FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
25 November 2004
Commission File Number 000-02404
BALTIMORE TECHNOLOGIES PLC
(Registrant's name)
Baltimore Technologies plc, Innovation House, Mark Road
Hemel Hempstead, Herts, HP2 7DN, United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or 40-F.
Form 20-F _____X_____ Form 40-F _________
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): _____
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): _____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3(b) under the Securities Act of 1934.
Yes _________ No _____X_____
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with rule 12g3-2(b).
EXHIBIT INDEX
Press Release regarding Company Update dated 25 November 2004
25 NOVEMBER 2004
BALTIMORE TECHNOLOGIES PLC
(Ticker: Reuters BLM.L or Bloomberg: BLM LN)
("Baltimore" or the "Company")
PROPOSED CONSOLIDATION OF SHARE CAPITAL, CANCELLATION OF LISTING AND TERMINATION
OF ADS PROGRAM AND UPDATE ON EARTHPORT CLAIM
1. Introduction
The Board of Baltimore today announces that it has approved proposals to
consolidate the Company's share capital, to apply to cancel the listing of the
Company's ordinary shares on the Official List of the UK Listing Authority and
their trading on the London Stock Exchange's market for listed securities and to
terminate the Company's American Depositary Share ("ADS") program.
The Company will in due course send to its shareholders a circular containing
details of these proposals and incorporating a notice convening an Extraordinary
General Meeting of the Company to be held on 20 December 2004 to approve the
proposed share capital consolidation and cancellation of listing. The circular
will also set out certain Risk Factors which shareholders should take into
account when considering these proposals.
The Board also announces an update on the proceedings brought against the
Company by Earthport plc ("Earthport").
2. Share capital consolidation
The Company currently has around 40,000 shareholders. Of these, approximately
24,000 shareholders (representing some 59 per cent. of the total number of
shareholders but less than 2.5 per cent. of the issued ordinary shares) have
registered holdings of less than 125 ordinary shares. As at close of business on
24 November 2004, a shareholding of 125 ordinary shares or less was worth under
GBP22.
The Board of Baltimore believes that it is not in the Company's best interests
to continue to bear the significant costs which the Company incurs in servicing
a very large shareholder base of low value holdings. The Board is therefore
proposing a consolidation of the Company's ordinary shares in order to introduce
a more appropriate share structure for the Company.
It is proposed to achieve this by consolidating every 125 ordinary shares of 1p
each into one new ordinary share of 125p, aggregating the fractional
entitlements of shareholders arising on such consolidation and selling such
fractional entitlements. The net proceeds arising from the sale of fractional
entitlements will be distributed to shareholders pro rata to the fractional
entitlements to which they would otherwise have been entitled. Amounts of less
than GBP3 payable to any shareholder will not however be distributed but will be
retained by the Company.
As a consequence of the consolidation, holders of less than 125 existing
ordinary shares in the Company at the time that the proposed consolidation takes
effect will not receive any new ordinary shares in the Company. They will
instead cease to be shareholders in the Company and will receive the net
proceeds arising from the sale of their fractional entitlements provided those
proceeds amount to GBP3 or more. If a shareholder holds 125 or more ordinary
shares at the time of the proposed consolidation, every 125 shares held will be
consolidated into one new ordinary share in the Company. The shareholder will
also receive the net cash proceeds of the sale of any fractions to which he is
entitled, again provided such proceeds amount to not less than GBP3.
The proposed consolidation eliminating a number of small shareholders is
expected to result in a significant reduction of the annual administrative costs
which the Company incurs in servicing those shareholders.
