Arcon, the exploration group, has announced plans for a one-for-10 consolidation of its ordinary shares and a proposed share capital reduction.

The company is proposing that every 10 ordinary shares, with a nominal value of just one cent each, be consolidated into one new ordinary share with a nominal value of 10 cents.

It is also proposing to wipe out the €80.1 million deficit on its profit and loss account by reducing the balance on its share premium account by a similar sum.

"This will increase the financial flexibility of the company and should enable the company to pay a dividend in the future if it so wishes," the exploration company said.

The share capital reduction requires High Court approval, while both the consolidation and reduction must be approved by shareholders in the group at an extraordinary meeting, to be held along with the annual general meeting on July 19th.

Arcon has also set up a low-cost share dealing service, to be provided until August 6th, to assist shareholders with small or uneconomical shareholdings to dispose of their shares.

Full details of the service, which is being provided by Capita IRG Trustees, have been set out in a letter to shareholders, which was posted yesterday.

Dealing in the current existing ordinary shares will cease from the close of business on August 6th and dealing in the new consolidated shares will begin from the start of business on August 9th.

In 2002, the company underwent a major financial restructuring, including a rights issue, which raised €5.7 million before costs to recapitalise the company.