Notice of AGM

 

TIDMNTY 
 
RNS Number : 2895S 
Network Technology PLC 
07 September 2010 
 

 
                                         7 September 2010 
For immediate release 
                     NETWORK TECHNOLOGY PLC (THE "COMPANY") 
NOTICE OF ANNUAL GENERAL MEETING, PROPOSED CANCELLATION OF LISTING OF SHARES ON 
THE OFFICIAL LIST AND TRADING OF THE SHARES ON THE LONDON STOCK EXCHANGE (THE 
"NOTICE") AND DESPATCH OF ANNUAL REPORT. 
The board of directors of the Company confirms that the Notice of the Annual 
General Meeting to be held on 30 September 2010 at 12.00 noon at 26 Victoria 
Way, Burgess Hill, West Sussex, RH15 9NF has been dispatched to shareholders by 
post together with a copy of the annual report in respect of the  financial year 
ended 31 March 2010. 
The Notice includes a special resolution to authorise cancellation of the 
Company's listing of Ordinary Shares on the Official List of the UK Listing 
Authority and their admission to trading on the Main Market of the London Stock 
Exchange (the "De-Listing Resolution"). 
The rationale behind the De-Listing Resolution is that for the last few years 
the Company has struggled to find investment for its new technologies. Market 
conditions and the particular challenges of being a very small cap technology 
based company have contributed to this. The Directors have been the sole 
investors in new equity in the Company over the last few years, which alone has 
enabled the Company to keep afloat and allowed it to re-shape itself. 
The current share price values the Company at around only one-eighth of its 
annual sales. The Company cannot afford to appoint a broker or financial advisor 
without new investment in the Company or it becoming significantly more cash 
productive. This is unlikely to happen in the near future whilst the Company 
continues to invest in new technologies and manufacturing capacity. 
The Board of the Company hopes that Shareholders would be happy to continue to 
support the Company whether it is listed or not. The Board of the Company 
recommends that Shareholders vote FOR the De-Listing Resolution. 
As it is not a foregone conclusion that the De-Listing Resolution is passed, the 
Directors have also proposed a share buy-back resolution, limited to a maximum 
of 5% of the Company's issued share capital. This is conditional on the 
De-Listing Resolution not being passed. The intention is that smaller 
Shareholders, for whom selling their shareholding is not feasible because 
transaction costs out-weigh the price of such shareholding, in particular, will 
be able to take advantage of any share buy-back by the Company. 
The Notice, together with other documents, will shortly be available from the 
Company's website at 
www.network-technology.com/news/. The Chairman's letter to shareholders is set 
out below in full. 
 
Terms defined in this announcement shall have the same meaning as in the Notice, 
unless stated otherwise. 
 
For further information please contact: Network Technology plc, Helen Catt, 0144 
                487 0408 
 
 Chairman's Letter to Shareholders 
Dear Shareholder, 
I am writing to you with details of the Annual General Meeting of the Company 
(the "AGM") which we are holding at the Company's registered office, 26 Victoria 
Way, Burgess Hill, West Sussex RH15 9NF on 30 September 2010 at noon. The formal 
notice of Annual General Meeting is set out at Part II on pages 6, 7 and 8 of 
this document. 
An explanation of the business to be conducted at the AGM is included at Part 
III on pages 9 to 10 of this document. 
Proposed De-Listing: background and implications 
This year's AGM includes a special resolution (resolution no. 5) (the 
"De-Listing Resolution") to cancel the Company's listing of Ordinary Shares on 
the Official List of the UK Listing Authority and their admission to trading on 
the main market of the London Stock Exchange ("De-Listing"). 
Pursuant to Listing Rule 5.2.5(2), a delisting of the Company's Ordinary Shares 
on the Official List and the trading of the Ordinary Shares on the main market 
of the London Stock Exchange requires the approval of a resolution from at least 
75% of the shareholders of the Company. Therefore, the Board is proposing the 
De-Listing Resolution at this year's AGM. 
The rationale behind the De-Listing Resolution is that for the last few years 
the Company has struggled to find investment for its new technologies. Market 
conditions and the particular challenges of being a very small cap technology 
based company have contributed to this. The Directors have been the sole 
investors in new equity in the Company over the last few years, which alone has 
enabled the Company to keep afloat and allowed it to re-shape itself. 
Conditional upon the De-Listing Resolution being approved by the Shareholders, 
the Company will give notice of its intention to cancel the listing of its 
Ordinary Shares on the Official List and the trading of the Ordinary Shares on 
the main market of the London Stock Exchange. Following De-Listing, the Company 
will no longer be subject to the UK Listing Rules as well as any other rules and 
regulations applying to companies with securities listed on the Official List 
and traded on the main market of the London Stock Exchange and Shareholders will 
no longer be entitled to the rights and protections under such rules and 
regulations. 
 
