Promethean PLC Cancellation of Trading on AIM (6436W)

TIDMPTH

RNS Number : 6436W

Promethean PLC

10 November 2014

10 November 2014

Promethean PLC

("Promethean" or the "Company")

Publication of Circular

Further to the announcement of 16 July 2014, the board of Promethean plc announce that the Company has today published a circular and notice of Extraordinary General Meeting outlining the terms of a proposed members' voluntary liquidation and proposed cancellation of admission to trading on AIM (the "Circular"). Further details are set out below.

The Circular has today been posted to shareholders and will shortly be available at the Company's website www.prometheanplc.com.

Unless defined herein, capitalised terms used in this announcement shall have the meaning attributed to them in the Circular.

Enquiries:

   Promethean PLC                                                   [phone] 

Sir Peter Burt

S. P. Angel Corporate Finance LLP: [phone]

Stuart Gledhill

Jeff Keating

Expected Timetable of Principal Events

 
                                                2014 
---------------------------------------------  ----------------- 
 Publication and despatch of the Circular and   10 November 
  the Form of Proxy to Shareholders 
---------------------------------------------  ----------------- 
 Latest time and date for receipt of Form of    10.00 a.m. on 
  Proxy                                          7 December 
---------------------------------------------  ----------------- 
 Suspension of trading on AIM of the Ordinary   7.30 a.m. on 9 
  Shares                                         December 
---------------------------------------------  ----------------- 
 Extraordinary General Meeting                  10.00 a.m. on 
                                                 9 December 
---------------------------------------------  ----------------- 
 Last day of dealings in Ordinary Shares on     8 December 
  AIM and in CREST 
---------------------------------------------  ----------------- 
 Cancellation of admission to trading on AIM    with effect from 
  of the Ordinary Shares                         7:00 a.m. on 10 
                                                 December 
---------------------------------------------  ----------------- 
 

Notes:

(1) If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by an announcement through the regulatory information service of the London Stock Exchange plc.

   (2)           All references in this document are to London times unless otherwise stated. 

(3) The proposed appointment of a liquidator and the proposed cancellation of trading on AIM requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the Extraordinary General Meeting.

Proposed Members' Voluntary Liquidation and Proposed Cancellation of Admission to Trading on AIM of the Ordinary Shares

   1.         Introduction 

As you know from the Company's announcement to the London Stock Exchange on 16 July 2014, the Company's proposed acquisition of securities in T.I.S Holdings Ltd ("TIS") and of the Protected Asset TEP Fund plc participating shares did not proceed. As a result, the Company is now a listed entity with only one investment - its interests in TIS - and some residual cash. Further to this outcome, the Board has come to the conclusion that the most appropriate next step for the Company is for it to be wound up and a liquidator appointed. A consequence of such appointment would be the Cancellation.

The purpose of the Circular is to explain the background to and the reasons for these Proposals, and to explain why the Directors unanimously consider the Proposals to be in the best interests of the Company and its shareholders as a whole and, further, to seek your approval for the placing of the Company into Members' Voluntary Liquidation, the appointment of the Proposed Liquidator and the Cancellation at the Extraordinary General Meeting convened for this purpose. The notice of the Extraordinary General Meeting has today been sent to shareholders. Your attention is drawn to paragraph 7 below which contains a unanimous recommendation from the Directors that you vote in favour of the Proposals.

   2.         Background to the Proposals 

The Prospectus dated 2 May 2014, which was issued to Shareholders, provided a comprehensive operating and financial review of the then current position of both the Company and of TIS. As was made clear in the Prospectus (pages 146 et seq), TIS' future prospects are dependent on the outcome of a large number of variables and consequently were extremely difficult to evaluate.

As of 31 March 2014, TIS had current bank debt of GBP10.8 million and further, non-current, financial indebtedness of GBP55.818 million in the form of loans and accrued interest on those loans ("Loans") granted by the Company and the original TIS vendor shareholders (the "Vendors"). Promethean had an interest (described in the Prospectus as "Investor Loan Notes") of GBP26.858 million. The Vendors' interests in the Loans (described in the Prospectus as "Management Loan Notes and Deep Discounted Bonds") amounted to GBP28.960 million. Once the bank debt is repaid, the Loans would become repayable on demand. Given the total bank debt which ranks ahead of the Loans and any equity interest, it seems extremely unlikely that there will be any value attaching to the residual interests of the Company in TIS. As a consequence the Company has no reason to continue its existence.