The ordinary shares underlying the Company's ADSs, which are deposited with JP
Morgan Chase Bank, N.A. (the "Depositary"), will also be subject to the
consolidation. The Depositary will allocate the post-consolidation shares it
receives to ADS holders on a pro rata basis in accordance with the provisions of
the Deposit Agreement. Accordingly, after the share consolidation, each ADS will
represent 1/625th of one share. Upon surrender of any such holder's ADSs for
cancellation, such holder will be entitled to receive the whole number of shares
represented by such holder's ADSs so surrendered. To the extent such
cancellation would require a fractional share to be delivered, such ADSs will
not be cancelled and shall be returned to the holder entitled thereto. The
Depositary will sell any shares representing fractional entitlements at the end
of the 30 day exchange period following termination of the ADS program (as
described below) for the benefit of such ADS holders. Consequently, any ADS
holder owning fewer than 625 ADSs prior to the share consolidation will no
longer be entitled to receive underlying ordinary shares upon the surrender of
their ADSs after the share consolidation.
The Record Date for the proposed consolidation will be close of business on 20
December 2004 and, if approved by shareholders, the proposed consolidation will
become effective at that time.
3. Cancellation of listing
The Board has been considering whether it makes sense for the Company to
continue the listing of its ordinary shares on the Official List of the UK
Listing Authority and the trading of such shares on the London Stock Exchange's
market for listed securities. The Board does not believe that, in the Company's
current situation where it is essentially a cash shell, it is in the Company's
best interests to incur the costs involved in maintaining such a listing.
Furthermore, in the event that the Company finds a meaningful sale or purchase
transaction it will be required to issue a Class 1 circular and may be required
to make a new application for listing, and the Board believes that this
requirement may hinder the Company in its efforts to explore and initiate new
business opportunities. The Board has therefore concluded that, subject to
shareholder approval, it will apply for the cancellation of its listing
following the termination of the Company's ADS program in the United States.
Further details of the proposed termination of the Company's ADS program are set
out below.
Under the existing Listing Rules, shareholder approval to cancel a listing is
not required. However the Board has decided nonetheless to put the proposal to
shareholders by way of an ordinary resolution.
The cancellation of the listing of the Company's ordinary shares on the Official
List and the trading of such shares on the London Stock Exchange's market for
listed securities are expected to take effect in February 2005. In any event,
the cancellation will not happen prior to 4 January 2005. The Company will issue
an announcement nearer the time to confirm the date, which will depend on when
the termination of the ADS program actually takes place.
Assuming that the cancellation goes ahead, the Board intends to keep under
review the situation to see whether at any future time it will be appropriate
for the Company to seek a new listing either on the Official List or on AIM. The
Board is currently exploring whether a matched bargain facility can be put in
place to facilitate shareholders' dealings in ordinary shares in the Company
following the cancellation of the Company's listing. Further details of any such
facility would be provided to shareholders at a future date.
4. Termination of ADS program
The Company also intends to give notice to the Depositary that it has elected to
terminate its ADS program and to direct the Depositary to terminate the Deposit
Agreement and all outstanding American Depositary Receipts ("ADRs") evidencing
ADSs by mailing notice of such termination to the ADS holders. The termination
of the Deposit Agreement and the ADRs will be effective 30 days after such
notice is sent. Persons holding ADSs prior to such termination will cease to
hold ADSs and will instead become beneficial owners of such number of new
ordinary shares deposited with the Depositary under the ADS program as were
represented by the number of ADSs held. As mentioned above, this number of
ordinary shares will be dependent upon whether the proposed share consolidation
takes place.
Upon the termination of the Deposit Agreement, the Depositary will no longer
forward proxy and other materials from the Company to holders of ADSs or vote
the ordinary shares underlying the ADSs on behalf of the holders of ADSs. As a
result, former holders of ADSs will be unable to cast votes with respect to
matters requiring the affirmative vote of shareholders (such as electing
directors or approving resolutions) unless and until they exchange their ADRs
for ordinary shares underlying their ADSs.
The Company also intends to give notice to the Depositary to amend the Deposit
Agreement so that the period in which ADS holders may exchange their ADSs for
underlying shares will be shortened from six months to 30 days following the
date of termination of the Deposit Agreement. Accordingly, for a period of 30
days from that date, former holders of ADSs may elect to receive from the
Depositary such number of new ordinary shares as are represented by their ADSs.
