TIDMGRIT
RNS Number : 3545H
Global Resources Investment Tst PLC
03 December 2020
Market Abuse Regulation (MAR) disclosure
Certain statements in this announcement contain inside
information for the purpose of Article 7 of EU Regulation
596/2014.
Global Resources Investment Trust Plc
("GRIT" or the "Company")
Notice of General Meeting
Company Voluntary Arrangement
GBP125,893 Placing of Ordinary Shares
Issue of GBP100,000 Convertible Unsecured Loan Notes
1. Introduction
On 30 June 2020 the Company announced the suspension of trading
of its securities on the Main Market resulting from its failure to
publish by that date an audited annual report and financial
statements for the year ended 31 December 2019. At the same time
the Company announced that, subject only to the resumption in
trading of the Company's Ordinary Shares, it had conditionally
raised GBP167,858 through the issue of 8,392,902 Shares at a price
of 2p per share.
The Company's main remaining asset is its 25.4% shareholding in
Anglo-African Minerals PLC ('AAM') and the loans made to AAM, which
amount, with accumulated interest, to some $2.1 million. As
announced on 24 February 2020, TerraCom Limited, a mining company
listed in Australia ('ASX:TER'), itself announced that it had
executed what it described as a binding term sheet to acquire 100%
of AAM, subject to due diligence and regulatory approvals.
In an announcement made on 30 October, TerraCom stated that 'due
diligence on [AAM] has been significantly hampered...by
international travel restrictions brought about by the impacts of
COVID-19. However, as restrictions are now easing, members of
TerraCom's management team will be visiting the site in Guinea in
the coming weeks and will meet with potential contractors and
government officials to progress the project'. While this is
encouraging, at the time of writing it nevertheless remains unclear
whether the proposed sale of AAM to TerraCom will proceed and
therefore when or whether the Company will be able to realise its
investment in AAM or receive repayment of its loans to AAM.
The Board has therefore concluded that, in order to avoid the
need for a formal insolvency process, it is in the best interests
of the Company to renegotiate the terms of the conditional placing
which was announced on 30 June 2020 and for the Company to enter
into a Company Voluntary Arrangement ('CVA'). The Company's broker,
Peterhouse Capital Limited, has negotiated with the Placees of the
placing announced on 30 June 2020 a revised price of 1.5 pence per
share (instead of the previously agreed 2 pence) to raise
GBP125,893, subject only to approval by Creditors of the CVA ('CVA
Approval') and the passing by shareholders of the Resolutions. In
return, the Placees have waived their requirement for the current
suspension of trading in the Company's Ordinary Shares to be
lifted. Additionally, the Company will issue GBP100,000 Convertible
Unsecured Loan Notes ('CULNs'), again subject only to CVA Approval
and the passing of the Resolutions.
The proceeds of the Placing and the CULNs will allow the Company
to implement the CVA.
In order to issue the Placing Shares and enable the conversion
of the CULNs, the Company is seeking authority to issue and to
disapply statutory pre-emption rights for 8,392,902 Shares
(representing 20 per cent. of the issued share capital of the
Company as at 27 November 2020 (the latest practicable date prior
to the date of this document)) until the end of the Company's next
annual general meeting (at which the Company will seek renewal of
such authority).
A Circular has been posted to Shareholders and will shortly be
available on the National Storage Mechanism ("NSM"). This Circular
also seeks shareholders' approval for the CVA. A Notice convening
the General Meeting to be held at 11.00 a.m. on 21 December 2020,
at the offices of Peterhouse Capital Limited, 80 Cheapside, London
EC2V 6EE, to consider the Resolutions as set out at the end of this
Circular.
Shareholders should be aware that the Placing and the issue of
the CULNs are conditional upon CVA Approval and the passing of the
Resolutions. If either of these conditions is not satisfied, then
the Placing and the issuance of the CULNs will not proceed. In this
case the Company would then have insufficient working capital to
continue to trade as a going concern and, in the absence of any
other source of funding, the Board may have no alternative but to
place the Company into an insolvency process, probably
administration.