On the advice of Promethean's lawyers, discussions about the possibility of converting all the loan notes and accrued interest into ordinary TIS shares were held with the representative of the other TIS shareholders and loan note holders. The level of bank debt suggests there would be virtually no prospect of any value being derived from the loan notes and consequently, to all intents and purposes, there would be no possible value in the TIS equity. Unfortunately, the representative of the other TIS creditors and shareholders was unwilling to agree.

A proposal has been made by an investor connected to TIS management to acquire TIS for GBP200,000, such sum to be divided equally between the Company and the Vendors ("the Proposed Transaction"). If the Proposed Transaction were to proceed, Promethean would receive GBP100,000 in full and final settlement of what it is owed. The proposal as discussed is conditional inter alia upon obtaining regulatory and tax clearance and on agreeing the purchase of the bank debt at a substantial discount. There is no certainty that the Proposed Transaction will proceed.

The Board was approached with a view to providing the funds to acquire the discounted bank debt but, having discussed the opportunity with a number of the Company's institutional shareholders, it was clear that there was no enthusiasm amongst the Company's shareholders for making any further investment in TIS. Although GBP100,000 is a negligible fraction of the nominal value of the loans and accrued interest owed to the Company by TIS, there is little practical possibility of the Company recovering any greater value than that represented by the Proposed Transaction.

Having discussed the overall position with a number of the Company's institutional shareholders, and in recognition of the ongoing costs of running the Company, the Board has decided to recommend that the Company be wound up and a liquidator be appointed as soon as possible to distribute pro rata in specie to Shareholders the Company's interests in the Loans and in the TIS shares, together with the residual cash. In the event that the Proposed Transaction completed, there would be neither TIS loans nor shares to distribute in specie - there would only be the residual cash left to distribute.

To this end, the Board has decided to call an Extraordinary General Meeting to be held on 9 December 2014 to consider the Resolutions. The Resolutions authorise (i) the Cancellation, (ii) the placing of the Company into Members' Voluntary Liquidation, (iii) the appointment of Dennis Anthony McGurgan of Grant Thornton Limited to liquidate the Company, to repay its outstanding creditors and to return the residual cash and any remaining TIS interest to Shareholders, thereafter progressing a dissolution of the Company once that process is complete, (iv) the fixing of the remuneration of the Liquidator, and (v) authorising the Liquidator to make distributions in specie. The notice calling the EGM and the Resolutions on which shareholders are asked to vote is attached.

The Company has notified the London Stock Exchange of the proposed Cancellation. In the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 8 December 2014 and that the effective date of the Cancellation will be 10 December 2014.

   3.         Members' Voluntary Liquidation 

If the Resolutions are approved by the Shareholders, the Company will commence a Members' Voluntary Liquidation following the Cancellation and the appointment of a liquidator is accordingly required. The appointment of the Proposed Liquidator is subject to the approval of a majority of Shareholders (in person or by proxy) at the Extraordinary General Meeting. Accordingly, the Resolutions set out in the notice of Extraordinary General Meeting on pages 7 to 8 of the Circular seek Shareholder approval for, inter alia, the appointment of the Proposed Liquidator. Subject to the Resolutions being passed, the Proposed Liquidator will be appointed immediately upon the commencement of the Members' Voluntary Liquidation.

In the course of the Members' Voluntary Liquidation, any surplus cash and assets of the Company will be returned to Shareholders (less any costs and expenses associated with the liquidation).

   4.         Process for Delisting and its effects 

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the intention to delist, subject to Shareholder approval, giving twenty business days' notice. Under the AIM Rules, it is a requirement that the Delisting is approved by not less than 75 per cent of votes cast by Shareholders (in person or by proxy) at the Extraordinary General Meeting. Accordingly, the Resolutions set out in the notice of Extraordinary General Meeting on pages 7 to 8 of the Circular seek Shareholder approval for the Delisting. Subject to the Resolution approving the Delisting being passed at the Extraordinary General Meeting, it is anticipated that trading in the Ordinary Shares on AIM will be suspended at 7.30 a.m. UK time on 9 December 2014 with Delisting taking effect at 7:00 am UK time on 10 December 2014.

