TIDMPCGE
RNS Number : 6701U
PCG Entertainment plc
20 January 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
20 January 2017
PCG Entertainment Plc
("PCGE", the "Company" or the "Group")
PCG Entertainment Plc / Index: AIM / Epic: PCGE
Notice of Extraordinary General Meeting
Further to its announcement on 11 January 2017, PCG
Entertainment Plc (AIM: PCGE), the AIM quoted Asia-Pacific online
media and entertainment company, today announces notice of an
Extraordinary General Meeting of the Company ("EGM") at which
shareholder approval will be sought for the sale of its wholly
owned subsidiary, Center Point Development Corp. The EGM will be
held at 11.00 am on 10 February 2017 at the Company's register
office, G1 Haven Court, 5 Library Ramp, Gibraltar.
Extracts from the Notice of EGM published on the Company's
website are set out below. The full Notice of EGM and Forms of
Proxy can be found on the Company's website at www.pcge.com
For further information:
PCG Entertainment plc
Nick Bryant, CEO Tel: +44 20 7812
0645
Allenby Capital
Nick Naylor / Nick Harriss Tel: +44 20 3328
/ James Thomas 5656
Beaufort Securities
Saif Janjua Tel: +44 20 7382
8300
Damson Communications
Amelia Hubert Tel: +44 20 7812
0645
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of Notice of EGM 20 January 2017
Latest time and date for receipt 11.00 am on 8
of Forms of Proxy for use at the February 2017
Extraordinary General Meeting
Extraordinary General Meeting 11.00 am on 10
February 2017
All times and dates are Central European Time ("CET"). The EGM will commence
at 10.00 am (GMT) / 11.00 am (CET).
LETTER FROM THE CHAIRMAN OF PCG ENTERTAIMENT PLC
Dear Shareholder (and, for information only, the holders of
options and warrants in the Company),
1. Introduction
The EGM Notice for the EGM to be held at 11.00 am on 10 February
2017 at the Company's registered office has been posted on the
Company's website in accordance with the resolutions passed at the
last General Meeting. The EGM is being convened for the purpose of
asking Shareholders to consider and, if thought fit, pass the
Resolution.
On 11 January 2017, the Company announced that it had agreed to
the sale, conditional upon shareholder approval, of CPDC, details
of which are described in Section 2 below. The Resolution, details
of which are included below, is proposed for the purpose of
approving the sale of CPDC by Shareholders.
2. The Transaction
Following much negotiation, the Board has agreed to sell CPDC to
the Purchasers, subject to the approval, by Shareholders, of the
Resolution.
The consideration for CPDC will be the proceeds of the sale of
399,815,438 Ordinary Shares owned by the Purchasers, which are to
be sold by Beaufort, acting as agent, with the net proceeds (after
transaction costs) to be paid to the Company by Beaufort, and
retained by the Company.
The net effect of the Transaction will be to acquire for sale to
the benefit of the Company, shares held by the Purchasers in
exchange for CPDC. In total, the Ordinary Shares being sold
represent approximately 30% of the currently issued Ordinary Share
capital of the Company. The sale proceeds of these Ordinary Shares
will enable the Company to raise funds with no further dilution to
existing shareholders.
The Board of PCGE believes that no value remains in CPDC. The
gambling and gaming licence previously held by CPDC has already
been transferred to another subsidiary of the Company and, due to
the supplier and customer disputes previously announced, CPDC
currently has no revenue.
The following Significant and Substantial Shareholders (both as
defined by the AIM Rules) will cease to be Shareholders in the
Company on completion of the Transaction:
Name of Shareholder Number of Ordinary Percentage
Shares of
Enlarged Share
Capital
Heng Jui Lin(1) 158,152,538 11.81
Kung Min Lin(2) 150,654,654 11.25
Kaitian Investment
Company Limited 85,680,000 6.40
Notes:
1. Heng Jui Lin is deemed to be interested in 158,152,538
Ordinary Shares referred to above as follows:
a. 37,500,000 Ordinary Shares held in his own name;
b. 120,401,116 Ordinary Shares held by Kolarmy Technology Inc.,
a company owned and controlled by Heng Jui Lin; and
c. 251,422 Ordinary Shares held by Kolarmy Ventures Inc., a
company owned and controlled by Heng Jui Lin.
