Ishaan Real Estate PLC Notice of EGM (4936F)

TIDMISH

RNS Number : 4936F

Ishaan Real Estate PLC

24 May 2013

Ishaan Real Estate Plc

("Ishaan Real Estate" or the "Company")

Notice of Extraordinary General Meeting

The Board of Ishaan Real Estate announces that it is today posting a circular to Shareholders (the "Circular") outlining proposals relating to the members' voluntary winding up of the Company and the cancellation of admission of the Company's Ordinary Shares to trading on AIM and convening an extraordinary general meeting ("Extraordinary General Meeting") relating to the same. The Extraordinary General Meeting will be held at Top Floor, 14 Athol Street, Douglas, Isle of Man IM1 1JA, on 24 June 2013 at 12.00 pm.

The Circular will be made available on the Company's website www.ishaanrealestate.com.

The expected timetable is set out in Appendix 1 to this announcement.

Certain defined terms are set out in Appendix 2 to this announcement.

Introduction

At an extraordinary general meeting of the Company held on 11 March 2013, Shareholders approved the Disposal and the amendment to the Company's investment strategy as proposed by the Independent Board Committee and more particularly described in the circular to Shareholders dated 22 February 2013 (the "Disposal Circular"). The Disposal was subsequently completed on 3 May 2013.

Following the completion of the Disposal, the Company's operations effectively ceased and it became a cash shell. It is the Directors' opinion that the best course of action is to now wind up the Company and return its surplus cash to Shareholders. The Independent Board Committee indicated in the Disposal Circular that once the Disposal had been completed, the Board would convene an extraordinary general meeting at which resolutions would be proposed to voluntarily wind up the Company and to cancel the Company's admission to trading on AIM.

Accordingly, Shareholders are now being asked to approve the Winding Up Proposal which will enable the Directors to continue the process of the members' voluntary winding up of the Company in accordance with Part V of the Act (the "Winding Up"). Pursuant to section 214 of the Act, the Directors are seeking this approval by way of special resolution, which requires a majority of not less than 75 per cent. of the votes cast by Shareholders attending and voting at the Extraordinary General Meeting. Furthermore, in accordance with the Act, Shareholder approval is also being sought for the appointment of Michael Fayle of KPMG LLC to act as liquidator in the members' voluntary winding up process.

The Directors consider that it is not in the best interests of Shareholders that the Company continues to incur the costs associated with maintaining the admission of Ordinary Shares to trading on AIM while the Company completes a members' voluntary winding up process. Accordingly, as part of the Winding Up Proposal, Shareholders are being asked to approve the Cancellation, which requires a majority of not less than 75 per cent. of votes cast by Shareholders attending and voting at the Extraordinary General Meeting.

Having completed the Disposal, the Board's aim is to reduce the operating costs of the Group as much as is practicable so as to maximise the Estimated Net Cash Resources in order to achieve the expected Total Shareholder Distribution of approximately 51 pence per Ordinary Share. If the Winding Up Proposal is not approved by Shareholders, the expected Total Shareholder Distribution of approximately 51 pence per Ordinary Share will not take effect and instead the Board will need to consult with Shareholders as to the future of the Company, which owns no property assets and is not expected to generate any operational income. If the Resolution is passed at the Extraordinary General Meeting, the Directors will proceed with the Winding Up process.

The Disposal

Following the approval by Shareholders of the Disposal at the extraordinary general meeting of the Company held on 11 March 2013, the Disposal was subsequently completed on 3 May 2013. The Investment Advisory Agreement automatically terminated on completion of the Disposal.

Prior to completion of the Disposal, the Board was informed that the Indian tax authorities had confirmed that withholding tax equivalent to approximately GBP1.1 million was payable in respect of the Disposal. As announced on 30 April 2013, the parties agreed certain amendments to the Share Purchase Agreements to reflect that the nil withholding tax certificate would not be obtained. An initial agreement was reached on 29 April 2013 to dispose of the Mauritian SPVs (except I-8 Company (Mauritius) Ltd) owned by the Mauritian Holdco to Neerav or one of its affiliates. The Mauritian Holdco and Neerav are in the process of negotiating a sale and purchase agreement relating to the SPV Sale and it is anticipated that the sale will be completed in July 2013, raising cash proceeds of approximately GBP700,000, which, subject to the factors outlined in section 8 of the Circular, will be available for distribution to Shareholders as part of the Final Distribution.

