TIDMBCB
RNS Number : 4665Q
BCB Holdings Ltd
19 October 2011
19 October 2011
BCB Holdings Limited
Demerger of its Non-Belizean Businesses
Belize City, Belize, 19 October 2011. BCB Holdings Limited
(London - AIM: BCB; Trinidad and Tobago Stock Exchange - BCBTT;
Bermuda - BBHL) today announces that the Board is proposing to BCB
Holdings Shareholders that the Company be reorganised by demerging
its Non-Belizean Businesses into a new holding company, Waterloo
Investment Holdings Limited, which has recently been incorporated
in British Virgin Islands to become the new holding company for the
Non-Belizean Businesses.
It is intended that the Demerger will be effected by way of the
declaration and payment by BCB Holdings of a dividend in kind to
Qualifying BCB Holdings Shareholders, followed by a capital
reduction and repayment to those Qualifying BCB Holdings
Shareholders satisfied by the transfer of the Non-Belizean
Businesses and the New Loan Note to WIHL, in consideration for the
issue of shares by WIHL to the Qualifying BCB Holdings Shareholders
and the assumption by WIHL of the obligations of BCB Holdings under
the Assumed Loan Notes by way of the issue of the WIHL Debentures
to the Assumed Loan Noteholders.
The Company will be dispatching a circular to BCB Shareholders
today containing further details of the Demerger.
THE DEMERGER
The Demerger will result in BCB Holdings Shareholders holding
shares in two distinct entities, which will be the holding
companies of two distinct groups with separate strategic, capital
and economic characteristics and management teams:
-- BCB Holdings, whose shares will continue to be admitted to
trading on AIM, the Trinidad and Tobago Stock Exchange and the
Bermuda Stock Exchange, will remain the owner of the largest
banking operation in Belize, through Belize Bank, as well as
international operations through BCB International.
-- WIHL, whose shares are intended to be traded by JP Jenkins,
will become the holding company for the Non-Belizean Businesses
which have large exposure to the TCI through British Caribbean
Bank. WIHL will also hold the interests in Associates.
The Demerger will constitute a fundamental change of business of
the Company which, under Rule 15 of the AIM Rules, requires
approval of BCB Holdings Shareholders. In accordance with the AIM
Rules, the Company is required to send a circular to BCB Holdings
Shareholders setting out the reasons for, and principal terms of,
the Demerger and to seek BCB Holdings Shareholder approval for the
Demerger. If the Resolution is passed, the Directors expect that,
subject to the Directors considering at the Second BCB Holdings
Board Meeting that the Demerger is in the best interests of the
Company, the Demerger will become effective on 26 October 2011.
BACKGROUND TO THE DEMERGER
The BCB Holdings Board believes that the BCB Holdings Group
currently consists of two geographically separated financial
services businesses which, due to recent economic developments,
have become diverse from each other and which possess very
different economic drivers. Belize Bank and BCB International
(which together form the principal assets of the Retained BCB
Holdings Businesses) provide a comprehensive range of banking
services to both retailing and commercial customers. In contrast,
the business of the British Caribbean Bank group (which forms part
of the Non-Belizean Businesses subject to the Demerger) focuses on
the provision of lending and as such its assets are principally
comprised of loans, which were in part funded by the BCB Holdings
Loan Notes. These loans have a high concentration in asset backed
lending to the tourism and property development sectors, which were
in part funded by the BCB Holdings Loan Notes.
The BCB Holdings Board believes that, given the differences in
both strategy and funding structure between these two financial
services businesses, the BCB Holdings Group and, therefore its
shareholders, would benefit from separation of these financial
services businesses, which will assist each financial services
business to focus on its individual strategic direction and realise
its future growth potential. More specifically, the performance of
the Retained BCB Holdings Businesses will continue to be closely
linked to the general economic performance of Belize which has a
diverse and increasingly indigenous economy with increased banking
regulation and political influence in domestic business policy,
whilst the performance of the Non-Belizean Financial Services
Businesses will be more closely tied to the general economic
performance of the Turks & Caicos Islands which are almost
exclusively dependent on the tourism industry and related service
sectors.
In addition, BCB Holdings Group holds an aggregate interest of
approximately 25 per cent in Associates which own a successful
edible oil and related products business based in Costa Rica with
operations in Central America. The business and performance of
Associates (the shareholding in which is to be owned by the
Non-Belizean Businesses) is closely tied to world demand for palm
oil and the world markets for edible oil bi-products. The Board
believes that these should form part of WIHL going forward, as
holding this interest as an investment fits more closely with the
strategy of WIHL and the medium to long term nature of its
portfolio of assets.
