MoneySwap Plc Posting of circular and notice of EGM (6210D)

TIDMSWAP

RNS Number : 6210D

MoneySwap Plc

28 April 2017

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

28 April 2017

MoneySwap plc

("MoneySwap" or the "Company")

Posting of circular and notice of EGM

Further to the announcement on 13 March 2017, the Company will on 02 May 2017 post to its shareholders a circular (the "Circular") containing a notice convening an extraordinary general meeting (the "EGM") to be held at 10:00 a.m. on 30 May 2017 at the offices of Allenby Capital Limited, 3 St. Helen's Place, London, EC3A 6AB.

The purpose of the EGM is to approve, inter alia:

   i.    the cancellation of the ordinary shares in the Company from trading on AIM; and 
   ii.    the adoption of new articles of association of the Company. 

(together the "Proposals").

Extracts from the Circular, which sets out the reasons for seeking Cancellation, are set out below and a copy of the Circular, along with the proposed amendments to the Company's articles of association, will shortly be available on the Company's website, www.moneyswapholdings.com.

For further information, please contact:

 
 MoneySwap Plc             Allenby Capital Limited 
 Interim Chief Executive   Nominated Adviser 
 Craig Niven               Nick Naylor / James 
                            Reeve 
 [phone]           [phone] 
 

EXTRACTS FROM THE CIRCULAR

The following has been extracted without amendment from, and should be read in conjunction with, the Circular to Shareholders dated 02 May 2017, available from the Company's website, www.moneyswapholdings.com.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Publication of this Circular                 02 May 2017 
 Latest time and date for receipt        10.00 a.m. on 27 
  of Forms of Direction                          May 2017 
 Latest time and date for receipt        10.00 a.m. on 28 
  of Forms of Proxy                              May 2017 
 Extraordinary General Meeting           10.00 a.m. on 30 
                                                 May 2017 
 Expected time and date that admission    7:00 a.m. on 07 
  of Ordinary Shares to trading                 June 2017 
  on AIM will be cancelled 
 

LETTER FROM THE CHAIRMAN OF MONEYSWAP PLC

   1.         Introduction 

The Company announced on 13 April 2017 that it intends to seek Shareholders' approval to cancel the admission of the Ordinary Shares from trading on AIM.

This letter sets out the background and reasons for the proposed Cancellation.

Wraith, in consultation with the Board, has recently undertaken a review of the benefits of the Ordinary Shares continuing to be traded on AIM. Having completed this review, the Board and Wraith have concluded that it is in the best interests of the Company and its Shareholders as a whole if the admission of the Ordinary Shares to trading on AIM is cancelled.

Any Shareholders wishing to sell their Ordinary Shares in the Company following Cancellation should contact the Company using the details set out in paragraph 9 of this Circular.

The AIM Rules provide that Cancellation be conditional upon the approval of the special resolution set out as resolution 1 in the notice convening the EGM, enclosed with this document, by not less than 75 per cent of the votes cast, whether in person or by proxy, by Shareholders in a general meeting.

The purpose of this document is to explain why the Board consider the Proposals to be in the best interests of the Company and its Shareholders as a whole and to recommend that you vote for the Resolutions required to implement the Proposals at the EGM scheduled to take place at 10:00 a.m. on 30 May 2017, notice of which is enclosed at the end of this document.

Allenby Capital, the Company's nominated adviser, has indicated to the Board that, in the event that the resolution to approve the Cancellation is not passed at the EGM, it will resign as the Company's nominated adviser, as the Subscription is unlikely to proceed. Should this occur, the Company would have one month to appoint a new nominated adviser, otherwise the Ordinary Shares would be cancelled from AIM in accordance with Rule 1 of the AIM Rules. The Board does not consider there to be a realistic prospect of appointing a new nominated adviser in the event that Allenby Capital resigns. Shareholders are therefore encouraged to vote in favour of the Resolutions.

   2.         Reasons for the proposed Cancellation 

After further consideration following the announcement of the Subscription by the Company on 21 March 2017, Wraith, in consultation with the Board, has concluded that it considers the Subscription should not proceed whilst the Ordinary Shares are admitted to trading on AIM and has, by virtue of a deed of variation entered into with the Company dated 27 April 2017, agreed that Cancellation becomes an additional condition to Completion. As the Company has announced on a number of occasions, the Company requires a substantial investment to secure its long term financial position. This investment is likely to come from the Subscription, which will only complete following Cancellation. It is highly unlikely that it would be possible to complete a subscription or fundraising with an alternative investor in the timeframe required in order to remain on AIM and the Board therefore considers that it is in the best interests of the Company and the Shareholders to proceed with the Subscription and for Cancellation to be effected.

