Notice of General Meeting regarding Cancellation

 

TIDMTLU 
 
RNS Number : 6242N 
Teleunit S.p.A 
20 February 2009 
 
+---------------------------------------+---------------------------------------+ 
|                                       |                      20 February 2009 | 
+---------------------------------------+---------------------------------------+ 
 
 
Teleunit SpA 
("Teleunit" or "the Group"; stock code: TLU) 
 
 
 
 
Notice of General Meeting 
 
 
 
 
 
 
The Company has today sent a circular to Shareholders to seek their approval 
for cancellation of admission to trading on AIM of the Company's Ordinary 
Shares.  A copy of the notice is available on the Company's website, 
 http://ir.teleunit.it. 
 
 
 
 
Background to the proposed Delisting 
 
 
The Ordinary Shares in the Company were admitted to trading on AIM on 26 May 
2004 with the Company having raised money at a Share Price of 20p, giving the 
Company a market capitalisation of GBP37.3 million. Since that time the market 
valuation of the Company has decreased substantially with the mid-market Share 
Price being 1.125p at the close of business on 19 February 2009, giving the 
Company a market capitalisation of GBP1.99 million. 
 
 
As reported in trading updates, interim and year-end results, the Group has 
suffered a series of setbacks which have meant that it has not achieved the 
targets it set at the time of the IPO: In June 2006 the Group reported its first 
loss since its incorporation in 1997; In 2007, a corporate and organisational 
restructuring delayed management's growth targets for the Group's core 
businesses; the Group incurred significant net losses and asset write-downs 
following a marked reduction in revenues as a result of a regulation-driven 
downturn in the VAS market; and protracted litigation with Telecom Italia SpA 
has over the years been a significant drain on management's time and the Group's 
financial resources. 
 
 
Despite these factors, the Group has enjoyed some success, not least by means of 
the successful start-up and proven growth of its subsidiary Neomobile, which to 
date continues to trade beyond expectations. In October 2008 a 15.87% stake of 
Neomobile was successfully sold to a VCC for a cash consideration of EUR10.0 
million, giving Neomobile an implied enterprise value of EUR63.0 million. Assuming 
a residual valuation unadjusted for subsequent growth, the Company's total AIM 
capitalisation today stands at a significant discount to the intrinsic value of 
its subsidiary. Notwithstanding this and the Group's greatly 
strengthened balance sheet and cash position following the sale, the Company's 
Share Price hardly responded. 
 
 
In light of these factors the Directors have formed the view that the market has 
lost confidence in the Company and that, looking forward, any recovery which may 
occur in the Company's financial performance is unlikely to be properly 
reflected in its Share Price.  Furthermore, there is very little interest in the 
Company, and an associated absence of demand for the Company's shares. This, 
together with the Company's very small free float, (82% of the Ordinary Shares, 
excluding those held in treasury, are held by three investors) makes the 
Ordinary Shares a highly illiquid stock and the Directors believe that average 
daily volumes (average of 33,236 shares traded per business day in 2008) are not 
sufficient to uplift the Share Price. 
 
 
The Directors consider it unlikely that the Company will wish or have any need 
to raise money via a new share issue in the foreseeable future and, even if such 
were feasible, the Directors consider that such a capital raising is unlikely to 
be achieved without unacceptably high dilution to existing shareholders. As such 
the Board does not expect the number of shares in free float to increase 
significantly. 
 
 
In light of this, the Directors consider that the costs associated with 
maintaining an AIM listing, which are in excess of GBP60,000 per year, and the 
related regulatory requirements and management time cost, are no longer 
justified.  Consequently, the Directors have concluded that it is no longer in 
the best interests of the Company to maintain  the admission to AIM of the 
Ordinary Shares. 
 
 
 
 
Strategy following the De-Listing 
 
 
The Board and Management will continue to pursue their strategy of selective 
international expansion and support for the Group's most profitable initiatives. 
This could also include the disposal of certain operating divisions that 
currently represent a cash drain and have limited future prospects. The Company 
undertakes to keep shareholders informed of its operations and finances by 
publishing the notices and results of General Meetings and the Group's 
consolidated year-end accounts on the Group's website. 
 
 
 
 
Transactions in Ordinary Shares following delisting 
 
 
Following the De-Listing there will be no market facility for dealing in 
Ordinary Shares and no price will be publicly quoted for Ordinary Shares. It is 
likely that there will be less liquidity in the Ordinary Shares and they will 
become more difficult to value. 
 
 
The Board recognises that not all Shareholders will be able and/or willing to 
continue to own shares in the Company following the De-Listing. Accordingly, the 
Board has appointed Daniel Stewart, its current Nominated Adviser and broker to 
provide a broking facility following the De-Listing. Under this facility 
shareholders or persons wishing to trade shares will be able to leave an 
indication with Daniel Stewart of their desire to buy or sell shares at a 
specific  price. Further details of the facility will be set out on the 
Company's website following the De-Listing. 
 
 
 
 
General Meeting 
 
 
The General Meeting to approve the De-Listing will be held on 23 March 2009, at 
10.00 a.m. (local time), at the Company's Head Office on Via Monteneri, 
Sant'Andrea delle Fratte, Perugia, Italy. Set out below is a summary of the 
resolution that will be put to Shareholders: 
 
 
1. Cancellation of admission to trading on AIM of the Company's Ordinary Shares: 
In accordance with Rule 41 of the AIM Rules, it is a requirement that any 
De-Listing from AIM be approved by not less than 75 per cent. of Shareholders 
voting in person or by proxy at a general meeting. The De-Listing, if approved, 
is expected to take effect on 31 March 2009. 
 
 
 
 
Directors' recommendation 
 
 
The Directors believe that, for the reasons outlined above, the De-Listing is in 
the best interests of the Company. The Directors therefore recommend that 
Shareholders vote in favour of the resolution at the General Meeting, as they 
themselves intend on doing in respect of their direct and indirect holdings of 
127,658,134 shares representing 72.3% of the voting issued Ordinary Share 
capital. 
 
 
Please note that all defined terms in this announcement are as set out in the 
circular. 
 
 
For further information, please contact: 
 
 
+-----------------------------------------------------+------------------------+ 
| Gianfranco Cimica, Chief Executive Officer,         |     00 39 075 528 3939 | 
| Teleunit SpA                                        |                        | 
+-----------------------------------------------------+------------------------+ 
| Oliver Rigby, Daniel Stewart & Company Plc          |          020 7776 6550 | 
+-----------------------------------------------------+------------------------+ 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCCKCKNFBKDBBD