Buy
Sell
Share Name Share Symbol Market Type Share ISIN Share Description
QANNAS INVESTMENTS LIMITED NEX:QIL.GB NEX Ordinary Share KYG7306P1037
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
- - - -

Qannas Investments Limited Notice of EGM

03/12/2019 7:01am

UK Regulatory (RNS & others)


QANNAS INVESTMENTS (NEX:QIL.GB)
Historical Stock Chart

6 Months : From Sep 2019 to Mar 2020

Click Here for more QANNAS INVESTMENTS Charts.

TIDMQIL

RNS Number : 3986V

Qannas Investments Limited

03 December 2019

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Qannas Investments Limited

("Qannas", or the "Company")

Notice of EGM

Qannas Investments Limited, the closed-ended investment company listed on the AIM market (AIM:QIL), announces that the notice of the Extraordinary General Meeting ("EGM") has today been posted to all shareholders and an electronic copy is available on the Company's website.

The EGM will be held at the offices of Estera Fund Administrators (Jersey) Limited, 13-14 Esplanade, St Helier, Jersey, Channel Islands, JE1 1EE on 18 December 2019 at 9.00 am.

For further information please contact:

   Qannas Investments Limited                Tel: 01534 844 806 

Nadia Trehiou

   ADCM Ltd. (Investment Manager)         Tel: +971 2 639 0099 

Mustafa Kheriba

   finnCap Ltd                                              Tel: 020 7220 0500 

Henrik Persson/James Thompson (Corporate Finance)

   1.         INTRODUCTION 

On 3 September 2019, Qannas Investments Limited ("Qannas" or the "Company") announced that it had conditionally agreed to acquire a substantial portfolio of investment assets and associated liabilities (the "Portfolio") from a consortium of third party vendors (the "Transaction").

On 29 November 2019, the Company announced that it proposed to cancel the admission of the Shares to trading on AIM (the "Cancellation") and that it would not seek re-admission to AIM following completion of the Transaction.

The board of directors of the Company (the "Board") is proposing:

-- a resolution to approve the cancellation of the admission of the Shares to trading on AIM; and

   --      to adopt the New Articles, 

(together, the "Proposals").

The Company is now writing to Shareholders to explain the Proposals and to seek the Shareholder approvals required in order to effect the Proposals. If the Resolutions relating to the Proposals are passed by the requisite majority at the EGM, the Company expects that the Cancellation will become effective on 31 December 2019.

Principal events relating to the Cancellation are set out in Appendix A of this document for Shareholder reference.

   2.         Background to, and reasons for, the cancellation 

The announcement of the Transaction on 3 September 2019 set out that the Transaction, if it were to complete, would comprise a reverse takeover pursuant to Rule 14 of the AIM Rules for Companies (the "AIM Rules") due to the size of the Transaction relative to the Company and, accordingly, the Company's Shares were suspended from trading on AIM pending publication of an admission document.

Qannas, the Investment Manager and advisers have worked diligently to advance the necessary workstreams to complete the Transaction. This had included inter alia detailed due diligence of and independent valuations of the Portfolio, transaction structuring, finalising documentation with regard to the Transaction with the vendors, advanced negotiations with the banks and financing counterparties associated with the Portfolio and arranging certain appointments to strengthen the board of Qannas.

The directors of the Company (the "Board") remain persuaded by the commercial and strategic merits of the Transaction, and that it represents a compelling opportunity to significantly enhance and broaden the existing investment portfolio of Qannas with the aim of achieving greater scale and enhanced diversification. The independent directors of the Company, being Chris Ward and Richard Prosser (the "Independent Directors"), having been so advised by the Investment Manager, are concerned that the benefits of the Transaction will diminish as the process of completing the Transaction extends and consider that a protracted execution phase will increase the risk of the Transaction lapsing. Following discussions with the vendors of the Portfolio, it has recently become apparent that there is a material risk that the Transaction will lapse before an AIM admission document can be finalised.

It is in this context that the Board have resolved to seek the Cancellation as soon as possible. The Board considers that the Transaction can be more expeditiously completed with greater certainty without the parallel complexities of the documentation and regulatory requirements of seeking a re-admission to trading on AIM. The Company and the Investment Manager would, as a result of completing the Transaction sooner, have the opportunity to restructure the Portfolio, enabling release of the value potential inherent in the Portfolio, for the benefit of Qannas and its Shareholders. Following completion of the Transaction, and implementation of certain restructuring measures that the Investment Manager believes will derive value for the Company from the Portfolio, the Company intends to seek a new admission to AIM or to another regulated, liquid, market or multi-lateral trading facility. Investors should keep in mind that any such admission would be subject to a range of risks beyond the control of the Company, including market conditions at the time of any such admission, funding requirements and availability of funding, investor appetite and the satisfaction of applicable legal and regulatory requirements in connection with the same. Accordingly, there can be no guarantee that the Company will be admitted to any regulated, liquid, market or multi-lateral trading facility in the future.

