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GYG PLC Proposed De-listing and Notice of General Meeting

02/08/2022 7:01am

UK Regulatory (RNS & others)


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RNS Number : 5320U

GYG PLC

02 August 2022

The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Article 7 of Regulation (EU) 596/2014, as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

2 August 2022

GYG plc

("GYG", the "Company" or the "Group")

Proposed cancellation of admission of Ordinary Shares to trading on AIM,

Notice of General Meeting,

Re-Registration as a Private Limited Company

and

Adoption of New Articles of Association

GYG (AIM: GYG) announces the proposed cancellation of admission of its ordinary shares to trading on AIM ("Cancellation"), re-registration as a private limited company ("Re-registration") and adoption of new articles of association ("New Articles").

A circular will be sent to Shareholders in the coming days, setting out the background to and reasons for the proposed Cancellation and the Re-registration and associated adoption of the New Articles ("Circular"). The Circular will also contain a notice convening a general meeting ("General Meeting") at which Shareholders are invited to consider and, if thought fit, approve the proposed Cancellation and the Re-registration and associated adoption of the New Articles.

The Directors have undertaken a review to evaluate the benefits and drawbacks to the Company and its Shareholders of retaining the listing of the Ordinary Shares on AIM. This review has included, amongst other matters, the impact of the current geopolitical situation, the compatibility of the requirements for transparency within public markets and client discretion, the public market share trading and valuation volatility of the Company and the increasing costs of maintaining a public listing. For these reasons, the Directors have concluded that Cancellation and Re-registration are in the best interests of the Company and its Shareholders as a whole. A detailed explanation of these reasons is set out in Appendix I to this announcement.

To be passed, the Cancellation Resolution requires, pursuant to Rule 41 of the AIM Rules, the approval of not less than 75 per cent. of the votes cast by Shareholders at the General Meeting. The resolution to approve the Re-registration and the adoption of New Articles also requires the approval of not less than 75 per cent. of the votes cast by shareholders at the General Meeting.

Should the Cancellation be approved by Shareholders at the General Meeting, the Company will consider implementing a matched bargain facility with a third party matched bargain facility provider which would facilitate Shareholders buying and selling Ordinary Shares on a matched bargain basis following Cancellation. In determining whether to put a Matched Bargain Facility in place, the Company shall consider expected (and communicated) Shareholder demand for such a facility, as well as the makeup of the share register following the Cancellation. Shareholders should be aware that the implementation of a Matched Bargain Facility is only under consideration at this stage and there can be no guarantee that the Company will conclude that putting a Matched Bargain Facility in place is beneficial for Shareholders.

The General Meeting will be held at the offices of Dickson Minto W.S. at 16 Charlotte Square, Edinburgh EH2 4DF at 10:30 a.m. on 31 August 2022.

The notice convening the General Meeting and setting out the Resolutions to be considered at it will be set out in a Circular which is expected to be posted to Shareholders in the coming days, extracts of which can be found in Appendix I to this announcement.

Capitalised terms in this announcement, unless otherwise defined, have the same meaning as will be set out in the Circular.

A copy of the Circular and the New Articles will be made available on the Company's website at www.gygplc.com in the coming days.

For further information, please contact:

 
 GYG plc                                    via FTI Consulting 
  Richard McGuire, Non-executive Chairman    Tel: +44 (0) 20 3727 
  Remy Millott, Chief Executive Officer      1000 
  Kevin McNair, Chief Financial Officer 
 Singer Capital Markets                     Tel: +44 (0) 20 7496 
  Tom Salvesen                               3000 
  Peter Steel, Amanda Gray 
 FTI Consulting                             Tel: +44 (0) 20 3727 
  Alex Beagley                               1000 
  Fiona Walker                               gyg@fticonsulting.com 
  Rafaella de Freitas 
 

Notes to Editors:

GYG is a superyacht painting, supply and maintenance company, offering services globally through operations in the Mediterranean, Northern Europe and the United States. The Company's brands include Pinmar, Pinmar Yacht Supply, and Technocraft. GYG's operations can be divided into three key sales channels:

-- Refit: repainting and finishing of superyachts, normally as part of a refit programme. Revenues also include scaffolding, containment and the removal and repair of fittings

   --        New Build: fairing and painting of new vessels as part of the build process 

-- Supply: the sale and delivery of maintenance materials, consumables, spare parts and equipment primarily to superyachts and trade customers

