Cleardebt Group PLC Statement re Intention to Delist (4126Z)

TIDMCLEA

RNS Number : 4126Z

Cleardebt Group PLC

07 March 2013

ClearDebt Group plc

7(th) March 2013

CLEARDEBT GROUP PLC ("CLEARDEBT" OR "THE COMPANY")

PROPOSED CANCELLATION OF AIM ADMISSION AND NOTICE OF GENERAL MEETING

ClearDebt announces that it is seeking Shareholder approval for the cancellation of admission to trading on AIM of its Ordinary Shares ("Cancellation").

A General Meeting ("GM") is being convened to be held on 25(th) March 2013 at 2pm at Nelson House, Park Road, Timperley, Cheshire WA14 5BZ at which a resolution which seeks Shareholder approval for the Cancellation will be proposed.

A circular convening the General Meeting will be posted to Shareholders. Copies of the circular will shortly be available on the Company's website: www.cleardebtgroup.co.uk.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS:

Latest time and date for receipt of Forms of Proxy for the GM 2pm on Thursday 21(st) March 2013

Time and date of GM 2pm on Monday 25(th) March 2013

Cancellation of admission to trading on AIM of the Ordinary Shares 7am on Wednesday 10(th) April

2013

The dates and times are based on the Company's expectation and may be subject to change. Any changes to the expected timetable will be announced publicly.

CONTACTS:

ClearDebt Group plc:

   David Mond (Chief Executive Officer)                                            0161 968 6806 
   David Shalom (Finance Director)                                                  0161 968 6847 

Seymour Pierce (Broker & Nominated Advisor):

   Guy Peters/David Banks/Katie Ratner                                          0207 107 8000 

The following information is extracted from a circular to Shareholders (the "Circular") expected to be posted today. Copies of the Circular will be available at the offices of Seymour Pierce Limited (20 Old Bailey, London EC4M 7EN) upon request. Definitions used in the Circular apply in this announcement, unless the context otherwise requires:

Proposed cancellation of the Company's AIM listing

   1.         Introduction 

The purpose of this letter is to provide you with the background to and the reasons for the proposed cancellation of the Company's listing on the AIM market of the London Stock Exchange plc ("AIM") (the "Cancellation"), and to explain why the directors consider this proposal to be in the best interests of the Company and Shareholders as a whole, and to seek your approval to the proposal at the general meeting of the Company convened for this purpose (the "GM").

   2.         Reasons for the proposed Cancellation 

Concerns over the recent share price performance of the Company have led the Directors to undertake a review of the merits or otherwise of the Company continuing to be admitted to trading on AIM ("Admission"). The Directors have concluded that a proposal to cancel the Admission should be made to Shareholders in general meeting. In reaching the decision to propose this to Shareholders, the Directors have taken the following factors into account:-

2.1 given the overall market, the Directors are of the opinion that it is difficult for the Company to attract any or meaningful equity investment through its listing on AIM;

2.2 the AIM Listing of the Ordinary Shares is not offering investors the opportunity to trade in meaningful volumes within the relative market;

2.3 the Company, like many other small AIM companies, has a tightly held register of Shareholders and suffers from a lack of liquidity for its ordinary shares. The current share register shows that more than 61% of the Company's ordinary shares are held by 17 Shareholders. In practical terms, this results in a small free float and low trading volumes, which further reduces demand for the Ordinary Shares;

2.4 it is unlikely that the Company will be able to raise money through a new share issue or issue new shares in connection with an acquisition and therefore the lack of ordinary shares in free float and low trading volumes will continue;

2.5 there is limited investor appreciation of the Company's business areas and increasing difficulty in attracting and maintaining institutional investors in the Company, particularly in the current economic environment;

2.6 the Directors estimate that annual direct and indirect costs of maintaining the listing of the ordinary shares on AIM are at least GBP93,455. This estimate includes listing expenses and AIM advisory fees (and excludes any indirect costs savings associated with a considerable amount of senior executive time which is currently spent dealing with issues relating to the AIM listing). The Directors consider that these costs are disproportionately high to the benefits of trading on AIM and that these funds could be better utilised in running the business;

2.7 the current economic turmoil and the susceptibility of the share price to the wider general equity market conditions is not to the benefit of the business;

2.8 the impact (at least in the short term) on the Company's share price arising as a result of the new debt management protocol announced on 7 February 2013 which could have a negative impact on the Company's cash flow and profitability in the short to medium term.

   3.         Process for Cancellation 

In accordance with Rule 41 of the AIM Rules, the Company has notified AIM Regulation of the intention to delist, giving at least 20 Business Days notice. Under the AIM Rules, it is also a requirement that the Cancellation must be approved by not less than 75 per cent of those present and entitled to vote or voting by proxy in a general meeting. Accordingly, the resolution set out in the notice of GM ("Resolution") seeks Shareholder approval for the Cancellation. Subject to the Resolution being passed by the requisite majority at the GM, and following a further five Business Days (which must pass following approval by the Shareholders in accordance with the AIM Rules), it is expected that trading on AIM in the Ordinary Shares will cease at the close of business on Tuesday 9(th) April 2013 with the Cancellation becoming effective from 7.00am on Wednesday 10(th) April 2013.