Notice of the EGM to be held at 13-14 Esplanade, St Helier, Jersey, Channel Islands at 9:00 a.m. on 18 December 2019, for the purpose of seeking Shareholder approvals required for the Proposals, is set in the shareholder circular posted to Shareholders today ("Shareholder Circular"). The Cancellation will be conditional upon consent of not less than 75 per cent. of votes cast by Shareholders at the EGM.

Abu Dhabi Financial Group ("ADFG"), the Company's majority shareholder, and 100 per cent. owner of the Investment Manager, has an interest in 75.87 per cent. of the Company's issued share capital and has indicated its intention to vote in favour of the Cancellation.

Subject to shareholder approval, it is expected that the Cancellation will take effect on 31 December 2019. If Shareholders do not approve the proposed Cancellation, this is likely to jeopardise the Company's ability to complete the Transaction.

   3.         Update on the Transaction 

The Independent Directors continue to believe that the Transaction represents an opportunity to enhance and broaden the existing investment portfolio of Qannas with the aim of achieving greater scale and enhanced diversification. The Independent Directors expect that such greater scale and diversification will, in the medium term, boost liquidity and the investor appeal of Qannas.

The Transaction presents Qannas with the opportunity to acquire the Portfolio with a net asset value (based on the terms of the Transaction) of approximately AED 415 million (approximately $113 million) as at 30 Nov 2019. The Transaction and subsequent balance of assets across the Company is consistent with the Company's investment strategy that it adopted in September 2018 and increases its investment exposure to listed equities in the GCC region.

The Portfolio includes shareholdings in a number of publicly traded GCC-focussed companies, in sectors such as real estate, maritime shipping services and insurance, as well as two plots of land that have been zoned for commercial or residential development and units of an open ended fund that the Company is currently invested in. The Transaction attributes a value to the assets in the Portfolio of approximately AED 1.5 billion (approximately $412 million), which represented a discount compared to the market value of the Portfolio as at 30 September 2019 of approximately AED 2.1 billion (approximately $579 million).

Qannas will also assume accompanying liabilities with a value as at the Latest Practicable Date of approximately AED 1.1 billion (approximately $300 million). The liabilities are structured such that the investment assets in the Portfolio are either held by or pledged with the relevant lenders under the facilities as collateral or security for the corresponding loan or held through brokers as security for margin trading facilities. Following completion of the Transaction, the Company and its Investment Manager intend to restructure certain of the borrowings.

The Company will issue approximately 180 million new ordinary shares of no par value ("New Qannas Shares") to the consortium of third party vendors (the "Contributing Parties") in consideration for the Portfolio, which was determined inter alia on Qannas' net asset value as at 31 July 2019.

   4.         Process for the cancellation 

The Cancellation is conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the EGM.

Notice of the EGM to be held at 13-14 Esplanade, St Helier, Jersey, Channel Islands at 9:00 a.m. on 18 December 2019, for the purpose of seeking Shareholder approvals required for the Proposals, is set out at the end of the Shareholder Circular.

If the Resolutions relating to the Proposals are passed by the requisite majority at the EGM, the Company currently expects that Cancellation will become effective on 31 December 2019.

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the date of the proposed Cancellation.

The Cancellation will not take effect until at least five clear Business Days have passed following the passing of the Resolution for the Cancellation. If the Resolution for the Cancellation is passed at the EGM, it is the Company's intention that the Cancellation will take effect on 31 December 2019.

   5.         Principal effects of the cancellation 

The principal effects that the Cancellation will have on Shareholders include the following:

   --      there will be no formal market mechanism enabling the Shareholders to trade Shares; 

-- whilst the Shares will remain freely transferrable, the liquidity of the Shares will be more constrained following the Cancellation than at present and the value of the Shares may be adversely affected as a consequence;

-- in the absence of a formal market, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

-- the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply. However, the Company intends to continue to provide updates to shareholders by maintaining its website covering substantially the same matters as are currently addressed on the Company's website, or such other method as may be agreed by or communicated to shareholders. The Company will consider on a case by case basis whether to make any announcement via RNS or a similar service. Any change to that approach will be communicated to shareholders;

-- Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events, such as substantial transactions, financing transactions, related party transactions and fundamental changes in the Company's business; and

   --      finnCap will cease to be the Company's nominated adviser and broker. 

The Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own independent professional tax adviser.

   6.         Transactions in shares 

The Company's shares are currently suspended from trading on AIM and will remain suspended prior to the proposed Cancellation.

In the event that Shareholders approve the Cancellation, Shareholders will not be able to buy or sell Shares on AIM prior to the Cancellation becoming effective on or around 31 December 2019.

