DIAM Diamond Cap

TIDMDIAM

RNS Number : 7866M

Diamond Circle Capital Plc

20 September 2012

20 September 2012

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, NEW ZEALAND OR SOUTH AFRICA OR IN OR INTO ANY OTHER JURISDICTION IF TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Diamond Circle Capital Plc ("Diamond Circle Capital" or the "Company")

Notice of General Meeting

The Company announces that it will today post a circular to Shareholders (the "Circular") including a notice of an Extraordinary General Meeting of the Company, to be held at 4.00 p.m. on 15 October 2012 at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP (the "Meeting") at which a Special resolution (the "Resolution") will be proposed to approve the re-registration of the Company as a company governed by the Isle of Man Companies Act 2006, the adoption of a new memorandum of association and, conditional upon the Re-registration and the adoption of the New Memorandum and the New Articles, to approve the return of capital scheme outlined below.

The Proposal is subject to Shareholder approval at the Meeting. The purpose of the Circular is to provide Shareholders with details of the Proposal and of the Resolution and to recommend that Shareholders vote in favour of that Resolution.

Introduction

On 12 July 2012, Shareholders approved the Company's proposal to amend its investment policy to reflect the Board's intention to effect a managed portfolio realisation comprising a sale of the Company's diamond portfolio and the return of the net proceeds to Shareholders.

Since then the Board has, as announced on 23 August 2012, sold five out of the Company's portfolio of eleven diamonds. It is the Board's current intention, as soon as practicable following receipt of the sale proceeds and completion of the Re-registration (defined below), to make a return of capital payment to Shareholders (a "Return of Capital Payment"). The timing and amount of such Return of Capital Payment will be announced in due course.

It is also the Board's current intention to make Return of Capital Payments on an ad hoc basis following the future sale of diamonds as and when the Board determines sufficient funds are available. It is currently anticipated that any Return of Capital Payment will be achieved through the cancellation of some (or all) of the paid up share capital of the Company, although the Board may use such other methods as it may determine.

To enable the Board to make one or more Return of Capital Payments in the manner contemplated by the Board, Shareholders are requested to approve the following:

a) the re-registration of the Company as a company governed by the Isle of Man Companies Act 2006 (the "2006 Act") (it is currently incorporated under the Isle of Man Companies Acts 1931-2004) (the "Re-registration");

b) the adoption of a new memorandum of association (the "New Memorandum") and new articles of association (the "New Articles"); and

c) conditional upon the Re-registration and the adoption of the New Memorandum and the New Articles, the approval of the return of capital scheme outlined below (the "Capital Return Scheme").

For the purposes of this announcement the Re-registration, the adoption of the New Memorandum and the New Articles and the Capital Return Scheme are collectively referred to as the "Proposals".

The Re-registration

The 2006 Act updates and modernises Isle of Man company law and, amongst other things, abolishes a number of traditional company law formalities including the requirement to maintain capital (subject to solvency). Accordingly, subject to the Re-registration becoming effective, it should be easier for the Company to return capital to its Shareholders under the Capital Return Scheme as there is no requirement to seek the approval of the Isle of Man High Court.

As part of the Re-registration, the Company proposes to adopt the New Articles, which the Company considers are appropriate for a company incorporated under the 2006 Act the shares of which are traded on the London Stock Exchange's main market for listed securities. The proposed New Articles are substantially the same as the Company's existing articles of association; those changes considered significant which have been incorporated in to the New Articles are listed in Part 2 of the Schedule to the Circular. In addition, Part 1 of the Schedule to the Circular contains a brief explanation of the key characteristics of companies incorporated under the 2006 Act.

Copies of the New Memorandum and the New Articles are available for review from the Company's registered office at any time before the Extraordinary General Meeting; in addition, copies of the New Memorandum and the New Articles will be available on the Company's website at www.diamondcirclecapital.co.im/ and at the Meeting.

On the basis that the Re-registration proceeds, the 2006 Act provides that the Company will be the same legal entity as exists at present and Re-registration will not serve to prejudice or affect the continuity of the Company. On the date the Registrar of Companies in the Isle of Man issues a certificate of re-registration in respect of the Company, the Company shall cease to be a company incorporated under and subject to the Companies Acts 1931-2004 (the "1931 Act"); instead the Company shall be subject to the 2006 Act.

The Capital Return Scheme

Under the Capital Return Scheme, the Board will be able to make Return of Capital Payments on an ad hoc basis whenever it determines the Company has sufficient cash available for the purpose (following the sale of its diamonds).

The Board's current intention is that Return of Capital Payments under the Capital Return Scheme will be achieved by a cancellation of some (or all) of the paid up share capital of the Company equal to the amount being returned.

On each occasion on which a Return of Capital Payment is made under the Capital Return Scheme via this proposed method, Shareholders will be entitled to receive a return of capital per Ordinary Share calculated in accordance with the following formula (rounded down to the nearest whole penny or cent) (the "Relevant Amount"):

A

B

Where:

"A" is the amount of cash proposed to be returned under the Capital Return Scheme on the relevant occasion; and

"B" is the aggregate number of Ordinary Shares in issue at the record date being the date notified by the Company to Shareholders as the date by which they must be registered as Shareholders in order to be entitled to receive the relevant Return of Capital Payment.

