Maistro PLC Intended cancellation of admission (3341Z)

TIDMMAIS

RNS Number : 3341Z

Maistro PLC

17 May 2019

Intended cancellation of admission

Maistro Plc (AIM: MAIS) ("Maistro" or the "Company") announces that it is proposing to cancel the admission to trading on AIM of its Ordinary Shares ("Cancellation").

A circular will be published and posted to the Company's Shareholders on 20 May 2019 setting out further details of the Cancellation and the implications for the Company's Shareholders ("Circular"). The Circular will also contain a notice convening a general meeting of the Company ("General Meeting") at which Shareholders are being invited to consider the proposed Cancellation, re-registration as a private limited company ("Re-registration") and adoption of new articles of association (together, the "Resolutions").

The Directors consider these proposals to be in the best interest of Company and its Shareholders as a whole after considering, amongst other things, the costs of maintaining trading in the Ordinary Shares on AIM and the limited free float and liquidity in the Ordinary Shares and intend to vote in favour of the Resolutions at the General Meeting.

The Ordinary Shares are expected to continue to be admitted to trading on AIM until Cancellation, which is expected to be effective at 7:00 a.m. on 28 June 2019. Further details of the intended Cancellation, including an expected timetable, are detailed below.

The Board continues to expect net revenue growth in the current year and to make progress on a number of key metrics including broader customer base and improved margins in line with comments made at the final results in March 2019.

Whilst revenues from the Company's largest customer were slower than forecast in Q1, the pipeline of opportunities is strong with a number of large UK corporates expected to start sourcing services through the Maistro Platform in Q2 and Q3. The Board has implemented efficiencies in its cost structure to reflect the greater focus on domestic customers and it expects that the Company has cash runway into 2020.

The Board expects to raise further capital in the near future to extend the cash runway to further support business growth.

For further information, please contact:

 
 Maistro plc 
 David Rowe (Chairman)                           [phone] 
 Laurence Cook 
 
 N+1 Singer (Nominated Adviser and Broker)       [phone] 
 James White (Corporate Finance) 
 Tom Salvesen/Mia Gardner (Corporate Broking) 
 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS*

 
 Notice provided to the London            Friday 17 May 2019 
  Stock Exchange to notify it of 
  the proposed Cancellation 
 Publication and posting of the           Monday 20 May 2019 
  Circular and Form of Proxy to 
  Shareholders 
 Latest time and date for receipt         10:00 a.m. on Tuesday 11 June 
  of completed Forms of Proxy in           2019 
  respect of the General Meeting 
 Time and date of the General Meeting     10:00 a.m. on Thursday 13 June 
                                           2019 
 Expected last day of dealings            Thursday 27 June 2019 
  in Ordinary Shares on AIM 
 Expected time and date of Cancellation   7:00 a.m. on Friday 28 June 2019 
 

* 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 a further announcement.

BACKGROUND AND REASONS FOR CANCELLATION

The Directors have conducted a review of the benefits and drawbacks to the Company and its Shareholders in retaining its quotation on AIM, and believe that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Directors have considered the following key factors, amongst others:

-- Liquidity in the Ordinary Shares is very poor, with relatively small trades having a large impact on the price of Ordinary Shares. The average daily volume year-to-date stands at just 647,677 (equivalent to GBP8,096 at the current share price of 1.25p) and the year-to-date spread between the bid and offer price for the Ordinary Shares stands at 13.6%.

-- Liquidity is also impacted by the concentrated Shareholder register. The top six Shareholders account for over 60% of the total Ordinary Shares in issue (including the Directors). These Shareholders subscribed for over 90% of the fund raise in December 2018.

-- The Directors believe that the investment fundamentals of the business are not well matched to the profile of institutional investors typically investing in public company fundraises. There has been very limited appetite for the Company's shares in the last two years. Additionally, the Directors believe that, following Cancellation, early stage financial investors, who do not invest in public companies, may be more likely to invest in a future fundraise. This could lower dilution to existing investors, which in the context of expected future fundraises, could be a material benefit.

-- There is a considerable financial cost, use of management time and legal and regulatory burden associated with maintaining the Company's admission to trading on AIM, which the Directors' believe are disproportionate to the benefits to the Company. It is estimated that Cancellation will reduce the Company's recurring administrative costs by over GBP80,000 per annum and these sums can be better spent investing in the business.

Following careful consideration, the Directors believe that it is in the best interests of the Company and Shareholders to seek the proposed Cancellation at the earliest opportunity.

Following the Cancellation, the Board believes 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 Part II of 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 5 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 Thursday 27 June 2019 and that the Cancellation will take effect at 7:00 a.m. on Friday 28 June 2019.