The Directors believe that the Demerger will demonstrate more
clearly the value of the various diverse business sectors
identified above and will thereby create improved potential for an
increase in value for BCB Holdings Shareholders as a whole as
investors will be able to analyse more closely each group's
fundamentals. The Directors believe that an informed current value
of BCB Holdings is not fully reflected at present in its share
price, as BCB Holdings' shares are currently valued at a discount
of more than 80 per cent. to its tangible net assets based on its
share price as at 13 October 2011 and the latest audited financial
statements as at 31 March 2011.
FINANCIAL EFFECTS OF THE DEMERGER
In the year ended 31 March 2011, BCB Holdings Group's financial
services division reported an operating loss of US$21.9 million
(2010 - operating income US$12.7 million) and BCB Holdings Group
reported a net loss of US$7.3 million (2010 - net income US$25.9
million), with a loss per ordinary share of US$0.07 (2010 -
earnings per ordinary share US$0.27).
On a pro forma basis, during this period, the Non-Belizean
Financial Services businesses generated an operating loss of US$8.1
million and the assets and businesses forming the WIHL group
generated net income of US$11.1 million.
At 31 March 2011, BCB Holdings Group reported total assets of
US$1,199.5 million and net assets of US$421.3 million. On a pro
forma basis, the assets and businesses forming the WIHL group
represented US$564.3 million of the total assets and US$295.2
million of net assets.
BCB HOLDINGS BOARD AND THE BOARD OF DIRECTORS OF WIHL
Andrew Ashcroft and Philip Johnson will resign from the BCB
Holdings Board and Cheryl Jones will become Chairman effective as
at the date of the Demerger.
The board of directors of WIHL consist of Philip Johnson, Peter
Gaze, Philip Osborne and Andrew Ashcroft.
RELATED PARTY TRANSACTION
The assumption by WIHL of the obligations under certain of the
BCB Holdings Loan Notes (the "Assumption") and the Demerger are
deemed to be related party transactions pursuant to Rule 13 of the
AIM Rules, because (i) WIHL and BCB Holdings share common
directors; (ii) they will have the same majority shareholder; and
(iii) such majority shareholder and certain directors of BCB
Holdings and WIHL have consented to the Assumption.
The Independent Directors, having consulted with the Company's
nominated adviser, Cenkos Securities plc, consider that the terms
of the Assumption and the Demerger are fair and reasonable insofar
as the BCB Holdings Shareholders and BCB Holdings Warrant Holders
are concerned.
BCB HOLDINGS LOAN NOTES
The Company will notify the Series 1 Loan Noteholders of its
intention to repay the Series 1 Loan Notes.
The Company has obtained from the requisite majority of Series 2
Loan Noteholders (being the holders of not less than three-quarters
of the nominal amount of the Series 2 Loan Notes) consent to the
amendment of the Series 2 Loan Notes such that the obligations
under Series 2 Loan Notes are assumed by WIHL which will issue WIHL
Debentures to the Series 2 Loan Noteholders equal to the principal
outstanding and carrying the obligation to pay all accrued interest
and otherwise on the same terms as the Series 2 Loan Notes. The
Company will cease to have any obligations under the Series 2 Loan
Notes.
The Series 3 Loan Noteholder and Series 4 Loan Noteholder has
consented to the assumption by WIHL of the obligations under the
Series 3 Loan Notes and the Series 4 Loan Notes. WIHL will issue
WIHL Debentures to the Series 3 Loan Noteholder and the Series 4
Loan Noteholder equal to the principal outstanding and carrying the
obligation to pay all accrued interest and otherwise on the same
terms as the Series 3 Loan Notes and the Series 4 Loan Notes. The
Company will cease to have any obligations under the Series 3 Loan
Notes and the Series 4 Loan Notes. As a condition to the consent of
the Series 2 Loan Noteholders, the Series 3 Loan Noteholder and the
Series 4 Loan Noteholder to the assumption by WIHL of the
obligations under their respective BCB Holdings Loan Notes, WIHL
has agreed to procure that Waterloo grants security over the
interests in the Associates to the Series 2 Loan Noteholders, the
Series 3 Loan Noteholder and the Series 4 Loan Noteholder. The
security will be granted solely for the purpose of securing the
repayment of the amounts outstanding under the Series 2 Loan Notes,
Series 3 Loan Notes and Series 4 Loan Notes.
BCB HOLDINGS WARRANTS
The issue and subsequent cancellation of the BCB Holdings B
Shares as part of the Demerger, constitute Adjustment Events (as
defined in the Warrant Instruments), under the Warrant Instruments.
