Gunsynd PLC Posting of Shareholder Circular and Notice of AGM (3366F)

TIDMGUN

RNS Number : 3366F

Gunsynd PLC

06 March 2020

Gunsynd PLC

("Gunsynd" or the "Company")

Posting of Shareholder Circular and Notice of AGM

Gunsynd (AIM: GUN, ISDX: GUN) announces that it has today posted a Circular to Shareholders ("the Circular") including a proposed capital reorganisation, proposed amendments to its Investing Policy and Notice of Annual General Meeting ("AGM").

The AGM will be held at 11:00 a.m. on 2 April 2020 at the offices of Hill Dickinson LLP, 105 Jermyn Street, St. James, London, SW1Y 6EE.

A copy of the Circular will be posted to shareholders today and is available on the Company's website: http://www.gunsynd.com .

An extract from the Chairman's Letter in the Circular is set out below.

All capitalised terms used throughout this announcement shall have the meanings given to such terms in the Definitions section of this announcement and as defined in the Circular.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

The directors of Gunsynd accept responsibility for this announcement.

For further information, please contact:

 
Gunsynd plc 
 Hamish Harris                 [phone] 
 
Cairn Financial Advisers LLP 
 James Caithie / Liam Murray   [phone] 
 
Peterhouse Corporate Finance 
 Lucy Williams                 [phone] 
 

"Notice of Annual General Meeting

   1.   Introduction 

I am writing to invite you to the annual general meeting (the "Annual General Meeting") of the Company to be held at the offices of Hill Dickinson LLP at 11:00 a.m. on 2 April 2020. This letter explains why the Directors recommend that shareholders of the Company (the "Shareholders") vote in favour of the resolutions being proposed at the Annual General Meeting (the "Resolutions").

The Company announced earlier today proposals to amend its Existing Investing Policy to broaden the potential scope of the Company's portfolio of assets and to undertake a Capital Reorganisation to ensure that the Company may raise funds through the issue of new ordinary shares in the Company to implement the Amended Investing Policy. Further details of the Capital Reorganisation and the Amended Investing Policy are set out below.

   2.   Background to and Reasons for the Capital Reorganisation 

The Company's shares are currently trading on AIM and NEX at or around the present nominal value of the Existing Ordinary Shares. English company law prohibits a company from issuing shares at a discount to the nominal or par value of its shares. Therefore, in order to ensure that the Company may carry out fundraising in the future, it is necessary to reduce the nominal value of the Company's Existing Ordinary Shares which may also assist in reducing volatility. The Directors therefore propose to effect a Capital Reorganisation on the following basis:

   --      adoption of amended memorandum and articles of association (the "New Articles"); 
   --      each of the Existing Deferred Shares shall be renamed Deferred A Shares; 

-- each of the Existing Ordinary Shares of 0.01 p each will be subdivided into and reclassified as one New Ordinary Share and one Deferred B Share;

-- each New Ordinary Share is an ordinary share in the capital of the Company with a nominal value of 0.001p each and having those rights set out in the New Articles (and noted below); and

-- each Deferred B Share is a deferred share in the capital of the Company with a nominal value of 0.009p each and having those rights set out in the New Articles (and noted below).

   3.   The New Articles 

The Company's current memorandum and articles of association were adopted by the Company on 12 September 2014 (the "Current Articles"). Due to the proposed Capital Reorganisation the Company needs to adopt a revised memorandum and articles of association to establish the Deferred B Shares, and set out the rights attaching hereto. Below is a summary of the material differences between the Current Articles and the proposed New Articles:

Establishing rights of Deferred B Shares

The New Ordinary Shares created upon implementation of the Capital Reorganisation will have the same rights as the Existing Ordinary Shares including voting, dividend, return of capital and other rights.

The rights attached to the Deferred B Shares will be identical in all respects to those of the Existing Deferred Shares (to be renamed Deferred A Shares) and will not have any voting rights and will not carry any entitlement to attended general meetings of the Company; nor will they be admitted to AIM or any other market. They will carry only a priority right to participate in any return of capital to the extent of GBP1 in aggregate over the class. In addition, they will carry only a priority right to participate in any dividend or other distribution to the extent of GBP1 in aggregate over the class. In each case a payment to any one holder of Deferred B Shares shall satisfy the payment required. The Company will be authorised at any time to effect a transfer of the Deferred B Shares without reference to the holders thereof and for no consideration pursuant to and in accordance with the Act. Accordingly, the Deferred B Shares will, for all practical purposes, be valueless and it is the Board's intention, at an appropriate time, to have the Deferred B Shares cancelled, whether through an application to the Companies Court or otherwise in accordance with the Companies Act 2006 (the "Act").

The rights attached to the New Ordinary Shares, the Existing Deferred Shares (to be renamed Deferred A Shares) and the Deferred B Shares will be contained in the New Articles to be adopted by the Company, conditional, inter alia, upon the passing of the Resolutions.

   4.   Capital Reorganisation 

It is proposed that each Existing Ordinary Share of 0.01 pence each in the capital of the Company to be subdivided into 1 New Ordinary Share of 0.001 pence each and 1 Deferred B Share of 0.009 pence each. This will result in 6,334,275,841 New Ordinary Shares and 6,334,275,841 Deferred B Shares being in issue immediately following the Capital Reorganisation. The number of Existing Deferred Shares (to be renamed Deferred A Shares) shall remain the same following the Capital Reorganisation.

