Bglobal PLC Return of Capital (9204L)

TIDMBGBL

RNS Number : 9204L

Bglobal PLC

10 July 2014

Bglobal plc ('Bglobal', the 'Group' or the 'Company')

PROPOSED RETURN OF CAPITAL TO SHAREHOLDERS OF 11 PENCE PER ORDINARY SHARE, DELISTING, CHANGE OF NAME AND NOTICE OF GENERAL MEETING (THE"PROPOSALS")

Bglobal plc (AIM:BGBL) is pleased to announce that it is proposing, subject to Shareholder and Court approval, to return approximately GBP11.7 million to Shareholders through a proposed return of capital to Shareholders (the "Return of Capital"). The Board has decided to effect the Return of Capital through a structure involving an issue of B Shares which would enable all Shareholders to receive their cash proceeds as capital, as would be the case on a winding up ("B Share Scheme").

Shareholders are also being asked to vote in favour of a change of the Company's name and the cancellation of trading of its shares on AIM.

In order to comply with the AIM Rules and applicable companies legislation, the change of name, the B Share Scheme, the Delisting and certain related matters require the approval of Shareholders at a general meeting of the Company, to be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at 10.00 a.m. on 30 July 2014. A circular, setting out further details of the Proposals and a notice convening the General Meeting is being posted to Shareholders today.

The Board is recommending to Shareholders that they vote in favour of the Resolutions to be proposed at the General Meeting, as the Directors have irrevocably undertaken to do for their respective individual beneficial holdings of, in aggregate, 125,000 Ordinary Shares, representing approximately 0.18 per cent. of the current issued share capital of the Company.

A circular, explaining the background to and reasons for the Proposals and providing notice of a general meeting (the "Circular"), is expected to be posted to Shareholders later today. Copies of the Circular will also be available on the Company's website (www.bglobalplc.com).

Background

As a result of the strategic review carried out by the Board, it was determined to dispose of Bglobal Metering and subsequently Utiligroup. Bglobal received a number of approaches for different combinations of business units from bidders who had different strategic goals. Throughout, the Board's approach was to analyse those bids with a view to ascertaining their successful delivery, not just in terms of execution risk, but also in terms of the ultimate return of cash to shareholders. KPMG assisted the Board in conducting a very thorough marketing exercise for each of the Group's key business units. The Board maintained all of the business divisions for minimal additional cost during this period. However, it soon became clear that closing Nutech and Bsmart was the most effective way of delivering shareholder value and this was done swiftly with minimal disruption to the other ongoing businesses. The Board's decisions have been vindicated by the completion of the prompt sale of both Bglobal Metering and Utiligroup on sensible terms and at acceptable values.

Return of capital

Following the two disposals referred to above and after having repaid the loan and borrowing facilities that the Group had with Synergy Capital and Barclays Bank plc, as at 9 July 2014 the Group had cash balances (net of GBP1.98 million of costs and expenses incurred in carrying out the strategic review, in the sale of Bglobal Metering and Utiligroup, in closing down Nutech and Bsmart, and in dealing with certain shareholder and restructuring costs) of, in aggregate, GBP16.4 million. The Board believes it is prudent to withhold GBP4.7 million from the Return of Capital. This sum is to cover contingent liabilities in the Board's assessment of a realistic worst case scenario and the anticipated costs of maintaining the Company in operation and ultimately winding it up. John Grant and Tim Jackson-Smith intend to appoint liquidators to formally wind up the Company as soon as practicable following the determination or settlement of all material contingent liabilities.

The principal contingent liabilities of the Company relate to the disposals of its subsidiaries. Whilst the Board sought to minimise the scope of those liabilities and the likelihood of any claim in relation to them, there is no guarantee that no claims will arise under the warranties and indemnities given and it is expected that there will be some small claims under one capped indemnity which was given on the sale of Bglobal Metering. The warranties and indemnities provided on the disposal of Bglobal Metering and Utiligroup expire on 17 July 2015 and 30 June 2015 respectively. The Company is required pursuant to the sale and purchase agreement relating to the disposal of Bglobal Metering to maintain and not distribute a reserve of GBP2.3 million to cover claims relating to that disposal. It also has contingent liabilities capped at GBP3.22 million from the sale of Utiligroup and running costs. The Board has assessed the likelihood of a claim being made under the warranties and indemnities that were given to the buyers of Bglobal Metering and Utiligroup and has also considered the quantum of any such claims in light of the scope and nature of the warranties and indemnities and the protections that were negotiated for the Company in respect of each transaction.