Following the De-Listing, there will no longer be a mechanism enabling 
shareholders to trade their Ordinary Shares through the market. Whilst the 
Ordinary Shares will remain freely transferable, they may be more difficult to 
sell compared to shares of listed companies as the Company does not intend to 
offer any off-market dealing facility. It may also be more difficult for 
shareholders to determine the market value of their shareholdings in the Company 
at any given time. 
 
The De-Listing may have tax implications on Shareholders who have claimed a tax 
benefit for holding shares in a listed company who could as a result of the 
De-Listing lose those benefits. The Company does not give any tax advice to 
Shareholders and requires each Shareholder to obtain their own independent 
advice on the effects of the De-Listing on a case by case basis. 
 
The current share price values the Company at around only one-eighth of its 
annual sales. The Company cannot afford brokers and market makers without new 
investment in the Company or it becoming significantly more cash productive. 
This is unlikely to happen in the near future whilst the Company continues to 
invest in new technologies and manufacturing capacity. In addition, the Company 
cannot otherwise achieve a realistic valuation for its technology and could use 
the cash spent at present on maintaining the listing towards the financing of 
its activities. 
We hope that you would be happy to continue to support the Company whether it is 
listed or not and therefore the Board recommends that you vote FOR the 
De-Listing Resolution. 
Proposed Share Buy-Back: background and implications 
As it is not a foregone conclusion that the De-Listing Resolution is approved, 
the Directors have also proposed a share buy-back resolution (resolution no. 6) 
(the "Share Buy-Back Resolution") at this year's AGM, which is limited to a 
maximum of 5% of the Company's issued share capital ("Share Buy-Back"). 
This resolution, which is proposed as a special resolution, requires a vote in 
favour by a majority of not less than 75% of the shareholders who vote in person 
or by proxy at the AGM. Under the Companies Act 2006 a shareholder vote is 
required to authorise the Share Buy-Back Resolution. 
The Share Buy-Back Resolution will only be proposed if the De-Listing Resolution 
is not passed. The intention is that smaller Shareholders, for whom selling 
their shareholding is not feasible because transaction costs out-weigh the price 
of such shareholding, in particular, will be able to take advantage of any Share 
Buy-Back by the Company. This will ensure there will be no direct cost 
associated with the disposal of such shares and a fair value for the shares will 
be payable. If the Share Buy-Back Resolution is approved, the Company intends to 
hold the shares in treasury. 
The directors only intend to exercise the authority to purchase shares where 
they consider that such purchases will be in the best interests of shareholders 
generally and will result in an increase in earnings per share. 
We hope that you will support the Company's Share Buy-Back and therefore the 
Board recommends that you vote FOR the Share Buy-Back Resolution. 
Voting 
It is important to the Company that Shareholders vote even if they are unable to 
attend the AGM. To this end, a form of proxy is enclosed for use by Shareholders 
so that they can appoint one or more persons to attend, speak and vote at the 
AGM on their behalf. Alternatively, Shareholders can nominate the Chairman of 
the meeting to vote for them. The results of the voting will be announced after 
the meeting. Shareholders attending the meeting in person and any proxies 
appointed by those Shareholders who are not able to attend the meeting in person 
will have the opportunity to ask questions on the AGM resolutions and any other 
topic of relevance to the business of the meeting. We hope that you will make 
use of the opportunity to raise questions on the topics to be discussed. You 
are, of course, invited to write to me at any time if you have any questions. 
Action to be taken 
If you would like to vote on the resolutions but cannot come to the AGM, please 
complete and return the form of proxy, in accordance with the instructions on 
the form of proxy, to the Company's registrars, Computershare Investor Services 
PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, as soon as possible and, 
in any event, no later than noon on 28 September 2010. Completion and return of 
a form of proxy will not prevent you from attending and voting in person at the 
meeting should you so wish. 
Recommendation 
The Board considers that all of the resolutions to be voted on are in the best 
interests of the Company and of its Shareholders as a whole and unanimously 
recommends Shareholders to vote in favour of the resolutions at the AGM, as the 
Directors themselves propose to do. 
I look forward to meeting as many of you as possible at the AGM. 
Yours sincerely, 
 
Klaus Bollmann 
Chairman 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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