PV Crystalox Solar PLC Notice of GM (5366W)

TIDMPVCS

RNS Number : 5366W

PV Crystalox Solar PLC

18 April 2019

PV Crystalox Solar PLC

Notice of General Meeting and Posting of Circular

PV Crystalox Solar PLC (the "Company") announces that it has posted a circular to Shareholders containing a Notice of General Meeting to be held at the offices of Norton Rose Fulbright LLP, 3 More London Riverside, London SE1 2AQ at 11.00 a.m. on 14 May 2019 for the purpose of approving the resolution required to effect the proposed reductions of capital, return of capital of 24 pence per share and share capital consolidation.

A copy of the Circular is available from the Company's website at www.pvcrystalox.com

Capitalised terms used herein will have the meaning given to them in the Circular.

The full text of the expected timetable of events and the Chairman's letter included in the Circular are reproduced below.

Enquiries:

   Matthew Wethey         [phone] 

Group Secretary

PV Crystalox Solar PLC

EXPECTED TIMETABLE OF EVENTS

 
 Latest time and date for receipt of Forms                      11:00a.m. on 12 
  of Proxy                                                             May 2019 
 General Meeting                                                11:00a.m. on 14 
                                                                       May 2019 
 Court Hearing                                                      4 June 2019 
 Registration of Court Order and Effective                          5 June 2019 
  Date of Reductions of Capital 
 Latest time and date for dealings in Existing                      5 June 2019 
  Ordinary Shares 
 Return of Capital Record Time                                 6.00pm on 5 June 
                                                                           2019 
 Share Capital Consolidation Record Time.                    6.00p.m. on 5 June 
  Existing Ordinary Share register closed                                  2019 
  and Existing Ordinary Shares disabled in 
  CREST 
 Cancellation of trading of Existing Ordinary                8.00a.m. on 6 June 
  Shares. New Ordinary Shares admitted to                                  2019 
  the standard segment of the Official List 
  and to trading on the London Stock Exchange's 
  main market for listed securities. Dealings 
  commence in New Ordinary Shares 
 New Ordinary Shares commence trading ex-entitlement           8.00am on 6 June 
  to Return of Capital                                                     2019 
 CREST accounts credited with New Ordinary               Approximately 8.00a.m. 
  Shares                                                         on 6 June 2019 
 Despatch of cheques to Shareholders or                         On or around 20 
  Shareholders' CREST accounts credited (as                           June 2019 
  appropriate) in respect of Return of Capital 
  entitlements, and despatch of share certificates 
  in respect of New Ordinary Shares 
 

Notes

These dates (except those for the receipt of forms of proxy and of the General Meeting) are estimates only, being subject to agreement of hearing dates with the Court. The timetable assumes that the General Meeting will not be adjourned as a result of there being no quorum, or for any other reason. If there is an adjournment, all subsequent dates are likely to be later than those shown. Any changes will be notified to Shareholders by an announcement on the Regulatory News Services of the London Stock Exchange.

All references to time in this document are to London time.

LETTER FROM THE CHAIRMAN OF PV CRYSTALOX SOLAR PLC

Proposed Reductions of Capital, Return of Capital, Share Capital Consolidation and Notice of General Meeting

   1.       Introduction 

The Board is pleased to confirm that it proposes to make a return of capital to Shareholders of approximately GBP38.5 million, subject to finalisation of the process and Shareholder approval. The General Meeting to seek Shareholder approval will be held on 14 May 2019 at 11.00a.m.

This letter explains the background to the Reductions of Capital and how the Return of Capital is proposed to be effected. The effect of the proposed Return of Capital will be that for every fully paid Existing Ordinary Share held at the Reductions of Capital Record Time, a Shareholder will receive 24 pence in cash. The expected date for the Return of Capital through despatch of cheques to Shareholders or crediting of Shareholders' CREST accounts (as appropriate) is on or around 20 June 2019.

