TIDMTAW
RNS Number : 1405W
Tawa PLC
20 December 2013
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES OR ANY JURISDICTION IN WHICH THE SAME WOULD
BE UNLAWFUL
TAWA PLC
Proposed Demerger of TAWA plc's Risk Carrier Business
Via
Reduction of Capital,
and
Notice of General Meeting
Following a strategic review to evaluate the best options for
maximising Shareholder value, the Board has today announced its
intention to demerge Tawa's operating divisions into two
independent groups. The Board believes that the Services Business
and the Risk Carrier Business will be better placed to pursue their
respective strategies as separate and distinct legal entities.
In order to achieve this separation, the Board is seeking
Shareholder approval for the Demerger. There are several steps
required to implement the Demerger, as follows:
-- the Reorganisation - this involves the transfer of certain of
the business and assets of the Risk Carrier Business to TAL,
currently a wholly-owned subsidiary of Tawa, so that TAL holds all
of the assets comprising the Risk Carrier Business;
-- the Reduction of Capital- Tawa does not currently have
sufficient distributable reserves to implement the Demerger and
accordingly Tawa will be applying to the Court for a capital
reduction which has the effect of increasing distributable
reserves; the Reduction of Capital will involve the cancellation of
Tawa's share premium account, the cancellation of 190,695 Tawa
Existing Ordinary Shares held in treasury and the reduction in the
nominal value of each Tawa Existing Ordinary Share; and
-- the Demerger - the Demerger will be effected after the
Reduction of Capital, by declaring a dividend in specie of TAL
Ordinary Shares to Qualifying Tawa Shareholders.
If the Demerger proceeds, Shareholders will continue to own Tawa
Ordinary Shares and Shareholders (other than Tawa US Shareholders)
who are registered on the Share Register at the Demerger Record
Time will receive:
One TAL Ordinary Share for every one Tawa Ordinary Share,
then held by them.
It is proposed that, following the Demerger, Tawa will be the
holding company for the Continuing Tawa Group whose business will
comprise the Services Business. Further details of the mechanics of
the Demerger are set out in Part III, including details of the
Retained Risk Carrier Companies, which will remain part of the
Continuing Tawa Group.
The Board believes that the Demerger will deliver additional
value to Shareholders by:
-- allowing the separate valuation of each business based on a
typical EBITDA multiple valuation for the Services Business and
based on a net asset valuation for the Risk Carrier Business;
-- allowing Tawa and TAL to pursue their strategic objectives
independently with greater individual control over resources and
opportunities;
-- developing bespoke management structures, focussed on the particular needs of each company;
-- allowing the Services Business to become a focussed managed services business;
-- increasing the potential for the Board to declare dividends
in respect of the Services Business; and
-- allowing the Services Business to separately raise capital as required.
Tawa currently has a strong and experienced operational
management team. Following the Demerger, this team will form the
core of the operational management of the Services Business and
will be continuing the operational management of the run-off
insurance companies within the TAL Group for at least 3 years,
ensuring appropriate continuity for both businesses. It is intended
that Mr Artur Niemczewski, will be appointed as the new Chief
Executive Officer of the Services Business from 1 February 2014 and
will lead Tawa with effect from the Demerger Effective Date when it
is intended that he is appointed to the Board and take up the
position of Chief Executive Officer of Tawa. Mr Colin Bird will
resign from the Board with effect from the Demerger Effective
Date.
The Board recognises that the Demerger will result in Qualifying
Tawa Shareholders holding shares in two distinct legal entities,
one publicly listed and one unlisted and further acknowledges that
holding unlisted securities may create difficulty for some
Shareholders. FinP has agreed to provide a share exchange offer
(the Share Exchange Offer) whereby Qualifying TAL Shareholders will
have the opportunity to exchange some or all of their TAL Ordinary
Shares for Tawa Ordinary Shares held by FinP.
A General Meeting of the Company will be held to approve the
Demerger and change of the Company's name, amongst other proposed
resolutions. This will be held at the offices of DLA Piper UK LLP,
3 Noble Street, London EC2V 7EE on 10 January 2014 at 10.00
a.m.