APPIX I - EXTRACTS FROM THE CIRCULAR TO SHAREHOLDERS

Background to and reasons for the Cancellation and Re-registration

The Directors have undertaken a review to evaluate the benefits and drawbacks to the Company and its Shareholders of retaining the listing of the Ordinary Shares on AIM. This review has included, amongst other matters, the impact of the current geopolitical situation, the compatibility of the requirements for transparency within public markets and client discretion, the public market share trading and valuation volatility of the Company and the increasing costs of maintaining a public listing. For these reasons, the Directors have concluded that Cancellation and Re-registration are in the best interests of the Company and its Shareholders as a whole. Further details of the background to and reasons for the Cancellation and Re-registration are set out below:

-- The Directors believe that a number of factors have impaired investor sentiment towards the Company, including, amongst others: (a) the Company's exposure to events outside its control impacting its recent trading performance; (b) current market conditions and the lack of new investor appetite for the industry as a result of the current geo-political climate; and (c) short term UK market volatility.

-- Further, the Directors believe that growing the Group's business within the parameters of a publicly quoted company will be more challenging due to: (a) continuing adverse sentiment towards the Company as referred to above and, more generally, around the superyacht sector in which the Group operates; and (b) the legal and regulatory burden associated in maintaining the Company's AIM listing. Due to the nature of the Company's business, its clients are sensitive to issues of privacy and, as a result, the Company operates under comprehensive non-disclosure agreements. The identity of the Company's clients, as well as a number of projects it undertakes, cannot be disclosed and this, in the opinion of the Directors, is misaligned with the typical expectations of public equity market investors. On the converse, the disclosures which are required to be made by the Company mean that the Company's peers have a far greater insight into its strategy, operational activities and future plans than the Company has into theirs, a factor which reduces the Company's relative competitiveness. These factors have all led the Directors to consider that the Company's business may no longer be appropriate for that of a publicly quoted company.

-- Due to the disruption suffered by the Company as a result of recent external events, the Directors believe that having access to capital in the near to medium-term may be prudent to ensure that the Company can capitalise successfully on future opportunities and growth and, as a result of the factors set out above, the Directors consider it unlikely that an equity fundraise using the public markets would successfully raise additional capital (or provide the optimal platform to do so), should it be so required.

-- More generally, the UK small and micro-cap public markets have changed significantly since the Company's IPO and the Directors believe that the Company's current public market valuation does not reflect the underlying potential of the business with the result that growth prospects are more readily accessible and managed in a private market environment.

-- There has been limited liquidity in the Ordinary Shares for some time and, as a result, the Directors believe that continued admission to trading on AIM no longer sufficiently provides the Company with the advantage of providing access to capital in the medium to longer-term, nor provides liquidity to investors. As a result, the Directors have concluded that the most likely source of future funds would be through private capital and debt funding.

-- The considerable cost, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM is, in the Directors' opinion, disproportionate to the benefits of the Company's continued admission to trading on AIM. Given the lower costs associated with private limited company status, it is estimated that the Cancellation and Re-registration will materially reduce the Company's recurring administrative and adviser costs by approximately EUR700,000 per annum, which the Directors believe can be better spent supporting growth in the Group's business.

-- As a result of the limited liquidity in Ordinary Shares highlighted above, the listing of the Ordinary Shares on AIM does not necessarily offer investors the opportunity to trade in meaningful volumes or with frequency within an active market. With low trading volumes, the Company's share price can move up or down significantly following trades of small volumes of Ordinary Shares. In the opinion of the Directors, the adverse share price performance is detrimental to the perception of the Group amongst customers, suppliers and other partners, which, in turn, has negatively impacted its staff morale and industry reputation as highlighted above.

Following careful consideration, the Directors believe that it is in the best interests of the Company and Shareholders to seek the proposed Cancellation and Re-registration.

In addition, in connection with the Re-registration, it is proposed that the New Articles be adopted to reflect the change in the Company's status to a private limited company. The principal effects of the Re-registration and the adoption of the New Articles on the rights and obligations of Shareholders and the Company are summarised in the Circular.

Process for, and principal effects of, the Cancellation

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of Cancellation. Additionally, Cancellation will not take effect until at least five clear Business Days have passed following the passing of the Cancellation Resolution. If the Cancellation Resolution is passed at the General Meeting, it is proposed that the last day of trading in Ordinary Shares on AIM will be 7 September 2022 and that the Cancellation will take effect at 7.00 a.m. on 8 September 2022.