The purpose of this document is to provide you with the background to, and reasons for, the Proposals, to explain why the Board considers the Proposals are likely to promote the success of the Company for the benefit of the Shareholders as a whole and why the Board unanimously recommends that you vote in favour of the Resolution to be proposed at the General Meeting, notice of which is set out at the end of this document. Shareholders should note that, unless the Resolution is approved at the General Meeting (and the Court approves the Reductions of Capital), the Return of Capital will not take place.

   2.       Background to and reasons for the Proposals 

On 8 November 2017 the Group announced that it had received notification of the final award rendered by the International Court of Arbitration of the International Chamber of Commerce in the matter filed by the Group in March 2015 and arising from an outstanding long-term wafer supply contract with one of the world's leading PV companies. The award required the customer, which had failed to purchase wafers in line with its contractual obligations, to pay the amount of around EUR36.5 million including interest to the Group as at 1 May 2018.

On 17 August 2018 the Group announced that it had concluded an agreement with the customer in settlement of all claims and obligations under the wafer supply contract and arbitration award. Under the agreement the customer made total payments of EUR28.8 million, being an initial payment of EUR14.5 million received in May 2018, and a further final payment of EUR14.3 million received in November 2018, and waived its right to demand delivery by the Group of 22.9 million wafers.

On 1 February 2019 the Group announced that following an extensive review of the strategic options for the future of the Group, the Board had concluded that returning a large proportion of available cash, as part of an orderly resolution of the Group's affairs, would be in the best interests of Shareholders rather than the pursuit of acquisitions.

On 21 March 2019 the Group announced that it intended to return 24 pence per ordinary share to shareholders on the register at the time of the Return of Capital, which will be implemented through a reduction of the capital reserves. The proposed reduction of the Company's share premium account and of the nominal value of the Ordinary Shares will enable the Company to make a Return of Capital to Shareholders of approximately GBP38.5 million in aggregate.

   3.       Current trading and prospects 

The Board has conducted an extensive review of the strategic options for the future of the Group and has concluded that returning a large proportion of available cash, as part of an orderly resolution of the Group's affairs, would be in the best interests of shareholders rather than the pursuit of acquisitions. In parallel we will aim to complete the transformation of the manufacturing operation in Germany using existing capabilities to develop new business opportunities in the cutting of non-silicon materials. A sale to a third party or a transfer of the business to the existing management team would be given consideration if an offer was made. Following the Return of Capital the Company will be considerably reduced in value. The Board currently intends to maintain the Company's listing on the standard segment of the Official List, however consideration will also be given to the possible cancellation of the listing. Three months' notice will be given to shareholders of any decision on cancellation which is unlikely to be taken before September. The Board will seek to return further surplus capital to Shareholders through a share buyback, tender offer or other means as and when the Board considers it appropriate. The Board will continue to explore options for the future of the Group in order to maximise shareholder return.

   4.       The Reductions of Capital 

In accordance with the Companies Act 2006 and applicable accounting standards, the Company's share premium account and capital redemption reserve are non-distributable capital reserves and are treated, except in limited circumstances, as part of the Company's paid up share capital.

Under the Companies Act 2006, a company may, with the sanction of a special resolution and the confirmation of the Court, reduce or cancel its existing issued share capital, share premium account and capital redemption reserve. It may apply the sums resulting from such reduction, amongst other things, in either repaying holders of the relevant shares the amounts paid up on the share capital which is reduced or cancelled or in crediting the company's profit and loss account, thereby potentially creating distributable reserves.

The proposed reduction of the Company's share premium account and of the nominal value of the Ordinary Shares will enable the Company to make a Return of Capital to Shareholders of approximately GBP38.5 million in aggregate.

The Board considers it desirable that the Company has the maximum flexibility to consider the means by which further value may be returned to Shareholders in the future, including by way of a share buyback or tender offer. The proposed cancellation of the Company's capital redemption reserve will create distributable reserves which may be utilised by the Company for facilitating future returns of cash to shareholders, including any future share buyback or tender offer, or for other corporate purposes.

In seeking the Court's approval of the Reductions of Capital and the Return of Capital, the Court will need to be satisfied that the interests of the creditors (including contingent creditors) of the Company, whose debts remain outstanding on the date on which the Court Order is registered, will not be prejudiced by the proposed Reduction of Capital. The Company proposes to demonstrate to the Court that its financial position is sufficiently strong so that the Company's creditors are not at risk of non-payment by reason of the Reductions of Capital, or will otherwise put in place such arrangements as the Court considers appropriate to satisfy the Court in this regard.

