Glencar abandons plans for share consolidation

Exploration minnow Glencar abandoned its plans for a share consolidation at an extraordinary general meeting (egm) yesterday, claiming market conditions were wrong for the move.

The board of the company had proposed a scheme that would have consolidated 10 old units into one new share, but backed down after shareholders made it clear this week that they were unhappy with both the plan and the management.

In a statement, the London-listed company said that, since it proposed the scheme on June 7th, "market conditions have changed considerably" and added that the board was not convinced that proceeding was in the shareholders' best interests.

The board voted down its own proposal at yesterday's meeting.

Chief executive Hugh McCullough told The Irish Times that the plan was postponed indefinitely.

He said one of the one of the main factors was the collapse of Regal Petroleum's share price on London's Alternative Investment Market (AIM), the exchange on which Glencar proposes to list.

It currently trades on the IEX market in Dublin and on the SEAQ market in London, which will be discontinued today.

Glencar has 173 million issued shares, well below the number at which companies consolidate.

Mr McCullough said that the board proposed the consolidation because its normal bid-offer spread, about £2.25 - £2.75 (€3.33 - €4.07), meant market makers could still trade the stock up or down and take their fees.

He claimed that the consolidated of stock would not make it as easy for market traders to do this.