The Board understands Wraith to have concluded that the costs and regulatory burden associated with remaining admitted to AIM are not commensurate with the benefits available to the Company and its Shareholders, given the current stage of development of the Company's business.

Pursuant to AIM Rule 41, the Cancellation can only be effected by the Company after securing a resolution of Shareholders passed by a requisite majority being not less than 75 per cent of the votes cast by Shareholders (in person or by proxy) at a general meeting. Under the AIM Rules, the Cancellation can only take place after the expiration of a period of twenty Business Days from the date on which notice of the Cancellation is given. In addition, a period of at least five Business Days following the Shareholder approval of the Cancellation is required before the Cancellation may be put into effect.

The Company, through its nominated adviser, has notified the London Stock Exchange of the proposed Cancellation and it is expected that Cancellation will take effect at 7.00 a.m. on 07 June 2017.

   3.         Current trading 

On 21 March 2017, the Company announced its results for the half year ended 30 September 2016. During this period, the Company reported revenue of US$218,572 and a loss before taxation of US$961,142. Trading in the second half of the financial period was in line with the first half and the Company is expecting to report a turnover for the year ended 31 March 2017 slightly ahead of the US$397,056 recorded for the year ended 31 March 2016. As a result of cost cutting measures undertaken during the last financial period, the Company anticipates that the loss before taxation for the year ended 31 March 2017 will be significantly lower than the US$3,065,096 reported for the year ended 31 March 2016.

Since the end of the financial year, a number of initiatives have been taken to increase revenues which are expected to translate into improved financial performance in the six months to 30 September 2017.

   4.         Future strategy of the Company 

As previously announced, in the months prior to the suspension of trading in the Ordinary Shares on AIM, the Company's revenues were adversely affected by the lack of access to adequate working capital and the uncertainty surrounding the financial viability of the business and its ability to raise capital.

With the proceeds from the Subscription and the monies borrowed pursuant to the Loan Agreement, it is expected that the Company will have sufficient working capital to increase revenue streams from the platforms and licences it currently holds. If successful, it may be appropriate to seek admission of the Company's shares to AIM or another public market at some time in the future, once the business operations of the Company have developed.

   5.         Effect of Cancellation 

The principal effect of the proposed Cancellation is that there would no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM or any other recognised market or trading exchange. There has been no underlying liquidity in the Ordinary Shares since the suspension of trading in the Ordinary Shares on AIM on 21 September 2016 and this will remain the case for the foreseeable future as long as the Company's Ordinary Shares are not traded on a public market. As described below, the Company will seek to facilitate any trades should Shareholders seek to buy or sell Ordinary Shares following Cancellation. However, such a facility may not result in an attractive share price or any liquidity for Shareholders.

Due to the limited number of existing Shareholders and the illiquidity of the Ordinary Shares prior to the suspension from trading in the Ordinary Shares on AIM, the Company is assessing whether to continue to offer a facility to enable electronic settlement of the Ordinary Shares following Cancellation. The Company will continue to maintain the Depository Interest facility representing Ordinary Shares for a period of not less than 45 days following Cancellation, during which period the Company will assess the commercial benefits of maintaining the Depository Interest facility. Should the Depository Interest facility be cancelled in due course, Shareholders will be able to continue to trade their Ordinary Shares in certificated form.

Shareholders should also be aware that the Company will no longer be bound by the AIM Rules and that, as a consequence, certain previously prescribed corporate governance procedures may not be adhered to in the future and the Company will no longer be required to announce material events or transactions including releasing interim results or final results. As the Company will no longer be subject to the AIM Rules, Shareholders will no longer be required to vote on certain matters as provided in the AIM Rules. However, following Cancellation, the Company intends to continue to maintain a website at www.moneyswapholdings.com for the foreseeable future, providing information on events or developments of the Company that are deemed significant by the Board.

