TIDMLETS
RNS Number : 2080S
Let's Explore Group PLC
08 March 2023
8 March 2023
Let's Explore Group PLC
("LETS" , the "Company" or the "Group" )
Publication of Circular and Notice of General Meeting
The Company is pleased to announce that today it will be
publishing a circular (the "Circular") containing details of a
proposed off-market purchase of the Company's ordinary shares of
0.040108663 pence each in the capital of the Company ("Ordinary
Shares"), and a proposed capital reduction (together the
"Proposals"), and a notice of a general meeting of the Company (the
"General Meeting"). The General Meeting will be held at 2:00 p.m.
on 27 March 2023 at St. James Room 1, 116 Pall Mall, St. James's,
London, SW1Y 5ED.
On 2 February 2023, the Company sent a circular to the Company's
Shareholders ("Shareholders") detailing the disposal of the
Location Based Entertainment business (the "LBE Sale") and
outlining the proposals to return the majority of the proceeds of
the LBE Sale to Shareholders. To allow the Company to return
capital to Shareholders and provide flexibility to make future
distributions and to complete the Off-Market Buy Backs, the Company
requires distributable reserves. Accordingly, the Board is seeking
approval, subject to the consent of the Court, for the Capital
Reduction and for the amount of the reduction to be transferred to
the Company's profit and loss account to create distributable
reserves.
In addition, and as previously announced, the Company proposes
to buy back and cancel 21,657,193 shares, plus 13,283,833 shares to
be issued pursuant to exercise of options, from Rod Findley, Ken
Musen and Alasdair Ritchie, (who are remaining with the Location
Based Entertainment business) as outlined in the circular of 2
February 2023. These 34,941,026 shares are being purchased at a
price of 3.65p per share with a net cost to the Company of
GBP943,252. The Circular includes details of the purchase of these
shares which is also subject to the necessary shareholder and UK
Court approvals.
The expected timetable of principal events and the Chairman's
statement from the Circular are set out below. Unless otherwise
indicated, all defined terms in this announcement shall have the
same meaning as described in the Circular.
Enquiries:
For further information please visit www. LetsExploreGroup.com ,
or contact:
Let's Explore Group Martin Higginson investors@l etsexploregroup.com
plc David Marks
Cenkos Securities Adrian Hadden Tel + 44 (0) 207 7397 8900
plc Camilla Hume
(Nomad and Sole Broker) Charlie Combe
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
The dates and times set out below are based on the Company's
current expectations and may be subject to change. Any change will
be notified via a Regulatory Information Service. References to
times are to London times, unless otherwise stated.
Publication of the Circular 8 March 2023
Latest time and date for receipt of Forms of 2 p.m. on 23 March 2023
Proxy for the General Meeting
General Meeting 2 p.m. on 27 March 2023
Expected date of initial directions hearing 5 April 2023
of the Court
Expected date of Court Hearing to confirm the 25 April 2023
Capital Reduction
Expected effective date for the Capital Reduction 26 April 2023
LETTER FROM THE CHAIRMAN OF LET'S EXPLORE GROUP PLC
(Incorporated and registered in England and Wales under number
10964782)
8 March 2023
Dear Shareholder
PROPOSED CAPITAL REDUCTION
AND
PROPOSED OFF-MARKET BUY BACK AUTHORITIES
AND
NOTICE OF GENERAL MEETING
1. Introduction
On 2 February 2023 the Company announced that it and its
subsidiary Let's Explore VR Limited (previously named as Let's
Explore Group Limited) had entered into a conditional sale and
purchase agreement, for the sale of the entire issued share capital
of Immotion Studios Limited and Immotion VR Limited and the
entirety of the common stock C.2K Entertainment Inc. which together
formed the Group's location-based entertainment business. On 1
March 2023, the Company announced that the LBE Sale had completed
(the "Announcement").