The principal effects of the Cancellation will be that:

-- there will be no formal market mechanism enabling the Shareholders to trade Ordinary Shares and while the Directors are exploring the possibility of putting a trading facility in place, there is no certainty that such a trading facility will be put in place to facilitate the trading of the Ordinary Shares;

-- while the Ordinary Shares will remain freely transferrable, it is possible that the liquidity and marketability of the Ordinary Shares will, in the future, be even more constrained than at present and the value of such shares may be adversely affected as a consequence;

-- in the absence of a formal market and quote, it may be more 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;

-- Nplus1 Singer will cease to be nominated adviser to the Company, and the Company will cease to have an independent nominated adviser;

-- 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 this instance, Shareholders who hold Ordinary Shares in CREST will receive share certificates; 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 Company will remain registered with the Registrar of Companies in England & Wales in accordance with and subject to the Companies Act 2006 (the "Law"), notwithstanding the Cancellation. Shareholders should also note that the Takeover Code will continue to apply to the Company following the Cancellation for the period of at least 10 years from the date of Cancellation subject to the Re-registration occurring. However, the Takeover Code may cease to apply earlier, if a majority of the Directors cease to be resident in the UK, Channel Islands or Isle of Man. Please refer to the Circular for further details of the implications of Cancellation with respect to the applicability of the Takeover Code.

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

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 Law;

-- continue to hold general meetings for at least 1 year following the Cancellation and Re-registration where shareholder resolutions are proposed, although the Company does not propose to continue to hold annual general meetings following Cancellation and Re-registration; and

   --      continue, for at least 12 months following the Cancellation, to maintain its website, https://www.maistro.com 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. 

In addition, the Company confirms that there is currently no intention to change the existing Directors following the Cancellation.

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 changes being made by the adoption of the New Articles will be included in the Circular. A copy of the New Articles will be able to be viewed at https://www.maistro.com following posting of the Circular.

PROCESS FOR CANCELLATION

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 the General Meeting. Accordingly, the Notice of General Meeting set out in Part IV of 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 28 June 2019. Accordingly, if the Cancellation Resolution is passed the Cancellation will become effective at 7.00 a.m. on 28 June 2019. If the Cancellation becomes effective, Nplus1 Singer will cease to be nominated adviser of the Company and the Company will no longer be required to comply with the AIM Rules.

Definitions

The following definitions apply throughout this Announcement, unless the context requires otherwise.

 
 "AIM"                       AIM, the market operated by the London Stock 
                              Exchange; 
 "AIM Rules"                 the rules and guidance for companies whose 
                              shares are admitted to trading on AIM entitled 
                              "AIM Rules for Companies" published by the 
                              London Stock Exchange, as amended from time 
                              to time; 
 "Business Day"              a day (excluding Saturday, Sunday and public 
                              holidays in England and Wales) on which banks 
                              are generally open for business in London 
                              for the transaction of normal banking business; 
 "Cancellation"              the cancellation of admission of the Ordinary 
                              Shares to trading on AIM in accordance with 
                              Rule 41 of the AIM Rules, subject to passing 
                              of the Cancellation Resolution; 
 "Cancellation Resolution"   Resolution 1 to be proposed at the General 
                              Meeting; 
 "Company" or "Maistro"      Maistro Plc, a company incorporated in England 
                              and Wales with registered number 8188404; 
 "CREST"                     the relevant system (as defined as the CREST 
                              Regulations) in respect of which Euroclear 
                              is the operator (as defined in those regulations); 
 "CREST Regulations"         the Uncertificated Securities Regulations 
                              2001 (SI2001/3755), as amended; 
 "Current Articles"          the articles of association of the Company 
                              at the date of the Circular; 
 "Directors" or "Board"      the directors of the Company, whose names 
                              are set out in Part 1 of the Circular and 
                              otherwise the directors from time to time. 
                              The Board comprises the directors at any 
                              time or the directors present at a duly convened 
                              meeting at which a quorum is present or, 
                              as the case may be, the directors assembled 
                              as a committee of such Board; 
 "Form of Proxy"             the form of proxy enclosed with the Circular 
                              for use at the General Meeting or at any 
                              adjournment thereof; 
 "General Meeting"           the General Meeting of the Company convened 
                              for 10:00 a.m. on Thursday 13 June 2019and 
                              any adjournment thereof, notice of which 
                              is set out at Part IV of the Circular; 
 "Nplus1 Singer"             Nplus1 Singer Advisory LLP, the Company's 
                              Nominated Adviser and Broker for the purposes 
                              of the AIM Rules, which is incorporated as 
                              a limited liability partnership in England 
                              and Wales with registered number OC364131; 
 "London Stock Exchange"     London Stock Exchange plc; 
 "New Articles"              the new articles of association of the Company 
                              to be adopted pursuant to Resolution 2 with 
                              such principal changes as summarised at Part 
                              II of the Circular, a copy of which will 
                              be available at: https://www.maistro.com 
                              following posting of the Circular; 
 "Notice of General          the notice of General Meeting which is set 
  Meeting" or "Notice"        out in Part IV of the Circular; 
 "Ordinary Shares"           the ordinary shares in the capital of the 
                              Company of 1 penny each and "Ordinary Share" 
                              means any one of them; 
 "Re-registration"           the proposed re-registration of the Company 
                              as a private limited company; 
 "Resolutions"               the resolutions to be proposed at the General 
                              Meeting in the form set out in the Notice 
                              of General Meeting; 
 "Shareholders"              holders of Ordinary Shares from time to time 
                              and "Shareholder" means any one of them; 
 

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 [e-mail] or visit www.rns.com.

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May 17, 2019 02:00 ET (06:00 GMT)