Upon Cancellation, the Company will cease to have a nominated adviser. The Company is currently required under the AIM Rules to consult with its nominated adviser on, for example, transactions constituting "related party transactions" under the AIM Rules, and to inform the nominated adviser of key decisions such as any proposed changes to the Board. Following Cancellation, the Shareholders will no longer benefit from the protection afforded by the nominated adviser.

Upon Cancellation, the Relationship Agreement and Lock-in Agreement will no longer be required to be entered into by Wraith and the Company. Please see paragraph 8 below for further details.

Accordingly, as a result of the Cancellation, the protections available to Shareholders will be limited to those available under Gibraltar law and the Company's articles of association from time to time.

   6.         Effect on the Company should Cancellation not proceed 

Allenby Capital, the Company's nominated adviser, has indicated to the Board that, in the event that the resolution to approve the Cancellation is not passed at the EGM, it will resign as the Company's nominated adviser, as the Subscription is unlikely to proceed. Should this occur, the Company would have one month to appoint a new nominated adviser, otherwise trading in the Ordinary Shares would be cancelled on AIM in accordance with Rule 1 of the AIM Rules. The Board does not consider there to be a realistic prospect of appointing a new nominated adviser in the one month period in the event that Allenby Capital resigns. Shareholders are therefore encouraged to vote in favour of the Resolutions.

The Board further considers that, should the Ordinary Shares be cancelled in accordance with AIM Rule 1, this could prejudice the Company's ability to re-admit to AIM or an alternative public market at some point in the future.

   7.         New Articles 

The Board considers it appropriate that the Company should adopt new articles of association with effect from (and subject to completion of) the Cancellation to reflect the fact that the Ordinary Shares will no longer be traded on a public market following the Cancellation. The New Articles are broadly similar to the Articles but contain the following changes:

1. A new right has been added for holders of 60 per cent or more of the Ordinary Shares to require the other holders of Ordinary Shares to sell their Ordinary Shares in the event that an "Approved Offer" is made from a bona fide third party for all of the Ordinary Shares. This would mean that where an Approved Offer is made Shareholders could be forced to sell their Ordinary Shares to the third party even if they object to the offer provided that holders of at least 60% of the Ordinary Shares approve of the offer. This prevents minority Shareholders frustrating a future sale and is for the benefit of Shareholders as a group. An "Approved Offer" is one that is made by a bona fide third party which offers the same or equivalent consideration for each Ordinary Share and which stipulates that the purchase of all of the Ordinary Shares shall occur simultaneously.

2. The requirement of the directors to retire by rotation has been deleted and accordingly directors will no longer have fixed term appointments.

   3.   Various minor amendments to reflect that the Ordinary Shares will no longer be traded on AIM. 

A copy of the New Articles showing the changes to the Articles has been posted to Shareholders along with this Circular and can also be found at www.moneyswapholdings.com.

   8.         Variation to the Subscription Agreement 

The Subscription Agreement has been amended by agreement between the Company and Wraith since a summary of the terms was provided to Shareholders in the Previous Circular. A summary of the changes as a result of the deed of variation between the Company and Wraith dated 27 April 2017 is as follows:

1. An additional condition to Completion has been added to the effect that Completion is also now conditional upon Cancellation having been completed to the reasonable satisfaction of Wraith.

2. The requirement that the Company, Allenby Capital and Wraith enter into the Relationship Agreement and the Lock-in Agreement has, conditional upon Cancellation occurring, been deleted.

3. Conditional upon Cancellation occurring, Calvin Yan will not now be appointed as an additional director of the Company.

4. Conditional upon Cancellation occurring, Wraith shall have the right to appoint two directors to the Board.

   9.         Trading in the Ordinary Shares after Cancellation 

The Board recognises that the Cancellation will make it more difficult for Shareholders to buy and sell Ordinary Shares should they wish to do so. Following the Cancellation, although the Ordinary Shares will remain transferable they will no longer be tradable on AIM. Accordingly, the Board will, following Cancellation, seek to introduce buyers to sellers in the event that the Company is able to match an indication to buy or sell with an opposite buy or sell instruction. Once an introduction has been made, Shareholders will be able to effect a transaction in the Ordinary Shares through a stock transfer form or share purchase agreement.

Shareholders or persons wishing to trade in the Company's Ordinary Shares following Cancellation should contact the Company via email to [e-mail], giving an indication that they are prepared to buy or sell at an agreed price.