Shareholders should note that if, for any reason, the Court declines to approve the Reductions of Capital, then the Return of Capital will not take place.

The Company intends that an application will be made for the Court to approve the Reductions of Capital promptly after the General Meeting provided that the Resolution has been passed. It is anticipated that the initial directions hearing in relation to the Reductions of Capital will take place on 22 May 2019, with the final Court Hearing taking place on 4 June 2019 and the Reductions of Capital becoming effective on 5 June 2019, following the necessary registration of the Court Order at Companies House. It is anticipated that Shareholders will be sent cheques (or have Shareholders' CREST accounts credited (as appropriate)) for the proceeds of the Return of Capital on or around 20 June 2019.

   5.       Share Capital Consolidation 

Immediately following the Return of Capital Record Time, the Company proposes to undertake the Share Capital Consolidation. The purpose of the Share Capital Consolidation is to seek to ensure that, subject to market fluctuations, the market price of each New Ordinary Share following the implementation of the Reductions of Capital is approximately the same as the market price of each Existing Ordinary Share immediately beforehand. The Share Capital Consolidation should also allow historical and future financial information in relation to the Company to be compared on a per-share basis before and after the Reductions of Capital.

The value proposed to be returned pursuant to the Return of Capital represents approximately 95.49% of the Company's market capitalisation (based on the average closing middle market price for the three business days prior to the date of posting of this document of 25.13 pence per Existing Ordinary Share). As a result of the Share Capital Consolidation, the number of ordinary shares in issue will be reduced by a broadly equivalent percentage (being 95.46%), with Shareholders receiving 1 New Ordinary Share for every 22 Existing Ordinary Shares held at the Share Capital Consolidation Record Time.

Following the Share Capital Consolidation, it is expected that there will be approximately 7,285,408 New Ordinary Shares in issue on the Admission Date. The New Ordinary Shares, when issued and fully paid, will rank for all dividends declared, made or paid after the date of allotment and issue of the New Ordinary Shares.

The New Ordinary Shares will, subject to Admission, be traded on the London Stock Exchange's main market for listed securities and will be equivalent in all material respects to the Existing Ordinary Shares. After the Reductions of Capital and the Share Capital Consolidation, Shareholders will own the same proportion of the Company as they did immediately beforehand, subject to fractional entitlements.

A fractional entitlement will arise as a result of the Share Capital Consolidation unless a holding of Existing Ordinary Shares is exactly divisible by 22. For example, a Shareholder holding 23 Existing Ordinary Shares would be entitled to 1 New Ordinary Share and a fractional entitlement of 1/22 of a New Ordinary Share after the Share Capital Consolidation. These fractional entitlements will be aggregated and sold in the market and, as the proceeds from the sale of any such fractional entitlement (net of any expenses) will be less than GBP5.00, Shareholders will have no entitlement or right to the proceeds of sale but instead any such proceeds will be retained by the Company.

Following the Share Capital Consolidation, New Ordinary Share certificates are expected to be sent to Shareholders who hold their Existing Ordinary Shares in certificated form by 20 June 2019, and the CREST accounts of Shareholders who hold their Existing Ordinary Shares in uncertificated form are expected to be credited with New Ordinary Shares at approximately 8.00am on 6 June 2019.

If you currently hold Existing Ordinary Shares in uncertificated form, it is currently expected that the Existing Ordinary Shares under ISIN GB00BFTDG626 will be disabled at 6.00pm on the day before Admission (which is currently expected to be 5 June 2019) and on or soon after 8.00am on the date of Admission (which is currently expected to be 6 June 2019) your CREST account will be credited with New Ordinary Shares under ISIN GB00BJ0CHQ31.

To effect the Share Consolidation it may be necessary to issue, repurchase for cancellation or cancel from the Company's holding in treasury, such number of Existing Ordinary Shares so that the number of the Company's Existing Ordinary Shares is exactly divisible by 22.

