TIDMPTH
RNS Number : 6436W
Promethean PLC
10 November 2014
10 November 2014
Promethean PLC
("Promethean" or the "Company")
Publication of Circular
Further to the announcement of 16 July 2014, the board of
Promethean plc announce that the Company has today published a
circular and notice of Extraordinary General Meeting outlining the
terms of a proposed members' voluntary liquidation and proposed
cancellation of admission to trading on AIM (the "Circular").
Further details are set out below.
The Circular has today been posted to shareholders and will
shortly be available at the Company's website
www.prometheanplc.com.
Unless defined herein, capitalised terms used in this
announcement shall have the meaning attributed to them in the
Circular.
Enquiries:
Promethean PLC +44 (0) 207 246 2590
Sir Peter Burt
S. P. Angel Corporate Finance LLP: +44 (0)20 3463 2260
Stuart Gledhill
Jeff Keating
Expected Timetable of Principal Events
2014
--------------------------------------------- -----------------
Publication and despatch of the Circular and 10 November
the Form of Proxy to Shareholders
--------------------------------------------- -----------------
Latest time and date for receipt of Form of 10.00 a.m. on
Proxy 7 December
--------------------------------------------- -----------------
Suspension of trading on AIM of the Ordinary 7.30 a.m. on 9
Shares December
--------------------------------------------- -----------------
Extraordinary General Meeting 10.00 a.m. on
9 December
--------------------------------------------- -----------------
Last day of dealings in Ordinary Shares on 8 December
AIM and in CREST
--------------------------------------------- -----------------
Cancellation of admission to trading on AIM with effect from
of the Ordinary Shares 7:00 a.m. on 10
December
--------------------------------------------- -----------------
Notes:
(1) If any of the above times and/or dates change, the revised
times and/or dates will be notified to Shareholders by an
announcement through the regulatory information service of the
London Stock Exchange plc.
(2) All references in this document are to London times unless otherwise stated.
(3) The proposed appointment of a liquidator and the proposed
cancellation of trading on AIM requires the approval of not less
than 75 per cent. of the votes cast by Shareholders at the
Extraordinary General Meeting.
Proposed Members' Voluntary Liquidation and Proposed
Cancellation of Admission to Trading on AIM of the Ordinary
Shares
1. Introduction
As you know from the Company's announcement to the London Stock
Exchange on 16 July 2014, the Company's proposed acquisition of
securities in T.I.S Holdings Ltd ("TIS") and of the Protected Asset
TEP Fund plc participating shares did not proceed. As a result, the
Company is now a listed entity with only one investment - its
interests in TIS - and some residual cash. Further to this outcome,
the Board has come to the conclusion that the most appropriate next
step for the Company is for it to be wound up and a liquidator
appointed. A consequence of such appointment would be the
Cancellation.
The purpose of the Circular is to explain the background to and
the reasons for these Proposals, and to explain why the Directors
unanimously consider the Proposals to be in the best interests of
the Company and its shareholders as a whole and, further, to seek
your approval for the placing of the Company into Members'
Voluntary Liquidation, the appointment of the Proposed Liquidator
and the Cancellation at the Extraordinary General Meeting convened
for this purpose. The notice of the Extraordinary General Meeting
has today been sent to shareholders. Your attention is drawn to
paragraph 7 below which contains a unanimous recommendation from
the Directors that you vote in favour of the Proposals.
2. Background to the Proposals
The Prospectus dated 2 May 2014, which was issued to
Shareholders, provided a comprehensive operating and financial
review of the then current position of both the Company and of TIS.
As was made clear in the Prospectus (pages 146 et seq), TIS' future
prospects are dependent on the outcome of a large number of
variables and consequently were extremely difficult to
evaluate.
As of 31 March 2014, TIS had current bank debt of GBP10.8
million and further, non-current, financial indebtedness of
GBP55.818 million in the form of loans and accrued interest on
those loans ("Loans") granted by the Company and the original TIS
vendor shareholders (the "Vendors"). Promethean had an interest
(described in the Prospectus as "Investor Loan Notes") of GBP26.858
million. The Vendors' interests in the Loans (described in the
Prospectus as "Management Loan Notes and Deep Discounted Bonds")
amounted to GBP28.960 million. Once the bank debt is repaid, the
Loans would become repayable on demand. Given the total bank debt
which ranks ahead of the Loans and any equity interest, it seems
extremely unlikely that there will be any value attaching to the
residual interests of the Company in TIS. As a consequence the
Company has no reason to continue its existence.
