TIDMIPO
RNS Number : 8321S
IP Group PLC
08 November 2019
IP Group plc
('IP Group' or 'the Group' or 'the Company')
Notice of General Meeting
IP Group (LSE:IPO), the developer of intellectual property-based
businesses, announces that later today the Company will post a
notice of general meeting ('General Meeting') to shareholders. The
General Meeting will be held at 11am on 25 November 2019, at the
offices of the Company at The Walbrook Building, 25 Walbrook,
London EC4N 8AF.
The purpose of the General Meeting is to seek the approval of
shareholders for the proposed Capital Reduction and to amend the
articles of association of the Company in relation to the borrowing
powers of the Company (the 'Article Amendment'). This is primarily
being done to give the Company the flexibility to make future
purchases of its own shares and/or to make future distributions of
profits in cash or specie, although the Company has no immediate
intention to do so.
The Capital Reduction involves the cancellation of the amount of
GBP584,955,054.58 standing to the credit of the Company's share
premium account (the 'Share Premium Reduction') and the
capitalisation of GBP372,600,000.00 being the entire amount
standing to the credit of the Company's merger reserve by issuing B
ordinary shares in the capital of the Company and thereafter to
cancel such B ordinary shares (the 'Merger Reserve Reduction' and
the Share Premium Reduction and the Merger Reserve Reduction
together being the 'Capital Reduction').
The Capital Reduction, if approved by the Court and when it
becomes effective, will have the effect of creating distributable
reserves and provide the Company with the ability to make purchases
of its own shares as permitted by the Companies Act 2006 and in
accordance with the resolution passed at the last annual general
meeting of the Company held in May 2019 (the '2019 AGM') and/or,
subject to the financial performance of the Company and the
Companies Act 2006, to make distributions of profits by way of
dividend either in cash or in specie. The Capital Reduction would,
after taking into consideration the existing negative retained
earnings of -GBP67,488,617.00, create distributable reserves to the
value of GBP890,066,437.58. Although IP Group has a positive profit
and loss reserve at a Group level, it does not currently have
distributable reserves at the Company level.
In seeking approval of the Capital Reduction, the directors of
the Company (the 'Directors') are not indicating any commitment to
buy back any Ordinary Shares or to make any distributions. The
Directors will only exercise the authority to purchase the
Company's shares if, in the light of market conditions prevailing
at the time, they consider that the purchase of such shares can be
expected to result in an increase in earnings or net assets per
share and is in the best interests of the Company's shareholders
(and other stakeholders) generally.
The authority to purchase the Company's shares given at the 2019
AGM is limited to a maximum of 105,914,459 Ordinary Shares, being
approximately 10% of the Company's issued share capital as at 17
April 2019. A similar authority is requested at each annual general
meeting of the Company.
The proposed 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. Following the implementation of the Capital Reduction
there will be no change to the Ordinary Shares in issue. No new
share certificates will be issued as a result of the proposed
Capital Reduction.
The proposed Capital Reduction is not expected to affect
outstanding options and awards over the Company's shares granted
under its share option schemes.
A copy of the circular containing the Notice of General Meeting
will shortly be available on the Company's website at
www.ipgroupplc.com/investor-relations.
Extracts from the circular are set out below and should be read
in conjunction with the full text of the circular.
Defined terms used in this announcement have the same meaning as
set out in the circular.
For further information please contact:
IP Group plc +44 (0) 20 7444 0050
Alan Aubrey, Chief Executive
Officer
Greg Smith, Chief Financial
Officer
+44 (0) 20 7444 0062
Liz Vaughan-Adams, Communications +44 (0) 7979 853802
Charlotte Street Partners
Andrew Wilson +44 (0) 7810 636995
David Gaffney +44 (0) 7854 609998
Notes for editors
About IP Group
IP Group is a leading intellectual property commercialisation
company which focuses on evolving great ideas, mainly from its
partner universities, into world-changing businesses. The Group has
pioneered a unique approach to developing these ideas and the
resulting businesses by providing access to business building
expertise, capital (through its 100%-owned FCA-authorised
subsidiaries IP Capital and Parkwalk Advisors), networks,
recruitment and business support. IP Group has a strong track
record of success and its portfolio comprises holdings in
early-stage to mature businesses across life sciences and
technology. IP Group is listed on the Main Market of the London
Stock Exchange under the code IPO.
For more information, please visit our website at
www.ipgroupplc.com.
Extracts from the Circular
PROPOSED CAPITAL REDUCTION
Share Premium Reduction
The Companies Act 2006 requires that if a company issues shares
at a premium to the nominal value of those shares, whether for cash
or otherwise, a sum equal to the aggregate amount or value 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 Board is recommending that the amount of
GBP584,955,054.58 standing to the credit of the Company's share
premium account be cancelled. As at 7 November 2019, the amount
standing to the credit of the Company's share premium account is
GBP684,955,054.58, culminating in the total standing to the credit
of the Company's share premium account following such cancellation
being GBP100,000,000.00.
Merger Reserve Reduction
Under certain circumstances, such as where shares are issued in
consideration for the acquisition of shares in another company,
instead of creating share premium, an amount is credited to a
merger reserve. As in the case of a share premium account, a merger
reserve can only be used in very limited circumstances. It is
therefore proposed to capitalise the entire sum standing to the
credit of the Company's merger reserve being GBP372,600,000.00, by
applying that sum in paying up in full new B ordinary shares in the
capital of the Company (whereby the nominal value of such shares is
equal to the sum that is obtained by dividing the number of such
shares to be issued into GBP372,600,000.00) (the 'B Shares') and on
the day prior to the day of the Court Hearing, allotting and
issuing such shares by way of a bonus issue to the persons holding
ordinary shares of GBP0.02 each in the capital of the Company (the
'Ordinary Shares') as at 6.00pm on such day, on the basis of 1 B
Share for every 1 Ordinary Share held (the 'Bonus Issue').
