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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Principle Cap. | LSE:PCX | London | Ordinary Share | LU0203938583 | ORD �1 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 15.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMPCX RNS Number : 8256K Principle Capital Holdings S.A. 27 April 2010 Principle Capital Holdings and Sanlam Group enter into subscription agreement; and proposed cancellation of listing Principle Capital Holdings S.A. ("Principle Capital" or the "Company") announces that on 26 April 2010 it entered into a conditional subscription agreement with the Sanlam Group, a leading financial services group in South Africa, and certain members of the Company's management team, pursuant to which these investors will initially subscribe GBP4 million for 26,666,666 Ordinary Shares at a price of 15 pence per share. As part of the initial investment, it is proposed that the nominal value of each of the Ordinary Shares will be reduced from GBP1.00 to GBP0.01 and that the admission to trading on AIM of the Ordinary Shares will be cancelled. The key reasons for the transaction include: * forming a strategic relationship with the Sanlam Group that the Company believes will assist the Company in expanding its emerging market alternative asset management business, particularly in Africa and India, and developing further its private client trust and fund administration business; * generating significant synergies and cross-selling opportunities that the Company believes will be created from the strategic relationship with the Sanlam Group; * the injection of an initial investment of GBP4 million into the Company to develop the business and, subject to certain fundraising and cost saving conditions being met, the Sanlam Group and the other investors have committed a second tranche of GBP4 million for the further development of the business. In order to provide shareholders of the Company with the opportunity to participate in the investment, the Company will make an open offer to eligible shareholders prior to the completion of the initial investment. The open offer will be contained in a separate circular. The investors have also indicated that they are willing to acquire the shares of any shareholders wishing to sell following the cancellation of admission to AIM at a price equal to the subscription price and such shares shall also be available to other shareholders wishing to participate in the purchase, pro rata to their holdings in the Company at the time that the details of the shares that have been offered for sale are sent to shareholders. The proceeds of the transaction will be used primarily for the launch of new alternative investment products focused on Africa and India, expansion of the Company's product distribution capability and the expansion of Silex, the Company's private client trust and administration business. These proposals are subject to shareholder approval and accordingly the directors have convened an EGM to be held on 19 May 2010.The proposals are also subject to a number of conditions being satisfied, including approvals required by the UK Financial Services Authority and the British Virgin Islands Financial Services Commission in relation to certain of the Company's subsidiaries and Sanlam being granted exchange control approval by the South African Reserve Bank. Commenting on the transaction, Jonathan Sieff, Chief Executive of Principle Capital Holdings said: "We are delighted to be able to accelerate the growth of the business by forming this strategic relationship with one of the leading financial services groups in South Africa and which is rapidly growing its interests elsewhere in Africa. The transaction will allow the Company to take advantage of opportunities that have emerged from the market dislocation over the past two years and, through the open offer, existing shareholders will also be able to participate in the investment. Consequently, the Board believes that the resolutions which will be proposed at the upcoming EGM are in the best interests of the Company and shareholders and is able to recommend that shareholders vote in favour of these resolutions." Johan van der Merwe, Chief Executive of Sanlam Investments said that the acquisition of a shareholding in Principle Capital complements Sanlam's existing strategy in particularly Africa and India. "We look forward to help building the business to be the pre-eminent player in the emerging market alternative asset management space in the countries we choose to operate", he added. - Ends - Enquiries +--------------------------------+----------------------------+ | Principle Capital Holdings | +44 20 7240 3222 | | Jonathan Sieff | | | Mark Whitfeld | | | | | +--------------------------------+----------------------------+ | Pelham Bell Pottinger | +44 (0) 7812 345 205 | | Olly Scott | | | | | +--------------------------------+----------------------------+ | Singer Capital Markets | +44 