Existing dividend mandates to bank or building society accounts given in relation to dividends paid in respect of Existing Ordinary Shares will continue to apply to the New Ordinary Shares.

   6.         Further returns of value 

Following the Return of Capital the Board will continue to manage the Group's current business in Germany while seeking a potential sale or transfer of that business to a new owner, including possibly the existing management of that business. The Board will also continue to explore strategic options for the future of the Group in order to maximise shareholder return. Should further surplus capital become available in the Group, and should the Board conclude that it is the best interests of Shareholders to return that capital to Shareholders, then the Board will seek to return further value to Shareholders, including by way of tender offer or share buyback.

   7.         Taxation 

The Return of Capital structure is expected to result in UK tax payers receiving their cash proceeds as capital for taxation purposes, provided that they hold their Ordinary Shares as an investment. The position of a particular Shareholder may differ and Shareholders should take their own advice. For information regarding the tax position of the Return of Capital, please see Part 2 of this document. If you are subject to taxation in a jurisdiction other than the UK, are non-UK domiciled or are in any doubt as to your tax position, you should consult an appropriate independent professional adviser.

   8.       Non-United Kingdom Shareholders 

Shareholders who are not resident in the United Kingdom or who are citizens, residents or nationals of other countries should consult their professional advisers to ascertain whether the Proposals will be subject to any restrictions or require compliance with any formalities imposed by the laws or regulations of, or any body or authority located in, the jurisdiction in which they are resident or to which they are subject. In particular, it is the responsibility of any Shareholders not resident in the United Kingdom or a citizen, resident or national of another country to satisfy themselves as to full observance of the laws of each relevant jurisdiction in connection with the Proposals, including the obtaining of any government, exchange control or other consent which may be required, or the compliance with other necessary formalities needing to be observed and the payment of any issue, transfer or other taxes or duties in such jurisdiction.

The distribution of this document in certain jurisdictions may be restricted by law. Persons into whose possession this document comes should inform themselves about and observe any such restrictions.

Shareholders who are not resident in the United Kingdom should note that they should satisfy themselves that they have fully observed any applicable legal requirements under the laws of their relevant jurisdiction in relation to the Proposals.

   9.       General Meeting 

At the end of this document is a notice convening the General Meeting to be held at Norton Rose Fulbright LLP, 3 More London Riverside, London, SE1 2AQ at 11.00 a.m. on 14 May 2019, at which the Resolution will be proposed.

The Resolution to be proposed at the General Meeting is a special resolution to authorise:

-- subject to Court approval, the Issued Capital Reduction, the Share Premium Reduction and the Capital Redemption Reduction, and the repayment of capital of an amount approximately equal to the aggregate of the Issued Capital Reduction Amount and the Share Premium Reduction Amount, and the transfer to the Company's profit and loss account of an amount equal to the Capital Redemption Reduction Amount; and

-- the subdivision and consolidation of the Existing Ordinary Shares into New Ordinary Shares, and the aggregation and sale of fractional entitlements with the proceeds of sale to be retained by the Company.

The Proposals are conditional upon, amongst other things, the Resolution being approved by Shareholders at the General Meeting. If the Resolution is not passed, the Return of Capital will not take place.

   10.     Action to be taken 

A Form of Proxy for use at the General Meeting is enclosed.

Whether or not you intend to attend the General Meeting in person, you are requested to complete and sign the Form of Proxy in accordance with the instructions printed on it and then to return it to the Company's Registrars, Equiniti, at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA. Completed forms of proxy should be returned to the Company's Registrars so as to be received by no later than 11.00 a.m. on 12 May 2019.

The completion and return of a Form of Proxy will not preclude you from attending the General Meeting and voting in person should you so wish.

   11.     Recommendation 

The Directors consider that the Proposals are likely to promote the success of the Company for the benefits of the Shareholders as a whole. Accordingly, the Board unanimously recommend that you vote in favour of the Resolution, as the Directors intend to do in respect of their beneficial holdings.

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.

END

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April 18, 2019 02:00 ET (06:00 GMT)