The principal effects of the Cancellation will include the following:

-- there will be no formal market mechanism enabling the Shareholders to trade Ordinary Shares;

-- it is possible that, following the publication of this announcement, the liquidity and marketability of the Ordinary Shares is reduced and their value adversely affected (however, as set out above, the Directors believe that the existing liquidity in the Ordinary Shares is in any event limited);

-- the Ordinary Shares may be more difficult to sell compared to shares of companies traded on AIM (or any other recognised market or trading exchange);

-- in the absence of a formal market and quote, it may be difficult for Shareholders to determine the market value of their investment in the Company at any given time;

-- the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply;

-- Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of price sensitive information or certain events and the requirement that the Company seek shareholder approval for certain corporate actions, where applicable, including substantial transactions, reverse takeovers, related party transactions and fundamental changes in the Company's business, including certain acquisitions and disposals;

-- the levels of disclosure and corporate governance within the Company may not be as stringent as for a company quoted on AIM;

-- the Company will no longer be subject to UK MAR regulating inside information and other matters;

-- the Company will no longer be required to publicly disclose any change in major shareholdings in the Company under the Disclosure Guidance and Transparency Rules;

-- the Takeover Code will cease to apply to the Company following the Cancellation and Re-registration;

   --        Singer Capital Markets will cease to be nominated adviser to the Company; 

-- whilst the Company's CREST facility will remain in place immediately post the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Ordinary Shares will remain transferable, they may cease to be transferable through CREST (in which case, Shareholders who hold Ordinary Shares in CREST will receive share certificates);

-- stamp duty will be due on transfers of shares and agreements to transfer shares unless a relevant exemption or relief applies to a particular transfer; and

-- the Cancellation and Re-registration may have personal taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

The above considerations are not exhaustive, and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

For the avoidance of doubt, the Company will remain registered with the Registrar of Companies in England & Wales in accordance with and, subject to the Companies Act, notwithstanding the Cancellation and Re-registration.

The Company currently intends to continue to provide certain facilities and services to Shareholders that they currently enjoy as shareholders of an AIM company. The Company will:

-- continue to communicate information about the Company (including annual accounts) to its Shareholders, as required by the Companies Act; and

   --        continue, for at least 12 months following the Cancellation, to maintain its website, https://www.gygplc.com (albeit the domain name may be altered as a result of changes to the Company's name in connection with the Cancellation and Re-registration) and to post updates on the website from time to time, although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under the Disclosure Guidance and Transparency Rules, AIM Rule 26 or to update the website as required by the AIM Rules. 

There will be no change to the composition of the Board immediately following the Cancellation and Re-registration. Richard McGuire and Richard King (being the two Non-Executive Directors of the Company) have, however, notified the Company that they are considering stepping down from their roles as directors in the period shortly following the Cancellation and Re-registration. A key purpose of their current positions is to bring independence to the Board, and help ensure that the Company meets its obligations under the AIM Rules, and such a role is unlikely to exist or be economically or operationally justified should the Cancellation and Re-registration take place.

The Resolutions to be proposed at the General Meeting include the adoption of the New Articles, with effect from the Re-registration. A summary of the principal differences between the Current Articles and the proposed New Articles is included in the Circular. A copy of the New Articles can be viewed at https://www.gygplc.com.

Transactions in the Ordinary Shares prior to and post the proposed Cancellation

Prior to Cancellation

Shareholders should note that they are able to continue trading in the Ordinary Shares on AIM prior to Cancellation.

Dealing and settlement arrangements

The Directors are aware that Shareholders may wish to acquire or dispose of Ordinary Shares in the Company following the Cancellation. Should the Cancellation be approved by Shareholders at the General Meeting, the Company will consider implementing a matched bargain facility with a third party matched bargain facility provider which would facilitate Shareholders buying and selling Ordinary Shares on a matched bargain basis following Cancellation ("Matched Bargain Facility").

In determining whether to put a Matched Bargain Facility in place, the Company shall consider expected (and communicated) Shareholder demand for such a facility, as well as the makeup of the share register following the Cancellation. Shareholders should be aware that the implementation of a Matched Bargain Facility is only under consideration at this stage and there can be no guarantee that the Company will conclude that putting a Matched Bargain Facility in place is beneficial for Shareholders. If put in place, Shareholders should also be aware that any such Matched Bargain Facility could also be withdrawn at a later date. Further details will be communicated to the Company's shareholders at the relevant time.

If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation becoming effective. As noted above, in the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 7 September 2022 and that the effective date of the Cancellation will be 8 September 2022.

Current Trading, Strategy and Prospects

The Company has today separately notified a trading update for the six months ended 30 June 2022. The text of that announcement will be included in the Circular.

Re-registration

As set out above, following the Cancellation, the Directors believe that the requirements and associated costs of the Company maintaining its public company status will be difficult to justify and that the Company will benefit from the more flexible requirements and lower costs associated with private limited company status. It is therefore proposed to re-register the Company as a private limited company. In connection with the Re-registration, it is proposed that the New Articles be adopted to reflect the change in the Company's status to a private limited company. The principal effects of the Re-registration and the adoption of the New Articles on the rights and obligations of Shareholders and the Company are summarised in the Circular.

