26 October 2022

A solution to the “Odd-lot problem”

McCann FitzGerald LLP is delighted to have advised its long-standing client, Kenmare Resources PLC (“Kenmare” or the “Company”), on the implementation of its recently completed Odd-lot Offer.

An Odd-lot Offer is an innovative mechanism which allows a company to purchase (at a premium for the participating shareholders) shares held by eligible certificated shareholders, who in this instance held fewer than 200 shares in the capital of Kenmare. This mechanism allows small shareholders who would otherwise have difficulty selling their holdings due to disproportionate trading costs to trade their shares.  

Following a restructuring and recapitalisation of the Company in 2016, Kenmare’s share register had an unusually large number of small shareholders, which made the Company a prime candidate to implement such an Odd-lot Offer.

An Odd-lot Offer has a number of benefits for the various stakeholders involved. It allows eligible shareholders to trade their shares without incurring any broking fees and it reduces the recurring administrative fees for companies that may have a disproportionately large number of small and inactive shareholders. Recognising the number of inactive shareholders on its register, eligible Kenmare shareholders were entitled to elect to sell or retain their Odd-lot holdings with shareholders assumed, in default of election, to wish to sell.

If you would like more information on the Odd-lot Offer process or would like to discuss whether this option is suitable for a particular company, please contact David Byers at David.Byers@mccannfitzgerald.com or Gillian Boyle at Gillian.Boyle@McCannFitzGerald.com.

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