The Board is aware that the proposed Cancellation, should it be approved by the Shareholders at the EGM, would make it more difficult to buy and sell Shares in the Company following the Cancellation. The Board intends to put in place an internal process that will allow Shareholders or persons wishing to acquire or sell Shares to provide an indication to the Administrator that they are prepared to buy or sell at an agreed price. The Company will have no obligation to arrange transactions between parties that are willing to buy and sell Shares.

   7.         CERTAIN MATERIAL DIFFERENCES BETWEEN CAYMAN islands AND ENGLISH CORPORATE LAW 

Set out below is a description of certain relevant company law differences between companies incorporated in the Cayman Islands and companies incorporated in England, which may continue to affect the holders of Ordinary Shares following the proposed Cancellation:

-- Pre-emptive rights: Shareholders do not have statutory pre-emption rights under the Cayman Islands Companies Law over further issues of shares of the Company.

-- Takeovers: The Company is not, and following the Cancellation will not be, subject to the City Code. The Cayman Islands Companies Law does not contain provisions similar to those in the City Code which oblige a person or persons acquiring at least 30 per cent. of shares in a company to which the City Code applies to make an offer to acquire the remainder of the shares in such company.

-- Disclosure of interests in shares: Under the Cayman Islands Companies Law, Shareholders are not obliged to disclose their interests in the Company in the same way as shareholders of a company governed by the Companies Act 2006 are required to do.

-- Issuance of preference shares: Subject to the New Articles, the Board could create a class of shares with terms intended to delay or prevent a change of control of the Company or to make removal of management more difficult. Additionally, the Board may create shares with liquidation rights, dividend rights or rights to receive consideration that greatly exceed the amount given to holders of Shares.

The list set out above is intended to be illustrative only and does not purport to be exhaustive or to constitute legal advice. Shareholders seeking a detailed explanation of the Articles or the New Articles or any provisions of Cayman Islands Companies Law, or the difference between it and English law or the law of any other jurisdiction, should consult their own independent legal adviser.

   8.         Current Trading 

The Directors are pleased to report a marginal improvement in Qannas' NAV since 30 June 2019. The existing portfolio described above are assets already in liquidation or, particularly with regard to HRC and Project Palace, where Qannas believes that a liquidity or exit event is likely to occur in the coming financial year to 31 December 2020.

Since 30 June 2019, a further distribution has been received from IFG such that Qannas has received approximately $16 million of an expected $19 million of expected proceeds. Qannas repaid $5 million of its borrowings in September 2019 leaving an outstanding amount of $5 million.

   9.         Cancellation and Completion of the Transaction 

As set out in the announcement of the Transaction on 3 September 2019, Eagle T2 Limited ("Eagle"), a wholly owned subsidiary of ADFG, which is the controlling shareholder of the Company's investment manager, ADCM Ltd., has advised the Contributing Parties in relation to the Transaction and provided advisory and financial support to facilitate the agreement and execution of the Transaction. Eagle is entitled to a fee payable by the representatives on behalf of the Contributing Parties (the "Eagle Fee"). The Company is not a party to the agreement between Eagle and the representatives on behalf of the Contributing Parties with regard to the Eagle Fee.

The Eagle Fee is comprised of AED 31 million in cash or in kind payments and the transfer to Eagle of 35 million New Qannas Shares on completion of the Transaction which would otherwise be issued to the Contributing Parties (the "Eagle Shares") and, therefore, has no incrementally dilutive impact on Shareholders. The Eagle Fee will continue to be payable to ADFG if completion of the Transaction occurs after the Cancellation.

ADCM has made the Independent Directors aware that Eagle is advising the Contributing Parties and the Independent Directors have provided their consent to any perceived conflict of interest (as required pursuant to the investment management agreement between the Company and Investment Manager dated 1 March 2012 and as amended and restated on 28 March 2014 and from time to time (the "Investment Management Agreement")).

The Independent Directors' have held separate discussions with regard to the Transaction in which Mustafa Kheriba, a director of Qannas and a director of ADCM and Deputy Chief Executive Officer of ADFG, has not participated.

The Cancellation will be conditional upon consent of not less than 75 per cent. of votes cast by Shareholders at the EGM. ADFG is currently the holder of Ordinary Shares representing 75.87 per cent. of the issued share capital of the Company and has indicated its intention to vote in favour of the Cancellation.

   10.       SHAREHOLDER AUTHORITies 
   10.1      Cancellation 

The Cancellation is conditional on the Shareholders passing a special resolution. The Company intends to proceed with the Transaction and the issue of the New Qannas Shares following the Cancellation.

If Resolution 1 is passed by the Shareholders at the EGM, the Company will have authority to effect the Cancellation.