Upon exchanging ADSs for new ordinary shares, these former holders of ADSs will
become shareholders in the Company. At the end of the 30 day exchange period,
the Depositary will sell all remaining new ordinary shares held by it, convert
the net sale proceeds into U.S. dollars, and distribute the net proceeds to
former holders of ADSs entitled to them in proportion to the number of ADSs
formerly held.
If the proposed share consolidation and the cancellation of the Company's ADS
program has the effect of reducing the number of U.S. shareholders in the
Company to below 300, the Company will terminate its registration and status as
a reporting company under the provisions of the Securities Exchange Act of 1934
and the various rules adopted under that legislation, resulting in a further
cost saving for the Company.
5. Update on the Earthport claim
On 22 July 2004, Earthport issued a claim against the Company in the High Court
of Justice of England and Wales. Earthport claimed fraudulent misrepresentation,
negligent misstatement and breach of contract and estimated the value of the
claim to be approximately GBP13 million. On 27 August 2004, Earthport served its
Particulars of Claim. The Company's solicitors, Herbert Smith, consider the
Particulars of Claim to be inadequately particularised, especially in respect of
Earthport's claims for fraudulent misrepresentation. On 24 November 2004, the
Company issued an application in the High Court to strike out Earthport's claim
for fraudulent misrepresentation. Furthermore, on the basis of its
investigations to date, the Company considers the remainder of Earthport's
claims to be without merit.
Where a Claimant is financially impecunious, the Court has power to order that
Claimant to pay money into Court as security for the Defendant's costs of
defending the proceedings. As the Company considers Earthport to be impecunious,
it has asked Earthport to provide such security but Earthport has not agreed to
do so. Accordingly, on 24 November 2004, the Company also issued an application
in the High Court for an Order that Earthport provide security for the Company's
costs in respect of the early stages of the litigation.
6. Current operations
The Company sold the last of its remaining operating businesses in 2003, and has
not engaged in operating activities since that time. Since taking office in July
2004, the Company's new Board of Directors has been working to resolve all
significant legacy issues, to identify a means of utilising the Company's
remaining non-cash assets, to reduce costs so as to maximise the cash available
for future deployment and to review appropriate business opportunities to
enhance shareholder value.
--ENDS--
Enquiries:
Bishopsgate Communications Ltd. Tel: 020 7430 1600
Maxine Barnes
Dominic Barretto
Email: maxine@bishopsgatecommunications.com
Further Information:
Certain statements made in this document that are not historical facts may be
forward-looking in nature. These forward-looking statements are based on current
expectations and projections about future events. Such forward looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance and developments of the Company to be
materially different from any future results, performance or developments
contained in or implied by such forward-looking statements. There can be no
assurance that actual results, performance and developments of the Company will
not differ materially from that expressed or implied by these forward-looking
statements due to many factors, many of which are outside the control of the
Company, including whether shareholders of the Company will approve the proposed
share consolidation and cancellation of listing; the uncertainty as to whether
the proposed share consolidation and termination of the Company's ADS program
will allow the Company to terminate its registration and ongoing reporting
requirements under the U.S. Securities Exchange Act of 1934; the ability of the
Company's new Board of Directors to resolve significant legacy issues and
identify and implement successfully business opportunities and strategies that
will enhance shareholder value; the impact of any legal proceedings against the
Company; the Company's ability to retain key personnel; the Company's ability to
maximise the disposal value of its non-cash assets and minimise its liabilities;
the Company's ability to obtain financing on favourable terms, if at all; and
the Board of Directors' ability to transition the Company into an operating
business and to manage growth effectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Baltimore Technologies plc
By: /s/Tim Lovell
Name: Tim Lovell
Title: Finance Director
Date: 25 November 2004