Norcon PLC Proposed Cancellation of Admission & Notice of AGM (6384Z)

TIDMNCON

RNS Number : 6384Z

Norcon PLC

31 May 2016

31 May 2016

NORCON PLC

("Norcon" or the "Company")

Proposed Cancellation of Admission to Trading on AIM

Publication of Circular and Notice of Extraordinary General Meeting

and

Notice of Annual General Meeting

Proposed Cancellation of Admission to Trading on AIM

Norcon (AIM: NCON), the global communications network specialist, announces that, as a result of a review of the benefits and drawbacks of being a quoted company, the Board has concluded that the cancellation of admission of its Ordinary Shares to trading on AIM ("Cancellation") is in the best interests of the Company and its Shareholders as a whole.

The Company therefore announces its intention to seek Shareholders' approval for the Cancellation. An explanatory circular will be posted to Shareholders today setting out the background to and reasons for the Cancellation, the reasons why the Directors believe that this is in the best interests of the Company and its Shareholders as a whole and their recommendation to Shareholders to vote in favour of the resolution on the Cancellation ("Resolution").

An Extraordinary General Meeting of the Company will be held at 12 p.m. on Wednesday 29 June 2016 at the Company's registered office at Fort Anne, Douglas, Isle of Man, IM1 5PD at which the Resolution will be proposed to Shareholders for approval. A notice convening the Extraordinary General Meeting is set out in the circular to shareholders which will shortly be available on the Company's website (www.norconplc.com).

The Company has received irrevocable undertakings from certain Directors being Trond Tostrup (Executive Chairman), Gaute Vik (Executive Director) and Jørn Longem (Non-Executive Director) and from Norconsult Telematics Holdings LTD. (a company controlled by Jørn Longem, Non-Executive Director of the Company and a company that Trond Tostrup, Executive Chairman of the Company, Arne Dag Aanensen, Chief Financial Officer of the Company and Gaute Vik, Executive Director of the Company are directors of), to vote in favour of the Resolution for 34,359,844 Ordinary Shares in aggregate, representing approximately 69.7 per cent. of the issued share capital of the Company.

Norconsult Telematics Holdings LTD., the Company's Major Shareholder, has advised the Company that on the date this Circular is posted to Shareholders (being Tuesday 31 May 2016) it will make an order to purchase up to 8,000,000 Ordinary Shares in the market at a price of 19 pence per Ordinary Share. Such order will remain open until the last trading day on AIM being Wednesday 6 July 2016 (unless the order is fulfilled in advance of this date). Shareholders should consult with their own independent financial adviser and/or broker should they wish to consider selling their interests in the market prior to the Cancellation becoming effective.

Subject to the Resolution being passed at the Extraordinary General Meeting, the expected last day of dealings in Ordinary Shares on AIM will be Wednesday 6 July 2016 and the Cancellation will become effective at 7.00 a.m. on Thursday 7 July 2016. Pursuant to Rule 41 of the AIM Rules, the Company, through its nominated adviser, finnCap, has notified the London Stock Exchange of the proposed Cancellation.

Further information regarding the background to and principal effects of the Cancellation is set out at the bottom of this announcement.

Notice of Annual General Meeting

In addition, the Company announces that its annual accounts for the year ended 31 December 2015 will today be sent to Shareholders, together with the Notice of Annual General Meeting ("AGM").

The AGM will be held at 11.30 a.m. on Wednesday 29 June 2016 at the Company's registered office at Fort Anne, Douglas, Isle of Man, IM1 5PD. Copies of these documents will shortly be available to view on the Company's website (www.norconplc.com).

For further information, please contact:

 
 Norcon plc 
                                               +47 901 69 
 Trond Tostrup, Executive Chairman                    369 
 Arne Dag Aanensen, Chief Financial 
  Officer                                   [phone] 
 
 
 finnCap Ltd 
 Corporate Finance- Stuart Andrews/Emily       +44 (0) 20 
  Watts                                         7220 0500 
 
 

ABOUT NORCON:

Established in 1957, Norcon (LSE/AIM: NCON) has been a trusted consultant and project manager for more than half a century to governments and some of the world's largest global firms. These organisations rely on Norcon to select, implement and maintain a communication infrastructure that not only matches, but also supports the critical needs of their operations. Norcon's strength lies in its understanding of complex communication networks and their design.