2. Background to and reasons for the CVA
The Company has creditors of GBP828,928. Due to the continuing
delay in completing a sale of its shares in AAM the Company has
insufficient funds to settle these Creditors as and when they fall
due.
The Board has concluded that, in order to preserve the Company
and avoid it trading insolvently, it should invite an insolvency
practitioner to propose to Creditors a CVA.
It is intended that, once a CVA has been agreed by Creditors and
endorsed by Shareholders, the following steps will be taken:
-- the Placing and the issue of CULNs are implemented;
-- an initial payment to creditors of an estimated 20 pence in the GBP is made;
-- new directors are appointed;
-- the existing directors resign;
-- the new Board raises sufficient additional funds to enable
the Company to carry on trading as a going concern;
-- the audit of the annual report and financial statements for
the year ended 31 December 2019 is completed and published;
-- the results for the six months ended 30 June 2020 are published; and
-- application is made to the FCA to lift the suspension of
trading in the Company's Ordinary Shares.
It is then anticipated that, whether or not the Company's shares
in AAM are sold and/or the loans repaid, the new Board will submit
to shareholders a plan for the recapitalisation of the Company and
its re-launch as an active investment trust. Whenever the sale of
AAM occurs, the proceeds from the sale and/or repayment of loans
will pass automatically under the terms of the CVA to the
supervisor of the CVA (the "Supervisor") and be applied by the
Supervisor to the payment of the remaining 80% of the amounts due
to Creditors, with any balance remaining being returned to the
Company.
3. Company Voluntary Arrangement
It is proposed that, on CVA Approval and the passing of the
Resolutions, the Company's Creditors will initially be paid an
estimated sum of 20 pence for every GBP1 of debt, with the
remaining balance, up to 100 pence, payable from the sale proceeds
of the Company's shares in AAM and/or by repayment by AAM of the
Company's loans to it.
The Directors have appointed Antony Batty of Antony Batty &
Company LLP to act as nominee (the "Nominee") in respect of the
proposal of the Directors for a CVA (the "CVA Proposal"). Mr Batty
has provided his consent to act as Nominee and, if the CVA Proposal
is approved, as Supervisor of the same, and his Nominee's Report
has been filed at Court as required.
A CVA requires the approval of 75 per cent. or more by value of
the creditors voting on the resolution in person or by proxy. It
also requires the approval of 50% or more by value of creditors who
are 'unconnected.' Once approved, the CVA binds all relevant
creditors who were entitled to vote, whether or not they were
present or represented at that meeting and so voted and whether or
not they actually received notice of the meeting.
A CVA also requires shareholder approval. The CVA Resolution in
the following Meeting Notice seeks that approval. It is being
proposed as an ordinary resolution and therefore requires the
approval of 50 per cent. by value of Shareholders present in person
or by proxy and voting on the CVA Resolution.
Approval by Creditors of the proposed CVA Proposal will be put
to a meeting of Creditors to be held at 10.30 a.m. on 21 December
2020 and, if approved by Creditors at that meeting, the CVA
Resolution will be put to Shareholders at a meeting to be held at
11.00 a.m. the same day.
For the avoidance of doubt, Shareholders will retain their
existing Ordinary Shares in the Company; and the CVA will not
result in any distribution being made to Shareholders of the
Company in their capacity as Shareholders.
A copy of the Directors' CVA Proposal incorporating the
Nominee's Report is available for download from the following
website: http://www.antonybatty.net/client-login.php access code
1976146269
Any Shareholder wishing to receive a paper copy of the proposal,
should contact Antony Batty on
020 7831 1234 , or email antonyb@antonybatty.com, or in writing
to Antony Batty, Anthony Batty & Company LLP, 3 Field Court,
London WC1R 5EF.
The CVA Proposal is conditional upon the approval of the
Resolutions, completion of the Placing and the issuance of the
CULNs.
Directors' participation in the CVA
The Directors, under the terms of their existing service
contracts and other arrangements, are currently owed in aggregate
GBP251,541. Under the terms of the CVA Proposal, the Directors are
entitled to make a claim for these contractual amounts owing to
them. Assuming all Creditors make a valid claim under the CVA
Proposal, the Directors will receive an initial payment of up to 20
pence in the GBP1 pari passu with all other creditors. Should fewer
of the Creditors make a valid claim under the CVA then the amount
issued to the Directors may increase.