20 3205 7500 | | Jeff Keating | | | | | +--------------------------------+----------------------------+ Note: Principle Capital was advised by financial consultants, MENA-RL, which is now part of Daniel Stewart & Co. plc. PROPOSED TRANSACTION, CAPITAL REDUCTION AND CANCELLATION OF ADMISSION 1. Introduction On 26 April 2010, the Company entered into a subscription agreement with the Investors, which is conditional upon, among other things, the passing of certain of the Resolutions and the making of the Open Offer, pursuant to which the Investors will initially subscribe for an aggregate of 26,666,666 Ordinary Shares at a price of 15 pence per Ordinary Share. As part of the Tranche 1 Subscription, it is proposed that the nominal value of each of the Ordinary Shares will be reduced from GBP1.00 to GBP0.01 and that the admission to trading on AIM of the Ordinary Shares will be cancelled. Further details of the Capital Reduction and the Cancellation are set out in Sections 8 and 10 respectively of this document, which include details of the Tender Facility, which has been proposed by the Investors to allow other Shareholders to sell their Ordinary Shares or Depositary Interests following the Cancellation. It is also proposed that Shareholders who do not wish to sell will be provided with an opportunity to participate in the investment in the Company pursuant to the Open Offer. Further details of the Open Offer are set out in Section 6. 2. Reasons for the Transaction The Board believes that there are strong strategic reasons for supporting the Transaction, which are as follows: · the Board believes that the Transaction will enable the Group to create a strategic relationship with the Sanlam Group that will assist the Group in expanding its alternative asset management business in certain of its key existing and target markets, such as Africa and India, and developing further its private client trust and fund administration business. Further details in relation to the Sanlam Group are set out in Section 5; · the Board believes that significant synergies and cross-selling opportunities will be created for the Group from the strategic relationship with the Sanlam Group; and · in the first tranche of their investment, which is conditional upon, among other things, the passing of certain of the Resolutions, the Investors will invest an aggregate of GBP4 million into the Company, which constitutes a significant capital injection which the Board believes the Group requires in order to develop its businesses. In addition and subject to certain fundraising and cost cutting hurdles being achieved, the Investors have committed a further tranche of GBP4 million for the further development of the business. The Board has also carefully considered the Subscription Price in relation to the Tranche 1 Subscription. In considering the proposed Subscription Price, which represents a discount of 7.69 per cent. to the closing mid market price of the Ordinary Shares on 26 April 2010 (being the last business day before the date of this document), the Board has taken into account: · the recent share price performance of the Ordinary Shares on a standalone and volume weighted basis; · the strategic benefits that the Transaction will bring to the Company, which are outlined above; · the Open Offer being made to Shareholders, which will allow each of them to participate in the investment in the same proportion relative to their current holding of Ordinary Shares as the Management Investors; · the Board's belief that the Company's net assets (including goodwill) are unlikely to be attributed any significantly greater value than the Subscription Price by investors in arriving at a valuation of the Group for the purposes of any investment; and · the possible alternatives to raising further equity capital in order to develop the business, such as a sale of assets, and the costs associated with those alternatives. Based upon these factors, the Board considers that the proposed investment at the Subscription Price represents an important strategic opportunity for the Group which will provide the Group with the capital injection and relationship that the Board believes are essential in order to allow the Group to continue to develop its business within a reasonable timescale. 3. Terms of the Transaction On 26 April 2010, the Company entered into a conditional subscription agreement with the Investors pursuant to which the Investors agreed to initially subscribe for an aggregate of 26,666,666 Ordinary Shares at a price of 15 pence per Ordinary Share. The subscription by the Investors for the Tranche 1 Shares is conditional upon, among other things: · the passing of Resolutions 1 to 4 (inclusive); · Sanlam being granted exchange control approval by the South African Reserve Bank in connection with the Tranche 1 Subscription and the Investor Loans (and related guarantees and other security); · Sanlam obtaining all necessary consents from the United Kingdom Financial Services Authority in connection with the Tranche 1 Subscription; · Silex Trust Company Limited and Silex Fund Administrators International Limited receiving the approval of the British Virgin Islands Financial Services Commission in connection with the Tranche 1 Subscription; · the release of all existing charges, pledges and other security over the Ordinary Shares held by the Management Investors; and · the making of the Open Offer by the Company. It is expected that the subscription for the Tranche 1 Shares will be completed immediately following satisfaction of these conditions. The Investors have also agreed to subscribe for a second tranche of an additional 26,666,666 Ordinary Shares conditional upon, among other things, the Group meeting certain fund raising and cost saving targets; regulatory approvals from the South African Reserve Bank, the United Kingdom Financial Services Authority and the British Virgin Islands Financial Services Commission; no material claim having been made by Sanlam under the warranties contained in the Subscription Agreement; and the approval of Shareholders being obtained in respect of the required increase in the Company's authorised share capital and the disapplication of pre-emption rights in respect of the additional Ordinary Shares. It is expected that the subscription for the second tranche will be completed immediately following satisfaction of these conditions, which is currently expected to be within 18 months following the EGM. Shareholders are not being asked to approve any resolutions necessary to effect the subscription of the second tranche at this time. However, it is the Board's intention to offer Shareholders the opportunity to participate in the tranche 2 subscription in the same proportion relative to their holding of Ordinary Shares as the Management Investors, although, as the conditions are currently expected to take up to 18 months to be satisfied, it will need to review all circumstances existing at the time. Any participation by Shareholders in the second tranche will be satisfied from the Ordinary Shares that would otherwise be allotted to the Management Investors pursuant to the Subscription Agreement. The Investors consist of Sanlam, which is a member of the Sanlam Group, one of South Africa's leading financial services groups, and the following members of the Company's management team: Nicholas Holdings, in which Brian Myerson has a potential beneficial interest; Heritage, in which Jonathan Sieff has a potential beneficial interest and which owns 6.08 per cent. of the Company; Gristel Holdings, the shares of which are owned by Brian Padgett and which owns 5.28 per cent. of the Company and Andrew James Peggie, who owns 3.94 per cent. of the Company. Brian Myerson is a Director and Executive Chairman of the Company, Jonathan Sieff is a Director and Chief Executive Officer of the Company and Brian Padgett is a Director. Nicholas Holdings, Heritage and Gristel Holdings are related parties for the purposes of AIM Rule 13. The Company is not giving any warranties or indemnities to Sanlam in connection with the Transaction on the basis that the Management Investors have agreed to give significant warranties and indemnities to Sanlam in relation to the Company and all of the Group's businesses. Sanlam also has a right to terminate the Subscription Agreement in the event that any matter arises prior to Tranche 1 Completion which would constitute a material breach of those warranties. In addition, the Management Investors have agreed to a lock-in from selling their Ordinary Shares for a period of five years from the Tranche 1 Completion or, if later, the date of the repayment of all amounts by the relevant Management Investor under any Investor Loan. In addition to the commitments by the Management Investors, each of the Investor Managers has agreed to a 25 per cent. reduction in their salary with effect from 1 January 2010; to exclusion from any future option grants under the Company's existing option plan; and to an obligation to sell their Ordinary Shares in the event that they leave the business, in certain circumstances at a discount to the fair value (as determined by an independent valuer) of up to 66 per cent. In addition, the Company has agreed to put into place a new bonus plan with effect from Tranche 1 Completion pursuant to which each of the Investor Managers will receive a share of a bonus pool which is equal to fifty per cent. of the performance fees and carried interests earned by the Group after the adoption of the plan. 4. SHAREHOLDERS' AGREEMENT AND ARTICLES OF INCORPORATION Resolution 4 of the Resolutions proposes that the Revised Articles will be adopted by the Company conditional upon the later of the Tranche 1 Completion and the Cancellation. The Revised Articles include, among other things, restrictions on the transfer of Ordinary Shares by Shareholders and provisions allowing for a proposal right for the nomination of Directors by the Management Investors and Sanlam. In addition, pursuant to the terms of the Subscription Agreement, the Investors have agreed that on the Tranche 1 Completion they will enter into the Shareholders' Agreement, which will govern the relationship of the Investors in relation to the Company. 