DQ Entertainment PLC Replacement - Update re GM & Resignation of Nomad (0182O)

TIDMDQE

RNS Number : 0182O

DQ Entertainment PLC

04 February 2016

The following announcement replaces the announcement released by DQ Entertainment plc on 3 February 2016 at 17.50 under RNS number 0112O. The title of the announcement has been changed to read "Update regarding requisition of general meeting and other matters and resignation of nominated adviser and broker". The rest of the announcement text is unchanged and is reproduced in full below.

4 February 2016

DQ Entertainment plc ("DQE" or the "Company")

Update regarding requisition of general meeting and other matters and resignation of nominated adviser and broker

The Board of DQE, a leading animation, gaming, live action entertainment production and distribution company, announces that the Company's AIM Nominated Adviser and Broker, Allenby Capital Limited ("Allenby Capital"), has served notice under the terms of the contract with the Company for its appointment as Nominated Adviser and Broker to the Company to terminate on 22 February 2016.

In accordance with the AIM Rules, the Company must appoint a new Nominated Adviser and Broker by no later than 23 February 2016 in order to avoid suspension of the Company's shares. The Company is currently in discussion with prospective Nominated Advisers and Brokers in order for their appointment to commence on or before 23 February 2016 and so to avoid suspension of the Company's shares on AIM. If a new Nominated Adviser is not appointed within one month of Allenby Capital ceasing to act, then admission to trading on AIM of the Company's shares will be cancelled.

In addition, further to the announcement on 27 October 2015 regarding the requisition of general meeting of the Company (the "General Meeting") to propose resolutions to appoint Anil Chintapalli and Suresh Chitturi as directors of the Company (the "Proposed Directors"), in order to satisfy the AIM Rules for Companies (the "AIM Rules"), due diligence has been underway on the Proposed Directors. Based on work undertaken to date, Allenby Capital has, at this time, not reached a satisfactory conclusion to its due diligence for the purposes of the AIM Rules for the appointment of one of the Proposed Directors to proceed and due diligence on the other is unlikely to be progressed until the appointment of a new Nominated Adviser. Allenby Capital has indicated to the board of DQE that should the General Meeting and appointment of the Proposed Directors proceed without Allenby Capital being satisfied with the due diligence, then Allenby Capital would have no choice but to immediately resign as Nominated Adviser, which, in the absence of a replacement Nominated Adviser, would lead to the immediate suspension in trading of the Company's shares on AIM. If the Company was unable to appoint a new Nominated Adviser within one month of such suspension, then admission to trading on AIM of the Company's shares will be cancelled.

It should be noted that, under the terms of the bonds issued by certain of the Company's subsidiaries and announced on 9 December 2014 (the "Bonds"), if the Company's admission to AIM is cancelled, an event of default would occur under the Bonds. In the event of such event of default, the bondholders could seek to accelerate their repayment or exercise their security thereunder. The Company is not in a position to repay the Bonds at the present time. As at the date of this announcement, approximately US$35 million has been drawn down under the Bonds.

In addition, the Company has received a letter from solicitors acting on behalf of parties requisitioning the General Meeting calling into question: i) the validity of the Company's annual general meeting held on 28 September 2015 and the resolutions passed; and ii) the Company's authority to issue the warrants announced on 1 February 2016 and allot shares pursuant to their exercise and suggesting that legal action may ensue. The Company believes that any legal proceedings are unfounded and will vigorously defend them. The Company is taking legal advice on this matter.

Enquiries:

 
DQ Entertainment plc                  Tel: [phone] 
 Tapaas Chakravarti - Chairman         53726 
 and CEO 
 Rashida Adenwala - Director Finance 
 & Investor Relations 
 
  Allenby Capital Limited               Tel: +44 (0)20 
  Jeremy Porter / Alex Brearley         3328 5656 
 
  Buchanan                              Tel: +44 (0)20 
  Mark Edwards/Robbie Ceiriog-Hughes    7466 5000 
 

- Ends -

This information is provided by RNS

The company news service from the London Stock Exchange

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February 04, 2016 02:00 ET (07:00 GMT)