The BCB Holdings Board has resolved that although these two events
constitute two separate Adjustment Events, the cancellation of the
BCB Holdings B Shares shall be deemed to constitute the only
Adjustment Event for the purposes of each of the Warrant
Instruments and hereby gives notice, pursuant to clause 2.3 of the
Warrant Instruments, of such Adjustment Event. The cancellation of
the BCB Holdings B Shares and therefore the occurrence of the
Adjustment Event is conditional on the Demerger being approved at
the Second BCB Holdings Board Meeting. Following the Adjustment
Event, the Directors anticipate that the Exercise Price (as defined
in each respective Warrant Instrument) for each BCB Holdings
Warrant will be within the range of US$1.84 and US$2.05. An
announcement confirming the Exercise Price will be made on or prior
to the Demerger, once the Exercise Price has been certified by the
Company's auditor, pursuant to the Warrant Instruments.
In addition, the BCB Holdings Board has resolved to reduce the
notice period for notifying BCB Holdings Warrantholders of an
Adjustment Event under the Warrant Instrument from 10 Business Days
to 5 Business Days.
GENERAL MEETING
The Demerger will constitute a fundamental change of business of
the Company for the purpose of Rule 15 of the AIM Rules, and
accordingly completion of the Demerger is conditional upon, amongst
other things, BCB Holdings Shareholder approval of the Resolution
being obtained at the General Meeting, notice of which is expected
to be sent to BCB Shareholders later today. The Resolution requires
the approval of more than 50% of the votes cast at the General
Meeting.
For further information contact:
BB Holdings Limited
Belize +501 227 7178
UK +44 (0)20 7248 6700
Cenkos Securities plc
Nicholas Wells / Adrian Hargrave +44 (0)20 7397 8900
Note: This and other press releases are available at the
Company's web site:
http://www.bbholdingslimited.com
DEFINITIONS
AIM AIM, a market operated by the London Stock
Exchange;
AIM Rules the AIM rules for companies as published by
the London Stock Exchange from time to time
Associates Grupo Agroindustrial CB, S.A., Tower Strategic,
Ltd., Mesocafta International, S.A. and BVI
International Holdings, companies operating in
the edible oil and related products business
sector in Central America;
Assumed Loan Notes a Series 2 Loan Note, Series 3 Loan Note or
Series 4 Loan Note;
Assumed Loan Noteholder a holder of a Series 2 Loan Note, Series 3
Loan Note or Series 4 Loan Note;
BCB Holdings or Company BCB Holdings Limited, an international business
company incorporated in Belize under the IBCA
with registered number 1;
BCB Holdings B Shares the 100,007,864 class B ordinary shares of
US$4.40 par value each in
the share capital of BCB Holdings;
BCB Holdings Board the board of directors of BCB Holdings;
BCB Holdings Group BCB Holdings and its subsidiary undertakings
from time to time;
BCB Holdings Optionholder a holder of a BCB Holdings Option;
BCB Holdings Options outstanding options issued pursuant to the
Long Term Incentive
Plan;
BCB Holdings Shareholder a holder of BCB Holdings Shares;
BCB Holdings Shares the 100,007,864 ordinary shares without par
value in the share
capital of BCB Holdings;
BCB Holdings Warrantholders a holder of a BCB Holdings Warrant;
BCB Holdings Warrants the outstanding warrants issued by BCB Holdings
pursuant to the Warrant Instruments;
BCB Holdings Loan a Series 1, Series 2, Series 3, or Series 4
Noteholder Loan Noteholder (as applicable);
BCB Holdings Loan the Series 1, Series 2, Series 3, and Series
Notes 4 Loan Notes;
BCB International British Caribbean Bank International Limited;
Belize Bank The Belize Bank Limited;
British Caribbean British Caribbean Bank Limited, a bank licensed
Bank to carry on banking business in the TCI;
Demerger the demerger of the Non-Belizean Businesses
from the BCB Holdings Group;
Directors the directors of BCB Holdings;
Dividend Record Date 21 October 2011
Ex Dividend Date 20 October 2011
First BCB Holdings the meeting of the board of directors of BCB
Board Meeting Holdings to be held on 20 October 2011 which is
to resolve on the declaration and payment of a
dividend distribution, in favour of Qualifying
BCB Holdings Shareholders, of 100,007,864 BCB
Holdings B Shares on the basis of 1 BCB
Holdings B Share for each BCB Holdings Share
General Meeting the general meeting of BCB Holdings to be held
at 8.30 a.m. on 26 October 2011 (or any