In addition, the Board has approved the sale of the Brand by the Company to Neerav Cyprus, an affiliate of Neerav and on 23 May 2013 Neerav Cyprus accepted a binding offer from the Company to acquire the Brand. It is anticipated that the Brand Sale will be completed by not later than 30 September 2013, raising cash proceeds of GBP250,000, which, subject to the factors outlined in section 8 of the Circular, will be available for distribution to Shareholders as part of the Final Distribution. Neerav Cyprus confirmed that it does not wish to purchase or seek registration of the Brand in any jurisdiction outside the Territory.

Subject to completion of the SPV Sale and the Brand Sale, the Company will be able to retain the proceeds of the sales as cash available for subsequent distribution to Shareholders. Therefore, as announced on 30 April 2013, the impact of the above on the quantum of distributions to Shareholders is expected to be limited.

Further details of the terms of the SPV Sale and the Brand Sale are contained in the Circular.

Rationale for the Winding Up Proposal

Upon the completion of the Disposal, the Group's operations effectively ceased and the Company became a cash shell. It is the Directors' opinion that the best course of action is to now wind up the Company and return its surplus cash to Shareholders.

The Directors' aim is to reduce the ongoing costs of the Group as much as is practicable so as to maximise the Estimated Net Cash Resources in order to achieve the expected Total Shareholder Distribution of approximately 51 pence per Ordinary Share.

If the Winding Up Proposal is not approved by Shareholders, the expected Total Shareholder Distribution of approximately 51 pence per Ordinary Share will not take effect and instead the Board will need to consult with Shareholders as to the future of the Company.

Mechanics of the Winding Up

In order to initiate the Winding Up, separate statutory declarations made by a majority of Directors of the Company are required to the effect that they have made a full inquiry into the affairs of the Company and, that having done so, they have formed the opinion that the Company will be able to pay its debts in full within a period not exceeding 12 months from the commencement of the members' voluntary winding up. A majority of Directors made such a statement of solvency on or about 22 May 2013.

Secondly, the Directors are calling an Extraordinary General Meeting of the Company for 24 June 2013 to seek Shareholder approval for the Winding Up in accordance with the Act. The Resolution to approve the Winding Up requires a majority of not less than 75 per cent. of the votes cast at the Extraordinary General Meeting.

In accordance with the Act, Shareholder approval is also being sought for the appointment of Michael Fayle, of KPMG LLC (the "Liquidator"), to act as liquidator in the members' voluntary winding up process. If appointed, the Liquidator, having set aside sufficient assets in a liquidation fund to meet the Company's known and contingent liabilities, will endeavour to ensure that an Initial Distribution to Shareholders of the Company's cash assets available for distribution on the members' voluntary winding up is made as soon as possible. To the extent that any part of this retention is not required to meet such liabilities, the balance will be distributed in cash to Shareholders by the Liquidator at a later date.

If the Winding Up Proposal is passed by the requisite majority, the Directors will proceed with the Winding Up Proposal.

The Liquidator, if appointed by the Shareholders at the Extraordinary General Meeting, will undertake the process of payment of creditors and collection and distribution of the Company's assets and, once this is complete, make up a final account. He must then call a further general meeting of the Company to lay the account before the Shareholders; and, within one week of the final general meeting, send to the Registrar of Companies a copy of the account together with a final return for registration. On the expiration of three months from the date of registration of the return, the Company is deemed to be dissolved.

It is expected that the Final Distribution will be made by July 2014 and that the Winding Up will be completed in 2014.

Further details of the proposed quantum and timing of the Total Shareholder Distribution, the calculation of Estimated Net Cash Resources and the factors affecting the timing and amount of the Initial Distribution and the Final Distribution are contained in the Circular.

Cancellation of admission to Trading on AIM

The Directors consider that it is not in the best interests of Shareholders that the Company continues to incur the costs associated with maintaining the admission of Ordinary Shares to trading on AIM while the Company completes a members' voluntary winding up process.

Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders at an extraordinary general meeting. Accordingly, conditional on the passing of the Winding Up Proposal, a special resolution will be proposed at the Extraordinary General Meeting to approve the application to the London Stock Exchange for Cancellation. If this resolution is approved with the requisite majority, it is expected that cancellation of dealings will take effect at 7.00 am on 25 June 2013.

In any event, under the Act, any transfer of shares, not being a transfer made to or with the sanction of the Liquidator and any alteration in the status of the Shareholders, made after the approval of the Winding Up Proposal, would be void. As such, Shareholders should be aware that trading in the Ordinary Shares on AIM will be suspended from 7.00 am on 24 June 2013, in advance of the Extraordinary General Meeting.

No provision will be made for trading in the Ordinary Shares following Cancellation and the Ordinary Shares will not be transferable once the Company enters liquidation.

Extraordinary General Meeting

At the Extraordinary General Meeting, the following special resolution will be proposed:

(A) in accordance with the Act, the Directors be authorised to proceed with the members' voluntary winding up of the Company and to take such steps, including but not limited to the payment of interim distributions and the appointment of the Liquidator, as they in their absolute discretion deem necessary to effect the members' voluntary winding up of the Company; and

(B) the admission of the Company's Ordinary Shares to trading on AIM be cancelled in accordance with Rule 41 of the AIM Rules.

Recommendation

The Directors unanimously recommend that Shareholders vote in favour of the Resolution as they themselves will be doing in respect of their entire beneficial holdings of Ordinary Shares amounting, in aggregate, to 2,184,448 Ordinary Shares, representing approximately 1.50 per cent of the issued Ordinary Share capital of the Company as at the date of this announcement.

Enquiries:

 
 Deutsche Bank AG, London Branch (NOMAD and broker to the Company) 
  Ben Lawrence 
  John O'Driscoll 
  Tel: [phone] 
 

Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervising Authority) and authorised and subject to limited by the Financial Conduct Authority (the "FCA"). Details about the extent of Deutsche Bank AG's authorisation and regulation by the FCA are available on request.

Deutsche Bank AG is acting for the Company and no one else in connection with the Disposal and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Deutsche Bank nor for providing advice in connection with the Disposal.

Appendix 1: Expected timetable of principal events

 
 Latest time and date for receipt of          12.00 pm on 22 June 2013 
  the Form of Proxy for the Extraordinary 
  General Meeting of Ishaan Real Estate 
  plc 
 Suspension of trading in the Ordinary         7.00 am on 24 June 2013 
  Shares on AIM 
 Extraordinary General Meeting of Ishaan      12.00 pm on 24 June 2013 
  Real Estate plc 
 Expected date of commencement of members'                24 June 2013 
  voluntary winding up of the Company 
 Expected date of cancellation of admission    7.00 am on 25 June 2013 
  of the Ordinary Shares to trading on 
  AIM 
 Expected date of payment of the Initial               by 31 July 2013 
  Distribution to Shareholders 
 Expected date of payment of the Final                    by July 2014 
  Distribution to Shareholders 
 

All references to times are to London times unless otherwise stated.