   10.        Special resolutions to be proposed at the Extraordinary General Meeting 

The Cancellation is subject to Shareholders passing the following Resolution 1:

1. "That the admission of the ordinary shares of 0.1 pence each in the capital of the Company to trading on AIM, a market operated by London Stock Exchange plc, be cancelled and that the directors of the Company be authorised to take all steps which they consider to be necessary or desirable in order to effect such cancellation."

In addition, the Board and Wraith consider it appropriate that Shareholders pass the following resolution to reflect that the Ordinary Shares will no longer be traded on a public market:

2. That, conditional upon resolution 1 being passed, the New Articles of the Company contained in the document signed by the Chairman for the purposes of identification be and are approved and with effect from Cancellation be adopted as the articles of association of the Company in substitution for and to the exclusion of the existing Articles."

The Resolutions are proposed as special resolutions of the Company. In accordance with the AIM Rules and the laws of Gibraltar, the special resolutions detailed above, will be required to be passed by a majority of not less than 75 per cent. of the votes cast by Shareholders (in person or by proxy) at the EGM.

   11.        Action to be taken 

Shareholders will find enclosed with this document a Form of Proxy and a Form of Direction (for use in the event that any Shareholder is a holder of Depositary Interests on the date of the Extraordinary General Meeting), in each case for use in connection with the Extraordinary General Meeting. Whether or not you intend to be present at the Extraordinary General Meeting, you are requested to complete and sign:

(a) in the case of Shareholders, the Form of Proxy, which should be returned to Prime Secretaries, Prime Management Limited, 13/15 Giro's Passage, Gibraltar, GX11 1AA as soon as possible and, in any event, so as to arrive no later than 10.00 a.m. on 28 May 2017; and

(b) in the case of holders of Depositary Interests, the Form of Direction, which should be returned to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, so as to arrive no later than 10.00 a.m. on 27 May 2017.

If a Form of Proxy or Form of Direction is not received by the dates and times set out above, it will be rendered void. The completion and return of a Form of Proxy will not preclude you from attending the Extraordinary General Meeting and voting in person if you so wish. Holders of Depositary Interests wishing to attend the EGM should contact the Depositary as per the instructions on the Form of Direction. Depositary Interests may be voted through the CREST Proxy Voting Service in accordance with the procedures set out in the CREST manual. The CREST message should be received not later than 10.00 a.m. on 28 May 2017.

   12.        Recommendation 

The Board considers the resolutions to be proposed at the EGM to be in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend Shareholders to vote FOR the Resolutions to be proposed at the EGM.