Consequently, the Board is proposing the Return of Capital to all Shareholders amounting to approximately GBP11.7 million in cash (11 pence per Ordinary Share), by way of a B Share Scheme, which gives Shareholders a return of the cash in the form of capital. The Board may seek to accelerate determination of its contingent liabilities if to do so is economically viable. If it does not, it is anticipated that they would otherwise be settled in September 2015.

Further cost savings

The Board is now focused on realising the Company's remaining assets, minimising costs and determining any contingent liabilities with a view to returning as much cash to Shareholders as is possible within the timing constraints imposed by its obligations.

In addition to the Company's bank balance, the Company has one remaining asset being the property which housed the former Nutech training centre at Phoenix Park. The property was fitted out to provide training to smart meter installers and has classrooms, workshops and associated infrastructure throughout. The Board anticipates that to maximise the returns from its sale, a small amount of building and refitting work will be required to return the premises to office use. Commencing that work is now the Company's top priority. Whilst the Company is unable to predict the property market, it is hoped that once completed, the property may be marketed and sold for approximately GBP325,000.

Notice has been served to terminate the Company's head office lease with effect from September 2014. It is also proposed to extend the Company's financial year to 30 June in order to avoid the requirement for a further audit prior to the Company's liquidation and anticipated return of additional capital in September 2015. It is anticipated that on a future return of capital, as part of the liquidation process, the liquidator will furnish a statement of financial position to Shareholders.

Board structure

If the Required Resolutions are passed by the requisite 75 per cent. majorities, it is proposed that James Newman and Steven Fawkes will resign as non-executive directors and that Nick Makinson will resign as company secretary. John Grant and Tim Jackson-Smith will continue as the Company's only directors in revised roles as Non-executive Chairman, and Non-executive Director and company secretary respectively. To reflect their changed roles, John Grant and Tim Jackson-Smith will each receive a fee of GBP40,000 per annum. Such fees will only be reviewed in the event that the Company becomes involved in substantive litigation in relation to any contingent liabilities. Shareholders are reminded that John Grant is a representative of Hawkwood Capital, a major shareholder of the Company which supports the Return of Capital and the strategy of minimising costs to maximise Shareholder returns.

Delisting

The Company received clearance from HMRC that the disposal of its subsidiaries would not trigger any liability to corporation tax on the basis that the Company would be wound-up as soon as practicable following their sale. Accordingly, the Board does not believe that the Company would be an attractive shell company which might be purchased by a third party if it remained admitted to trading on AIM. Accordingly, the Board anticipates that the Delisting will help the Company to make further cost savings whilst continuing to minimise the Company's liabilities and sell its remaining property.

All of the steps outlined above will minimise the Company's expenditure and preserve its capital for later return to Shareholders.

Delisting process

Rule 41 of the AIM Rules requires an AIM company that wishes to cancel admission of its securities to trading on AIM to notify such intended cancellation to the public and separately to inform the London Stock Exchange of its preferred cancellation date. That rule also requires that, unless the London Stock Exchange otherwise agrees, the Delisting must be conditional upon the consent of not less than 75 per cent. of votes cast by the Shareholders, given in a general meeting.

Subject to Shareholder approval at the General Meeting, it is expected that the admission of the Ordinary Shares to trading on AIM will be cancelled with effect from 7.00 a.m. on 2 September 2014. Accordingly, trading in Ordinary Shares on AIM will cease at the close of business on 1 September 2014.

The Delisting may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult an appropriate professional adviser. Upon cancellation of the Ordinary Shares to trading on AIM, Charles Stanley will cease to be the Company's nominated adviser and broker and the Company will no longer be required to comply with the AIM Rules.