5. BACKGROUND ON SANLAM Sanlam is part of the Sanlam Group, a leading financial services group in South Africa with its head office in Bellville near Cape Town. The Sanlam Group has offices throughout South Africa and also has business interests elsewhere in Africa, Europe, India and Australia. In its South African operations the Sanlam Group employs about 9,400 staff members, about 2,300 accredited brokers, 4,000 advisers and agents with about 2,600 advisers and agents in the rest of Africa and about 20,500 in India. Sanlam Limited (SLM), which listed on the JSE Limited and the Namibian Stock Exchange after its demutualisation in 1998, had 544,564 shareholders on 31 December 2009. The Sanlam Group's operational strategy centres around five pillars: optimal capital utilisation, earnings growth, costs and efficiencies, diversification and transformation. At 31 December 2009, the Sanlam Group had assets of US$72,359 million under management. 6. THE OPEN OFFER In order to provide Shareholders with the opportunity to participate in the investment in the Company, the Company will make the Open Offer to Eligible Shareholders of up to 5,935,113 Ordinary Shares at the Subscription Price. The making of the Open Offer by the Company is one of the conditions to the completion of the subscription for the Tranche 1 Shares by the Investors and the Company anticipates that the Open Offer will be made immediately prior to the Tranche 1 Completion. Each of the Investors, Jonathan Sieff, David Cooley, Concerto, Valira International and Principle Capital Investments Limited has agreed under the terms of the irrevocable undertakings not to participate in the Open Offer. The terms of the Open Offer will be contained in a separate circular which will be sent to Eligible Shareholders at the time that the Open Offer is made. However, the principal terms will be as follows: · Eligible Shareholders will be given the opportunity to subscribe for the Open Offer Shares at a price of 15 pence per Open Offer Share, pro rata to their existing shareholding on the basis of 3 Open Offer Shares for every 4 existing Ordinary Shares held by the Eligible Shareholder on the Open Offer Record Date; · Entitlements of Eligible Shareholders will be rounded down to the nearest whole number of Open Offer Shares; · the Open Offer will not be underwritten; and · the Open Offer Shares will, when issued and fully paid, rank pari passu with the existing Ordinary Shares and will be issued subject to the terms of the articles of incorporation of the Company. 7. the TranCHE 1 Shares The Tranche 1 Shares will be issued credited as fully paid and will rank pari passu in all respects with the issued Ordinary Shares, including the right to receive dividends and other distributions declared, made or paid after the date of their issue. 8. THE CAPITAL REDUCTION There are currently 18,644,806 Ordinary Shares in issue, of which 48.22 per cent. are owned by Concerto, Jonathan Sieff and the Management Investors (principally Concerto, which owns 30.30 per cent.). It is proposed that as part of the Tranche 1 Subscription the issued share capital of the Company will be reduced from GBP18,644,806, divided into 18,644,806 ordinary shares of GBP1.00 each, to GBP186,448.06, divided into 18,644,806 ordinary shares of GBP0.01 each. The Capital Reduction is proposed in light of the Company's current share price in order to allow the Company to proceed with the Tranche 1 Subscription by reducing the nominal value of the Ordinary Shares to an amount below the Subscription Price. Pursuant to Article 7.6 of the Company's current articles of incorporation, the Company may reduce its share capital provided that it obtains the approval of its shareholders in a general meeting, further details of which are set out in Section 11. Following the Capital Reduction (and subject to the creditor protections outlined below), a special reserve will be credited by the aggregate amount by which the share capital is reduced (being GBP18,458,357.94). Under the Act, creditors whose claims predate the publication of the Resolutions in the Mémorial may, within 30 days from their publication, apply to the Tribunal d'Arrondissement for security to be put into place in order to safeguard their interests. Until such time as the applications of the creditors have been considered by the Tribunal d'Arrondissement, no payments of any amount credited to the special reserve of the Company may be made to the Shareholders. It should be noted that it is not currently proposed that the Capital Reduction will involve any distribution or repayment of capital by the Company to any Shareholder. It should also be noted that the Capital Reduction will not involve any reduction in the Company's underlying assets and the reduction in the nominal value of the Ordinary Shares should not in itself affect their market value. 