www.norconplc.com

BACKGROUND AND REASONS FOR CANCELLATION

The Board has conducted a review of the benefits and drawbacks to the Group and its Shareholders in retaining its quotation on AIM, and believes that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Board has considered the following key factors:

-- the considerable cost, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM which, in the Directors' opinion, are disproportionate to the benefits to the Company;

-- the Directors and the Major Shareholder hold in total 70.5 per cent. of the Company's current issued share capital and, as a result, the free float and liquidity of the Ordinary Shares is limited;

-- the AIM listing of the Ordinary Shares does not, in itself, offer investors the opportunity to trade in meaningful volumes or with frequency within an active market. With little trading volume, the Company's share price can move up or down significantly following trades of small numbers of shares; and

-- due to the Company's limited liquidity in its shares and, in practical terms, a small free float and market capitalisation, continuing admission to trading on AIM no longer sufficiently provides the Company with the advantages of providing access to capital or enabling the Ordinary Shares to be used to effect acquisitions.

Following careful consideration, the Board believes that it is in the best interests of the Company and Shareholders to seek the proposed Cancellation at the earliest opportunity.

PROCESS FOR, AND PRINCIPAL EFFECTS OF, THE CANCELLATION

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of Cancellation. Additionally, Cancellation will not take effect until at least 5 clear Business Days have passed following the passing of the Resolution. If the Resolution is passed at the Extraordinary General Meeting, it is proposed that the last day of trading in Ordinary Shares on AIM will be Wednesday 6 July 2016 and that the Cancellation will take effect at 7.00 a.m. on Thursday 7 July 2016.

The principal effects of the Cancellation will be that:

-- there would be no formal market mechanism enabling the Shareholders to trade Ordinary Shares on AIM and, furthermore, no other recognised market or trading facility (other than the proposed Matched Bargain Facility referred to in paragraph 3.2 below) will be available to enable trading of the Ordinary Shares;

-- while the Ordinary Shares will remain freely transferrable, it is possible that following publication of this document, the liquidity and marketability of the Ordinary Shares may be significantly reduced and the value of such shares may be adversely affected as a consequence;

-- it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

-- the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply;

-- Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events, or required to obtain shareholder approval, where applicable, including substantial transactions, financing transactions, reverse takeovers, related party transactions and fundamental changes in the Company's business, including certain acquisitions and disposals;

-- the levels of transparency and corporate governance within the Company are unlikely to be as stringent as for a company quoted on AIM; the Company will cease to have an independent nominated adviser and broker;

-- the Company's CREST facility will be cancelled and, although the Ordinary Shares will remain transferable, they will cease to be transferable through CREST. Instead, Shareholders who hold Ordinary Shares in CREST will receive share certificates; and

-- the Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

The Company will remain subject to the Isle of Man Companies Act 2006. Shareholders should also note that the Takeover Code will continue to apply to the Company following the Cancellation for the period of 10 years from the date of Cancellation and, therefore, Shareholders will continue to receive the minority and other protections afforded by the Takeover Code. The Company will also continue to be bound by the Articles (which requires shareholder approval for certain matters) following the Cancellation; the Company may, however, seek Shareholder approval to amend the Articles so as to reflect the Company's change from listed to unlisted status.

The above considerations are non-exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

The Company will endeavour to continue to provide certain facilities and services to Shareholders that they currently enjoy as shareholders of an AIM company. Following the Cancellation, the Company will:

-- continue to communicate information about the Company (including annual accounts) to its Shareholders, as required by law, and the Company will continue to hold annual general meetings; and

-- continue to maintain its website, http://www.norconplc.com/ and to post updates on the website from time to time (being at least every six months), although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under AIM Rule 26 or to update the website as required by the AIM Rules.

In addition, the Company has been notified that it is the intention of Kenneth West to resign as Non-Executive Director of the Company on or around 31 December 2016.

TRANSACTION IN THE ORDINARY SHARES PRIOR TO AND FOLLOWING THE PROPOSED CANCELLATION

Prior to the Cancellation

Norconsult Telematics Holdings LTD., the Company's Major Shareholder, has advised the Company that on the date the Circular is posted to Shareholders (being Tuesday 31 May 2016) it will make an order to purchase up to 8,000,000 Ordinary Shares in the market at a price of 19 pence per Ordinary Share. Such order will remain open until the last trading day on AIM being Wednesday 6 July 2016 (unless the order is fulfilled in advance of this date). Shareholders should consult with their own independent financial adviser and/or broker should they wish to consider selling their interests in the market prior to the Cancellation becoming effective.