   4.         Effect of the Cancellation on Shareholders 

The principal effects of the Cancellation would be that:-

4.1 there would no longer be a formal market mechanism enabling Shareholders to trade their shares on AIM or any other market or trading exchange;

4.2 the Company would not be bound to announce material events, such as interim or final results, material transactions or administrative changes;

4.3 the Company would no longer be bound to comply with the corporate governance requirements for companies with shares admitted to trading on AIM;

4.4 the Company would no longer be required to comply with the AIM Rules (or to have a nominated advisor), and Shareholders would no longer be required to vote on certain matters prescribed by the AIM Rules;

   4.5       Shareholders will not be able to read the Company's share price in the daily newspapers; 

4.6 interim reports will not be sent to Shareholders and, as a result, Shareholders will only receive the annual report once a year; and

4.7 the Company's CREST facility will be cancelled and although the Ordinary Shares will remain transferable, they will cease to be transferable through CREST. Instead, Shareholders who hold Ordinary Shares in CREST will receive share certificates.

However, the Directors intend to continue to operate the Company for the benefit of all Shareholders. They also intend to continue to keep Shareholders informed of progress and remain committed to high standards of corporate governance. As such, the Directors will:-

   4.8       post items of news on the Company's website (www.cleardebtgroup.co.uk); 

4.9 hold annual general meetings and general meetings in accordance with statutory requirements and the Company's Articles of Association (the "Articles");

   4.10      continue to send to Shareholders copies of the Company's audited accounts each year; and 

4.11 operate the Company with the corporate governance appropriate to a company with approximately 280 shareholders.

Following the Cancellation, although the Ordinary Shares will remain transferable they will no longer be tradable on AIM and no other trading facility will be available to facilitate the trading of the Ordinary Shares. Consequently, it is likely to be more difficult for a Shareholder to purchase or sell any Ordinary Shares following the Cancellation. The Directors intend, however, to review on an ongoing basis whether they can facilitate trading on a matched bargain basis in the UK and Shareholders interested in any such potential matched bargain arrangements should contact the Company Secretary, David Mond on 00 44 161 968 6806 in the first instance. Following the Cancellation, transfers of Ordinary Shares may be effected in accordance with those provisions of the Articles concerning off-market transfers of shares in certificated form.

It is the Company's intention to cancel the CREST facility following the passing of the resolutions at the GM and arrangements will be made to send share certificates to those Shareholders (at their risk) currently using CREST.

Shareholders should note that, even if the Cancellation is approved and becomes effective, the Company will remain subject to the provisions of the City Code on Takeovers and Mergers for a period of 10 years. The City Code provides an orderly framework within which takeovers and mergers are conducted and operates principally to ensure that shareholders are treated fairly and not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment. The City Code will however cease to apply to the Company 10 years after the Cancellation becomes effective. However, the regulatory regime imposed through the AIM Rules, which applies solely to companies with shares admitted to trading on AIM, will no longer apply. Upon the Cancellation becoming effective, Seymour Pierce Limited, will therefore cease to be nominated adviser and broker to the Company.

   5.         Expected Timetable of Events 
 
 Despatch of this document and form of proxy     Thursday 7(th) 
  and notice provided to London Stock Exchange    March 2013 
  to cancel the Admission 
 Latest time and date for receipt of Forms       2pm on Thursday 
  of Proxy in respect of the GM                   21(st) March 
                                                  2013 
 Time and date of the GM                         2pm on Monday 
                                                  25(th) March 
                                                  2013 
 Expected last day of dealings in Ordinary       Tuesday 9(th) 
  Shares on AIM                                   April 2013 
 Expected date of Cancellation                   7am on Wednesday 
                                                  10(th) April 
                                                  2013 
 

Each of the times and dates in this timetable is subject to change. If any of the above time and/or dates change, the revised times and dates will be notified to Shareholders by an announcement through a regulatory information service recognised by the London Stock Exchange.

   6.         General Meeting 

The notice convening the GM to be held at Nelson House, Park Road, Timperley, Cheshire WA14 5BT at 2pm on Monday 25(th) March 2013 is set out at the end of this document to approve, as a special resolution, the Cancellation.

   7.         Action to be taken 

You will find enclosed with this document a form of proxy for use at the GM. Whether or not you propose to attend the GM in person you are requested to complete the form of proxy and return it to Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA, so as to arrive no later than 2pm on 21(st) March 2013. The completion and return of the form of proxy will not affect your right to attend and vote in person at the GM if you so wish.

   8.         Recommendation 

The Directors believe that the proposed Resolution is in the best interests of the Company and unanimously recommend that you vote in favour of it as they intend to do in respect of their own beneficial shareholdings of 125,565,618 Ordinary Shares which represent the equivalent of 40.68 per cent of the issued Ordinary Shares.

The Directors, those connected with them and other Shareholders have irrevocably undertaken to vote in favour of the proposed resolution in respect of an aggregate of 211,294,246 Ordinary Shares (including the 125,565,618 Ordinary Shares referred to above), representing approximately 68.46 per cent of the issued Ordinary Share capital of the Company.

This information is provided by RNS

The company news service from the London Stock Exchange

END

STRUNANROOAORAR