9. REASONS FOR THE CANCELLATION It is proposed that as part of the Tranche 1 Subscription the admission of the Ordinary Shares to trading on AIM will be cancelled. The Directors have considered the benefit to the Company and its Shareholders of maintaining the admission of the Ordinary Shares in the event that the Tranche 1 Subscription proceeds in light of the following factors: ? the limited market appreciation of the Group's businesses resulting in the Ordinary Shares having very limited 'market' value; ? the concentration of the shareholder base, of which the Management Investors, Concerto, Jonathan Sieff, David Cooley, Valira International and Principle Capital Investments Limited own approximately 68.12 per cent., resulting in limited trading liquidity in the Ordinary Shares; and ? the costs and regulatory burdens associated with maintaining an admission to AIM. The Directors have concluded based upon the above factors that it is no longer in the best interests of the Company or its Shareholders to maintain admission to AIM of the Ordinary Shares. 10. THE CANCELLATION In accordance with Rule 41 of the AIM Rules, the Company has today notified the London Stock Exchange of the Cancellation, which is conditional upon the consent of not less than 75 per cent. of votes cast by Shareholders at the EGM. The Cancellation is expected to be effective from 27 May 2010. Upon the Cancellation becoming effective, Singer will cease to be nominated adviser and broker to the Company and the Company will no longer be required to comply with the AIM Rules. In addition, the Depositary Interest facility will no longer be made available and the Depositary Interests will be cancelled in accordance with the terms of the facility. Following the Cancellation, there will no longer be a public market or trading facility on any recognised investment exchange and the opportunity for Shareholders and holders of Depositary Interests to realise their investment in the Company will therefore be more limited. There is no current intention to make any formal or market facility, such as a matched bargain settlement facility, available to facilitate trading in the Ordinary Shares following the Cancellation. However, any Shareholders or holders of Depositary Interests wishing to sell any Ordinary Shares or Depositary Interests should notify the Company's registrar, Computershare, in writing at Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH following the closing of the Open Offer as the Investors have informed the Company that they are willing to acquire any Ordinary Shares or Depositary Interests held by any holders wishing to sell on the following terms: · the price offered per Ordinary Share or Depositary Interest will be 15 pence, being the same price as the Subscription Price; · any Shareholder or holder of Depositary Interests wishing to sell any Ordinary Shares or Depositary Interests will be required to contact Computershare during the period commencing on the date of the closing of the Open Offer, which will be communicated to Shareholders at the time that the Open Offer is made, and ending on the date which is 30 days following such date to confirm that it wishes to sell its Ordinary Shares or Depositary Interests at the Subscription Price; and · Computershare will be acting to provide a third party service only in respect of putting the holders of Ordinary Shares or Depositary Interests in contact with the Investors and facilitating the transfer of shares and the issue of consideration payments as an off-market transaction. No financial advice will be given by Computershare. In order to give any remaining Shareholders the opportunity to participate in the Tender Facility, details of any Ordinary Shares or Depositary Interests that are offered for sale pursuant to the Tender Facility will be sent to those Shareholders by the Company following the expiry of the 30 day period outlined above and they will be given the opportunity to participate in the purchase pursuant to the terms of the Revised Articles pro rata to their holding of Ordinary Shares and/or Depositary Interests at the time that the details of the Ordinary Shares or Depositary Interests that have been offered for sale are sent to them. Each of Jonathan Sieff, David Cooley, Concerto, Valira International and Principle Capital Investments Limited has agreed under the terms of their irrevocable undertakings not to participate in the Tender Facility. Shareholders should be aware that the Tender Facility being proposed by the Investors will only be made available following the passing of the resolution necessary to effect the Cancellation and after Tranche 1 Completion and the Open Offer. 