On 2 February 2023, the Company sent a circular to Shareholders
setting out details of the LBE Sale and outlining the proposals to
return the majority of the proceeds of the LBE Sale to
Shareholders.
Under the Companies Act, for the Company to be able to return
capital to Shareholders as outlined in the Announcement and to
complete the Off-Market Buy Backs, the Company requires
distributable reserves sufficient to effect the Off-Market Buy
Backs and the Return of Capital (having first offset any deficit on
its profit and loss reserves). Accordingly, the Board is seeking
approval from Shareholders, subject to the consent of the Court,
for the Capital Reduction and for the amount of the capital
reduction to be transferred from the Share Premium Account to the
Company's profit and loss account in order, along with the gain on
LBE Sale, to create positive distributable reserves necessary to
effect the Off-Market Buy Backs and the Return of Capital as
outlined in the Announcement.
The General Meeting that will be held at St. James Room 1, 116
Pall Mall, St. James's, London, SW1Y 5ED at 2 p.m. on 27 March 2023
to consider the Resolutions put to Shareholders.
The purpose of the Circular is to provide you with information
about the Proposals and to explain why the Board considers the
Proposals to be in the best interests of the Company and its
Shareholders as a whole and unanimously recommends that you vote in
favour of the Resolutions to be proposed at the General Meeting.
Shareholders should note that, unless the Resolutions are approved
at the General Meeting (and the Court subsequently confirms the
Capital Reduction), the Off-Market Buy Backs will not take place
and the Return of Capital will not occur.
Part II of the Circular contains definitions of words and terms
that have been used throughout it. Please refer to Part II as you
review the Circular.
2. Background to, and reasons for, the Capital Reduction
Under the Companies Act, a company may, with the sanction of a
special resolution passed by its shareholders and confirmation of
the Court, reduce or cancel its share capital, share premium
account and other reserves. It may then apply the sums resulting
from such reduction to its distributable reserves. These sums may
then be treated as distributable for the purposes of making future
returns to Shareholders.
The Companies Act requires that if a company issues shares at a
premium to the nominal value of those shares for cash or otherwise,
a sum equal to the aggregate amount of the premiums must be
transferred to the company's share premium account. A share premium
account can only be used in very limited circumstances.
The Company currently has a Share Premium Account of
GBP20,570,000 which it plans to reduce in full.
The Capital Reduction, if approved, allows the Company to
proceed with the Off-Market Buy Backs and the Return of Capital.
Therefore, the Company is seeking approval for the Capital
Reduction.
3. Background to the Off-Market Buy Backs
As announced on 2 February 2023, it is the intention of the
Board to return around GBP13.5m of the net proceeds of the LBE Sale
to Shareholders. Approximately GBP1m will be used to satisfy the
Off-Market Buy Backs and circa GBP12.5m will be allocated to the
Return of Capital.
On 1 February 2023, the Company entered into the Off-Market Buy
Back Agreements which are conditional, inter alia, on the Company
having sufficient distributable profits to fund the acquisitions of
the AR Shares, the KM Shares and the RF Shares. Rodney Findley,
Kenneth Musen and Alasdair Ritchie are employed by C.2K
Entertainment Inc. and it was agreed that their shares would be
bought back as part of the arrangements for the LBE Sale. Further
details of the Off-Market Buy Back Agreements are set out in Part V
of the Circular and copies of each of the Off-Market Buy Back
Agreements are available for inspection at the registered office of
the Company for a period of 15 days ending on the date of the
General Meeting.
Upon completion of the Off-Market Buy Back Agreements, the
Company intends to cancel the Ordinary Shares bought back by the
Company pursuant thereto.
Therefore, the Company is seeking approval for the Off-Market
Buy Backs.
4. The Capital Reduction
To allow the Company to undertake the Off-Market Buy Backs and
the Return of Capital, the Company must undertake the Capital
Reduction to provide it with the necessary distributable
reserves.
