Palmaris Capital PLC Notice of EGM - Delisting (8266O)

TIDMPMS

RNS Number : 8266O

Palmaris Capital PLC

16 October 2012

16 October 2012

Palmaris Capital Plc

("Palmaris" or "the Company")

Proposed cancellation of admission of ordinary shares to trading on AIM

Proposed re-registration as a private limited company

Palmaris, the investment company with a 16.1% holding in Scottish Resources Group Limited ("SRG"), announces the following:

   --     The proposed cancellation of admission of the Company's Ordinary Shares to trading on AIM ("Cancellation"). 

-- The proposed re-registration of the Company as a private limited company ("Re-registration").

-- An Extraordinary General Meeting ("EGM") of the Company will be held at 11:00 a.m. on Thursday 8 November 2012 to consider, inter alia, the above proposals.

These proposals are conditional on Shareholder approval. Full details of the proposed Cancellation and Re-registration, including details of what action Shareholders should take, are set out in the circular posted to Shareholders today. A copy of the circular will be made available on the Company's website (www.palmariscapital.com) and a summary is given below. Unless otherwise defined, terms used in this announcement have the meaning given to them in the circular.

Reasons for the proposed Cancellation and Re-registration

For some years now the Company's sole remaining investment has been its interest in Scottish Resources Group Limited ("SRG"), which operates a number of opencast coal mines in Scotland, and also has property interests as well as sources of renewable energy.

The directors had hoped that SRG would obtain a public listing on the London Stock Exchange in 2010. Unfortunately, due to adverse market conditions, this did not happen. Had the listing proceeded, the directors would have either distributed the listed SRG shares to Shareholders (so that Shareholders would have held SRG shares directly) or sold the listed SRG shares and distributed the resulting cash proceeds to Shareholders. In either case, the Company would have been wound up thereafter.

In the absence of a public listing of SRG, the directors had hoped that a purchaser would emerge for SRG in order to allow the Company to realise its investment and return the resulting cash proceeds to Shareholders but unfortunately this has not yet happened.

In addition, as indicated in the Company's interim report, the price of coal has fallen significantly since last autumn due to the substantial production of shale gas in the United States and the consequent decision by American coal producers to sell into the international market which was already oversupplied. It therefore seems that market conditions may remain difficult for SRG for the foreseeable future, and that the Company may not realise its investment for some time. If it does so, the directors still intend to wind up the Company and distribute any remaining cash to Shareholders.

As the Company has received no dividend from its investment in SRG, the operating costs of the Company have had to be met from its own existing cash resources. These resources are finite and the Company has already had to borrow funds from a major Shareholder to meet its operating costs. The directors decided in January 2011 to reduce the Company's operating costs by ceasing to pay directors' salaries and fees and they have remained unpaid since then (save in respect of Greg Melgaard who has been receiving a salary of GBP15,000 per annum (fully reimbursed by SRG) with effect from 1 January 2012). This reduced the Company's net annual operating costs to approximately GBP70,000. However, even this level of cost is now unaffordable and the costs must be reduced further.

The majority of the Company's remaining operating costs relate to maintaining the listing of the Company's shares on AIM and the directors have taken the decision that continuing this is no longer viable. Costs associated with being admitted to trading on AIM include fees payable to the Company's nominated adviser and broker, annual fees paid to London Stock Exchange plc, costs relating to public announcements, daily listings in newspapers and fees and expenses of accountants and lawyers engaged to provide services and advice relating to the Company's compliance with the regulation to which the Company is subject as a result of being listed on AIM. The directors estimate that the Cancellation should reduce the Company's net annual operating costs to approximately GBP15,000 (comprising audit fees and other similar costs).

Once the Company has ceased to be listed on AIM, it will 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 2006.

