Mar 2008 Financial News

CCMB - Scheme of Arrangement

Mar 19, 2008

Capital & Credit Merchant Bank Limited

The Scheme of Arrangement

1. As previously announced to stockholders at the last Annual General Meeting on May 16, 2007, the Board of Directors of the Bank and of CCFG decided, subject to the approval of the stockholders to take to take the following steps on or before the Delisting Date to reorganize the Group.


2. On February 14, 2008 the Supreme Court of Jamaica ordered that a meeting of the stockholders, other than the Group Company, be convened in accordance with the Articles of Incorporation of the Bank for the purpose of considering and, if thought fit, approving with or without modification, a Scheme of Arrangement under section 206 of the Act, proposed to be made between the stockholders and the Bank whereby:

i. The Group Company will issue to Stockholders, other than to the Group Company, credited as fully paid, six (6) CCFG Ordinary Shares in the Group Company in exchange for ever five (5) CCMB Ordinary Shares, such shares to rank equally with the issued ordinary shares of CCFG. Fractional shares are to be included in this allocation and will be rounded up or down to the nearest whole number. Fractional shares of 0.5 or more will be rounded up and counted as one share and fractional shares of less than 0.5 will be rounded down to the nearest whole number.

ii. The CCMB Ordinary Shares held by Stockholders, other than those held by the Group Company, will be aggregated and transferred to the Secretary of the Bank, who will execute a single transfer of the said CCMB Ordinary Shares to the Group Company to cross the floor of the JSE and the TTSE immediately before the delisting takes place on the Delisting Date.

iii. The Bank will issue, credited as fully paid to Stockholders a bonus issue of 42,743,978 CCMB Cumulative Redeemable Preference Shares (each a CCMB Preference Share) with a value per share of J$2.00 by capitalising the sum of J$85,487,956 being part of the amount currently standing to the credit of the Bank's unappropriated profits. The aforesaid bonus issue shall be allotted at the ratio of one (1) CCMB Preference Share for every fifteen (15) CCMB Ordinary Shares held by the Stockholders. Fractional shares are to be included in this allocation and will be rounded up or down to the nearest whole number. Fractional shares of 0.5 or more will be rounded up and counted as one share and fractional shares of less than 0.5 will be rounded down to the nearest whole number.

iv. The Bank will apply to de-list the CCMB Ordinary Shares from the JSE and TTSE.

v. The Group Company will apply to list the CCFG Ordinary Shares on the JSE and TTSE.

vi. The Bank will apply to list the CCMB Preference Shares on the JSE and the TTSE.

vii. The Delisting Date as mentioned aforesaid shall be determined by the Board of the Bank and shall be the date on which the CCMB Ordinary Shares are to be de-listed from the JSE and the TTSE and on which the CCFG Ordinary Shares and the CCMB Preference Shares are to be simultaneously listed on the JSE and TTSE.

viii. The Scheme shall become effective as soon as an office copy of the order sanctioning the Scheme under section 206 of the Companies Act, 2004 shall have been delivered to the Registrar of Companies for registration.


3. On February 19, 2008, the Supreme Court varied the above order so as to change the requirement of the Bank to send the Explanatory Statement and the Scheme of Arrangement to stockholders by 'prepaid registered post* to send the same by 'pre-paid post'.


4. After the proposed reorganisation of the Group, the minority shareholding in the Group Company to be held by the Stockholders will be 22.38% made up as follows:

i. The number of CCFG Ordinary Shares issued to all stockholders, excluding rounding differences for the fractional shares, as fully paid will be 927,565,945.

ii. The Stockholders will collectively be issued, excluding rounding differences for the fractional shares, 207,565,945 of the above CCFG Ordinary Shares or 22.38% of the issued share capital of the Group Company.

This will result in the Bank becoming a wholly owned subsidiary of the Group Company and the Group Company being made up of the existing stockholders of the Group and the Stockholders of the Bank.

All fees and expenses relating to the listing of the CCFG Ordinary Shares and the CCMB Preference Shares and to the Delisting of the CCMB Ordinary Shares, payable to the JSE and the TTSE respectively, will be paid by the Group Company.


Source:
Capital & Credit Merchant Bank Limited Explanatory Statement, Page 5-6