Risks associated with the Delisting

There are certain risks associated with the Delisting. The Board considers the principal risks that Shareholders should consider to be as follows:

(a) Lack of an ongoing trading platform

Once the Delisting has taken place, there will no longer be a formal market mechanism for Shareholders to trade in the Ordinary Shares and no price will be publicly quoted for the Ordinary Shares. Shareholders will be able to buy and sell their Ordinary Shares "off market" although this will be more difficult than trading "on market". The only other opportunity for Shareholders to sell their Ordinary Shares would arise upon a sale of all of the issued share capital of the Company to a third party. It will therefore be more difficult for Shareholders to realise their Ordinary Shares than when the Company had an AIM quotation and, where a buyer is identified, it will be difficult to place a fair value on any such sale.

(b) Corporate governance and regulation

After the Delisting, the AIM Rules will no longer apply to the Company and levels of corporate governance and transparency will no longer be dictated by those rules. However, as the Company will remain a public limited company (albeit unlisted) there is still a requirement under the Companies Act for it to have at least two directors. John Grant and Tim Jackson-Smith will continue to run the Company for the benefit of all Shareholders. Their sole task will be to effect an orderly winding down of the Company's affairs at as low a cost as is possible in order to maximise returns to Shareholders and appoint liquidators to finally wind-up the Company when most appropriate. They will convene an annual general meeting of the Company when required to do so and would seek Shareholder support at that meeting for their continuing mandate.

Notwithstanding the cancellation of the Ordinary Shares to trading on AIM, the Company will continue to publish annual reports and accounts and hold Annual General Meetings and other General Meetings in accordance with the applicable statutory requirements and the Company's articles of association. Where the Board considers it to be in the interests of the Company to do so, it will continue to post certain additional information relating to the Company on its website. Any shareholders requesting information following the Delisting will be encouraged to contact John Grant or Tim Jackson-Smith directly.

In addition, the provisions of the Takeover Code will continue to apply in the event that circumstances arise where the Company would be an offeree company for the purposes of the Takeover Code. John Grant and Tim Jackson-Smith will ensure that the Shareholders continue to be afforded the same protections so that, amongst other things, all Shareholders will be treated fairly, will be able to decide on the merits of a takeover offer and Shareholders of the same class are afforded equivalent treatment by an offeror.

The B Share Scheme

Each Shareholder will receive one B Share for each corresponding Ordinary Share held at the Record Time and will receive 11 pence in respect of each such B Share on the redemption thereof.

It is expected that each B Share will be redeemed by the Company for 11 pence by 26 August 2014 and cancelled by the Company on redemption. It is expected that the redemption proceeds will be sent to relevant Shareholders by 5 September 2014. Further details of the B Share Scheme are contained in the Circular.

Information relating to the B Shares

None of the B Shares will be admitted to AIM or to trading on the London Stock Exchange, nor will the B Shares be listed or admitted to trading on any recognised investment exchange. The B Shares will have limited rights. The rights and restrictions attached to the B Shares are set out more fully in the Circular.

Change of Name

As part of the disposal of Bglobal Metering, the Company undertook to seek to change its name to a name not including the word Bglobal. Accordingly, it is proposed to change the Company's name to Stand Fast Value Return PLC. Shareholder approval to the Company's change of name is required and will be sought at the General Meeting.

General Meeting

Implementation of the Delisting, the change of name and B Share Scheme and certain related matters require the approval of Shareholders at a general meeting of the Company. Accordingly there is set out in the Circular a notice convening the General Meeting to be held at to be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at 10.00 a.m. on 30 July 2014. The Resolutions proposed at the General Meeting will adopt the new Articles of Association incorporating the rights and restrictions attaching to the B Shares and approve and authorise certain steps to be taken by the Company and its Directors for the purposes of implementing the B Share Scheme.

Irrevocable Undertakings

The Company has received irrevocable undertakings to vote in favour of the Resolutions from Martin Evans, Hawkwood Capital, and James Newman. In aggregate, irrevocable undertakings have been received in relation to 22,836,370 Ordinary Shares which represent 21.47 per cent. of the Existing Ordinary Shares.