In addition to the approval by Shareholders of the Capital
Reduction Resolution, the Capital Reduction requires the approval
of the Court. Accordingly, following the General Meeting, an
application will be made to the Court in order to confirm and
approve the Capital Reduction.
In providing its approval of the Capital Reduction, the Court
may require measures to be put in place for the protection of
creditors (including contingent creditors) of the Company whose
debts remain outstanding on the relevant date, except in the case
of creditors which have consented to the Capital Reduction. Such
creditor protection measures may include seeking the consent of the
Company's creditors to the Capital Reduction or the provision by
the Company to the Court of an undertaking to deposit a sum of
money into a blocked account created for the purpose of discharging
the non-consenting creditors of the Company or an undertaking to
treat as undistributable for the time being certain sums
representing the realisation of "hidden value" in the balance sheet
as at the Effective Date.
It is anticipated that the initial Court directions hearing in
relation to the Capital Reduction will take place on 5 April 2023,
with the final Court Hearing taking place on 25 April 2023 and the
Capital Reduction becoming effective on the following day,
following the necessary registration of the Court Order at
Companies House.
There will be no change in the number of Ordinary Shares in
issue (or their nominal value) following the implementation of the
Capital Reduction and no new share certificates will be issued as a
result of the Capital Reduction. The Capital Reduction itself will
not involve any distribution or repayment of capital or share
premium by the Company and will not reduce the underlying net
assets of the Company. The distributable reserves arising on the
Capital Reduction will, subject to the discharge of any
undertakings required by the Court, allow the Company to undertake
the Off-Market Buy Backs and undertake the Return of Capital as
explained above.
Once the Return of Capital is implemented the number of Ordinary
Shares in issue will reduce.
Once the Capital Reduction has become effective, the Company
will complete the Off-Market Buy Backs and will announce the
details of the proposed tender offer. To allow the proposed tender
offer to proceed, the Company will need Shareholder approval to
conduct on-market buy backs of its Ordinary Shares. This will
necessitate a further general meeting of Shareholders.
The proposed tender offer documentation will be sent to
Shareholders at the same time as the notice convening the
additional general meeting requesting authority to conduct
on-market buy backs of Ordinary Shares and it is expected that the
proposed tender offer will close immediately prior to the general
meeting and that the results of the tender offer will be announced
shortly thereafter.
Assuming Shareholders approve the terms of the proposed tender
offer the proceeds of the Return of Capital would be remitted to
participating Shareholders shortly thereafter. The Company is
targeting overall completion of the Return of Capital (including
payment of monies) by the end of May 2023.
Shareholders should note that if, for any reason, the Court
declines to approve the Capital Reduction, the Capital Reduction
will not take place. The Board reserves the right to abandon or to
discontinue (in whole or in part) the application to the Court in
the event that the Board considers that the terms on which the
Capital Reduction would be (or would be likely to be) confirmed by
the Court would not be in the best interests of the Company and/or
its Shareholders as a whole. The Board has undertaken a thorough
and extensive review of the Company's liabilities (including
contingent liabilities) and considers that the Company will be able
to satisfy the Court that there is no real likelihood that any
creditor of the Company would be prejudiced by the Capital
Reduction.
5. General Meeting and Resolutions
The Notice of General Meeting is set out in Part V of the
Circular.
The General Meeting will take place at St. James Room 1, 116
Pall Mall, St. James's, London, SW1Y 5ED at 2 p.m. on 27 March
2023. At the General Meeting, the Resolutions set out in Part V of
the Circular will be proposed to Shareholders.
Resolutions 1-3 (inclusive) are ordinary resolutions and will be
passed if more than 50% of the votes cast (in person or by proxy)
at the General Meeting are in favour of each resolution. Resolution
4 is a special resolution and will be passed if 75% or more of the
votes cast (in person or by proxy) at the General Meeting are in
favour of it.
The Resolutions are summarised below:
Resolution 1 - this is an ordinary resolution to approve,
subject to the passing of Resolution 4 and the capital reduction
approved by Resolution 4 taking effect, the Rodney Findley Buy Back
Agreement.