The Placing and the CULNs
Peterhouse has conditionally raised GBP125,893 before expenses
through the Placing and GBP100,000 via the issue of the CULNs. The
Placing and the issue of the CULNs are conditional on CVA Approval
and approval of the Resolutions.
The proceeds of the Placing and the issuance of the CULNs will
allow the Company to implement the CVA Proposal.
Following completion of the Placing, the Placees will, in
aggregate, hold approximately 16.66 per cent. of the Enlarged Share
Capital.
The CULNs are convertible at 1.5p and repayable within 18
months.
Gledhow Investments PLC ("Gledhow") has conditionally subscribed
for 4,666,667 Placing Shares at the Placing Price, which will
equate to 9.27 per cent of the Enlarged Share Capital. Gledhow has
also conditionally subscribed for GBP80,000 of the CULNs. On
conversion of these CULNs into Ordinary Shares, Gledhow will hold
an aggregate 17.54 per cent of the Fully Enlarged Share Capital.
Gledhow is an investment vehicle currently quoted on the AQSE
Growth Market.
In addition, Phillip J Milton & Company Plc on behalf of its
discretionary clients has conditionally subscribed for 2,666,667
Placing Shares. Phillip J Milton & Company Plc's total direct
and indirect holding will increase to 25.28 per cent of the
Enlarged Share Capital (before conversion of the CULNs). As Phillip
J Milton & Company Plc is currently a 22.4% shareholder in the
Company, it is a Related Party under the Listing Rules. This
conditional placing is however deemed to be a smaller related party
transaction within the definition of Listing Rule 11.1.10R because
the percentage ratios are less than 5% but exceed the 0.25%
threshold as set out in LR 11.1.10R(1).
It is the intention that there will be Board changes following
the completion of the Placing and the issue of the CULNs.
Shareholders should be aware that the Placing and the issuance
of the CULNs are conditional upon the CVA Approval and the passing
of the Resolutions. If these conditions are not met, then the
Placing and issuance of the CULNs will not proceed, and the Company
would then have insufficient capital to continue trading as a going
concern; and, in the absence of any other source of funding, the
Board may have no alternative but to place it into a formal
insolvency process, probably administration.
Use of Proceeds
The proceeds of the Placing and the issue of the CULNs will be
used to settle outstanding Creditors under the terms of the CVA
Proposal. Following the full settlement of Creditors as part of the
proposed CVA Proposal (that is to say the estimated initial payment
of 20 pence in the GBP1 and subsequent settlement of the remaining
80 pence, assuming that the proceeds of sale of the Company's
shares in AAM and/or the repayment of the Company's loans to AAM
suffice), the Company will be free of debt.
General Meeting
The Notice convening the General Meeting at which the
Resolutions will be proposed is set out at the end of this
Circular. A summary of the Resolutions is set out below.
The Resolutions
Resolution 1 , which will be proposed as an ordinary resolution,
will, if passed, give the Directors the authority to allot up to a
further 8,392,902 new Shares, equal to 16.66 per cent. of the
Enlarged Share Capital.
Resolution 2 , which will be proposed as an ordinary resolution,
seeks approval for the CVA.
Resolution 3 , which will be proposed as a special resolution,
will, if passed, give the Directors the authority to allot all the
Shares over which they are granted authority pursuant to Resolution
1 for cash on a non-pre-emptive basis.
Action to be taken
Given the current Covid-19 pandemic, the Company and the Board
remind all Shareholders of the British Government's current
restrictions on gatherings of persons from different households and
the rules regarding social distancing. Unless and until the current
restrictions are relaxed or lifted, the Directors are asking all
Shareholders not to attend the General Meeting. Shareholders who
intend to attend the General Meeting in person in breach of any
stay at home measures, which are in place on the date of the
General Meeting, will not be admitted. Instead, you are asked to
vote by way of proxy in advance of the General Meeting and we
encourage you to appoint the chairman of the General Meeting as
your proxy with your voting instructions.