11. Requirement for Shareholder Approval In connection with the Tranche 1 Subscription, it is necessary for the Directors to seek the authority of the Shareholders to reduce the Company's issued share capital, to decrease the Company's authorised share capital, to authorise the Directors to issue the Tranche 1 Shares and the Open Offer Shares within the limits and conditions provided for under the new authorised share capital and to disapply the statutory pre-emption rights of existing Shareholders under Luxembourg law in accordance with, and for the reasons set out in, the Report. In addition, Rule 41 of the AIM Rules requires that any cancellation by a company of the admission of its shares to trading on AIM will be conditional upon the consent of not less than 75 per cent. of votes cast by its shareholders given in a general meeting. Accordingly, the Directors have convened the EGM at which Shareholders will consider and if thought fit pass the Resolutions, among other things, to approve the Capital Reduction, to authorise the Directors to issue the Tranche 1 Shares and the Open Offer Shares and to approve the Cancellation. The Directors intend to ask Shareholders at the EGM: (1) to reduce the issued share capital of the Company from GBP18,644,806, divided into 18,644,806 ordinary shares of GBP1.00 each, to GBP186,448.06, divided into 18,644,806 ordinary shares of GBP0.01 each; (2) to approve a decrease in the authorised share capital of the Company from GBP24,500,000 to GBP538,089.14; to renew the Directors' authorisation to issue new Ordinary Shares up to the new authorised share capital amount on the terms provided in Article 7.2 to Article 7.5 of the Company's existing articles of incorporation for a further period of five years and to disapply the statutory pre-emption rights of existing Shareholders under Luxembourg law in accordance with, and for the reasons set out in, the Report. The Company does not, however, have any current intention of using this authority save in respect of the issue of the Tranche 1 Shares and the Open Offer Shares and pursuant to the exercise of options under the Company's existing share option arrangements; (3) to make consequential amendments to the Company's articles of incorporation to reflect the previous resolutions; (4) conditional upon the later of the Tranche 1 Completion and the Cancellation, to adopt the Revised Articles; and (5) to approve the Cancellation. Shareholders should be aware that, in the event that Resolutions 1 to 4 are passed (which only require the approval of two thirds of Shareholders with a quorum of the holders of more than half of the issued share capital of the Company present or represented) but Resolution 5 (which approves the Cancellation and which requires the approval of 75 per cent. of votes at the EGM) is not passed, the Investors have agreed to re-apply for the Cancellation following the completion of the Tranche 1 Subscription and the Open Offer at which time the Investors and those Shareholders that have undertaken to vote in favour of the Resolutions will together hold in excess of 75 per cent. of the issued share capital of the Company. 12. Related Party TRANSACTION As part of Sanlam's participation in the Transaction, Sanlam and the Company agreed that the following Management Investors would subscribe for Ordinary Shares at a price of 15 pence per Ordinary Share: Nicholas Holdings, in which Brian Myerson has a potential beneficial interest; Heritage, in which Jonathan Sieff has a potential beneficial interest and which owns 6.08 per cent. of the Company; and Gristel Holdings, the shares of which are owned by Brian Padgett and which owns 5.28 per cent. of the Company. Under AIM Rule 13, such an arrangement constitutes a related party transaction as Brian Myerson, Jonathan Sieff and Brian Padgett are Directors. Taking into account the factors set out in Section 2 above (including, in particular, the Open Offer to be made to Eligible Shareholders, which will allow them to participate in the investment in the same proportion relative to their current holding of Ordinary Shares as the Management Investors), in accordance with AIM Rule 13, the Independent Directors, deemed to be independent directors for these purposes, consider, having consulted with Singer, that the terms of the transaction between the Company and the Directors (excluding the Independent Directors) are fair and reasonable insofar as the Company's Shareholders are concerned. 13. BOARD CHANGES In connection with the Transaction, Leonard O'Brien and David Cooley have each agreed to resign as Director with effect from the Tranche 1 Completion and Richard Bolton has agreed to resign with effect from the later of Tranche 1 Completion and the Cancellation. Robert Roux and Johan van der Merwe of the Sanlam Group will each be appointed as a Director with effect from the Tranche 1 Completion, subject to such appointments being confirmed at the next general meeting of the Company following their appointment. 