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Prime People plc- Capital Reorganisation

Prime People plc- Capital Reorganisation

Prime People plc has announced a reorganisation of its share capital which will reduce the significant number of small shareholders that exist in the Company and provide the opportunity for those shareholders to dispose of their shares without incurring disproportionately high dealing costs.

The Company has approximately 600 shareholders, over 50 per cent of whom hold fewer than 500 ordinary shares. By consolidating and subsequently subdividing its ordinary share capital, the Company believes that certain of the costs inherent in maintaining a register of this size will be reduced and an exit will be provided to small shareholders. The Board of Directors therefore considers that it is in the interests of the Company and its shareholders to reorganise the Company's share capital in such a way as to provide a cash payment per Ordinary Share, free of dealing charges, for their entire shareholding to all holders of 500 or fewer Ordinary Shares.

The Board of Directors has, therefore, made arrangements to give the holders of small shareholdings cash in consideration for their Ordinary Shares without those shareholders incurring dealing charges.

As a result of the proposed reorganisation all shareholders will receive cash to the extent that their shareholding is not exactly divisible by 500.

Structure of the proposals

The Company proposes to consolidate every 500 Ordinary Shares into one consolidated ordinary share. Following the Consolidation, resulting fractions of the Consolidated Ordinary Shares will be aggregated and sold by the Board of Directors of the Company with the proceeds being remitted to the relevant shareholders. Cash payments of less than GBP3.00 will not be distributed to holders of Ordinary Shares but will instead be aggregated and held for the benefit of the Company. Following the consolidation and the sale of the fractional entitlements , it is proposed that every Consolidated Ordinary Share be subdivided into 500 new ordinary shares of 10p par value. The subdivision shall take effect on 8 July 2009, being the first business day immediately after the Record Date.

The effect of the proposed capital reorganisation is that shareholders holding 500 or fewer Ordinary Shares on 7 July 2009 will receive a cash payment equivalent to the market value of their shares, as represented by the closing middle market price (derived from the Official List of the UK Listing Authority) on AIM on 8 June 2009 of 21 pence for each Ordinary Share which they held.

The Directors anticipate that the capital reorganisation will reduce the number of shareholders from the present level of approximately 600 to approximately 250. This will reduce the Company's costs on an ongoing basis. The Directors do not anticipate any suspension on AIM of the trading of the Company's Ordinary Shares or any delay in the commencement of the trading of new Ordinary Shares as a result of the capital reorganisation. Cheques due to shareholders in respect of cash payments and share certificates in respect of the new Ordinary Shares will be despatched on or around 15 July 2009.

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