Shareholders will find a Form of Proxy enclosed for use at the
General Meeting. You are requested to complete and return the Form
of Proxy in accordance with the instructions printed thereon as
soon as possible.
To be valid, completed Forms of Proxy must be received by the
Company's registrars, Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol, BS99 6ZY not later than 11.00
a.m. on 17 December 2020, being 48 hours (two working days) before
the time appointed for holding the General Meeting.
You are entitled to appoint a proxy to exercise all or any of
your rights to vote at the General Meeting instead of you. Your
attention is drawn to the notes to the Form of Proxy.
Recommendation
The Directors consider that the CVA Proposal, the Placing, and
the issuance of the CULNs are in the best interests of the Company,
its Creditors and the Shareholders as a whole.
In the absence of any other source of funding, the only
alternative course of action, in the opinion of the Board, would be
to place the Company into a formal insolvency process, probably
administration; and, while this might result in a similar outcome
for Shareholders as a CVA (in that an administrator would return
surplus funds to the Company in the same way as a CVA Supervisor
would), the Board is advised that the Company would very likely
lose its public listing; and the opportunity to create future value
for Shareholders would therefore be severely constrained.
The Directors therefore unanimously recommend that Shareholders
vote in favour of all the Resolutions.
Yours faithfully
James Normand
Chairman
The Directors accept responsibility for this announcement.
For further information, please contact:
Global Resources Investment Trust Tel: +44 (0) 203 198 2554
PLC
Martin Lampshire
---------------------------
Beaumont Cornish Ltd Tel: +44 (0) 207 628 3396
---------------------------
Roland Cornish
Felicity Geidt
---------------------------
Peterhouse Capital Limited Tel: +44 (0) 207 469 0930
---------------------------
Lucy Williams
Duncan Vasey
Heena Karani
DEFINITIONS
The following definitions apply throughout this document and the
Form of Proxy, unless the context requires otherwise:
AQSE Growth Market the primary market for unlisted securities
operated by the Aquis Stock Exchange
Board the board of Directors
CULNs the convertible unsecured loan note instrument for
GBP100,000 between the Company and the Noteholders
CULN Shares the 6,666,667 Ordinary Shares issued to the CULN
holders upon converting the CULNs
Company Global Resources Investment Trust plc
CREST the computerised settlement system operated by Euroclear
which facilitates the transfer of title to shares in uncertificated
form
Creditors the creditors of the Company
Creditors' Meeting the meetings of creditors to be convened at
10.30 a.m. on 21 December 2020 pursuant to the CVA
CVA a Company Voluntary Arrangement, pursuant to Part 1 of the
Insolvency Act 1986, details of which are set out in this document
and a proposal document available to Creditors and Shareholders
dated 30 November 2020 (the "CVA Proposal").
CVA Approval approval of the terms of the CVA Proposal at the
Creditors' Meeting and the General Meeting convened for such
purposes
CVA Resolution the resolution to approve the terms of the CVA
Directors the directors of the Company or any duly constituted
committee of the Board
Enlarged Share Capital the Issued Share Capital plus the Placing Shares
Euroclear Euroclear UK & Ireland Limited, being the operator
of CREST
Form of Proxy the form of proxy provided with this document for
use by Shareholders in connection with the General Meeting
Fully Enlarged Share Capital the Enlarged Share Capital plus the CULNs Shares
General Meeting the general meeting of the Company to consider
the Resolutions, convened for 21 December 2020 at 11.00 a.m, notice
of which is set out on page 10 of this document
Issued Share Capital 41,964,512 Ordinary Shares currently in issue
London Stock Exchange London Stock Exchange plc
Nominee or Supervisor Antony Batty of Antony Batty & Company LLP
Noteholders holders of the CULNs
Notice of General Meeting the notice of the General Meeting as
set out on page 8 of this document
Ordinary Shares ordinary shares of 0.1p each in the capital of
the Company
Placees a subscriber of the Placing Shares under the Placing
Placing the conditional placing of the Placing Shares
Placing Shares the 8,392,902 Ordinary Shares to be issued as
part of the Placing
Registrar Computershare Investor Services PLC
Resolutions the resolutions being proposed at the General Meeting
Shareholder a holder of Shares
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