TIDMWRN
RNS Number : 7574M
Worthington Group PLC
17 October 2016
Worthington Group plc ("the Company" or "Worthington")
17(th) October 2016
FOR IMMEDIATE RELEASE
As announced on 10 October 2014, the Board of Directors was
required by the FCA to request that trading in Worthington shares
be suspended. This was to allow time for opinion to be sought from
the regulators over whether a reverse takeover had been, or was
likely to be triggered by the various acquisitions and investments
that the Company had agreed to, or was in negotiations to complete.
After protracted discussions with the UKLA, the Company was advised
by them that it was likely that the Company had changed the nature
of its business sufficiently that it had become an investment
company which required a change of status from the Standard List to
the Premium List. The Board of Directors took the view that the
rules governing investment entity status on the Premium List were
not compatible with the Company's stated aim and plans to become a
conglomerate, and an alternative future was sought by the
Company.
On 15 April 2015, the Company announced that it was in
discussions with a group of investors (the "SPV Investors"), which
sought to establish a special purpose vehicle ("SPV") to provide
funding for an overseas listed company. The Company's discussions
with the SPV Investors included the possibility that the overseas
listed company would make an offer for Worthington, once the
financing had been provided.
On 15 May 2015, the Company announced that the SPV was Greenland
Mining Management Limited and the overseas listed company was
NunaMinerals A/S ("Nuna"), a company quoted on the Copenhagen Stock
Exchange.
On 3 July 2016, Nuna announced that the Court of Greenland had
ruled in favour of a bankruptcy petition claim by Mr Ole
Christiansen, former CEO of Nuna. On 4 July 2016, the Chairman of
Nuna published a response to the bankruptcy petition claim.
On 21 September 2016, Nuna announced that it had lodged an
appeal in the High Court of Greenland in relation to the bankruptcy
order. On 13 October 2016, Nuna announced that the High Court of
Greenland had annulled the earlier bankruptcy ruling and that Nuna
was waiting for further information from the courts on the
conditions associated with the High Court ruling.
Due to the uncertainties relating to Nuna, the Board of
Worthington have continued to look at a viable alternative to
provide a secure future for the Company and its stakeholders.
Pension fund issues
On 23 March 2015, the Company announced that Worthington's
pension fund, the "Jerome Group plc Retirement Benefits Plan", had
resolved the legal dispute over GBP3m of the scheme's cash assets,
which were placed with solicitors pending an investment in the
Rangers Football Club prior to it entering administration in 2012.
The Company is pleased to be able to confirm that the GBP3m that
was previously held in a client account with Collyer Bristow LLP on
behalf of the pension fund, was recovered in full together with
interest and costs.
However, despite this, in keeping with many other final salary
schemes, the pension fund, which is sponsored by the Company as
principal employer, is still in substantial deficit. As a
consequence of Worthington currently being unable to complete the
proposed acquisitions itself, due to having no tradable shares with
which to do so, the Company is therefore not in a position to be
able to service the Company's pension fund contributions on an
ongoing basis. During the time that the Company was able to proceed
with its acquisition plan, servicing the pension deficit into the
future was manageable in relation to the size of the
acquisitions.
In order to protect the pensioners' position, the Pension Fund
will therefore need to enter the Pension Protection Fund so that
existing pensioners will be paid in full, and deferred pensioners
(i.e. those yet to retire) will receive 90% of their pension
entitlements. In order for the Pension Fund to qualify to enter the
Pension Protection Fund, it is necessary for Worthington to go
through a qualifying event.
The Board of Directors have therefore decided to propose terms
for a Company Voluntary Arrangement ("CVA") with all creditors; the
principal terms of which are envisaged to be as follows:
-- 50% of the proceeds, after legal costs, of any successful
litigation that the Company, or its subsidiaries, has against
various third parties will be distributed to the creditors of
Worthington up to the amount of their full verified claim.