Recommendation

The Board considers the Proposals and the Resolutions to be in the best interests of Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as the Directors have irrevocably undertaken so to do for their respective individual beneficial holdings of, in aggregate, 125,000 Ordinary Shares, representing approximately 0.18 per cent. of the total issued share capital of the Company as at 8 July 2014 (being the latest practicable date prior to the publication of the Circular).

Notice of General Meeting and availability of Circular

The Company has published a Circular to Shareholders dated 10 July 2014, which provides further details of the Proposals and encloses the Notice of General Meeting to be held on 30 July 2014 and the Form of Proxy. The Circular is being posted to Shareholders today.

Expected Timetable of Principal Events

 
 Publication of the Circular          10 July 2014 
-----------------------------------  ------------------- 
 Latest time and date for receipt 
  of Forms of Proxy and CREST           10.00 a.m. on 28 
  Proxy Instructions for the            July 2014 
  General Meeting 
-----------------------------------  ------------------- 
 Record time for those shareholders 
  on the Register of Members            6.00 p.m. on 28 
  entitled to attend or vote            July 2014 
  at the General Meeting 
-----------------------------------  ------------------- 
 General Meeting                      10.00 a.m. on 30 
                                       July 2014 
-----------------------------------  ------------------- 
 Court Directions Hearing             7 August 2014 
-----------------------------------  ------------------- 
 Latest time and date for dealings 
  in Ordinary Shares prior to           5.00 p.m. on 20 
  the Record Time                       August 2014 
-----------------------------------  ------------------- 
 Court hearing to approve the         20 August 2014 
  Capital Reduction 
-----------------------------------  ------------------- 
 Record Time                          6.00 p.m. on 22 
                                       August 2014 
-----------------------------------  ------------------- 
 B Shares issued after                6.00 p.m. on 22 
                                       August 2014 
-----------------------------------  ------------------- 
 Redemption of B Shares               By 26 August 2014 
-----------------------------------  ------------------- 
 Latest time and date for dealings 
  in Ordinary Shares prior to           5.00 p.m. on 1 
  Delisting                             September 2014 
-----------------------------------  ------------------- 
 Cancellation of admission to         7.00 a.m. on 2 
  trading on AIM                       September 2014 
-----------------------------------  ------------------- 
 Despatch of cheques or, if 
  held in CREST, CREST accounts         By 5 September 
  credited in respect of proceeds       2014 
  under the B Share Scheme 
-----------------------------------  ------------------- 
 

For further information, please contact:

 
John Grant, Executive  Mark Taylor          Rebecca Sanders-Hewett 
 Chairman               Laura White          Dwight Burden 
 Tim Jackson-Smith,     Charles Stanley      David Ison 
 CEO                    Securities           Redleaf Polhill 
 Bglobal plc            Nominated Adviser    Tel: [phone] 
 Tel: [phone]         and Broker           4730 
 600                    Tel: [phone] 
 

