Avanti Capital PLC Notice of EGM (4688H)

TIDMAVA

RNS Number : 4688H

Avanti Capital PLC

18 August 2016

18 August 2016

Avanti Capital plc ("Avanti" or the "Company")

Notice of Extraordinary General Meeting

relating to the Cancellation of admission of Ordinary Shares to trading on AIM

Avanti wishes to announce that a circular dated 18 August 2016 (the "Circular") will be posted to shareholders of the Company to enable shareholders to vote on the cancellation of admission of the Ordinary Shares to trading on AIM. Included within the Circular is a notice of an extraordinary general meeting to be held on 26 September 2016.

A copy of the Circular will shortly be available on the Company's website at www.avanticap.com.

Capitalised terms and expressions used in this announcement shall have the same meanings as those attributed to them in the Circular.

Certain extracts from the Circular are set out below.

ENQUIRIES:

   Avanti Capital Plc                                         Tel: [phone] 

Richard Kleiner

   Panmure Gordon (UK) Limited                Tel: [phone] 

Andrew Potts

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Publication of this document           18 August 2016 
 Latest time and date for receipt     11.00 a.m. on 24 
  of Form of Proxy                      September 2016 
 General Meeting                      11.00 a.m. on 26 
                                        September 2016 
 Last day of dealings in Ordinary       3 October 2016 
  Shares on AIM 
 Cancellation of admission              4 October 2016 
  to trading on AIM of the Ordinary 
  Shares becoming effective 
 

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 recognised by the London Stock Exchange.

(2) The Delisting of the Ordinary Shares requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the General meeting.

LETTER FROM THE CHAIRMAN

Dear Shareholder,

Cancellation of admission of Ordinary Shares to trading on AIM

Notice of General Meeting

   1.     Introduction 

On 13 May 2016 the Company announced the conditional disposal of the Company's interests in Mblox Inc. ("Mblox") by way of a merger of Mblox with CLX Communications AB ("CLX"). On 12 July 2016 CLX announced completion of the merger agreement with Mblox. Following these events, the Board has concluded that there is no longer any advantage to the Company in maintaining a quotation on AIM.

Accordingly, the Board is proposing to convene a General Meeting to put to Shareholders a special resolution to cancel admission of the Company's Ordinary Shares to trading on AIM.

   2.     Background and current trading and strategy 

Based on the terms of the merger agreement between Mblox and CLX, the Company has received cash of approximately US$2.85m (approximately GBP2.16m based on the exchange rate of GBP1 = $1.32 that existed at time of conversion to sterling). The balance of the consideration of approximately US$0.9m (approximately GBP0.7m assuming the same exchange rate of GBP1=$1.32 is prevalent at time of receipt) has been confirmed by Mblox as the amount that is required to be held in the escrow retention account, being the Company's share of the overall consideration held in the escrow retention account. The terms of the escrow retention account are such that, subject to any warranty or other claims that may be brought by CLX, the retention monies will be paid out 18 months after completion, with the Company receiving its pro rata entitlement.

Following receipt of monies from CLX and having obtained legal advice from the Company's solicitors, the Board has settled its outstanding liabilities. These are principally Odyssey Partners Limited, a company in which Richard Kleiner has a 50 per cent. interest, who under the terms of the investment management agreement entered into in November 2008 ("IMA"), are due a payment of accrued unpaid management fees of GBP132,000 (excluding VAT) and a carried interest payment of approximately GBP850,000, of which GBP645,000 is payable now and the balance payable following release of monies from the escrow retention account (assuming no claims have been made by CLX). The precise amount of the balance may vary depending upon the exchange rate that prevails at the time of the release of the retention and subsequent conversion to sterling.

Following receipt of monies due from CLX and payment of amounts due under the IMA, the Board has decided to declare an interim dividend of 22 pence per share, equivalent to approximately GBP1.8m. Details of the dividend declaration and payment are set out in today's announcement made by the Company which include the record date, ex-dividend date and payment date.

With effect from 1 July 2016, the Board has agreed not to take any further directors fees. In addition, other than payment of amounts due to Odyssey Partners Limited under the IMA as described in the previous paragraph, Odyssey Partners Limited and the Board have reached agreement such that there will be no further amounts payable to Odyssey Partners Limited with effect from 1 July 2016.

Following receipt of monies from the disposal of the Company's Mblox interests and payment of amounts due under the IMA, the Board believes that it is appropriate to seek shareholders' approval for the Delisting, in order to reduce overhead costs to very modest levels for the period until the receipt of monies from the Mblox escrow retention account. The Board will also seek to monetise any value for the Company's other investments all of which are currently written down to GBPnil, although there is no current expectation that any value will be monetised.

Following the receipt of monies from the escrow retention account (18 months after completion), referred to above, the Board's current intention is that the Company would then appoint a liquidator in order to effect a winding up and return of remaining cash to shareholders.

   3.     Delisting 

Reasons for the Delisting

Following the disposal of the Company's Mblox interests, and in accordance with paragraph 5.6 of the AIM Note for Investing Companies, which forms part of the AIM Rules, the Company has a period of 12 months from the date of the disposal to implement its investing policy. If this is not fulfilled, the Company's shares will be suspended from trading on AIM.

However, the Board feels that with the Company's reduced size and revenues, and its remaining investments (other than cash) currently written down to GBPnil, the ongoing costs and regulatory requirements of a quotation on AIM can no longer be justified, and that greater shareholder value will ultimately be derived by operating the Company's business without these burdens. Additionally, it is unlikely that the Company could raise money through a new share issue, removing one of the key attractions of maintaining a quotation on AIM.