Process for Cancellation

In accordance with Rule 41 of the AIM Rules, the Company has notified AIM Regulation of the intention to delist. Under the AIM Rules, it is also a requirement that the Cancellation must be approved by not less than 75 per cent. of those present and entitled to vote or voting by proxy in a general meeting. Accordingly, the first resolution set out in the notice of EGM ("Resolution 1") seeks Shareholder approval for the Cancellation.

Subject to Resolution 1 being passed by the requisite majority at the EGM, it is expected that trading on AIM in the Ordinary Shares will cease at the close of business on 15 November 2012 with the Cancellation becoming effective from 7.00 a.m. on 16 November 2012.

Effect of the Cancellation on Shareholders

The principal effects of the Cancellation 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, and Shareholders would no longer be required to vote on certain matters prescribed by the AIM Rules;

   --     Shareholders will not be able to read the Company's share price in the daily newspapers; and 

-- interim reports will not be sent to Shareholders and, as a result, Shareholders will only receive the annual report once a year.

However, the directors intend to continue to operate the Company for the benefit of all Shareholders and to pursue efforts to maximise the proceeds of realisation of the Company's investment in SRG. They also intend to continue to keep Shareholders informed of progress and remain committed to high standards of corporate governance. As such, the directors will:

   --     post items of news on the Company's website (www.palmariscapital.com); 

-- hold annual general meetings and extraordinary general meetings in accordance with statutory requirements and the Company's articles of association;

   --     continue to send to Shareholders copies of the Company's audited accounts each year; and 

-- operate the Company with the corporate governance appropriate to a company with in excess of 500 shareholders.

Following the Cancellation, although the Ordinary Shares will remain transferable they will no longer be tradable on AIM and no other trading facility will be available to facilitate the trading of the Ordinary Shares. Consequently, it is likely to be more difficult for a Shareholder to purchase or sell any Ordinary Shares following the Cancellation. Following the Cancellation, transfers of Ordinary Shares may be effected in accordance with those provisions of the Articles concerning off-market transfers of shares in certificated form.

It is the Company's intention to cancel the CREST facility following the passing of the resolutions at the EGM and arrangements will be made to send share certificates to those Shareholders at their risk currently using CREST.

Shareholders should note that, even if the Cancellation and Re-registration are approved and become effective, the Company will remain subject to the provisions of the City Code on Takeovers and Mergers 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 Cancellation 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 Cancellation becoming effective, Execution Noble will therefore cease to be nominated adviser and broker to the Company.

Effect of the Re-registration on Shareholders

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 Act, it is necessary for Shareholders to pass a special resolution in a general meeting. Resolution 2 in the notice of the EGM ("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 Cancellation 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 Resolution 1 to approve the Cancellation is passed but Resolution 2 to approve the Re-registration is not passed, the Company will still proceed with the Cancellation.

EGM

The Company will hold the EGM at its registered office, Paterson Building, Gartsherrie Road, Coatbridge, Lanarkshire ML5 2EU on Thursday 8 November 2012 at 11am for the purpose of considering, and if thought fit passing the special resolutions to effect the Cancellation and the Re-registration.

Recommendation

The Directors believe that the proposed resolutions are in the best interests of the Company and unanimously recommend that you vote in favour of them as they intend to do in respect of their own beneficial shareholdings of 4,217,000 Ordinary Shares which represent 2.7 per cent. of the issued Ordinary Shares. In addition, Patersons Quarries Ltd and Waverton Capital Ltd who hold, in aggregate, 108,329,307 Ordinary Shares which represent 69.47 per cent. of the issued Ordinary Shares, have indicated that they also intend to vote in favour of the proposed resolutions.

In accordance with AIM Rule 26, a copy of this announcement is available on the Company's website at www.palmariscapital.com.

 
 
   For further information contact: 
 Greg Melgaard, Managing Director        [phone] 
 www.palmariscapital.com 
 John Llewellyn-Lloyd/Harry Stockdale 
  Execution Noble & Company Limited 
  (Nominated Adviser)                    [phone] 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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