DEFINITIONS

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

 
 AIM                      the AIM market operated by the London 
                           Stock Exchange; 
 AIM Rules                the rules for AIM companies published 
                           by the London Stock Exchange, as 
                           amended or re-issued from time to 
                           time; 
 Articles of              the articles of association of the 
  Association              Company; 
 B Shares                 the redeemable shares of 0.001 pence 
                           each in the capital of the Company 
                           carrying the rights and restrictions 
                           set out in Part IV of the Circular; 
 B Share Scheme           the proposed transactions comprising 
  or Return of             the Capital Reorganisation and the 
  Capital                  return of 11 pence per Ordinary 
                           Share by way of the issuance and 
                           redemption of the B Shares; 
 Bglobal Metering         B Global Metering Limited; 
 Board or Directors       the board of directors of Bglobal 
                           plc; 
 Bsmart                   Bsmart Energy Solutions Limited; 
 Capital Reduction        the proposed reduction of share 
                           capital to be effected, subject 
                           to Court approval, by Resolution 
                           3; 
 Capital Reorganisation   the proposed reorganisation of the 
                           Company's share capital comprising 
                           the Capital Reduction and the issue 
                           of the B Shares; 
 Charles Stanley          Charles Stanley Securities, a trading 
                           division of Charles Stanley & Co 
                           Limited; 
 Companies Act            the Companies Act 2006, as amended; 
 Company                  Bglobal plc; 
 Court                    the High Court of England and Wales; 
 CREST                    the relevant system (as defined 
                           in the CREST Regulations) in respect 
                           of which Euroclear is the Operator 
                           (as defined in the CREST Regulations); 
 CREST Manual             the CREST manual issued by Euroclear; 
 CREST member             a person who has been admitted by 
                           Euroclear as a system-member (as 
                           defined in the CREST Regulations); 
 CREST Proxy              the instruction whereby CREST members 
  Instruction              send a CREST message appointing 
                           a proxy for the General Meeting 
                           and instructing the proxy how to 
                           vote and containing the information 
                           set out in the CREST Manual; 
 CREST Regulations        the Uncertificated Securities Regulations 
                           2001 (SI 2001/3755); 
 Delisting                the proposed cancellation of the 
                           admission of the Ordinary Shares 
                           to trading on AIM as described in 
                           this announcement; 
 Euroclear                Euroclear UK & Ireland Limited, 
                           being the operator of CREST; 
 Existing Ordinary        Ordinary Shares in issue as at the 
  Shares                   date of the Circular; 
 Form of Proxy            the form of proxy enclosed with 
                           the Circular for use by Shareholders 
                           in connection with the General Meeting; 
 General Meeting          the general meeting of the Company, 
                           to be held at the offices of Travers 
                           Smith LLP, 10 Snow Hill, London 
                           EC1A 2AL at 10.00 a.m. on 30 July 
                           2014, or any adjournment thereof, 
                           notice of which is set out at the 
                           end of the Circular; 
 Group                    the Company and its subsidiaries 
                           and subsidiary undertakings from 
                           time to time; 
 HMRC                     HM Revenue & Customs; 
 London Stock             London Stock Exchange plc; 
  Exchange 
 New Ordinary             Ordinary Shares issued after the 
  Shares                   date of the Circular pursuant to 
                           the exercise of options by Optionholders; 
 Notice of General        the notice of the General Meeting 
  Meeting                  which appears at the end of the 
                           Circular; 
 Nutech                   Nutech Training Limited; 
 Ordinary Shares          the ordinary shares of 1 pence each 
                           in the capital of the Company; 
 Overseas Shareholders    Shareholders who are not resident 
                           in the United Kingdom or who are 
                           citizens, residents or nationals 
                           of a country other than the United 
                           Kingdom or who have a registered 
                           address which is not in the United 
                           Kingdom. For the avoidance of doubt, 
                           Shareholders who are not resident 
                           in the United Kingdom include Shareholders 
                           who are resident in the Channel 
                           Islands or the Isle of Man; 
 Record Time              6.00 p.m. on 22 August 2014 (or 
                           such other time and date as the 
                           Directors may determine); 
 Required Resolutions     Resolutions 1, 2, 3 and 4 set out 
                           in the Notice of General Meeting; 
 Resolutions              the resolutions to be proposed at 
                           the General Meeting to approve the 
                           Proposals, as set out in the Notice 
                           of General Meeting; 
 Shareholders             holders of Ordinary Shares and, 
                           where the context so requires, holders 
                           of B Shares; 
 Sterling or              the lawful currency of the United 
  GBP                      Kingdom; 
 Takeover Code            the City Code on Takeovers and Mergers, 
                           as issued from time to time by or 
                           on behalf of the Panel on Takeovers 
                           and Mergers in the United Kingdom, 
                           and any successor thereof or replacement 
                           thereto, and having regard to any 
                           public statements issued by the 
                           Panel in relation to the interpretation 
                           of the City Code on Takeovers and 
                           Mergers 
 UK or United             the United Kingdom of Great Britain 
  Kingdom                  and Northern Ireland; 
 Utiligroup               Utiligroup Limited. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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