The Board therefore has no intention or wish to put forward a new investing policy to Shareholders or to seek to undertake a reverse takeover in accordance with the provisions of the AIM Rules and has accordingly concluded that it is in the best interests of Shareholders as a whole that the Delisting be approved.

Effect of Delisting and share dealing following the Delisting

The principal effect of the Delisting is that Shareholders will no longer be able to buy and sell shares in the Company through a public stock market; that is, liquidity in the Company's shares will be very limited.

However, the Company intends to use its reasonable endeavours to facilitate introductions and communication among Shareholders who wish to sell their Ordinary Shares and those persons who wish to purchase Ordinary Shares. To do this, Shareholders or persons wishing to acquire or sell Ordinary Shares will be able to leave an indication with the Company that they are prepared to buy / sell Ordinary Shares at a specified price. In carrying out such introductions, the Company will not arrange transactions and will take no responsibility to match up Shareholders wishing to sell and purchase Ordinary Shares, and no responsibility in respect of the time frame and manner in which introductions or communications (if any) are made or as to the price at which any trades might take place.

The Company intends to continue to keep Shareholders informed of all material developments through its website and will continue to produce annual audited accounts.

Process of Delisting

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

Under the AIM Rules, it is a requirement that the Delisting is approved by the requisite majority of Shareholders voting at the General Meeting (being not less than 75 per cent. of the votes cast). Accordingly, the Resolution set out in the Notice of General Meeting seeks Shareholders' approval to the Delisting. Subject to the Resolution approving the Delisting being passed at the General Meeting, it is anticipated that trading in the Ordinary Shares on AIM will cease at close of business on 3 October 2016 with the Delisting taking effect at 7:30am on 4 October 2016.

Upon the Delisting becoming effective, Panmure Gordon (UK) Limited will cease to be nominated adviser 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.

Shareholders should note, however, that the Company will nevertheless remain subject to the provisions of the City Code on Takeovers and Mergers.

   4.     The General Meeting 

Set out at the end of the Circular is a notice convening the General Meeting to be held on 26 September 2016 at the offices of Berwin Leighton Paisner LLP, St Magnus House, 3 Lower Thames Street, London EC3R 6HE at 11.00a.m., at which the Resolution will be proposed.

The Resolution, which will be proposed as a special resolution, is to approve the Delisting.

   5.     Recommendation 

The Directors consider the Delisting to be in the best interests of the Company and its Shareholders as a whole and, accordingly, unanimously recommend Shareholders to vote in favour of the Resolution to be proposed at the General Meeting as they intend to do in respect of their beneficial holdings amounting, in aggregate, to 1,142,363 ordinary shares of the Company, representing approximately 14.2 per cent. of the existing issued ordinary share capital of the Company.

Yours faithfully

P.J. Crawford

Chairman

Avanti Capital plc

DEFINITIONS

The following definitions apply throughout this announcement unless the context otherwise requires:

 
 "Act"                the Companies Act 2006 (as 
                       amended) 
 "AIM"                the AIM Market operated by 
                       the London Stock Exchange 
 "AIM Rules"          the AIM Rules for Companies 
                       published by the London Stock 
                       Exchange from time to time 
 "Capita Asset        Capita Asset Services Limited, 
  Services" or         registrars to the Company 
  "Registrars" 
 "Company"            Avanti Capital plc, a company 
                       incorporated and registered 
                       in England and Wales under 
                       the Companies Act 1985 with 
                       registered number 03319365 
 "CREST"              the system for paperless settlement 
                       of trades and the holding of 
                       uncertificated securities administrated 
                       through Euroclear 
 "Delisting"          the cancellation of admission 
                       of the Ordinary Shares to trading 
                       on AIM 
 "Directors" or       the directors of the Company 
  "Board"              or any duly authorised committee 
                       thereof 
 "Euroclear"          Euroclear UK and Ireland Limited, 
                       the operators of CREST 
 "Form of Proxy"      the form of proxy for use by 
                       Shareholders in connection 
                       with the General Meeting and 
                       which is appended at the end 
                       of this document 
 "FSMA"               the Financial Services and 
                       Markets Act 2000 (as amended) 
 "General Meeting"    the general meeting of the 
                       Company to be held at the offices 
                       of Berwin Leighton Paisner 
                       LLP, St Magnus House, 3 Lower 
                       Thames Street, London EC3R 
                       6HE at 11 a.m. on 26 September 
                       2016, or any adjournment thereof, 
                       notice of which is set out 
                       at the end of the Circular 
 "Group"              the Company, its subsidiaries 
                       and its subsidiary undertakings 
 "London Stock        London Stock Exchange plc 
  Exchange" 
 "Notice of General   the notice convening the General 
  Meeting"             Meeting and which is set out 
                       at the end of the Circular 
 "Ordinary Shares"    ordinary shares of GBP0.01 
                       each in the capital of the 
                       Company 
 "Prospectus Rules"   the Prospectus Rules brought 
                       into effect on 1 July 2005 
                       pursuant to Commission Regulation 
                       (EC) No. 809/2004 
 "Resolution"         the resolution to be proposed 
                       at the General Meeting as set 
                       out in the Notice of General 
                       Meeting 
 "Shareholders"       the registered holders of ordinary 
                       shares of the Company 
 "Takeover Code"      the City Code on Takeovers 
                       and Mergers 
 "UK"                 the United Kingdom of Great 
                       Britain and Northern Ireland 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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August 18, 2016 02:01 ET (06:01 GMT)