TIDMTAIH
RNS Number : 5784B
Taihua Plc
05 April 2017
Taihua plc
("Taihua" or the "Company")
Proposed cancellation of Admission to AIM
Notice of General Meeting
The Company announces that it will, today, be sending a Circular
to Shareholders together with a notice convening a General Meeting
to seek Shareholder's approval to cancel the admission of the
Company's Ordinary Shares to trading on AIM and re-register the
Company as a private limited company.
1. Introduction
This Circular sets out the background to and reasons for the
Delisting, additional information on the implications of the
Delisting for the Company and its Shareholders, and why your Board
believes the Delisting to be in the best interests of Shareholders
as a whole. Having disclosed their interests in the Company and
their intentions with regard to their individual holdings, the
Directors also unanimously recommend the Delisting.
In addition to the Delisting, the Notice of GM will include the
resolution in respect of the proposed re-registration of the
Company as a private limited company ("Re-Registration").
2. The Delisting and Re-Registration
2.1 Reasons for the Delisting and Re-Registration
The Directors have undertaken a review of the merits or
otherwise of the Company continuing to be admitted to trading on
AIM. The Directors have concluded that a proposal to cancel the
Admission should be made to Shareholders at the General Meeting. In
reaching the decision to propose this to Shareholders, the
Directors have taken the following factors into account: -
-- The primary purpose of the Company's Admission was the
opportunity it provided to raise capital in support of the
Company's growth prospects. Given current market conditions, and in
particular the lack of investors for the Company's businesses, the
Directors are of the opinion that it is difficult for the Company
to attract any or meaningful equity investment through its status
as a quoted company on AIM and accordingly the Directors will be
assessing potential alternatives to raise growth capital.
-- There are significant professional fees associated with the Admission.
In the Board's opinion the costs of Admission outweigh any
benefits that currently accrue to the Company or its Shareholders
and the Admission should therefore be cancelled as it is no longer
in the best interests of the Shareholders as a whole.
Once the Company has ceased to be listed on AIM, it would 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.
2.2 Effects of Delisting
The principal effects of the Delisting 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 (or to have a nominated advisor), and Shareholders would
no longer be required to vote on certain matters prescribed by the
AIM Rules; and
-- interim reports will not be sent to Shareholders and, as a
result, Shareholders will only receive the annual report once a
year.
Following the Delisting, although the Ordinary Shares will
remain transferable, they will no longer be tradable on AIM.
Consequently, it is likely to be more difficult for a Shareholder
to purchase or sell any Ordinary Shares following the Delisting.
Following the Delisting, transfers of Ordinary Shares may be
effected in accordance with those provisions of the Articles
concerning off-market transfers of shares.
It is the Company's intention to cancel the CREST facility
following the passing of the resolutions at the GM and arrangements
will be made to send share certificates to those Shareholders (at
their risk) currently using CREST.
2.3 Delisting procedure
Your Board has accordingly concluded that it is in the best
interests of Shareholders as a whole that the Delisting be
approved.
Under the AIM Rules, the Delisting can only be effected by the
Company after securing a special resolution of Shareholders in a
general meeting, whereby at least 75 per cent. of votes cast are in
favour of such a resolution. A period of at least five Business
Days following the Shareholder approval of the Delisting is
required before the Delisting may be put into effect.
Resolution 1 contained in the Notice of GM ("Resolution 1")
seeks Shareholder approval for the Delisting. The Company has
received irrevocable undertakings from Shareholders holding
68,380,262 Ordinary Shares, representing approximately 70.38 per
cent. of the current voting rights in the Company, to vote in
favour of the Delisting. Assuming that Shareholders approve this
resolution, it is proposed that the Delisting will take place by 8
May 2017 at the earliest.
2.4 Effect of the Re-registration
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 Companies Act, it is necessary for Shareholders to pass a
special resolution in a general meeting. Resolution 2 in the notice
of the GM ("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 Delisting 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 Resolution1 to approve the Delisting is passed but Resolution
2 to approve the Re-registration is not passed, the Company will
still proceed with the Delisting.
Shareholders should note that, even if the Delisting and
Re-registration are approved and become effective, the Company will
remain subject to the provisions of the City Code 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 Delisting 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 Delisting becoming effective, WH Ireland will
therefore cease to be nominated adviser and broker to the
Company.
3. City Code
The City Code is issued and administered by the Takeover Panel.
The City Code currently applies to the Company and will continue to
apply to the Company notwithstanding the Delisting. The City Code
will cease only to apply to the Company on the expiry of the
10-year period from the date of the Delisting or, if earlier, the
date on which the Company is dissolved.
