TIDMPMS
RNS Number : 8266O
Palmaris Capital PLC
16 October 2012
16 October 2012
Palmaris Capital Plc
("Palmaris" or "the Company")
Proposed cancellation of admission of ordinary shares to trading
on AIM
Proposed re-registration as a private limited company
Palmaris, the investment company with a 16.1% holding in
Scottish Resources Group Limited ("SRG"), announces the
following:
-- The proposed cancellation of admission of the Company's Ordinary Shares to trading on AIM ("Cancellation").
-- The proposed re-registration of the Company as a private
limited company ("Re-registration").
-- An Extraordinary General Meeting ("EGM") of the Company will
be held at 11:00 a.m. on Thursday 8 November 2012 to consider,
inter alia, the above proposals.
These proposals are conditional on Shareholder approval. Full
details of the proposed Cancellation and Re-registration, including
details of what action Shareholders should take, are set out in the
circular posted to Shareholders today. A copy of the circular will
be made available on the Company's website
(www.palmariscapital.com) and a summary is given below. Unless
otherwise defined, terms used in this announcement have the meaning
given to them in the circular.
Reasons for the proposed Cancellation and Re-registration
For some years now the Company's sole remaining investment has
been its interest in Scottish Resources Group Limited ("SRG"),
which operates a number of opencast coal mines in Scotland, and
also has property interests as well as sources of renewable
energy.
The directors had hoped that SRG would obtain a public listing
on the London Stock Exchange in 2010. Unfortunately, due to adverse
market conditions, this did not happen. Had the listing proceeded,
the directors would have either distributed the listed SRG shares
to Shareholders (so that Shareholders would have held SRG shares
directly) or sold the listed SRG shares and distributed the
resulting cash proceeds to Shareholders. In either case, the
Company would have been wound up thereafter.
In the absence of a public listing of SRG, the directors had
hoped that a purchaser would emerge for SRG in order to allow the
Company to realise its investment and return the resulting cash
proceeds to Shareholders but unfortunately this has not yet
happened.
In addition, as indicated in the Company's interim report, the
price of coal has fallen significantly since last autumn due to the
substantial production of shale gas in the United States and the
consequent decision by American coal producers to sell into the
international market which was already oversupplied. It therefore
seems that market conditions may remain difficult for SRG for the
foreseeable future, and that the Company may not realise its
investment for some time. If it does so, the directors still intend
to wind up the Company and distribute any remaining cash to
Shareholders.
As the Company has received no dividend from its investment in
SRG, the operating costs of the Company have had to be met from its
own existing cash resources. These resources are finite and the
Company has already had to borrow funds from a major Shareholder to
meet its operating costs. The directors decided in January 2011 to
reduce the Company's operating costs by ceasing to pay directors'
salaries and fees and they have remained unpaid since then (save in
respect of Greg Melgaard who has been receiving a salary of
GBP15,000 per annum (fully reimbursed by SRG) with effect from 1
January 2012). This reduced the Company's net annual operating
costs to approximately GBP70,000. However, even this level of cost
is now unaffordable and the costs must be reduced further.
The majority of the Company's remaining operating costs relate
to maintaining the listing of the Company's shares on AIM and the
directors have taken the decision that continuing this is no longer
viable. Costs associated with being admitted to trading on AIM
include fees payable to the Company's nominated adviser and broker,
annual fees paid to London Stock Exchange plc, costs relating to
public announcements, daily listings in newspapers and fees and
expenses of accountants and lawyers engaged to provide services and
advice relating to the Company's compliance with the regulation to
which the Company is subject as a result of being listed on AIM.
The directors estimate that the Cancellation should reduce the
Company's net annual operating costs to approximately GBP15,000
(comprising audit fees and other similar costs).
Once the Company has ceased to be listed on AIM, it will be
easier to operate as a private limited company than as a public
limited company and it is therefore also proposed that the Company
should re-register as a private limited company. This will save a
small amount of money on annual running costs and will also allow
future corporate actions to be undertaken in a more straight
forward and cost effective manner due to the more flexible regime
which applies to private companies under the Companies Act
2006.
Process for Cancellation
In accordance with Rule 41 of the AIM Rules, the Company has
notified AIM Regulation of the intention to delist. Under the AIM
Rules, it is also a requirement that the Cancellation must be
approved by not less than 75 per cent. of those present and
entitled to vote or voting by proxy in a general meeting.
Accordingly, the first resolution set out in the notice of EGM
("Resolution 1") seeks Shareholder approval for the
Cancellation.
Subject to Resolution 1 being passed by the requisite majority
at the EGM, it is expected that trading on AIM in the Ordinary
Shares will cease at the close of business on 15 November 2012 with
the Cancellation becoming effective from 7.00 a.m. on 16 November
2012.