Resolutions 2 - this is an ordinary resolution to approve,
subject to the passing of Resolution 4 and the capital reduction
approved by Resolution 4 taking effect, the Kenneth Musen Buy Back
Agreement.
Resolution 3 - this is an ordinary resolution to approve,
subject to the passing of Resolution 4 and the capital reduction
approved by Resolution 4 taking effect, the Alasdair Ritchie Buy
Back Agreement.
Resolution 4 - this is a special resolution to approve, subject
to confirmation of the Court, the cancellation of the Share Premium
Account.
6. United Kingdom Taxation
The following comments are intended as a general guide only and
relate only to certain UK tax consequences of the Reduction of
Capital. The comments are based on current legislation and HM
Revenue & Customs published practice, both of which are subject
to change, possibly with retrospective effect. These comments deal
only with Shareholders who are resident for taxation purposes in
the UK, who are the absolute beneficial owners of the Ordinary
Shares and who hold them as an investment and not in a trading
account ("UK Shareholders"). They do not deal with the position of
certain classes of Shareholders, such as dealers in securities,
insurance companies, collective investment schemes or persons
regarded as having obtained
their Ordinary Shares by reason of employment. Any Shareholder
who has any doubt about their own taxation position, or who is
subject to taxation in any jurisdiction other than the UK should
consult their own professional taxation advisor immediately.
The Share Premium Reduction should not have any consequences for
UK Shareholders for the purposes of UK taxation of chargeable gains
(CGT), UK income tax, UK corporation tax, or UK stamp taxes.
7. Action to be taken in respect of the General Meeting
Shareholders will be sent a Form of Proxy for use at the General
Meeting. Whether or not you intend to be present 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, Neville Registrars Limited, by not later
than 2 p.m. on 23 March 2023, or 48 hours (excluding any part of a
day that is not a Business Day) before any adjourned General
Meeting. Completion of the Form of Proxy will not preclude you from
attending the meeting and voting in person if you so wish.
8. Recommendation
The Directors consider that the Capital Reduction and the
Off-Market Buy Backs to be in the best interests of the Company and
its Shareholders as a whole. Accordingly, the Directors unanimously
recommend that you vote in favour of the Resolutions to be proposed
at the General Meeting, as they intend to do in respect of their
aggregate shareholdings, of 35,444,946 Ordinary Shares representing
approximately 8.52% of the Ordinary Shares in issue at the date of
this announcement.
Yours faithfully
Sir Robin Miller
Non-executive Chairman
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"Act" Companies Act 2006;
"AR Shares" the 3,480,593 Ordinary Shares issued
and registered in the name of Alasdair
Ritchie;
"Alasdair Ritchie Buy Back the off-market buy back agreement
Agreement" entered into on 1 February 2023
between Alasdair Ritchie and the
Company in relation to the buy back
by the Company of the AR Shares;
"Board" or "Directors" the directors of the Company or
any duly appointed committee thereof;
"Capital Reduction" the proposed cancellation of the
Company's Share Premium Account
pursuant to the resolution 4 as
set out in the Notice of General
Meeting;
"Capital Reduction Record 6.00p.m. on the date immediately
Time" preceding the date of the Court
Hearing;
"Capital Reduction Resolution" the resolutions to be proposed at
the General Meeting in relation
to the proposed Share Premium Account
Reduction which is set out in full
in the Notice of General Meeting
at resolution 4;
"Cenkos" Cenkos Securities plc;
"Company" or "LEG" Let's Explore Group plc, a company
incorporated in England and Wales
with registered number 10964782;
"Court" the High Court of Justice in England
and Wales;
"Court Hearing" the hearing by the Court to confirm
the Capital Reduction;