14. USE OF PROCEEDS The proceeds of the Transaction will be used for the development of the Group's businesses. The primary focus will be on: the launch of several new alternative investment products focused on Africa and India (including the financing of the typical investment manager commitments to those products), a significant expansion in the Group's product distribution capability and the expansion of Silex, the Group's private client trust and fund administration business. 15. INVESTOR LOANS As part of the Transaction, Sanlam has agreed to loan to Nicholas Holdings and Heritage the monies required by them in connection with: (i) the subscription for the Transaction Shares; (ii) the acquisition of any Ordinary Shares pursuant to the Tender Facility; and (iii) the subscription for Ordinary Shares in the tranche 2 subscription. Sanlam has also agreed to make loans available to any of the other Management Investors should they be required in connection with the tranche 2 subscription. The security provided to Sanlam in connection with the loan arrangements includes share charges in favour of Sanlam in respect of the Ordinary Shares to be issued to Nicholas Holdings and Heritage at the Tranche 1 Completion. 16. EGM The EGM is to be held at 58, rue Charles Martel, L-2134 Luxembourg on 19 May 2010 at 10.00 a.m. CET in order to consider and vote on the Resolutions. 17. Irrevocable Undertakings The Board has, at the date of this document, received irrevocable undertakings from Shareholders owning 14.70 per cent. of the Ordinary Shares to vote in favour of the Resolutions. In addition, each of Concerto, Jonathan Sieff, Heritage, Gristel Holdings, Valira International and David Cooley have given irrevocable undertakings to vote their Ordinary Shares, representing in aggregate 53.42 per cent. of the Ordinary Shares, in favour of the Resolutions. Therefore, in aggregate, a minimum of 68.12 per cent. of the Ordinary Shares are committed to be voted in favour of the Resolutions. 18. Recommendation Resolutions 1 to 4 (inclusive) will be passed if more than two thirds (66.6 per cent.) of votes of the Shareholders (or their proxies) are cast in favour of those Resolutions, provided that a quorum of more than half of the issued share capital of the Company is present or represented at the EGM. Resolution 5 approving the Cancellation will be passed if more than 75 per cent. of the votes cast by Shareholders (or their proxies) are cast in favour of the Resolution. The Board believes that the Resolutions contained in the Notice of Meeting are in the best interests of the Company and Shareholders as a whole and unanimously recommends Shareholders to vote in favour of the Resolutions, as each of Concerto, the family vehicle of Brian Myerson (Executive Chairman); Jonathan Sieff (Chief Executive Officer); Heritage, the family vehicle of Jonathan Sieff; Gristel Holdings, the interest of Brian Padgett; Valira International, the interest of Leonard O'Brien; and David Cooley, shall do in respect of their beneficial shareholdings representing in aggregate 53.42 per cent. of the Ordinary Shares. Definitions In this document: Act means the Luxembourg Law of 10 August 1915 governing commercial companies, as amended from time to time; AIM means the market of that name operated by the London Stock Exchange plc; AIM Rules means the rules for companies whose securities are traded on AIM and their nominated advisers published by the London Stock Exchange plc as amended from time to time; Board means the board of directors of the Company composed of Brian Alan Myerson, Jonathan Sieff, David John Cooley, Brian Sean Padgett, Leonard Joseph O'Brien and Richard John Bolton; Cancellation means the proposed cancellation of admission to trading on AIM of the Ordinary Shares in accordance with the AIM Rules; Capital Reduction means the proposed reduction of the issued share capital of the Company from GBP18,644,806, divided into 18,644,806 ordinary shares of GBP1.00 each, to GBP186,448.06, divided into 18,644,806 ordinary shares of GBP0.01 each; Circular means the circular to be sent to Shareholders in connection with the EGM; Company means Principle Capital Holdings S.A. (registered number R.C.S. Luxembourg B 98144), a 1929 holding company incorporated in the Grand Duchy of Luxembourg; Computershare means Computershare Investor Services PLC; Concerto means Concerto Capital Corporation Limited (registered number 42347), a private company incorporated in the British Virgin Islands, the entire issued share capital of which is beneficially owned by the Nicholas Trust; Consulate Trust means a discretionary trust established by a Declaration of Trust dated 13 October 2008 settling certain property on discretionary trusts for the benefit of potential beneficiaries who include Jonathan Sieff and certain members of his family; Depositary Interests means depositary interests representing the Ordinary Shares; Directors means the directors of the Company; EGM means the extraordinary general meeting of the Company to be held at 58, rue Charles Martel, L-2134 Luxembourg on 19 May 2010 at 10.00 a.m. CET; Eligible Shareholders means the holders of Ordinary Shares at the Open Offer