The City Code and the Takeover Panel operate principally to
ensure that shareholders are treated fairly and are not denied an
opportunity to decide on the merits of a takeover and that
shareholders of the same class are afforded equivalent treatment by
an offeror. The City Code also provides an orderly framework within
which takeovers are conducted. In addition, it is designed to
promote, in conjunction with other regulatory regimes, the
integrity of the financial markets
The City Code is based upon a number of General Principles which
are essentially statements of standards of commercial behaviour.
General Principle One states that all holders of securities of an
offeree company of the same class must be afforded equivalent
treatment and if a person acquires control of a company, the other
holders of securities must be protected. This is reinforced by Rule
9 of the City Code which requires a person, together with persons
acting in concert with him, who acquires shares carrying voting
rights which amount to 30 per cent. or more of the voting rights to
make a general offer. A general offer will also be required where a
person who, together with persons acting in concert with him, holds
not less than 30 per cent. but not more than 50 per cent. of the
voting rights, acquires additional shares which increase his
percentage of the voting rights. Unless the Takeover Panel
consents, the offer must be made to all other shareholders, be in
cash (or have a cash alternative) and cannot be conditional on
anything other than the securing of acceptances which will result
in the offeror and persons acting in concert with him holding
shares carrying more than 50 per cent. of the voting rights.
4. Intention to purchase Ordinary Shares from other Shareholders after the Delisting
Mr Yunwu Liu and Mr Mingjian Yin, the Directors of the Company,
and Mr Tao Ji, the major Shareholder of the Company, have signified
their intent to purchase Ordinary Shares from other Shareholders
after the Delisting.
Mr Yunwu Liu, Mr Mingjian Yin and Mr Tao Ji will approach other
Shareholders separately to discuss such transactions after the
Delisting.
5. The Board following Delisting and Corporate Governance
It is intended that Mr Nicholas Lyth and Mr Chong Cao will
resign as Directors of the Company on the date of Delisting and
hence the Board will comprise Mr Yunwu Liu, Mr Mingjian Yin, Mr
Chun Chai and Mr Zhaoyang Ma immediately following Delisting.
However, the Directors intend to continue to operate the Company
for the benefit of all Shareholders. They also intend to continue
to keep Shareholders informed of progress. As such, the Directors
will:-
-- hold annual general meetings and general meetings in
accordance with statutory requirements and the Articles; and
-- continue to send to Shareholders copies of the Company's annual accounts each year.
6. General Meeting
Set out at the end of the Circular is a notice convening the GM
of the Company to be held at 11.00 a.m. (UK time) on 21 April 2017
at the offices of Athena Law, Gregs Building, 1 Booth Street,
Manchester, M2 4DU. At this GM, the Resolutions will be
proposed.
7. Irrevocable Undertakings
The Company has received irrevocable undertakings from Yunwu
Liu, Mingjian Yin, Tao Ji and Chun Chai to vote in favour of the
Resolutions. These undertakings represent 70.38 per cent. of the
voting rights in the Company.
8. Actions to be taken - GM
Enclosed with the Circular is a Form of Proxy for use at the GM.
Whether or not you propose to attend the GM in person, you are
requested to complete and return the Form of Proxy to the office of
the Company's Registrars Capita Asset Services, at PXS, 34
Beckenham Road, Beckenham, BR3 4TU in accordance with the
instructions printed thereon as soon as possible and, in any event,
so as to be received no later than11am on 19 April 2017. Completion
and return of a Form of Proxy will not preclude you from attending
the AGM and voting in person if you wish.
9. Recommendation
The Directors consider that all the Resolutions to be considered
at the GM, including the Delisting, are fair and reasonable and are
in the best interests of the Company and the Shareholders as a
whole. The Directors therefore unanimously recommend that you vote
in favour of the Resolutions.
A copy of the AGM notice will be made available on the Company's
website at www.taihuaplc.com.
Capitalised terms used but not otherwise defined in this
announcement bear the meanings ascribed to them in the
Circular.
Enquiries:
Nicholas Lyth, Taihua plc 07769 906 686
Katy Mitchell, WH Ireland Limited +44 161 832 2174
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Notice given to London Stock 5 April 2017
Exchange notifying it of proposed
Delisting
Publication of the Circular 5 April 2017
Latest time and date for receipt 11.00 a.m. on 19
of Form of Proxy April 2017
General Meeting 11.00 a.m. on 21
April 2017
Announcements of results of 21 April 2017
AGM
Expected last day of dealings 5 May 2017
in Ordinary Shares on AIM
Expected time and date that with effect from
the admission to trading of 7.00 a.m.
the Ordinary Shares on AIM on 8 May 2017
will be cancelled
If any of the above times and/or dates change, the revised times
and/or dates will be notified to Shareholders by announcement
through a Regulatory Information Service of the London Stock
Exchange.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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