Yujin International Ltd Proposed Scheme of Restructuring (7686H)

TIDMYUJ

RNS Number : 7686H

Yujin International Ltd

02 December 2015

2 December 2015

 
 yujin international ltd. 
  ("YIL" or "the Company") 
 
 

Proposed SCHEME to restructure the business of YUJIN INTERNATIONAL LTD and its subsidiaries

The Company announces that it has been granted approval by the High Court of the Republic of Singapore (the "Court") for the Company to seek shareholder approval for a proposed scheme of arrangement between the Company and its members for the purpose of restructuring the business of the Company and its subsidiaries (the "Group").

Rationale

The Company's rationale for restructuring the business of the Group is as follows:

(a) Given the business environment that the Group has operated since its admission to the AIM market of the London Stock Exchange plc ("AIM"), several factors have contributed to the view that it does not make commercial and economic sense for the existing business of the Group to remain listed on AIM:

(i) low trading liquidity: one of the reasons the Company sought a listing was to provide additional liquidity to current and future investors of the Company. However trading volumes of the Company's shares on AIM has been unsatisfactory;

(ii) greater management flexibility: a delisting would provide the Group with the benefit of greater management flexibility, allowing the subsidiaries to operate with greater speed in a challenging environment;

(iii) eliminate certain costs: stock exchange fees, compliance and other related costs associated with ongoing listing requirements will be eliminated from the perspective of the existing business; and

(iv) access to capital markets no longer required for its existing operations: the Company has not undertaken any equity fundraising on AIM since its admission and is unlikely to require access to equity capital markets in the foreseeable future.

(b) Restructuring will enable the business of the Group to be delisted leaving the Company as a listed shell which can be sold or used as a vehicle for the injection of new business.

Investing Policy

It is proposed that the Company will have a generalist investing policy with the ability to invest in all sectors; however the focus will be on businesses exhibiting the factors and management necessary for significant growth over the short to medium term and generating good cash flow. The Directors intend initially to focus primarily on the UK where the Directors believe that there are suitable opportunities, although other European countries may also be considered in due course.

It may be considered appropriate to take an equity interest in any proposed business, which may range from a majority position to 100 per cent ownership. Any investment is likely to be made into an unquoted company and structured as a direct acquisition, the Board therefore being actively involved in such acquired business.

As the Company's financial resources are likely to be invested in just one investment, this acquisition is also likely to be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules. The Company does not currently intend to fund any investment with debt or other borrowings, but may do so if appropriate.

The Company's primary objective is that of achieving for Shareholders, over time, both capital growth and income through increasing profitability coupled with dividend payments on a sustainable basis.

The current intention of the Group is to acquire new business into the Company by way of a reverse takeover within six months of the completion of the restructuring.

While the Company has not signed any definitive agreements, it is in discussions with a UK-incorporated healthcare placement company for a possible acquisition.

The Group is also in discussions with a potential investor for a convertible loan note for GBP250,000 to cover the working capital requirements of the Company including but not limited to the financing of the restructuring and the related fees involved in identifying and subsequently acquiring a new business.

The Group will provide further details of potential acquisitions and financing at the appropriate time.

Proposed scheme to restructure the business of the Group

Yujin Holdings Pte Ltd ("YHolding") has been incorporated as a wholly-owned subsidiary of the Company. Pursuant to the proposed restructuring (the "Proposed Scheme") the business of the Group will be as follows:

(a) the transfer of shares held by the Company directly in the following subsidiaries, to YHolding in exchange for new shares of YHolding, allotted and issued as fully-paid to the Company, on the basis of 48 new YHolding shares for every 100 shares held by the Company in each subsidiary:

 
 Subsidiary           Shares held by   New YHolding 
                                 YIL         shares 
 Yujin Alfa Pte 
  Ltd                        375,000        180,000 
 Yujin Bravo Pte 
  Ltd                         50,000         24,000 
 Yujin Chartering 
  Pte Ltd                    100,000         48,000 
 JR Orion Services 
  Pte Ltd                    100,000         48,000 
 

Shareholders of the Company will still hold the same percentage ownership of the subsidiaries.

(b) by undertaking a distribution of the YHolding Shares in specie to entitled shareholders on the basis of one YHolding share for every 100 existing shares held by entitled Shareholders, with fractional entitlements to be disregarded. On this basis, it is estimated that 300,000 YHolding Shares will be transferred to entitled Shareholders pursuant to the Proposed Scheme.

Pursuant to the Proposed Scheme, entitled Shareholders will receive the YHolding Shares without being required to make any payment for them.

The Proposed Scheme is subject to, inter alia, the following:

(a) the passing of a special resolution requiring a majority of not less than three-fourths of the Shareholders present and voting at the extraordinary general meeting ("EGM") in favour of the Proposed Scheme, for which not less than 21 days' notice has been given;

(b) no application opposing the Proposed Scheme being made by any member or creditor of the Company or other person entitled to do so under and in accordance with the Companies Act or if such application is made, it has been withdrawn or the Court has approved the Proposed Scheme.

There are no current plans to change the make-up of the Board until such time as a new asset is identified and acquired by the Company. Pending the completion of such an exercise, the Board will then review its composition.

The approval from the Court is an important part of the process for the Company in implementing the Proposed Scheme and the Company wishes to assure all stakeholders that the approval from the Court will not adversely affect the Group's commitment and ability in the continuing performance of its business and current projects.

Having obtained Court approval, a Circular containing the final terms of the Proposed Scheme and notice of the EGM will be posted to members, the provision of which will be announced in due course.

The Company will continue to comply with the AIM Rules for Companies.

BY ORDER OF THE BOARD

For further information please contact:

Yujin International Ltd. Tel: [phone]

Keen Whye LEE

Or visit www.yujininternational.com

Cantor Fitzgerald Europe

Rick Thompson / Michael Reynolds Tel: [phone]

This information is provided by RNS

The company news service from the London Stock Exchange

END

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December 02, 2015 11:30 ET (16:30 GMT)