Following the Cancellation

The Board is aware that the proposed Cancellation, should it be approved by Shareholders at the Extraordinary General Meeting, would make it more difficult for Shareholders to buy and sell Ordinary

Shares should they wish to do so.

Shortly following the proposed Cancellation, the Company intends, subject to being able to comply with Isle of Man company law, to return cash to Shareholders by way of a Tender Offer, which will be open to all Shareholders aside from the Major Shareholder, at a price of 19 pence per Ordinary Share. It is intended that the Tender Offer will be open for a period of 3 months (the "Closing Date") from the date that the Tender Offer documentation is sent to Shareholders. Any Ordinary Shares purchased by the Company by way of the Tender Offer will be subsequently held in treasury. The Company will send a circular to Shareholders containing the terms of the Tender Offer at an appropriate time and further details will be made available through the Company's website at http://www.norconplc.com/.

Following the Closing Date of the Tender Offer, the Company will consider, depending on the number of Shareholders remaining after the Closing Date, putting in place a Matched Bargain Facility to assist Shareholders to trade in the Ordinary Shares. If implemented, the Matched Bargain Facility would be made available either directly through the Company or through a third party provider. Under the Matched Bargain Facility, Shareholders or persons wishing to acquire or dispose of Ordinary Shares would be able to leave an indication with the Matched Bargain Facility that they are prepared to buy or sell at an agreed price. In the event that the Matched Bargain Facility is able to match that order with an opposite sell or buy instruction, the Matched Bargain Facility would contact both parties and then effect the bargain. Should the Company put in place a Matched Bargain Facility, details would be made available to Shareholders on the Company's website at http://www.norconplc.com/ and directly by letter or e-mail (where appropriate).

CURRENT TRADING AND STRATEGY

The Company released its Annual Report for the year ended 31 December 2015 on 19 April 2016. In this report the Directors stated that the Company's new solutions portfolio continued to deliver encouraging results and the interaction between engineering solutions and deployment services was proving profitable. The Company has a strong cash position and order backlog and, in light of this, will seek to pursue new markets and engage with new customers. Following the Cancellation, the Company will continue with this strategy.

IRREVOCABLE UNDERTAKINGS

The Company has received irrevocable undertakings from certain Directors being Trond Tostrup (Executive Chairman), Gaute Vik (Executive Director) and Jørn Longem (Non-Executive Director) and from Norconsult Telematics Holdings LTD. (a company controlled by Jørn Longem, Non-Executive Director of the Company and a company that Trond Tostrup, Executive Chairman of the Company, Arne Dag Aanensen, Chief Financial Officer of the Company and Gaute Vik, Executive Director of the Company are directors of), to vote in favour of the Resolution for 34,359,844 Ordinary Shares in aggregate, representing approximately 69.7 per cent. of the issued share capital of the Company. As a result, the Directors believe it is likely that the Resolution will be passed at the Extraordinary General Meeting.

PROCESS FOR CANCELLATION

Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders at an Extraordinary General Meeting. Accordingly the Notice of

Extraordinary General Meeting set out in Part II of this document contains a special resolution to approve the Cancellation.

Furthermore, Rule 41 of the AIM Rules requires an AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date. In accordance with AIM Rule 41, the Directors have notified AIM of the Company's intention, subject to the Resolution being passed at the Extraordinary General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 7 July 2016. Accordingly, if the Resolution is passed the Cancellation will be effective at 7.00 a.m. on 7 July 2016.

EXTRAORDINARY GENERAL MEETING

The Extraordinary General Meeting will be held at the Company's registered office at Fort Anne, Douglas, Isle of Man, IM1 5PD commencing at 12.00 p.m. on Wednesday 29 June 2016. If approved it is expected that the Cancellation will take effect from 7.00 a.m. on Thursday 7 July 2016.

If the Cancellation becomes effective, finnCap Ltd will cease to be nominated adviser of the Company and the Company will no longer be required to comply with the AIM Rules.

RECOMMATION

The Directors consider that the Resolution and Cancellation is in the best interests of the Company and its Shareholders as a whole. The Directors unanimously recommend that you vote in favour of the Resolution.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Notice provided to the                Tuesday 31 May 2016 
  London Stock Exchange 
  to notify it of the proposed 
  Cancellation 
 Publication and posting               Tuesday 31 May 2016 
  of the Circular and Form 
  of Proxy to Shareholders 
 
 Latest time and date            12 p.m. on Monday 27 June 
  for receipt of completed                            2016 
  Forms of Proxy in respect 
  of the Extraordinary 
  General Meeting 
 Time and date of the              12 p.m. on Wednesday 29 
  Extraordinary General                          June 2016 
  Meeting 
 Expected last day of                Wednesday 6 July 2016 
  dealings in Ordinary 
  Shares on AIM(2) 
 Expected time and date              7.00 a.m. on Thursday 
  of Cancellation(2)                           7 July 2016 
 

DEFINITIONS

 
 "AIM"                      AIM, the market operated by the 
                             London Stock Exchange 
 "AIM Rules"                the rules and guidance for companies 
                             whose shares are admitted to trading 
                             on AIM entitled "AIM Rules for 
                             Companies" published by the London 
                             Stock Exchange, as amended from 
                             time to time 
 "Articles"                 the articles of association of 
                             the Company as at the date of 
                             this document 
 "Business Day"             a day (excluding Saturday, Sunday 
                             and public holidays in England 
                             and Wales) on which banks are 
                             generally open for business in 
                             London for the transaction of 
                             normal banking business 
 "Cancellation"             the cancellation of admission 
                             of the Ordinary Shares to trading 
                             on AIM, subject to passing of 
                             the Resolution and in accordance 
                             with Rule 41 of the AIM Rules 
 "Circular"                 the circular to Shareholders dated 
                             31 May 2016 
 "Company" or               Norcon plc, a company registered 
  "Norcon"                   in Isle of Man with company number 
                             002730V and whose registered office 
                             is at Fort Anne, Douglas, Isle 
                             of Man, IM1 5PD 
 "CREST"                    a relevant system (as defined 
                             in the CREST Regulations) in respect 
                             of which Euroclear is the Operator 
                             (as defined in the CREST Regulations) 
 "CREST Regulations"        the Uncertificated Securities 
                             Regulations 2006 of the Isle of 
                             Man 

                             (Statutory Document Number 743/06) 
                             including any modifications or 
                             any regulations made in substitution 
                             under sections 48 and 215 of the 
                             IoM 2006 Act and for the time 
                             being in force 
 "Directors" or             the board of directors of the 
  "Board"                    Company 
 "Extraordinary             the Extraordinary General Meeting 
  General Meeting"           of the Company convened for 12.00 
                             p.m. on Wednesday 29 June 2016 
                             and any adjournment thereof, notice 
                             of which is set out at the end 
                             of the Circular 
 "Form of Proxy"            the form of proxy enclosed within 
                             the Circular for use at the Extraordinary 
                             General Meeting or at any adjournment 
                             thereof 
 "London Stock              London Stock Exchange plc 
  Exchange" 
 "Major Shareholder"        Norconsult Telematics Holdings 
                             LTD., who have an interest in 
                             27,170,511 Ordinary Shares, representing 
                             55.1 per cent. of the issued share 
                             capital of the Company 
 "Matched Bargain           the proposed matched bargain trading 
  Facility"                  facility 
 "Notice of Extraordinary   the notice of Extraordinary General 
  General Meeting"           Meeting which is set out in the 
                             Circular 
 "Ordinary Shares"          the ordinary shares of GBP0.01 
                             each in the capital of the Company, 
                             and "Ordinary Share" means any 
                             one of them 
 "Regulatory Information    has the meaning given to it in 
  Service"                   the AIM Rules any of the services 
                             approved by the London Stock Exchange 
                             for the distribution of AIM announcements 
                             and included within the list maintained 
                             on the website of the London Stock 
                             Exchange 
 "Resolution"               the resolution to be proposed 
                             at the Extraordinary General Meeting 
                             in the form set out in the Notice 
                             of Extraordinary General Meeting 
 "Shareholders"             holders of Ordinary Shares from 
                             time to time and "Shareholder" 
                             means any one of them 
 "Takeover Code"            the City Code on Takeovers and 
                             Mergers 
 "Tender Offer"             the proposed tender offer to be 
                             made by the Company to purchase 
                             Ordinary Shares 
 "United Kingdom"           the United Kingdom of Great Britain 
                             and Northern Ireland 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 31, 2016 02:01 ET (06:01 GMT)