Eastbridge Investments PLC Notice of General Meeting (8735B)

TIDMEBIV

RNS Number : 8735B

Eastbridge Investments PLC

21 June 2016

21 June 2015

Eastbridge Investments Plc

("Eastbridge" or the "Company")

NOTICE OF GENERAL MEETING

On 13 October 2015 Eastbridge announced a new investing policy, which was approved by shareholders at an extraordinary general meeting held on 30 October 2015. This change in policy was as a result of the Company being unable to fulfil its previous policy and in response to an approach by Helix Investment Management SLP ("Helix") regarding a future strategy for Helix and Eastbridge to work together.

Upon the approval of shareholders for the new investing policy an investment was made into the Company by clients of Helix and this was utilised to purchase an initial GBP500,000 of the Tranche B Helix Securitisation Fund, yielding 9.85% per annum.

On 11 January 2016 it was announced that non-binding heads of terms had been entered into for a potential reverse acquisition of Privilege Wealth Plc ("Privilege"). Regrettably, this potential transaction has yet to be consummated although negotiation has continued since January.

INVESTING POLICY

The directors of Eastbridge have now received an alternative proposal regarding the future of the Company. In light of the limited progress that has been made in respect of the acquisition of Privilege and the short time remaining until the Company is liable to be cancelled from trading on AIM, the directors have agreed with the owners of Privilege that, conditional on the passing of the resolutions to be proposed at the general meeting to be held on 24 June, negotiations with Privilege regarding the potential reverse transaction be terminated and that the Company will pursue the alternative proposal.

Under the new terms being offered the Company will, conditional upon shareholder consent, receive up to GBP3.17 million of new investment which will be immediately deployed towards fulfilment of its revised investing policy. The funds will be invested in a range of low-risk equity and debt instruments issued by banks and other financial service providers which produce regular cashflow and this will be used as the cornerstone of the Company's investment portfolio. It is the current intention that further funds will be raised later in the year to add to the portfolio.

The Company's existing investing policy states that it will make "investment into asset backed or insured equity and debt instruments which make regular cash payments, principally those used to fund retail finance in the form of secured and unsecured personal loans from the issuers of the securities being acquired." The Directors consider that whilst the securities in which they intend to invest, via the secondary market, satisfy certain of these criteria, it can be argued that as the funds raised upon the initial issue of those instruments was not fully utilised for secured and unsecured personal loans, this being only an element of the application of funds, the assets being acquired may not qualify as being in accordance with the Company's investing policy.

The directors of Eastbridge are taking all possible steps not only to promote the success of the company and generate returns for shareholders but also to maintain the Company's admission to trading on AIM. As such, in order to maximise the likelihood that London Stock Exchange plc will confirm Eastbridge has satisfied its investing policy upon acquiring these new assets, the Company has today called a general meeting to be held on 6 July 2016 at which the investing policy will be modified.

The new investing policy to be approved by shareholders is, in full:

"The Company's investing policy will be to invest in equity or debt securities or instruments which generate, or are intended to generate, regular cash payments, issued by banks, other financial institutions and companies who offer retail and non-retail consumers secured and unsecured loans. These equity or debt securities or instruments will be purchased either via the public markets or directly from the issuers or their authorised offerors.

All investments made by the Company will be passive in nature and without a specified minimum or maximum holding period. It is the intention of the Company to equally weight its investments on the basis of projected yield, but it is intended that no single investment represent more than 20 per cent of the assets of the Company at the time of acquisition of that investment.

The Company does not anticipate borrowing or gearing its balance sheet in order to make investments, nor does it anticipate cross-holdings.

Whilst the securities or instruments to be acquired are all intended to generate regular cash payments, it is the intention of the Company, in the short term, to reinvest the returns on its investments and to grow its portfolio, rather than returning cash to shareholders in the form of dividends or other distributions. Accordingly investors should regard the potential return from holding shares in the Company as being of a capital, rather than income, nature. The Company does not intend to establish a fixed life after which it will seek to realise its investments and return capital to shareholders.

Upon completion of the proposed investments, the Board believes, based upon its current outgoings, that the Company will have sufficient financial resources and income to continue to operate indefinitely."

GENERAL MEETING

The Company has posted a circular to shareholders setting out details of the proposed changes and calling an extraordinary general meeting for 6 July 2016 at which a single resolution will be put to shareholders to approve the new investing policy.

PLACING

Conditional upon approval of the investing policy, the Company intends to issue up to 2.64 billion new Ordinary Shares at a price of 0.12p per share to a limited number of new institutional and professional investors. The new investors, who are unconnected, will hold, in aggregate, approximately 86 per cent. of the issued share capital of the Company following the placing and the net proceeds will be utilised to make investments in a range of instruments in accordance with the new investing policy set out above. The precise details of the instruments and the amount purchased will be determined by reference to market price and availability at the time the placing is completed and further details will be provided in due course.

TRADING ON AIM

The Company's ordinary shares have been suspended from trading on AIM since 11 January 2016, being one year from the date it became an investing company. Presuming that the new investing policy is adopted, the placing completed and a range of new investments acquired the Company will apply to AIM Regulation for confirmation that, by holding approximately GBP3.6 million of securities spread across a range of issuers in accordance with its investing policy, it has satisfied its investing policy and thus trading in its ordinary shares, including the placing shares, should resume. Further details of the application for resumption of trading will be given in due course.

WARRANTS

On 21 December 2015 the Company announced that it had entered into a warrant issuance programme with Peterhouse Corporate Finance Limited ("Peterhouse"), pursuant to which Peterhouse was granted a warrant to subscribe for up to 1.5 billion new ordinary shares in Eastbridge at a variable price related to the market price of the Company at any time between 4 January 2016 and 4 January 2018. The purpose of this programme was to create a mechanism whereby an ongoing marketing campaign could produce regular cash injections into the Company.

Eastbridge and Peterhouse have now agreed, conditional upon the passing of the resolutions to be proposed at the general meeting to be held on 24 June, to cancel this warrant programme in its entirety. In addition, a separate warrant issued to Peterhouse on 30 January 2015 to subscribe for ordinary shares up to 3 per cent. of the Company from time to time at a price of 0.14p per share and a warrant held by Helix to subscribe for up to 8.5 billion ordinary shares at a price of 0.3p per share will also be cancelled conditional upon passing of the resolutions to be proposed at the general meeting to be held on 24 June.

For further additional information please contact:

 
 Eastbridge Investments Plc          Tel: +44 (0)78 
  Gregory Collier                     301 82501 
 Nominated Adviser                   Tel: +44 (0)20 
  Northland Capital Partners          3861 6625 
  Limited 
  William Vandyk / Matthew Johnson 
 Broker                              Tel: +44 (0)20 
  Peterhouse Corporate Finance        7469 0930 
  Limited 
  Fungai Ndoro /Lucy Williams 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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June 21, 2016 11:32 ET (15:32 GMT)