DEFINITIONS

 
AIM                        AIM, a market operated by the 
                            London Stock Exchange; 
AIM Rules for Companies    the rules of AIM as set out 
 or AIM Rules               in the publication entitled 
                            AIM Rules for Companies published 
                            by the London Stock Exchange 
                            from time to time; 
Allenby Capital            Allenby Capital Limited, the 
                            Company's nominated adviser 
                            and broker for the purposes 
                            of the AIM Rules; 
Articles                   the Company's articles of association, 
                            in effect as at the date of 
                            this document which were adopted 
                            on 20 April 2017; 
Board                      the board of directors of the 
                            Company from time to time; 
Business Days              any days on which the London 
                            Stock Exchange is open for 
                            business; 
Cancellation               the cancellation of admission 
                            of the Ordinary Shares to trading 
                            on AIM becoming effective in 
                            accordance with Rule 41 of 
                            the AIM Rules; 
Circular or this document  this document dated 02 May 
                            2017; 
Company or MoneySwap       MoneySwap plc, a company incorporated 
                            in Gibraltar with registered 
                            number 96229 and whose registered 
                            office is 13/15 Giro's Passage, 
                            Gibraltar; 
Completion                 completion of the issue of 
                            the Initial Subscription Shares 
                            to Wraith, pursuant to the 
                            Subscription Agreement between 
                            MoneySwap and Wraith; 
CREST                      the relevant system (as defined 
                            in the CREST Regulations) in 
                            respect of which Euroclear 
                            is the Operator (as defined 
                            in the CREST Regulations); 
Depositary                 Capita IRG Trustees Limited, 
                            The Registry, 34 Beckenham 
                            Road, Beckenham, Kent BR3 4TU; 
Depositary Interests       the depositary interests in 
 or DIs                     uncertificated form representing 
                            Ordinary Shares; 
Directors                  the directors of the Company 
                            at the date of this document, 
                            as set out on page 6 of this 
                            document; 
Enlarged Share Capital     the Company's issued share 
                            capital as enlarged by the 
                            issue of the Initial Subscription 
                            Shares; 
EU                         the European Union; 
Euroclear                  Euroclear UK & Ireland Limited; 
Existing Options           the share options granted by 
                            the Company as at the date 
                            of this Circular; 
Extraordinary General      the extraordinary general meeting 
 Meeting or EGM             of the Company, notice of which 
                            is set out at the end of this 
                            Circular, and including any 
                            adjournment(s) thereof; 
FCA                        the UK's Financial Conduct 
                            Authority; 
Form of Direction          the form of direction for DI 
                            holders accompanying this document 
                            relating to the Extraordinary 
                            General Meeting; 
Form of Proxy              the form of proxy accompanying 
                            this document relating to the 
                            Extraordinary General Meeting; 
FSMA                       the UK Financial Services and 
                            Markets Act 2000, as amended; 
GBP or GBP                 pound sterling, the legal currency 
                            of the United Kingdom; 
Initial Subscription       the issue of the Initial Subscription 
                            Shares at Completion to Wraith 
                            pursuant to the terms of the 
                            Subscription Agreement; 
Initial Subscription       the 2,443,420,775 new Ordinary 
 Shares                     Shares proposed to be issued 
                            to Wraith pursuant to the Initial 
                            Subscription at Completion 
                            (or such higher number of Ordinary 
                            Shares as would entitle Wraith 
                            to hold at least 51 per cent. 
                            of the Enlarged Share Capital 
                            on Completion); 
Loan Agreement             the loan facility dated 6 March 
                            2017 between the Company and 
                            Wraith, further details of 
                            which were announced by the 
                            Company on 6 March 2017; 
Lock-in Agreement          the lock-in agreement that 
                            was originally proposed to 
                            be entered into between Wraith, 
                            Allenby Capital and the Company 
                            on Completion, further details 
                            of which are set out in the 
                            Previous Circular; 
London Stock Exchange      the London Stock Exchange Group 
                            plc; 
New Articles               the proposed new articles of 
                            association of the Company; 
Notice of Extraordinary    the notice of Extraordinary 
 General Meeting            General Meeting, set out at 
                            the end of this document; 
Ordinary Shares            the ordinary shares of GBP0.001 
                            each in the capital of the 
                            Company in issue from time 
                            to time; 
Previous Circular          the circular sent to Shareholders 
                            dated 28 March 2017; 
Proposals                  the Cancellation and the adoption 
                            of the New Articles; 
Prospectus Rules           the Prospectus Rules published 
                            by the FCA; 
Relationship Agreement     the agreement that was originally 
                            proposed to be entered into 
                            on Completion between the Company, 
                            Allenby Capital and Wraith, 
                            details of which are set out 
                            in the Previous Circular; 
Resolutions                the resolutions to be proposed 
                            at the Extraordinary General 
                            Meeting, as set out in the 
                            Notice of Extraordinary General 
                            Meeting; 
Shareholders               holders of Ordinary Shares; 
Subscription               the conditional subscription 
                            by Wraith for Ordinary Shares 
                            as set out in the Previous 
                            Circular; 
Subscription Agreement     the agreement dated 20 March 
                            2017 between the Company and 
                            Wraith relating to the Subscription, 
                            as amended by a deed of variation 
                            dated 28 March 2017 and a deed 
                            of variation dated 27 April 
                            2017, details of which are 
                            set out in paragraph 8 of this 
                            Circular; 
uncertificated             shares recorded on a register 
                            of securities maintained by 
                            Euroclear in accordance with 
                            the CREST Regulations as being 
                            in uncertificated form in CREST 
                            and title to which, by virtue 
                            of the CREST Regulations, may 
                            be transferred by means of 
                            CREST; 
UK or United Kingdom       the United Kingdom of England, 
                            Scotland, Wales and Northern 
                            Ireland; 
US$ or $                   US dollars, the legal currency 
                            of the United States; and 
Wraith                     Wraith Holding B.V., a company 
                            incorporated in the Netherlands 
                            with Company number 67229581 
                            and whose registered address 
                            is Startbaan 8, 1185 XR, Amstelveen, 
                            the Netherlands. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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