If the Capital Return Scheme returns capital by way of some of the paid up share capital of the Company, the amount paid up on each of the issued Ordinary Shares will be reduced by the Relevant Amount.

The decision to make any Return of Capital Payments under the Capital Return Scheme and the method via which such payments are made will be at the sole discretion of the Board.

Risks associated with the Proposals

Material risk factors associated with the Proposals and which are known to the Company are set out below. Shareholders should carefully consider all such risk factors (although there may be others which are of equal or greater magnitude which are not known to the Company or which the Company deems to be immaterial and which, accordingly, are not set out in this document or which may be applicable to certain Shareholders or types of Shareholders and of which the Company is unaware). Further, as market conditions change or develop over time, these matters may be subject to risk factors not currently contemplated. However, the Board considers the following to be key risk factors relating to the Proposals:

-- The treatment of tax on a Return of Capital Payment under the Capital Return Scheme may be different for individual Shareholders depending on their individual stakes and residence. Although the Board's current intention is that this will be achieved by a cancellation of some of the paid up share capital of the Company equal to the amount being returned, Re-registration will allow the Board to effect the Capital Return Scheme in any other manner permitted under the 2006 Act.

-- Whether or not the Proposals are approved, the Net Asset Value ("NAV") performance of the Company may decline. Shareholders will still be at risk of declines in NAV in the period whilst diamonds are being sold and prior to completion of the Capital Return Scheme.

-- The Company's diamonds may not be sold at the values at which they have been included in the calculation of the NAV set out in the circular to Shareholders in response to the offer dated 25 May 2012.

-- Due to the illiquid nature of many of the Company's diamonds, it may take significant time to effect a sale and complete the Capital Return Scheme. Furthermore the sale proceeds received by the Company may vary significantly from those currently anticipated and the costs involved (which would be borne by Shareholders) may be significant.

-- Even after the managed realisation process has commenced, market or other events could have a material adverse effect on the timing and quantum of potential distributions to Shareholders.

-- The costs of selling diamonds may be significant. Certain of those costs may be avoidable if those diamonds were to be sold at a later date or over a longer time period. The determination of whether or not to incur those costs will be at the absolute discretion of the Board (or; if subsequently appointed, a liquidator). Those costs would be deducted from Return of Capital Payments made to Shareholders.

-- As the Capital Return Scheme is undertaken, it may become the case that the Company no longer meets the eligibility requirements of the Listing Rules and therefore the listing of the Shares may then, or subsequently, be suspended (and subsequently cancelled).

-- The costs and expenses of the Company during the Capital Return Scheme process may be significant, given the length of time it may take to realise the sale of the diamonds. As the Company returns capital to shareholders via the Capital Return Scheme, the fixed costs of the Company would be spread over a smaller asset base and the Company's total expense ratio is likely to increase.

Meeting and Resolution

The Proposals are subject to the approval of the special resolution by Shareholders at the Meeting.

All persons holding Ordinary Shares at 4.00 p.m. on 15 October 2012, or if the Meeting is adjourned, on the register of members of the Company 48 hours before the time of any adjourned Meeting, shall be entitled to attend or vote at the Meeting and shall be entitled to one vote per Ordinary Share held.

A quorum consisting of two Shareholders present in person or by proxy and being entitled to vote is required for the Meeting. In order for the Resolution to be passed, it must be approved by at least 75 per cent. of the votes cast or, if on a poll, by Shareholders representing at least 75 per cent. of the votes cast, by those Shareholders present in person or by proxy and being entitled to vote.

Taxation

A summary of the tax consequences of the Proposals in the United Kingdom and Switzerland is set out in Part 3 of the Schedule to the Circular. If you are in any doubt as to your tax position or the impact of the Proposals on you, you are recommended to consult your professional adviser.

RECOMMENDATION

The Board considers the Proposals to be in the best interests of the Company and its Shareholders as a whole. The Board therefore recommends that you vote in favour of the Resolution as each member of the Board (to the extent that he holds shares in the Company) intends to do in respect of his own beneficial holdings, amounting in aggregate to 5,000 Ordinary Shares, which represents approximately 0.0673 per cent. of the Company's issued ordinary share capital.

For further information please contact:

Numis Securities Limited

Tel: 020 7260 1000

David Benda / Nathan Brown

Redleaf Polhill

Tel: 020 7566 6700

Emma Kane/Rebecca Sanders-Hewett

Numis Securities Limited, which is authorised and regulated by the Financial Services Authority, is acting exclusively for Diamond Circle Capital Plc and for no-one else in connection with the Offer and will not be responsible to anyone other than Diamond Circle Capital Plc for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in relation to the Offer or any other matters referred to herein.

Forward Looking Statements

This document contains statements that are or may be forward-looking with respect to the financial condition, results of operations and businesses of DCC. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, valuation, performance or achievements of DCC, or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

This information is provided by RNS

The company news service from the London Stock Exchange

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