"Court Order" the order of the Court confirming
the Capital Reduction;
"CREST" the relevant system (as defined
in the CREST Regulations) in respect
of which Euroclear is the Operator
(as defined in the CREST Regulations);
"CREST Regulations" the Uncertificated Securities Regulations
2001 (as amended);
"Effective Date" the date of the Court Order;
"Form of Proxy" the form of proxy accompanying the
Circular relating to the General
Meeting;
"FSMA" the Financial Services and Markets
Act 2000, as amended;
"General Meeting" the general meeting of the Company,
notice of which is set in the Circular
and including any adjournment(s)
thereof;
"Group" the Company and its subsidiaries and
subsidiary undertakings (in each case
as defined in the Act);
"KM Issued Shares" the 7,592,251 Ordinary Shares issued
and registered in the name of Kenneth
Musen;
"KM Option Shares" the options for 2,846,536 Ordinary Shares
held pursuant to the Company's Share
Option Scheme held by Kenneth Musen;
"KM Shares" the KM Issued Shares and the KM Option
Shares;
"Kenneth Musen Buy Back Agreement" the off-market buy back agreement entered
into on 1 February 2023 between Kenneth
Musen and the Company in relation to
the buy back by the Company of the KM
Shares;
"LBE Sale" the sale of the entire issued share
capital of Immotion Studios Limited
and Immotion VR Limited and the entirety
of the common stock C.2K Entertainment
Inc. pursuant to a share purchase agreement
dated 1 February 2023 entered into between
(1) the Company, (2) Let's Explore Group
Limited (previously known as Immotion
Limited) and (3) LBE Bidco, Inc.;
"Market Abuse Regulation" the Market Abuse Regulation (2014/596/EU)
(incorporating the technical standards,
delegated regulations and guidance notes,
published by the European Commission,
London Stock Exchange, the FCA and the
European Securities and Markets Authority)
as retained in the UK pursuant to section
3 of the European Union (Withdrawal)
Act 2018;
"Notice of General Meeting" the notice of General Meeting, set out
in Part V of the Circular;
"Off-Market Buy Back Agreements" the Alasdair Ritchie Buy Back Agreement,
the Kenneth Musen Buy Back Agreement
and the Rodney Findley Buy Back Agreement.
"Off-Market Buy Backs" the proposals contemplated in the Alasdair
Ritchie Buy Back Agreement, Kenneth
Musen Buy Back Agreement and the Rodney
Findley Buy Back Agreement;
"Off-Market Buy Back Resolutions" the resolutions to be proposed at the
General Meeting in relation to the proposed
Off-Market Buy Backs which are set out
in full in the Notice of General Meeting
at resolutions 1-3 (inclusive);
"Ordinary Shares" ordinary shares of 0.040108663 pence
each in the capital of the Company;
"Proposals (i) the Capital Reduction; and
(ii) the Off-Market Buy Backs;
all as set out in the Resolutions;
"Registrars" Neville Registrars Limited, registrars
to the Company;
"RF Issued Shares" the 10,584,349 Ordinary Shares issued
and registered in the name of Rodney
Findley;
"RF Option Shares" the options for 10,437,297 Ordinary
Shares held pursuant to the Company's
Share Option Scheme held by Rodney Findley;
"RF Shares" the RF Issued Shares and the RF Option
Shares;
"Resolutions" the Capital Reduction Resolution and
the Off-Buy Back Resolutions set out
in full in the Notice of General Meeting;
"Return of Capital" proposed return of capital outlined
in the Announcement;
"Rodney Findley Buy Back the off-market buy back agreement entered
Agreement" into on 1 February 2023 between Rodney
Findley and the Company in relation
to the buy back by the Company of the
RF Shares;
"Share Option Scheme" the Company's share option scheme adopted
by Shareholders on 9 July 2018;
"Shareholders" holders of Ordinary Shares;
"Share Premium Account" the share premium account of the Company;
"Share Premium Account Reduction" the cancellation of the full amount
outstanding to the credit of the Share
Premium Account;
"UK" the United Kingdom of Great Britain
and Northern Ireland.
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END
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