On the advice of Promethean's lawyers, discussions about the
possibility of converting all the loan notes and accrued interest
into ordinary TIS shares were held with the representative of the
other TIS shareholders and loan note holders. The level of bank
debt suggests there would be virtually no prospect of any value
being derived from the loan notes and consequently, to all intents
and purposes, there would be no possible value in the TIS equity.
Unfortunately, the representative of the other TIS creditors and
shareholders was unwilling to agree.
A proposal has been made by an investor connected to TIS
management to acquire TIS for GBP200,000, such sum to be divided
equally between the Company and the Vendors ("the Proposed
Transaction"). If the Proposed Transaction were to proceed,
Promethean would receive GBP100,000 in full and final settlement of
what it is owed. The proposal as discussed is conditional inter
alia upon obtaining regulatory and tax clearance and on agreeing
the purchase of the bank debt at a substantial discount. There is
no certainty that the Proposed Transaction will proceed.
The Board was approached with a view to providing the funds to
acquire the discounted bank debt but, having discussed the
opportunity with a number of the Company's institutional
shareholders, it was clear that there was no enthusiasm amongst the
Company's shareholders for making any further investment in TIS.
Although GBP100,000 is a negligible fraction of the nominal value
of the loans and accrued interest owed to the Company by TIS, there
is little practical possibility of the Company recovering any
greater value than that represented by the Proposed
Transaction.
Having discussed the overall position with a number of the
Company's institutional shareholders, and in recognition of the
ongoing costs of running the Company, the Board has decided to
recommend that the Company be wound up and a liquidator be
appointed as soon as possible to distribute pro rata in specie to
Shareholders the Company's interests in the Loans and in the TIS
shares, together with the residual cash. In the event that the
Proposed Transaction completed, there would be neither TIS loans
nor shares to distribute in specie - there would only be the
residual cash left to distribute.
To this end, the Board has decided to call an Extraordinary
General Meeting to be held on 9 December 2014 to consider the
Resolutions. The Resolutions authorise (i) the Cancellation, (ii)
the placing of the Company into Members' Voluntary Liquidation,
(iii) the appointment of Dennis Anthony McGurgan of Grant Thornton
Limited to liquidate the Company, to repay its outstanding
creditors and to return the residual cash and any remaining TIS
interest to Shareholders, thereafter progressing a dissolution of
the Company once that process is complete, (iv) the fixing of the
remuneration of the Liquidator, and (v) authorising the Liquidator
to make distributions in specie. The notice calling the EGM and the
Resolutions on which shareholders are asked to vote is
attached.
The Company has notified the London Stock Exchange of the
proposed Cancellation. In the event that Shareholders approve the
Cancellation, it is anticipated that the last day of dealings in
the Ordinary Shares on AIM will be 8 December 2014 and that the
effective date of the Cancellation will be 10 December 2014.
3. Members' Voluntary Liquidation
If the Resolutions are approved by the Shareholders, the Company
will commence a Members' Voluntary Liquidation following the
Cancellation and the appointment of a liquidator is accordingly
required. The appointment of the Proposed Liquidator is subject to
the approval of a majority of Shareholders (in person or by proxy)
at the Extraordinary General Meeting. Accordingly, the Resolutions
set out in the notice of Extraordinary General Meeting on pages 7
to 8 of the Circular seek Shareholder approval for, inter alia, the
appointment of the Proposed Liquidator. Subject to the Resolutions
being passed, the Proposed Liquidator will be appointed immediately
upon the commencement of the Members' Voluntary Liquidation.
In the course of the Members' Voluntary Liquidation, any surplus
cash and assets of the Company will be returned to Shareholders
(less any costs and expenses associated with the liquidation).
4. Process for Delisting and its effects
In accordance with Rule 41 of the AIM Rules, the Company has
notified the London Stock Exchange of the intention to delist,
subject to Shareholder approval, giving twenty business days'
notice. Under the AIM Rules, it is a requirement that the Delisting
is approved by not less than 75 per cent of votes cast by
Shareholders (in person or by proxy) at the Extraordinary General
Meeting. Accordingly, the Resolutions set out in the notice of
Extraordinary General Meeting on pages 7 to 8 of the Circular seek
Shareholder approval for the Delisting. Subject to the Resolution
approving the Delisting being passed at the Extraordinary General
Meeting, it is anticipated that trading in the Ordinary Shares on
AIM will be suspended at 7.30 a.m. UK time on 9 December 2014 with
Delisting taking effect at 7:00 am UK time on 10 December 2014.