-- 10% of any pre-tax profits that the Company makes, following
the successful completion of its acquisitions (before or after any
change of control of Worthington), will be distributed to creditors
until such time as creditors receive full payment of their verified
claim. Thus, 90% of the after-tax profits will be retained for the
benefit of shareholders in the enlarged Company.
In order for the CVA to be implemented, 75% by value of the
creditors voting in the proposed CVA must vote in favour of the
CVA, together with shareholders representing 50.01% of the votes
cast at the general meeting to approve the CVA.
At the same general meeting, the Company will seek the approval
of shareholders for the implementation of the CVA for the purposes
of Rule 21.1 of the Takeover Code.
Those creditors who are connected parties to the possible offer
for Worthington by Nuna are:
Unsecured creditors: Mandolyn Limited (Doug Ware), Richard
Spurway and Olympus Trading Group Limited (Aidan and Wulstan
Earley); and
Secured creditors: European & Asian Limited (Doug Ware),
Richard Spurway and Renatus Capital Limited (Aidan and Wulstan
Earley)
Rangers Litigation and Craig Whyte
The Board of Directors reaffirm that Mr Craig Whyte has no
interest in Worthington or its subsidiaries.
It remains the view of the Directors that the Company has,
through its ownership of Law Financial Limited, claims relating to
the administration of Rangers Football Club, the sale of its assets
and the liquidation of RFC 2012 Plc.
Conclusion
The Board believes that the above CVA proposals, which are
expected to be circulated to shareholders and creditors shortly,
provide an opportunity for all stakeholders to benefit from the
future success of the Company. Because of the delays in the
possible takeover of Worthington, in order to secure the position
for pensioners, the Pension Fund Trustees have had no alternative
but to issue a Petition to wind up the Company, this Petition is
due to be heard on the 24(th) October 2016. The Board is of the
view that these CVA proposals will now provide the best possible
outcome for creditors, including pensioners, whilst also ensuring
that the Company's shareholders are able to participate in the
Company's future success. It is therefore expected that the
Petition hearing on the 24(th) October 2016 will be adjourned, in
order to allow the proposal for the CVA to be put in place. The
Board is very grateful to the Pension Fund Trustee for the support
that it has shown to the Company over the last two years in these
particularly trying and testing times.
About Worthington Group Plc ("Worthington")
Worthington (Stock Exchange LSE: WRN) is a British investment
company that celebrates its 62(nd) anniversary as a London Stock
Exchange main market listed company this year. The Company has four
areas of investment focus: property, litigation claims, new economy
and emerging markets. The Company believes that exceptional
shareholder returns can be achieved by utilising its main market
Sterling paper to acquire investments in these sectors
worldwide.
Note: Forward-looking statements contained in this announcement,
including Worthington's strategy and plans, as well as expectations
for future revenue and earnings, reflect Worthington's current
views and assumptions with respect to future events and are subject
to certain risks, uncertainties and assumptions. There are many
factors that may cause actual results achieved to differ materially
from expectations for future results and expectations that may be
expressed in or form an assumption of such forward-looking
statements. Such factors include risks related to the day to day
business of Worthington, client volatility, sales fluctuations, the
general economic climate, political and environment and other
risks, cancellations, software failures and interruption to service
to customers due to technical problems, acquisition delays and
failure as well as other uncertainties related to the results of
Worthington including risks of delays or closure of projects, price
falls, currency fluctuations and changes in contract terms,
legislation and administrative practices, as well as competition
risk and other unforeseen factors. If one or more of such risks or
factors of uncertainty were to materialise, or should one or more
of the statements provided prove to be incorrect, actual
developments may differ materially from the forward-looking
statements contained in this announcement.
Enquiries:
Media information Tel: +44 203 291 1872
or email: media@worthingtongroupplc.com
PD Cosec - Company Secretary Tel: +44 208 940 0963
Website: www.worthingtongroupplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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