The B Shares will not be admitted to trading on the main market
of London Stock Exchange plc or any other market. No share
certificates will be issued in respect of the B Shares. The B
Shares will have extremely limited rights; in particular, the B
Shares will carry no rights to participate in the profits of the
Company and no rights to participate in the Company's assets, save
on a winding up. The B Shares will be transferable, but no market
will exist in them and it is anticipated that the Court will
confirm their cancellation the day after they are issued.
Shareholder Approval
Your approval is being sought to carry out the Capital Reduction
pursuant to the special resolutions (Resolutions 1 and 2) set out
in the Notice of General Meeting.
Court Approval
In addition to the approval by the shareholders, the proposed
Capital Reduction requires the confirmation of the Court.
Accordingly, following approval of the proposed Capital Reduction
by shareholders, an application will be made to the Court in order
to confirm and approve the proposed Capital Reduction. In seeking
such approval, the Court may require protection for the 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 proposed Capital Reduction. Any such
creditor protection may include seeking the consent of the
Company's creditors to the proposed 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, in due course, any amounts owing to the non-consenting
creditors of the Company. The Company currently owes no more than
GBP26,400,199.65 to its creditors, consisting of the EIB finance
facility, general trade creditors and accruals and, pursuant to the
acquisition of Parkwalk Advisors Ltd in 2016, deferred
consideration obligations. It also has contingent liabilities under
a parent company guarantee given in respect of IP2IPO Limited's
lease of the Group's Walbrook Building offices.
It is anticipated that the initial directions hearing in
relation to the proposed Capital Reduction will take place on 5
December 2019, with the final hearing by the Court to confirm the
proposed Capital Reduction ('Court Hearing') taking place on 17
December 2019 and the proposed Capital Reduction becoming effective
on the following day, following the necessary registration of,
amongst other things, the order of the Court confirming the
proposed Capital Reduction (the 'Court Order') at Companies
House.
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 proposed 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 the
shareholders as a whole. The Board have 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, as at the date on which the Court Order relating to
the proposed Capital Reduction and the statement of capital in
respect of the proposed Capital Reduction have both been registered
by the Registrar of Companies at Companies House and the proposed
Capital Reduction therefore becomes effective, the Company's
creditors will either have consented to the proposed Capital
Reduction or be sufficiently protected.
ARTICLE AMENDMENT
After obtaining legal advice, the Board is proposing that the
borrowing provisions of the Articles are amended to bring them in
line with current market practice, by reducing the existing limit
on the Company's borrowing from four times the Company's adjusted
capital and reserves to two times. An additional change is also
being made to the definition of Adjusted Capital and Reserves in
the Articles, to bring it in line with the Company's current
accounting practices. The detail of these changes is set out in
Resolution 3. Your approval is therefore being sought to approve
these changes.
GENERAL MEETING
We are holding the General Meeting at the Company's offices at
The Walbrook Building, 25 Walbrook, London EC4N 8AF at 11am on 25
November 2019.
In order to better reflect the views of all shareholders a poll
will be held in relation to each Resolution.
The Resolutions will each be proposed as a special resolution.
This means that, for these resolutions to be passed on a poll,
members representing not less than 75% of the total voting rights
of the members voting (in person or by proxy) must vote in favour
of the Resolutions.
ACTION TO BE TAKEN
If you would like to vote on the Resolutions but cannot come to
the General Meeting, please fill in the proxy form sent to you with
the circular and return it, together with the power of attorney or
other authority (if any) under which it is signed, to our
registrars, Link Asset Services, by hand only to Link Asset
Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU,
as soon as possible. They must receive it by no later than 11am on
21 November 2019. Alternatively, you may vote electronically via
our registrars' website at www.signalshares.com. In order for you
to be able to vote in this way, you will need your Investor Code
which is printed on your share certificate.
CREST members who wish to appoint a proxy or proxies through the
CREST electronic proxy appointment service may do so by using the
procedures described in the CREST Manual. CREST messages must be
received by the issuer's agent (CREST ID No. RA10) by no later than
11am on 21 November 2019.
DOCUMENTS AVAILABLE FOR INSPECTION
The Articles (showing the Article Amendment) will be available
for inspection at the offices of the Company at The Walbrook
Building, 25 Walbrook, London EC4N 8AF on any weekday (Saturdays,
Sundays and public holidays excluded) from the date of the circular
until the close of the General Meeting, and will also be available
at the place of the General Meeting for at least 15 minutes before
and during the meeting.
RECOMMENDATION
The Board considers that the Resolutions to be put to the
General Meeting are in the best interests of the Company and its
shareholders as a whole. The Directors will be voting in favour of
them in respect of their own shareholdings and unanimously
recommend that you do so as well.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Date of publication of the circular 8 November 2019
Latest time and date for receipt of completed 11am on 21 November
proxy forms 2019
General Meeting 11am on 25 November
2019
Time and date of the Bonus Issue* 6pm on 16 December
2019
Court Hearing to confirm Capital Reduction* 17 December 2019
Registration of Court Order and effective 18 December 2019
date of Capital Reduction**
If any of the above times or dates should change, the revised
times and/or dates will be notified to Shareholders by an
announcement to any of the services approved by London Stock
Exchange plc for the distribution of the announcements and included
within the list maintained on the website of London Stock Exchange
plc (known as a Regulatory Information Service).
* This date is subject to any changes which may be imposed by
the Court.
** This date will depend on, amongst other things, the date on
which the Court confirms the proposed Capital Reduction.
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 rns@lseg.com or visit www.rns.com.
END
NOGLLFIFLILTIIA
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