An application will be made to the Registrar of Companies for the Company to be re-registered as a private limited company. Re-registration will take effect when the Registrar of Companies issues a certificate of incorporation on Re-registration. The Registrar of Companies will issue the certificate of incorporation on Re-registration when it is satisfied that no valid application can be made to cancel the resolution to re-register as a private limited company or that any such application to cancel the resolution to re-register as a private limited company has been determined and confirmed by the Court.

Takeover Code

The Takeover Code applies to all offers for companies which have their registered offices in the United Kingdom, the Channel Islands or the Isle of Man if any of their equity share capital or other transferable securities carrying voting rights are admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man.

The Takeover Code also applies to all offers for companies (both public and private) which have their registered offices in the United Kingdom, the Channel Islands or the Isle of Man and which are considered by the Panel to have their place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man, but in relation to private companies only if one of a number of conditions are met, including that any of the company's equity share capital or other transferable securities carrying voting rights have been admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man at any time in the preceding 10 years.

If the Cancellation and Re-registration are approved by Shareholders at the General Meeting, the Company will be re-registered as a private company and its securities will no longer be admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom. In these circumstances, the Takeover Code will only apply to the Company if it is considered by the Panel to have its place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man. This is known as the "residency test". In determining whether the residency test is satisfied, the Panel has regard primarily to whether a majority of a company's directors are resident in these jurisdictions.

The Panel has confirmed to the Company that, on the basis of the current residency of the Directors, the Company will not have its place of central management and control in the United Kingdom following the Cancellation and Re-registration. As a result, if the Cancellation and Re-registration are approved by Shareholders at the General Meeting and become effective, the Takeover Code will cease to apply to the Company and Shareholders will no longer be afforded the protections provided by the Takeover Code, including the requirement for a mandatory cash offer to be made if either:

-- a person acquires an interest in shares which, when taken together with the shares in which persons acting in concert with it are interested, increases the percentage of shares carrying voting rights in which it is interested to 30 per cent. or more; or

-- a person, together with persons acting in concert with it, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with it, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which it is interested.

Brief details of the Panel, and of the protections afforded to Shareholders by the Takeover Code (which will cease to apply following the Cancellation and Re-registration), will be set out in the Circular.

Process for Cancellation

Under the AIM Rules, it is a requirement that the Cancellation must be approved by Shareholders holding not less than 75 per cent. of votes cast by Shareholders at the General Meeting. Accordingly, the Notice of General Meeting set out in the Circular contains a special resolution to approve the Cancellation.

Furthermore, Rule 41 of the AIM Rules requires any AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date. In accordance with AIM Rule 41, the Directors have notified the London Stock Exchange of the Company's intention, subject to the Cancellation Resolution being passed at the General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 8 September 2022. Accordingly, if the Cancellation Resolution is passed, the Cancellation will become effective at 7.00 a.m. on 8 September 2022. If the Cancellation becomes effective, Singer Capital Markets will cease to be nominated adviser of the Company and the Company will no longer be required to comply with the AIM Rules.

Recommendation

The Directors consider that the Cancellation and the Re-registration and adoption of the New Articles are in the best interests of the Company and its Shareholders as a whole and, therefore, unanimously recommend that you vote in favour of the Resolutions at the General Meeting as Remy Millott, Kevin McNair, Rupert Savage and Richard King (being the Directors who are interested in Ordinary Shares) intend to vote, or procure the vote, in respect of, in aggregate, 6,187,844 Ordinary Shares to which they are beneficially entitled.

APPENDIX II

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
  Event                                          Time and/or date (1)(2) 
  Notice provided to the London                            2 August 2022 
   Stock Exchange to notify it 
   of the proposed Cancellation 
 Publication and posting of the                            3 August 2022 
  Circular 
 Latest time for receipt of proxy           10:30 a.m. on 26 August 2022 
  appointments in respect of the 
  General Meeting 
 General Meeting                            10.30 a.m. on 31 August 2022 
 Last day of dealings in Ordinary                       7 September 2022 
  Shares on AIM 
 Cancellation                              7.00 a.m. on 8 September 2022 
 Re-registration as a private               week commencing 12 September 
  company                                                           2022 
 Notes: 
  (1) All of the times referred to in this announcement refer 
  to London time, unless otherwise stated. 
 (2) Each of the times and dates in the above timetable is 
  subject to change. If any of the above times and/or dates 
  change, the revised times and dates will be notified to Shareholders 
  by an announcement through a Regulatory Information Service. 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

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