adjournment thereof)
IBCA the International Business Companies Act, 1990
of Belize (as amended);
Independent Directors the independent directors of BCB Holdings,
being the Directors other than Andrew Ashcroft,
Peter Gaze, Philip Johnson and Philip Osborne;
JP Jenkins a division of Rivington Street Stockbrokers;
London Stock Exchange London Stock Exchange plc;
New Loan Note the loan note to be issued by Waterloo to BCB
Holdings equal to the amount of principal and
accrued interest on the Series 2 Loan Note,
Series 3 Loan Note and Series 4 Loan Note as at
the date of the transfer of Central American
Holdings to Waterloo;
Non-Belizean Businesses the Non-Belizean Financial Services Businesses,
certain off shore business interests and
services and BCB Holdings' approximate 25
percent interest in the Associates;
Non-Belizean Financial the non-Belizean financial services businesses
Services Businesses of BCB Holdings which are owned by Waterloo
and its subsidiaries and are proposed to be
transferred to WIHL pursuant to the Demerger,
the principal assets and businesses being the
British Caribbean Bank and loans associated
with properties located in principally in the
TCI;
Qualifying BCB Holdings the BCB Holdings Shareholders on the share
Shareholders register of BCB Holdings at the Dividend Record
Date;
Resolution the resolution set out in the notice of General
Meeting;
Retained BCB Holdings the financial services businesses of BCB
Businesses Holdings which are owned directly by BCB
Holdings or indirectly by B.B. International
Limited and are proposed to be retained by BCB
Holdings following the Demerger, the principal
assets and businesses being Belize Bank and BCB
International;
Second BCB Holdings the meeting of the board of
Board Meeting directors of BCB Holdings to be held
on 26 October 2011 which is to
resolve on, amongst other things: --
the reduction of BCB Holdings' share
capital by cancellation of all the
BCB Holdings B Shares; -- the
transfer of BCB Holding's shares in
Waterloo to WIHL in consideration
for WIHL issuing 100,007,864
ordinary shares of US$1.00 par value
to the Qualifying BCB Holdings
Shareholders on the basis of one
share in WIHL for each BCB Holdings
B Share previously held; and -- the
transfer of the New Loan Note to
WIHL in consideration for WIHL
assuming the obligation of BCB
Holdings under the Assumed Loan
Notes by way of an issue of the WIHL
Debentures to the Assumed Loan
Noteholders;
Series 1 Loan Noteholder a holder of a Series 1 Loan Note;
Series 2 Loan Noteholder a holder of a Series 2 Loan Note;
Series 3 Loan Noteholder a holder of a Series 3 Loan Note;
Series 4 Loan Noteholder a holder of a Series 4 Loan Note;
Series 1 Loan Notes US$50,000,000 10 percent fixed rate, unsecured
loan notes due 2013
and issued pursuant to a loan note instrument
dated 23 March 2007;
Series 2 Loan Notes US$50,000,000 10 percent fixed rate, unsecured
loan notes due 2014
and issued pursuant to a loan note instrument
dated 10 October 2007;
Series 3 Loan Notes US$57,000,000 10 percent fixed rate, unsecured
loan notes due 2015
and issued pursuant to a loan instrument dated
31 March 2010;
Series 4 Loan Notes US$60,000,000 10 percent fixed rate, unsecured
loan notes due 2016
and issued pursuant to a loan instrument dated
31 March 2010;
TCI the Turks & Caicos Islands;
Treasury Shares the 3,635,120 ordinary shares without par value
in the capital of BCB Holdings held by a
subsidiary and a nominee of BCB Holdings in
treasury;
United Kingdom or the United Kingdom of Great Britain and
UK Northern Ireland;
United States or US the United States of America;
US$ the lawful currency of the United States of
America;
Warrant Instruments (i) the BCB Holdings warrant instrument dated
23 March 2007; and
(ii) the BCB Holdings warrant instrument dated
10 October 2007;
Waterloo Waterloo Capital Holdings Limited, a company
incorporated in the British Virgin Islands with
registered number 1628512 whose registered
office is at Craigmuir Chambers, Road Town,
Tortola, British Virgin Islands;
WIHL Waterloo Investment Holdings Limited, a BVI
business company
with registered number 1628508 and registered
office at Craigmuir
Chambers, Road Town, Tortola, British Virgin
Islands;
WIHL Debentures the debentures to be issued by WIHL pursuant
to its assumption of the obligations of BCB
Holdings under the Assumed Loan Notes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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