Following the Cancellation of trading in the Company's shares on
AIM, the Ordinary Shares will not be traded on any public market
and the CREST facility (through which the depositary interests
representing Ordinary Shares are currently traded) will be
cancelled. The Ordinary Shares will remain capable of being
transferred in paper form (and therefore not through CREST) for a
limited time until the Members' Voluntary Liquidation is completed
at the discretion of the Liquidator. A Shareholder will be unable
to purchase or sell any Ordinary Shares following Cancellation.
Transfers of interests in shares in certificated form should be
sent to the Company's UK Transfer Agent, Capita Registrars, 34
Beckenham Road, Beckenham, Kent BR3 4TU, United Kingdom. Existing
share certificates remain valid until completion of the Members'
Voluntary Liquidation.
If Shareholders wish to buy or sell Ordinary Shares on AIM they
must do so prior to the Cancellation becoming effective. As noted
above, in the event that Shareholders approve the Cancellation, it
is anticipated that the last day of dealings in the Ordinary Shares
on AIM will be 8 December 2014 and that the effective date of the
Cancellation will be 10 December 2014.
Upon the Delisting becoming effective, S. P. Angel Corporate
Finance LLP will cease to be nominated adviser and broker to the
Company and the Company will no longer be required to comply with
the rules and corporate governance requirements to which companies
admitted to trading on AIM are subject, including the AIM
Rules.
5. Shareholder indications and total voting rights
Shareholders should be aware that Shareholders who hold more
than 50% of the Company's share capital have indicated that they
are likely to vote for the Resolutions. As certain of the
resolutions are Special Resolutions, they will require a majority
of 75%, not 50%, of the votes cast.
At the date of the Circular the Company's issued share capital
consists of 45,190,000 Ordinary Shares. Each Ordinary Share carries
the right to one vote at a general meeting and therefore the total
voting rights in the Company as at 6.00pm on the day immediately
prior to the date of the Circular is 45,190,000.
6. Extraordinary General Meeting and action to be taken
Set out at the end of the Circular is a notice of an
Extraordinary General Meeting which is to be held at Clinch's
House, Lord Street, Douglas, Isle of Man IM99 1RZ at 10:00 a.m.
local time on 9 December 2014 at which the Resolutions will be put
to Shareholders.
7. Recommendation
Given the crisis which struck in 2008, Promethean's performance
has been better than many of its contemporaries and despite such
performance, it is for the reasons set out above that the Directors
believe that the Proposals are in the best interests of the Company
and of Shareholders as a whole. Accordingly, the Directors
unanimously recommend Shareholders to vote in favour of the
Proposals.
DEFINITIONS
The following definitions apply throughout the Circular unless
the context otherwise requires:
'Admission' the admission of the Ordinary Shares to trading on AIM
'Act' the Companies Act 2006 (an Act of Tynwald, the parliament
of the Isle of Man), as amended and including those provisions of
the Companies Act 1931 applied thereto by s.182 of the Companies
Act 2006
'AIM' the AIM market operated by the London Stock Exchange
'AIM Rules' the AIM Rules for companies admitted to trading on
AIM published by the London Stock Exchange, as amended from time to
time
'Cancellation' or the proposed cancellation of the Company's
Ordinary Shares from trading
'Delisting' on AIM
'Company' or Promethean plc
'Promethean'
'CREST' the relevant system (as defined on the Regulations) in
respect of which Euroclear UK & Ireland Limited is the Operator
(as defined in the Regulations)
'Directors' or 'Board' the directors of the Company
'Extraordinary the Extraordinary General meeting of the
General Meeting' Company convened for 10:00 a.m. local time
on 9 December 2014 and any adjournment thereof,
notice of which is set out at the end of
this document
'Form of Proxy' the form of proxy accompanying this document for
use in connection with the Extraordinary General Meeting
'London Stock Exchange' London Stock Exchange plc
'Members' Voluntary a Members' Voluntary Winding Up within the meaning of the Act
Liquidation'
'Ordinary Shares' ordinary shares of GBP0.01 each in the capital of the Company
'Proposals' the proposed Members' Voluntary Liquidation,
appointment of the Proposed Liquidator and Cancellation
'Proposed Liquidator' Dennis Anthony McGurgan of Grant Thornton
Limited, Third Floor, Exchange House, 54-62 Athol Street, Douglas,
IM1 1JD
'Regulations' the Uncertificated Securities Regulations 2001 (SI
2001 No. 3755 of Parliament), as amended from time to time
'Resolutions' the resolutions set out in the notice of the
Extraordinary General Meeting at the end of the Circular and
Resolution means any of them, as the context may require
'Shareholders' the holders of the Ordinary Shares
This information is provided by RNS
The company news service from the London Stock Exchange
END
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