The Record Date for the Capital Reorganisation will be 2 April 2020.

   5.   Effects of the Capital Reorganisation 

For purely illustrative purposes, examples of the effects of the proposed Capital Reorganisation (should be approved by Shareholders) are set out below:

 
 Number of Existing      Number of New Ordinary    Number of Deferred 
  Ordinary Shares held    Shares following the      B Shares following 
                          Capital Reorganisation    the Capital Reorganisation 
          99                       99                          99 
                        ------------------------  ---------------------------- 
          100                      100                         100 
                        ------------------------  ---------------------------- 
         1,000                    1,000                       1,000 
                        ------------------------  ---------------------------- 
 
   6.   Admission of New Ordinary Shares 

Application will be made for the New Ordinary Shares to be admitted to trading on AIM and NEX in place of the Existing Ordinary Shares. It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence on 1 April 2020.

The ISIN and SEDOL in respect of the Existing Ordinary Shares remain unchanged in respect of the New Ordinary Shares.

Shareholders who hold Existing Ordinary Shares in uncertificated form will have such shares disabled in their CREST accounts on the Record Date and their CREST accounts will be credited with the New Ordinary Shares. Following Admission, which is expected to take place on 1 April 2020.

Following the Capital Reorganisation, existing share certificates will continue to be valid. No share certificates will be issued in respect of the Deferred B Shares.

The Notice set out at the end of the document contains resolutions to give effect to the proposed Capital Reorganisation (amongst other matters) which are conditional, amongst other matters, on the passing of the Resolutions.

   7.   Proposed Amendments to Investing Policy 

The Company has considered a number of opportunities within its Existing Investing Policy and it has come to the conclusion that the Existing Investing Policy may need to be varied when considering suitable opportunities to create value for Shareholders. Therefore, the Board has resolved to seek shareholder approval to amend the Company's investing policy in order to potentially maximise shareholder value by adopting the Amended Investing Policy.

The Company's proposed Amended Investing Policy, which is subject to Shareholder approval at the Annual General Meeting, is set out below:

"Amended Investing Policy

(Set out below is the investing policy which would apply to the Company if shareholder approval is obtained at the Annual General Meeting. Proposed changes to the investing policy are either struck-through or underlined).

The Company's Investing Policy is to invest in and/or acquire companies and/or projects within the natural resources sector, life sciences sector (concentrating on but not being limited to, plant-based nutrition and environmentally friendly alternatives to food sources) and the alcohol beverage sector, (concentrating on but not being limited to, ingredients used within the production of such beverages including sugar cane, agave, and molasses) which the Board considers, in its opinion, have potential for growth. The Company will consider opportunities in all sectors as they arise if the Board considers there is an opportunity to generate potential value for Shareholders. The geographic focus will primarily be Europe, Australia, the US and the Caribbean, however investments may also be considered in other regions to the extent the Board considers that potential value can be achieved.

Where appropriate, the Board may seek to invest in businesses where it may influence the business at a board level, add their expertise to the management of the business, and utilise their industry relationships and access to finance.

The Company's interests in an investment and/or acquisition may range from a minority position to full ownership and may comprise one investment or multiple investments. The investments may be in either quoted or unquoted companies; be made by direct acquisitions or farm-ins; and may be in companies, partnerships, earn-in joint ventures, debt or other loan structures, joint ventures or direct or indirect interests in assets or projects. The Board may focus on investments where intrinsic value may be achieved from the restructuring of investments or merger of complementary businesses.

The Board expects that investments will typically be held for the medium to long term, although short term disposal of assets cannot be ruled out if there is an opportunity to generate a return for Shareholders. The Board will place no minimum or maximum limit on the length of time that any investment may be held. The Company may be both an active and a passive investor depending on the nature of the individual investment.

There is no limit on the number of projects into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover under the AIM Rules. The Board intends to mitigate risk by appropriate due diligence and transaction analysis. Any transaction constituting a reverse takeover under the AIM Rules will also require Shareholder approval. The Board considers that, as investments are made and new investment opportunities arise, further funding of the Company may also be required.

Where the Company builds a portfolio of related assets, it is possible that there may be cross holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate. Investments in early stage assets are expected to be mainly in the form of equity, with debt potentially being raised later to fund the development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing. The Board may also offer New Ordinary Shares by way of consideration as well as cash, thereby helping to preserve the Company's cash for working capital and as a reserve against unforeseen contingencies including, for example, delays in collecting accounts receivable, unexpected changes in the economic environment and operational problems.

Investments may be made in all types of assets and there will be no investment restrictions on the type of investment that the Company might make or the type of opportunity that may be considered.

The Company may consider possible opportunities anywhere in the world.

The Board will conduct initial due diligence appraisals of potential business or projects and, where they believe further investigation is warranted, intend to appoint appropriately qualified persons to assist. The Board believes its expertise will enable it to determine quickly which opportunities could be viable and so progress quickly to formal due diligence. The Company will not have a separate investment manager."

-ENDS-

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March 06, 2020 11:26 ET (16:26 GMT)