Tuesday, May 10, 2011

Further to the announcement by Cape plc (“Cape“) on 2 March 2011, Cape today announces details of the proposed change to the corporate structure of the Cape Group (the “Group“). The restructuring proposals (the “Proposals“) will put in place a new parent company for the Group, which will be Jersey-incorporated and UK listed, with its tax residence in Singapore and Jersey (“New Cape“).

As referred to in Cape’s announcement on 2 March 2011, as part of the process for the transfer of the trading facility in Cape’s ordinary shares from AIM to the premium listing segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange’s main market for listed securities, the Cape Board together with its advisors have closely examined the current corporate structure of the Group. Over the past five years, the geographic mix of the Cape Group’s business has become increasingly international, with 67% of profits generated from outside the UK in 2010. The Cape Board expects the growth of the business over the next five years to be driven primarily from the operations in international markets, particularly the Pacific Rim and Far East regions, which is the fastest growth market for the Group’s range of services. This is expected to continue to be driven by the high levels of committed capital investment in several large scale gas/LNG projects in the region.

With the expected growth in the Far East / Pacific Rim region, the Group has received strong support from the government of Singapore, including the Singapore Economic Development Board. The Cape Board has therefore concluded that Cape and its shareholders would be better served through an international holding company structure that supports the Group’s operational and financial management. The Cape Board believes that the most appropriate structure is for the new Group holding company (New Cape) to be Jersey-incorporated and UK listed, with its tax residence in Singapore. New Cape will also be tax resident in Jersey, although no tax liability is expected to arise there.

The Proposals are being implemented by means of a scheme of arrangement of Cape under Part 26 of the Companies Act 2006 (the “Scheme“) and are therefore subject to shareholder approval at a Court-convened meeting and a General meeting. A circular setting out full details of the Proposals is being despatched to Cape shareholders later today (the “Scheme Circular“). A prospectus in relation to New Cape will be published by New Cape on or around 16 May 2011 (the “Prospectus“). Both documents will be available on the Cape Group website (www.capeplc.com) from their respective publication dates and the Prospectus will be submitted to the National Storage Mechanism and be available for inspection from its publication date at the National Storage Mechanism’s website at www.hemscott.com/nsm.do. If approved by Cape shareholders, and subject to the satisfaction of certain other conditions, the Scheme is expected to become effective on or around 17 June 2011.

The New Cape Group will have the same business and operations after the date on which the Scheme becomes effective as the current Group had before such date. The Proposals will not result in any immediate changes in the day-to-day operations of the business of the Cape Group or its strategy.

New Cape will have the same Board and management team as Cape on the date that the Scheme becomes effective, although increased time will be spent in Singapore. The Board will continue to evaluate further opportunities to strengthen the Board as appropriate, particularly in light of the Group’s growth and increased presence in the Far East / Pacific Rim.

Application will be made to the UK Listing Authority for the new ordinary shares of 25p each in New Cape (the “New Cape Shares“) to be admitted to the premium listing segment of the Official List of the UK Listing Authority and to the London Stock Exchange for the New Cape Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities.

The implementation costs of the Proposals are expected to be approximately £2 million.

Source: Cape