Record Date; Gristel Holdings means Gristel Holdings Limited (registered number 526641), a private company incorporated in the British Virgin Islands, the entire issued share capital of which is owned by Brian Padgett; Group means the Company and its subsidiaries; Heritage means Heritage Property Investment Limited (registered number 1462379), a private company incorporated in the British Virgin Islands, the entire issued share capital of which is beneficially owned by the Consulate Trust; Independent Directors means Leonard Joseph O'Brien, David John Cooley and Richard John Bolton, being those Directors who are not involved in the Transaction for the purposes of AIM Rule 13; Investor Loans means the loans from Sanlam to certain of the Management Investors in connection with, among other things, the subscription for the Transaction Shares, details of which are set out in Section 15 of this document; Investor Managers means Brian Myerson, Jonathan Sieff, Brian Padgett and Andrew James Peggie; Investors means Sanlam and the Management Investors; Johannesburg Stock Exchangemeans JSE Limited; Management Investors means Nicholas Holdings, Heritage, Gristel Holdings and Andrew James Peggie; Nicholas Holdings means Nicholas Holdings Limited (registered number 5598), a private company incorporated in the British Virgin Islands, the entire issued share capital of which is beneficially owned by the Nicholas Trust; Nicholas Trust means a discretionary trust established by a Deed of Settlement dated 21 March 1988 settling certain property on discretionary trusts for the benefit of potential beneficiaries who include Brian Alan Myerson and certain members of his family; Notice of Meeting means the notice of EGM and its agenda, which is set out in Annexure A of the Circular; Open Offer means the proposed open offer (or, in the event that the Cancellation has occurred prior to the Open Offer, a private placement) of Ordinary Shares to Eligible Shareholders, details of which are set out at Section 6; Open Offer Record Date means close of business on the business day immediately preceding the date of the Open Offer; Open Offer Shares means the 5,935,113 Ordinary Shares which are to be made available for subscription by Eligible Shareholders under the Open Offer; Ordinary Shares means the ordinary shares of GBP1 each in the issued share capital of the Company, the nominal value of which it is proposed will be reduced to GBP0.01 pursuant to the Capital Reduction; Report means the report as set out in Annexure C of the Circular, prepared by the Board in accordance with the Act, setting out the detailed reasons why the preferential subscription rights of the Shareholders will be disapplied in connection with the issue of the Tranche 1 Shares; Resolutions means the resolutions to be proposed to Shareholders at the EGM and which are set out in Annexure A of the Circular (being the Agenda of the EGM); Revised Articles means the revised form of articles of incorporation of the Company, the adoption of which will be proposed in Resolution 4 of the Resolutions and a copy of which is enclosed with the Circular; Sanlam means Sanlam Netherlands Holding B.V., a company incorporated in The Netherlands; Sanlam Group means Sanlam Limited and its subsidiaries; Shareholders means the shareholders in the Company; Shareholders' Agreement means the shareholders' agreement to be entered into between the Investors, Concerto and the Investor Managers on the Tranche 1 Completion; Singer means Singer Capital Markets Limited; Subscription Agreement means the agreement dated 26 April 2010 between the Company and the Investors pursuant to which the Investors have agreed to conditionally subscribe for an aggregate of 53,333,332 Ordinary Shares at a price of 15 pence per Ordinary Share in two tranches; Subscription Price means 15 pence per Ordinary Share; Tender Facility means the facility proposed by the Investors to allow other Shareholders to sell their Ordinary Shares or Depositary Interests following the Cancellation, details of which are set out in Section 10; Tranche 1 Completion means completion of the Tranche 1 Subscription; Tranche 1 Shares means the 26,666,666 Ordinary Shares to be issued on the Tranche 1 Completion; Tranche 1 Subscription means the subscription for the Tranche 1 Shares by the Investors; Transaction means the subscription for the Transaction Shares by the Investors; Transaction Shares means the 53,333,332 Ordinary Shares to be issued pursuant to the Transaction in two tranches; Valira International means Valira International Limited (registered number 526531), a private company incorporated in the British Virgin Islands, the entire issued share capital of which is owned by Leonard O'Brien; GBP or Pounds Sterling means the lawful currency of the United Kingdom of Great Britain and Northern Ireland. This information is provided by RNS The company news service from the London Stock Exchange END MSCLFFEVSEIRFII
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