A Circular containing details of the Proposed Reduction in
Capital, Demerger of Tawa plc's Risk Carrier Business and actions
to be taken by Shareholders in respect of the Demerger and a Notice
containing details of the General Meeting of the Company, will be
sent to Shareholders today and is available to be viewed on the
Company's website at www.tawaplc.com. The same definitions apply
throughout this announcement as are used in the Circular.
Gilles Erulin, CEO of Tawa, commented "We have been working for
the last 18 months on turning our listed vehicle into a pure play
insurance and reinsurance service provider, freeing it up from the
natural or even unexpected volatility of the riskier business we
invest in. The new scope of Tawa, with the positive results of the
integration of Pro and Chiltington, the growing STRIPE community
and the Asta performances gathers all the right ingredients for
future growth and profitability. I am certain that, the new Pro
Insurance Solutions plc structure, under the stewardship of Artur,
will enhance our service offerings to our clients and will enable
us to attract and retain further talents to our organisation. I am
confident the new Pro Insurance Solutions plc structure will
satisfy shareholder aspiration for sustainable shareholder value
creation"
Enquiries
Tawa
Gilles Erulin, CEO +44 207 068 8000
FWD
Mike Gaughan +44 7796 140 963
Peel Hunt LLP (Nominated
adviser and broker)
Guy Wiehahn
Harry Florry +44 207 418 8893
Tawa Existing Ordinary Shares
The Tawa Existing Ordinary Shares have not been and will not be
registered under the US Securities Act, or under the securities
laws of any state or other jurisdiction of the United States and
may not be offered or sold within the United States, except
pursuant to an applicable exemption from, or in a transaction not
subject to, the registration requirements of the US Securities Act
and in compliance with any applicable securities laws of any state
or other jurisdiction of the United States. There will be no offer
of the Tawa Existing Ordinary Shares in the United States.
The Tawa Existing Ordinary Shares have not been approved or
disapproved by the US Securities and Exchange Commission, any state
securities commission in the United States or any US regulatory
authority, nor have any of the foregoing authorities passed upon or
endorsed the merits of the offering of the Tawa Existing Ordinary
Shares or the accuracy or adequacy of this announcement. Any
representation to the contrary is a criminal offence in the United
States.
TAL Ordinary Shares
The TAL Ordinary Shares have not been and will not be registered
under the US Securities Act, or under the securities laws of any
state or other jurisdiction of the United States and may not be
offered or sold within the United States, except pursuant to an
applicable exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act and in
compliance with any applicable securities laws of any state or
other jurisdiction of the United States. There will be no offer of
the TAL Ordinary Shares in the United States and Tawa US
Shareholders will not receive TAL Ordinary Shares in connection
with the Demerger.
The TAL Ordinary Shares have not been approved or disapproved by
the US Securities and Exchange Commission, any state securities
commission in the United States or any US regulatory authority, nor
have any of the foregoing authorities passed upon or endorsed the
merits of the distribution of the TAL Ordinary Shares or the
accuracy or adequacy of this announcement. Any representation to
the contrary is a criminal offence in the United States.
FORWARD LOOKING STATEMENTS
Certain statements contained herein constitute forward-looking
statements. The forward-looking statements contained herein include
statements about the expected effects of the Reduction of Capital
and the Demerger, the expected timing and scope of the Reduction of
Capital and the Demerger and other statements other than in
relation to historical facts. Forward-looking statements including,
without limitation, statements typically containing words such as
"intends", "anticipates", "targets", "estimates", "believes",
"should", "plans", "will", "expects" and similar expressions or
statements that are not historical facts are intended to identify
those expressions or statements as forward-looking statements. The
statements are based on the assumptions and assessments by the
Board and are naturally subject to uncertainty and changes in
circumstances. By their nature, forward looking statements involve
risk and uncertainty and the factors described in the context of
such forward-looking statements in this announcement could cause
actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements. There
are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied
by such forward-looking statements. These factors include, but are
not limited to, the satisfaction or waiver of the conditions to the
Demerger, local and global political and economic conditions,
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