Following the Cancellation of trading in the Company's shares on AIM, the Ordinary Shares will not be traded on any public market and the CREST facility (through which the depositary interests representing Ordinary Shares are currently traded) will be cancelled. The Ordinary Shares will remain capable of being transferred in paper form (and therefore not through CREST) for a limited time until the Members' Voluntary Liquidation is completed at the discretion of the Liquidator. A Shareholder will be unable to purchase or sell any Ordinary Shares following Cancellation.

Transfers of interests in shares in certificated form should be sent to the Company's UK Transfer Agent, Capita Registrars, 34 Beckenham Road, Beckenham, Kent BR3 4TU, United Kingdom. Existing share certificates remain valid until completion of the Members' Voluntary Liquidation.

If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation becoming effective. As noted above, in the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 8 December 2014 and that the effective date of the Cancellation will be 10 December 2014.

Upon the Delisting becoming effective, S. P. Angel Corporate Finance LLP will cease to be nominated adviser and broker to the Company and the Company will no longer be required to comply with the rules and corporate governance requirements to which companies admitted to trading on AIM are subject, including the AIM Rules.

   5.         Shareholder indications and total voting rights 

Shareholders should be aware that Shareholders who hold more than 50% of the Company's share capital have indicated that they are likely to vote for the Resolutions. As certain of the resolutions are Special Resolutions, they will require a majority of 75%, not 50%, of the votes cast.

At the date of the Circular the Company's issued share capital consists of 45,190,000 Ordinary Shares. Each Ordinary Share carries the right to one vote at a general meeting and therefore the total voting rights in the Company as at 6.00pm on the day immediately prior to the date of the Circular is 45,190,000.

   6.         Extraordinary General Meeting and action to be taken 

Set out at the end of the Circular is a notice of an Extraordinary General Meeting which is to be held at Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ at 10:00 a.m. local time on 9 December 2014 at which the Resolutions will be put to Shareholders.

   7.         Recommendation 

Given the crisis which struck in 2008, Promethean's performance has been better than many of its contemporaries and despite such performance, it is for the reasons set out above that the Directors believe that the Proposals are in the best interests of the Company and of Shareholders as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Proposals.

DEFINITIONS

The following definitions apply throughout the Circular unless the context otherwise requires:

   'Admission'                          the admission of the Ordinary Shares to trading on AIM 

'Act' the Companies Act 2006 (an Act of Tynwald, the parliament of the Isle of Man), as amended and including those provisions of the Companies Act 1931 applied thereto by s.182 of the Companies Act 2006

   'AIM'                                     the AIM market operated by the London Stock Exchange 

'AIM Rules' the AIM Rules for companies admitted to trading on AIM published by the London Stock Exchange, as amended from time to time

'Cancellation' or the proposed cancellation of the Company's Ordinary Shares from trading

   'Delisting'                             on AIM 
   'Company' or                        Promethean plc 

'Promethean'

'CREST' the relevant system (as defined on the Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the Regulations)

   'Directors' or 'Board'          the directors of the Company 
 
 'Extraordinary      the Extraordinary General meeting of the 
  General Meeting'    Company convened for 10:00 a.m. local time 
                      on 9 December 2014 and any adjournment thereof, 
                      notice of which is set out at the end of 
                      this document 
 

'Form of Proxy' the form of proxy accompanying this document for use in connection with the Extraordinary General Meeting

'London Stock Exchange' London Stock Exchange plc

   'Members' Voluntary          a Members' Voluntary Winding Up within the meaning of the Act 

Liquidation'

   'Ordinary Shares'                 ordinary shares of GBP0.01 each in the capital of the Company 

'Proposals' the proposed Members' Voluntary Liquidation, appointment of the Proposed Liquidator and Cancellation

'Proposed Liquidator' Dennis Anthony McGurgan of Grant Thornton Limited, Third Floor, Exchange House, 54-62 Athol Street, Douglas, IM1 1JD

'Regulations' the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755 of Parliament), as amended from time to time

'Resolutions' the resolutions set out in the notice of the Extraordinary General Meeting at the end of the Circular and Resolution means any of them, as the context may require

   'Shareholders'                      the holders of the Ordinary Shares 

This information is provided by RNS

The company news service from the London Stock Exchange

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