Effect of the Cancellation on Shareholders
The principal effects of the Cancellation would be that:
-- there would no longer be a formal market mechanism enabling
Shareholders to trade their shares on AIM or any other market or
trading exchange;
-- the Company would not be bound to announce material events,
such as interim or final results, material transactions or
administrative changes;
-- the Company would no longer be bound to comply with the
corporate governance requirements for companies with shares
admitted to trading on AIM;
-- the Company would no longer be required to comply with the
AIM Rules, and Shareholders would no longer be required to vote on
certain matters prescribed by the AIM Rules;
-- Shareholders will not be able to read the Company's share price in the daily newspapers; and
-- interim reports will not be sent to Shareholders and, as a
result, Shareholders will only receive the annual report once a
year.
However, the directors intend to continue to operate the Company
for the benefit of all Shareholders and to pursue efforts to
maximise the proceeds of realisation of the Company's investment in
SRG. They also intend to continue to keep Shareholders informed of
progress and remain committed to high standards of corporate
governance. As such, the directors will:
-- post items of news on the Company's website (www.palmariscapital.com);
-- hold annual general meetings and extraordinary general
meetings in accordance with statutory requirements and the
Company's articles of association;
-- continue to send to Shareholders copies of the Company's audited accounts each year; and
-- operate the Company with the corporate governance appropriate
to a company with in excess of 500 shareholders.
Following the Cancellation, although the Ordinary Shares will
remain transferable they will no longer be tradable on AIM and no
other trading facility will be available to facilitate the trading
of the Ordinary Shares. Consequently, it is likely to be more
difficult for a Shareholder to purchase or sell any Ordinary Shares
following the Cancellation. Following the Cancellation, transfers
of Ordinary Shares may be effected in accordance with those
provisions of the Articles concerning off-market transfers of
shares in certificated form.
It is the Company's intention to cancel the CREST facility
following the passing of the resolutions at the EGM and
arrangements will be made to send share certificates to those
Shareholders at their risk currently using CREST.
Shareholders should note that, even if the Cancellation and
Re-registration are approved and become effective, the Company will
remain subject to the provisions of the City Code on Takeovers and
Mergers for a period of 10 years. The City Code provides an orderly
framework within which takeovers and mergers are conducted and
operates principally to ensure that shareholders are treated fairly
and not denied an opportunity to decide on the merits of a takeover
and that shareholders of the same class are afforded equivalent
treatment. The City Code will however cease to apply to the Company
10 years after the Cancellation becomes effective. However, the
regulatory regime imposed through the AIM Rules, which applies
solely to companies with shares admitted to trading on AIM, will no
longer apply. Upon the Cancellation becoming effective, Execution
Noble will therefore cease to be nominated adviser and broker to
the Company.
Effect of the Re-registration on Shareholders
Re-registration as a private limited company will not affect the
way in which the Company is managed.
In order to achieve Re-registration, in accordance with section
97 of the Act, it is necessary for Shareholders to pass a special
resolution in a general meeting. Resolution 2 in the notice of the
EGM ("Resolution 2") deals with this and the making of
consequential amendments to the Articles and such resolution is
conditional upon Resolution 1 being passed and the Cancellation
taking place.
If both Resolution 1 and Resolution 2 are passed, the
Re-registration of the Company will become effective upon the
Registrar of Companies issuing a certificate of incorporation on
re-registration which will be issued once the registrar is
satisfied that no valid application can be made to cancel
Resolution 2.
If Resolution 1 to approve the Cancellation is passed but
Resolution 2 to approve the Re-registration is not passed, the
Company will still proceed with the Cancellation.
EGM
The Company will hold the EGM at its registered office, Paterson
Building, Gartsherrie Road, Coatbridge, Lanarkshire ML5 2EU on
Thursday 8 November 2012 at 11am for the purpose of considering,
and if thought fit passing the special resolutions to effect the
Cancellation and the Re-registration.
Recommendation
The Directors believe that the proposed resolutions are in the
best interests of the Company and unanimously recommend that you
vote in favour of them as they intend to do in respect of their own
beneficial shareholdings of 4,217,000 Ordinary Shares which
represent 2.7 per cent. of the issued Ordinary Shares. In addition,
Patersons Quarries Ltd and Waverton Capital Ltd who hold, in
aggregate, 108,329,307 Ordinary Shares which represent 69.47 per
cent. of the issued Ordinary Shares, have indicated that they also
intend to vote in favour of the proposed resolutions.
In accordance with AIM Rule 26, a copy of this announcement is
available on the Company's website at www.palmariscapital.com.
For further information contact:
Greg Melgaard, Managing Director +44 (0) 7799 657 553
www.palmariscapital.com
John Llewellyn-Lloyd/Harry Stockdale
Execution Noble & Company Limited
(Nominated Adviser) +44 (0) 207 456 9191
This information is provided by RNS
The company news service from the London Stock Exchange
END
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