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Croma Group PLC

Notice of Extraordinary General Meeting 

Croma Group PLC has today posted a circular to shareholders convening an extraordinary general meeting to be held at 5th Floor, 1 Exchange Crescent, Edinburgh EH3 8UL at 2.00 p.m. (UK time) on Tuesday, 26 May 2009 at which resolutions in respect of the following will be proposed:

• a reduction of the share capital (by cancelling and extinguishing 4.9 pence of the amount paid up or credited as paid up on the issued ordinary shares of 5 pence each in the capital of the Company and reducing the nominal value of each issued and authorised but unissued ordinary share in the capital of the Company to 0.1 pence and by cancelling and extinguishing all of the deferred shares ('Deferred Shares') of 0.5 pence in the share capital of the Company);

• a cancellation of the share premium account of the Company;

• an alteration to the articles of association reflecting the reductions; and

• the grant of new share capital authorities. 

The circular also convenes a class meeting of the holders of Deferred Shares, to be held at 5th Floor, 1 Exchange Crescent, Edinburgh EH3 8UL at 2.20 p.m. (UK time)(or as soon thereafter as the extraordinary general meeting of the Company to be convened for 2.00 p.m. on the same day and at the same place shall have concluded or been adjourned) on Tuesday, 26 May 2009, at which a resolution to cancel and extinguish each of the Deferred Shares will be proposed.

The proposed share capital and share premium account reductions (which require both shareholder and High Court approval) have two principal purposes. The first is to eliminate the deficit on the Company's profit and loss account in order to give the Company greater flexibility in the future to begin to pay dividends and to manage its capital base. The second is to address another significant issue facing the Company. The nominal value of an ordinary share in the share capital of the Company is 5 pence. The average mid-market price of an ordinary share in the share capital of the Company over the 30 dealing days prior to 30 April 2009 (being the latest practicable date prior to the publication of this document) was approximately 1.52 pence. A company is prohibited by law from issuing shares at a discount to their nominal value. Accordingly, for practical purposes, the Company is not presently able to raise further finance by means of an issue of ordinary shares. If approved, the share capital reduction would result in the nominal value of an Ordinary Share being reduced to 0.1 pence, which would address this issue. 

Subject to shareholder and High Court approval being obtained, it is hoped that the reductions will take effect prior to the end of June 2009.

A copy of the circular is available for download from the investor relations section of the Company's website at www.cromagroup.co.uk. 

Enquiries:

Croma Group PLC

Sebastian Morley, CEO                            Tel: 07768 006909

        

Seymour Pierce Limited

Mark Percy/Catherine Leftley                   Tel: 020 7107 8000

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