   10.2      Adoption of New Articles 

The Transaction is conditional on the Shareholders passing a special resolution amending the Company's existing Articles and replacing them with the New Articles.

The only material difference between the Company's existing Articles and the New Articles is that under the New Articles there is an increase in the threshold required for termination of the Investment Management Agreement without cause by the Company from a majority of Shareholders to 75 per cent. of Shareholders entitled to vote at a general meeting of the Company.

Pursuant to the terms of the Transaction, a corresponding amendment will be made to increase the threshold for termination of the Investment Management Agreement in the Investment Management Agreement.

A copy of the current articles of association and the proposed new articles of association that reflect the amendments will be available for inspection during normal business hours (Saturdays, Sundays and public holidays excepted) on the Articles of Association section of the Investor Relations page of the Company's website https://qannasinvestments.com/memorandum-articles-of-assosiation/ and at the offices of the Administrator at 13-14 Esplanade, St Helier, Jersey, Channel Islands up until the close of the meeting. Copies will also be available at 13-14 Esplanade, St Helier, Jersey, Channel Islands on the morning of the meeting from 9.00 a.m. until its conclusion.

If Resolution 2 is passed by the Shareholders at the EGM the Company will adopt the New Articles conditional on and from the Cancellation.

   11.       EXTRAORDINARY GENERAL MEETING 

Set out at the end of the Shareholder Circular is a notice convening an EGM of the Company to be held at 13-14 Esplanade, St Helier, Jersey, Channel Islands at 9:00 a.m. on 18 December 2019 at which the Resolutions will be proposed.

The quorum required for the EGM will be two Shareholders present in person or by proxy and entitled to vote. The majority required for the passing of Resolutions 1 and 2 is no less than three quarters of the total number of votes cast for and against Resolutions 1 and 2, respectively.

   12.       ACTION TO BE TAKEN 

Please note that hard copy form of proxies will not be posted to shareholders with for this EGM. Whether or not you intend to be present at the EGM, you are asked to vote either online at www.signalshares.com or through Crest to be received by the Company's Registrars, Link Asset Services, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible but in any event not later than 9.00 am on the 16 December 2019 for holders of ordinary shares or 9.00am on the 13 December for holders of Depository Interests. Completion of the Form of Proxy or Form of Direction will not preclude you from attending and voting at the EGM should you so wish.

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Annual General Meeting to be held at 13-14 Esplanade, St Helier, Jersey, Channel Islands at 9:00 a.m. on Wednesday 18 December 2019. and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider should refer to their CREST sponsors or voting service provider(s), who will be able to take the appropriate action on their behalf.

   13.       RECOMMENDATION 

The Board, considers the approval of the Resolutions to be put forward at the EGM to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board, unanimously recommends that Shareholders vote in favour of the Resolutions.

   14.       Definitions 

Capitalised terms used but not otherwise defined in this announcement have the meanings given to them in the Shareholder Circular.

Appendix A

EXPECTED TIMETABLE OF PRINCIPAL EVENTS(1),(2)

 
 Announcement of the                                                                                  3 September 2019 
 Transaction................................................................................. 
 Announcement of proposed Cancellation and                                                            29 November 2019 
 notice provided to the London Stock 
 Exchange...................................................................................... 
 ................................... 
 Publication and posting of the Shareholder                                                            3 December 2019 
 Circular, Forms of Proxy and Forms of 
 Direction..................................................................................... 
 .................................... 
 Latest time and date for receipt of completed                                                         9:00 a.m. on 16 
  Forms of Proxy in respect of Ordinary Shareholders                                                     December 2019 
  for the Extraordinary General Meeting 
 Latest time and date for receipt of completed                                                         9:00 a.m. on 13 
  Forms of Direction in respect of holders of                                                            December 2019 
  Depository Interests for the Extraordinary 
  General Meeting....................... 
 Time and date of the Extraordinary General                                                            9:00 a.m. on 18 
  Meeting.................................................                                               December 2019 
 Expected time and date of Cancellation(3)                                                             7.00 a.m. on or 
  .....................................................................                             around 31 December 
                                                                                                                  2019 
 

__________________

Notes:

(1) All times referred to in this announcement are to times in London.

(2) All the above dates and times are indicative and any material changes to the timetable will be announced through a Regulatory Information Service.

(3) The Cancellation requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the Extraordinary General Meeting.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

NOGCKBDQABDDCBK

(END) Dow Jones Newswires

December 03, 2019 02:01 ET (07:01 GMT)

1 Year QANNAS INVESTMENTS Chart

1 Year QANNAS INVESTMENTS Chart

1 Month QANNAS INVESTMENTS Chart

1 Month QANNAS INVESTMENTS Chart
ADVFN Advertorial
Your Recent History
NEX
QIL.GB
QANNAS INV..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20200329 13:21:44