2. Kung Min Lin holds 138,654,654 Ordinary Shares through
Forbidden City Ltd, a company in which Kung Min Lin owns a majority
of the shares. Kung-Min Lin's wife, Yu-Ting Lin, holds 12,000,000
Ordinary Shares in her own name.
3. Background to the Transaction
The Company purchased CPDC in August 2015 for a consideration of
114,811,491 new Ordinary Shares plus the $410,000 cash payment for
the initial option to purchase CPDC. Initially CPDC performed well
with sales and profits both rising ahead of projections. However,
as first announced on 31 May 2016, certain issues arose relating to
a dispute between the vendors of CPDC and its major supplier. This
dispute has proved impossible to bring to an amicable conclusion,
and in turn this has prevented the development of CPDC in the way
that the Board intended. As previously announced on 30 September
2016, the revenue of CPDC had declined from the original position
and the Company had at that point made a provision against disputed
payments (being 57% of CPDC's accumulated profits at 30 June 2016).
The revenue of CPDC has continued to decline due to supplier and
customer disputes, primarily related to debts owed by the previous
owners.
The Board has considered taking legal action against the vendors
and taken advice on this matter. The Board's conclusion is that
even if it was to achieve judgement in the Company's favour in the
UK, the enforceability of that judgement would be expensive and
would carry no guarantee that any funds would eventually be
recovered by the Company. Accordingly, the Board concluded that the
actions proposed in this document are in the best interests of
shareholders.
4. Fundamental Change of Business under AIM Rule 15
The sale of CPDC will constitute a fundamental change of
business under AIM Rules and is therefore subject to the approval
of the Resolution by Shareholders at the EGM. Because the Company's
other business streams will continue, the Company will not,
following the sale of CPDC, be deemed to become an AIM Rule 15 Cash
Shell under the AIM Rules.
5. Future Strategy
If the Resolutions are approved, it is the intention of the
Directors to pursue the strategy outlined most recently in the
Company's interim results statement issued in September 2015 i.e.
"....to focus on the development of (the Company's) business in the
media, sports and gaming industries". This will be based upon the
Company's original media and gaming licences and the previously
announced initiatives in football and other sports.
It has been the Board's consistent strategy to grow the Company
both organically and through acquisition. The Directors will
continue to review potential acquisitions which can bring value to
shareholders.
6. Current Trading
Since the Company's trading update in November 2016 management
have continued to work on the sports and gaming interests
previously announced. The Board will update shareholders as soon as
there is something substantive to announce.
7. Extraordinary General Meeting
Set out in Part V of the Notice of EGM is a notice convening the
EGM to be held at 11.00 am on 10 February 2017 at the registered
office of the Company at G1 Haven Court, 5 Library Ramp, Gibraltar,
at which the Resolution will be proposed for the purposes of
approving the disposal of CPDC. The Resolution will be proposed as
an ordinary resolution and will require a simple majority of the
votes cast for it to be passed.
8. Action to be taken
You will find posted on the Company's website with this letter a
Form of Proxy for use by Shareholders at the EGM. Whether or not
you intend to be present at the EGM, you are requested to complete
and return the Form of Proxy in accordance with the instructions in
the Notice and printed on the Form of Proxy. To be valid, the
completed Form of Proxy must be received by Company's registrars,
Capita Asset Services, PXS 1, 34 Beckenham Road, Beckenham, Kent
BR3 4TU as soon as possible and in any event by no later than 11.00
am on 8 February 2017 (or, in the case of any adjournment or
postponement of the EGM, not later than 48 hours before the time
fixed for the holding of the adjourned or postponed meeting).
Completion of a Form of Proxy will not preclude you from attending
the EGM and voting in person if you so choose.
If you are a holder of Depository Interests, a Form of Direction
is enclosed. To be valid, the Form of Direction should be
completed, signed and returned in accordance with the instructions
printed thereon to the Company's depositary, Capita Asset Services,
PXS 1, 34 Beckenham Road, Beckenham, Kent, BR3 4TU as soon as
possible but, in any event, so as to be received no later than
11.00 am on 7 February 2017 (or, in the case of any adjournment or
postponement of the Extraordinary General Meeting, not later than
72 hours before the time fixed for the holding of the adjourned or
postponed meeting).
9. Recommendation
The Board believes that the passing of the Resolution is in the
best interests of the Company and its Shareholders as a whole.
Accordingly, the Board unanimously recommends that you vote in
favour of the Resolution. The Directors have given an irrevocable
undertaking to vote in favour of the Resolution in relation to the
147,632,026 Ordinary Shares they own or where they control the
voting rights.
Yours faithfully,
Richard O'Dell Poulden
Chairman, PCG Entertainment plc
On behalf of the Board of Directors
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"AIM" AIM, a market operated by the London Stock
Exchange
"AIM Rules" together, the AIM Rules for Companies
(including the guidance notes thereto)
and the AIM Rules for Nominated Advisers
as published by the London Stock Exchange
from time to time
"Articles" the articles of association of the Company
for the time being
"Beaufort" Beaufort Securities Limited, the Company's
broker
"Board" the collective body of the Directors of
the Company from time to time
"Company" or "PCGE" PCG Entertainment plc, incorporated and
registered in Gibraltar under the Gibraltar
Companies Act 1930 with registered number
107915
"CPDC" Center Point Development Corp, a whole
owned subsidiary of the Company, incorporated
in Belize with registered number 80218
"CREST" the relevant system for paperless settlement
of share transfers and the holding of
shares in uncertificated form, which is
administered by Euroclear UK & Ireland
Limited
"Depositary Interests" depositary interests of the Company
"Directors" the directors of the Company as at the
date of this document whose names are
set out in Part II of this document
"Extraordinary General the Extraordinary General Meeting of the
Meeting" or "EGM" Ordinary Shareholders of the Company to
be held on 10 February 2017 at 11.00 am
and including any adjournment or postponement
thereof
"Form of Direction" the form of direction for use by the holders
of Depositary Interests
"Form of Proxy" the form of proxy for use by the Shareholders
in connection with the EGM which accompanies
this document
"Group" PCGE and its 100% direct and indirect
subsidiary undertakings as at the date
of this document
"Kolarmy" Kolarmy Technology Inc., a company incorporated
in Brunei with registration number NBD/10419
"London Stock Exchange" London Stock Exchange plc
"Notice of EGM" the notice of the EGM which is set out
or "Notice of Extraordinary at Part V of this document
General Meeting"
or "EGM Notice"
"Ordinary Shares" the ordinary shares of 0.1 pence each
in the capital of the Company
"Purchasers" Kolarmy and certain other existing shareholders
of PCGE, some of whom were the vendors
of CPDC when purchased by PCGE, who have
agreed to purchase CPDC under the terms
of an agreement dated 10 January 2017
"Resolution" the Resolution set out in the EGM Notice
to approve the sale of CPDC to the Purchasers
"Shareholder(s)" holder(s) of the Ordinary Shares
"Transaction" collectively the sale of CPDC to the Purchasers
and the sale of the Ordinary Shares held
by the Purchasers by Beaufort for the
benefit of the Company
"United Kingdom" the United Kingdom of Great Britain and
or "UK" Northern Ireland
"uncertificated" recorded on the register of members of
or "in uncertificated the Company as being held in uncertificated
form" form in CREST
This information is provided by RNS
The company news service from the London Stock Exchange
END
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