Reliance GeneMedix PLC Proposed De-listing (5642L)

TIDMGMX

RNS Number : 5642L

Reliance GeneMedix PLC

05 September 2012

   FOR IMMEDIATE RELEASE                                                     5 September 2012 

Reliance GeneMedix plc

(AIM: GMX)

Proposed cancellation of admission of ordinary shares to trading on AIM

Proposed re-registration as a private limited company

and

Proposed adoption of new articles of association

Reliance GeneMedix plc (the "Company"), the AIM listed biopharmaceutical company, announces the following:

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

-- The proposed re-registration of the Company as a private limited company and the associated adoption of new articles of association.

-- The Annual General Meeting ("AGM") of the Company will be held at 11:00 a.m. on 28 September 2012 to consider, inter alia, the above proposals.

These proposals are conditional on Shareholder approval. Full details of the proposed De-listing 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 and a summary is given below. Unless otherwise defined, terms used in this announcement have the meaning given to them in the circular.

Rationale for delisting from AIM

The primary purpose of the admission to trading of the Ordinary Shares on AIM was for the Company to access public funds. The Directors believe that this has now been severely compromised given the trading price of the Ordinary Shares, the substantial decline in the trading volume and liquidity in the Ordinary Shares mentioned below and the prevailing market conditions. The Directors also believe that the Company would not be able to raise additional capital independently on AIM to fund the operations of the business at a valuation that would be acceptable to both the Company and the Shareholders in the foreseeable future.

The admission to trading of the Ordinary Shares on AIM does not, in itself, offer Shareholders meaningful liquidity or marketability of their shareholding or the opportunity to trade in meaningful volumes or with frequency. The Ordinary Shares are suffering from a lack of liquidity and, in practical terms, a small free float and market capitalisation has reduced demand. Only a limited proportion of the issued share capital of the Company is in public hands.

The Directors believe that the Company will continue to struggle to attract and retain sufficient coverage, institutional interest and level of market rating that would make retaining the admission of the Ordinary Shares to trading on AIM worthwhile.

If the Ordinary Shares are de-listed from AIM and are subsequently acquired by a third party, then proceeds from a potential trade sale could be maximised without reference to, what the Directors believe to be, an underperforming share price.

In addition, the Company would benefit from substantial administrative cost savings as a result of the De-listing. Such cost savings include professional fees associated with the admission of the Ordinary Shares to trading on AIM (including legal, accounting, broking, London Stock Exchange and nominated adviser costs). Similarly, the De-listing would result in reduced internal administrative costs by removing the Company's ongoing compliance obligations as a publicly quoted company and free up further management time.

The reduction of the costs referred to above would help to reduce the Company's ongoing requirement for funding and also provide the Company with resources to invest in business development. The Directors believe that the De-listing would enable the Company to implement its strategy with more flexibility and without needing to comply with the reporting and other requirements imposed by AIM.

Based on the above factors, the Directors believe that it is in the best interests of the Company and Shareholders as a whole that the Company be delisted from AIM.

The Company has been informed by its majority shareholder, Reliance Life Sciences B.V. ("RLS"), which holds 79.6 per cent. of the Ordinary Shares, that it intends to vote in favour of the De-Listing. Therefore, it is expected that the resolution to de-list from AIM will be passed at the AGM.

Rationale for re-registering as a private limited company

The Directors also propose that, conditional on the De-listing, the Company be re-registered as a private limited company. This will reduce both the costs and complexities of operating the Company and, in particular, will facilitate returns of capital to Shareholders without the need to apply to the Court.

Principal effects of de-listing and process

The principal effects that the De-listing will have on the Company are as follows:

-- Shareholders will no longer be able to buy and sell Ordinary Shares through AIM or any other public stock market and therefore liquidity and marketability of the Ordinary Shares will be reduced. The Company does not intend to offer a matched bargain settlement facility;

-- the Company will no longer be required to announce price sensitive information or other material developments or interim results; and

-- the Company will cease to have a nominated adviser and broker and will no longer be required to comply with the AIM Rules.

Under the AIM Rules, the De-listing can be effected following the expiry of 20 business days from the date on which notice of the De-listing is given to the London Stock Exchange provided that the De-listing has been approved by not less than 75 per cent. in value of votes cast by Shareholders and can only become effective once five business days have passed since the date on which the requisite Shareholder approval is given.

Principal effects of re-registration

The principal effects that the Re-registration will have on the Company are as follows:

-- as a private company, the Company will be prohibited from offering its securities to the public;

-- following Re-registration, the Company will be able to use the solvency statement procedure for a reduction of capital (and will not be required to obtain Court approval);

-- as a private company, the Company will be able to use the statutory written resolution procedure and will not be required to hold an annual general meeting; and

-- the provisions of the City Code will cease to apply to the Company following the tenth anniversary of the De-listing.

It is also proposed to adopt the New Articles with effect from Re-registration so as to reflect the Company's status as a private limited company.

Annual General Meeting

The Company will hold its AGM on 28 September 2012 at 11:00 a.m. at IDA Business & Technology Park, Srah, Tullamore, County Offaly, Ireland where among other things, the De-listing and the Re-registration will be considered and if deemed fit, approved as special resolutions.

Subject to approval of the De-listing by the requisite majority, it is anticipated that trading of the Ordinary Shares on AIM will cease at the close of business on 5 October 2012 and the effective date of the De-listing will be 8 October 2012. Further, conditional on the De-listing and subject to the approval of the Re-registration by the requisite majority, the earliest date the Company will be re-registered as a private company is 26 October 2012.

Recommendation

The Directors consider that all the Proposals to be considered at the Annual General Meeting are in the best interests of the Company and its Shareholders as a whole and are most likely to promote the success of the Company for the benefit of its Shareholders as a whole. The Directors will unanimously recommend that Shareholders vote in favour of all the Resolutions. RLS, a shareholder of the Company, holding 79.6 per cent. of the Ordinary Shares, has indicated to the Company that it intends to vote in favour of the Resolutions. As a result of this intention and given RLS's level of shareholding, it is expected that the Resolutions will be passed at the AGM.

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

ENQUIRIES:

   Reliance GeneMedix plc                                               Tel: [phone] 

Vinay Ranade, Chief Executive Officer

   Deloitte Corporate Finance                                          Tel: [phone] 

Jonathan Hinton, John Ball

   Lothbury Financial Services                                         Tel: [phone] 

Michael Padley

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCGMGGLZKVGZZM