Court for confirmation of the Capital Reduction if the Directors believe that the terms required to obtain confirmation are unsatisfactory to the Company or if, as the result of a material unforeseen event, the Directors consider that to continue with the Capital Reduction would be inappropriate or inadvisable.
Timetable of Principal Events
The expected timetable of principal events with respect to the Capital Reduction are as follows:
Date for the directions hearing for the High Court to consider the Capital Reduction application
17 October 2023
Date for the hearing by the High Court to confirm the Capital Reduction
7 November 2023
Expected date that the Capital Reduction becomes effective