Appendix 2: Definitions

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

 
 "Act"                              the Companies Act 1931 (Isle of Man) 
 "AIM"                              the market of that name operated by 
                                     the London Stock Exchange 
 "AIM Rules"                        the AIM Rules for Companies published 
                                     by the London Stock Exchange from time 
                                     to time 
 "Board" or the "Directors"         the directors or the board of directors, 
                                     as the case may be, of the Company from 
                                     time to time 
 "Brand"                            all rights, title and interest only 
                                     in and to the name "Ishaan" existing 
                                     as at 23 May 2013 in the Territory, 
                                     together with the goodwill and benefit 
                                     attached to the business in relation 
                                     to which the Brand is used or has been 
                                     used in the Territory, all logos, devices, 
                                     copyrights and designs associated with 
                                     the same and all rights, title, interest 
                                     and benefit in and to certain trade 
                                     mark registrations existing in the Territory 
 "Brand Sale"                       the proposed sale of the Brand to Neerav 
                                     Cyprus 
 "Cancellation"                     the proposed cancellation of the admission 
                                     of the Company's Ordinary Shares to 
                                     trading on AIM 
 "Company" or "Ishaan               Ishaan Real Estate plc, a company incorporated 
  Real Estate"                       and registered in the Isle of Man with 
                                     registered number 117470C 
 "Deutsche Bank"                    Deutsche Bank AG, London Branch 
 "Disposal"                         the disposal of the Company's property 
                                     interests in the Indian Investment Vehicles, 
                                     as further detailed in the Disposal 
                                     Circular 
 "Disposal Circular"                the circular to Shareholders dated 22 
                                     February 2013 
 "Estimated Net Cash Resources"     the estimated net cash available to 
                                     the Company following the Disposal after 
                                     deducting all costs associated with 
                                     the Disposal and the Winding Up 
 "Extraordinary General             the extraordinary general meeting of 
  Meeting"                           the Company to be convened for 12 pm 
                                     on 24 June 2013 to consider the Resolution 
 "Final Distribution"               the proposed distribution as described 
                                     in Section 6 of the letter from the 
                                     Chairman of the Company in the Circular 
 "Financial Conduct Authority"      Financial Conduct Authority of England 
                                     and Wales and its successors 
 "Form of Proxy"                    the form of proxy to accompany the Circular 
                                     for use at the Extraordinary General 
                                     Meeting 
 "Group"                            the Company and its subsidiary undertakings 
                                     from time to time 
 "Independent Board Committee"      a committee of the Board comprising 
                                     all the Directors other than Neel Raheja 
 "Indian Investment Vehicles"       the investment vehicles incorporated 
                                     in India in which the Group sold its 
                                     ordinary and preference shares (the 
                                     Disposal), as further detailed in the 
                                     Disposal Circular 
 "Initial Distribution"             the proposed distribution as described 
                                     in Section 6 of the letter from the 
                                     Chairman of the Company in the Circular 
 "Ishaan Real Estate"               see "Company" 
 "Investment Advisory               the investment advisory agreement between 
  Agreement"                         the Mauritian Holdco and Neerav dated 
                                     6 November 2006, as amended 
 "Liquidator"                       Michael Fayle, of KPMG LLC 
 "London Stock Exchange"            London Stock Exchange plc 
 "Mauritian Holdco"                 I Holding Company (Mauritius) Ltd 
 "Mauritian SPVs"                   the wholly owned subsidiaries of Mauritian 
                                     Holdco, which are as follows: I-1 Company 
                                     (Mauritius) Limited; I-2 Company (Mauritius) 
                                     Limited; I-4 Company (Mauritius) Limited; 
                                     I-6 Company (Mauritius) Limited; and 
                                     I-7 Company (Mauritius) Limited 
 "Neerav"                           Neerav Investment Advisory Services 
                                     (Dubai) Limited, the former investment 
                                     adviser to the Company, of which Neel 
                                     Raheja is a director 
 "Neerav Cyprus"                    Neerav Investment Advisory Services 
                                     (Cyprus) Private Limited 
 "Notice"                           the notice of the Extraordinary General 
                                     Meeting to be set out at the end of 
                                     the Circular 
 "Ordinary Shares"                  ordinary shares of GBP0.01 each in the 
                                     capital of the Company 
 "Resolution"                       the resolution to be proposed to Shareholders 
                                     at the Extraordinary General Meeting 
 "Share Purchase Agreements"        the five share purchase agreements dated 
                                     21 February 2013 in relation to the 
                                     Disposal, as further detailed in the 
                                     Disposal Circular 
 "Shareholder"                      a registered holder of Ordinary Shares 
 "SPV Sale"                         the proposed sale of the Mauritian SPVs, 
                                     except I-8 Company (Mauritius) Ltd, 
                                     to Neerav or its nominee 
 "Territory"                        the United Kingdom, Hong Kong, Singapore 
                                     and the United Arab Emirates 
 "Total Shareholder Distribution"   the Initial Distribution together with 
                                     the Final Distribution 
 "United Kingdom" or "UK"           the United Kingdom of Great Britain 
                                     and Northern Ireland 
 "Winding Up"                       the members' voluntary winding up of 
                                     the Company 
 "Winding Up Proposal"              the proposal to continue the Winding 
                                     Up and the proposal for the Cancellation 
 "GBP" or "GBP" or "Sterling"       the lawful currency of the UK and the 
  or "pence"                         Isle of Man 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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