TIDMJADE
RNS Number : 2719Y
Jade Road Investments Limited
02 January 2024
2 January 2024
JADE ROAD INVESTMENTS LIMITED
("Jade Road Investments", "JADE" or the "Company")
Proposed Disposal of Legacy Assets and Restructuring
Jade Road Investments Limited (AIM: JADE), the London quoted
company focused on seeking the best risk-adjusted returns globally
is pleased to provide details of a proposed disposal of certain
legacy assets, restructuring exercise and future strategic
direction.
The Company has conditionally agreed to transfer its legacy
Asian assets ("Legacy Assets") to a special purpose vehicle,
Eastern Champion Ltd ("SPV") (the "Legacy Asset Transfer"). Upon
completion of the Legacy Asset Transfer, the SPV will
simultaneously make an in specie dividend of its shares (the "In
Specie Dividend") to the existing shareholders of the Company
("Shareholders"). The net result is that Shareholders will continue
to own their existing shares in the Company and an equivalent
economic interest in the Legacy Assets through ownership of shares
in the SPV.
In order to effect the Legacy Asset Transfer, the Company
requires the support of both its Shareholders and the holders of
its USD10m 12.5% fixed rate secured loan notes (the "Loan Notes"
and the "Noteholders"). The Company is pleased to report that it
has received the unanimous support of the Noteholders to effect the
proposals including extending the maturity date of the Loan Notes
to 30 June 2024. The Company has also received an irrevocable
undertaking from shareholders in respect of 191,712,713 shares in
aggregate to vote in favour of the resolutions to be proposed at a
duly convened general meeting of the Company to approve the Legacy
Asset Transfer. This irrevocable undertaking represents 53.92% of
the total number of voting rights in the Company.
Upon completion of the Legacy Asset Transfer:
-- The Legacy Assets will be owned by the SPV. Whilst the SPV is
currently a wholly owned subsidiary of the Company, upon completion
of the Legacy Asset Transfer and the In Specie Dividend a new board
of directors independent of the Company will be appointed and an
independent investment manager will be engaged to manage the Legacy
Assets. Upon completion of the proposals, the SPV will therefore be
completely independent of the Company.
-- The Loan Notes issued by the Company, which have USD3.6m of
principal value outstanding, will be deemed repaid and
cancelled.
-- New replacement loan notes with a revised maturity date of 30
June 2024 will be issued by the SPV to the Noteholders who will
retain their security interest over the Legacy Assets and benefit
from an additional charge over the Company's retained assets,
capped at a value of USD0.5m.
-- Noteholders will be granted 1.8m 3-Year warrants by the
Company with a strike price of GBP0.0275.
Accordingly, the Company has entered into a conditional
agreement with the SPV in order to effect the Legacy Asset Transfer
("Hive Down Agreement") with the following key points:
-- The Company will transfer various special purpose vehicles
which own the Legacy Assets to the SPV, which already owns the
Company's investment in DocDoc Pte Ltd. The other Legacy Assets
comprised in those special purpose vehicles are the Company's
investments in Hong Kong Mining Holdings Limited, Meize Energy
Industries Limited, Infinity Capital Group, Infinity TNP and
Project Nicklaus, as well as the convertible loan notes issued to
the Company by Fook Lam Moon Holdings, and the benefit of a
USD3,700,000 loan made by the Company to Hong Kong Mining Holdings
Limited.
-- The consideration payable for the Legacy Assets by the SPV
will be satisfied by it making the In Specie Dividend.
-- The agreement is conditional on a number of matters,
including the issuance of the new replacement loan notes by the SPV
to the Noteholders and the creation of the new security package
described above.
-- Both parties will be granting limited warranties to each other.
These decisions mark a pivotal step in the Company's evolution,
reflecting a strategic approach to seek to enhance efficiency and
value. The net result of the proposals is that the Company will
both deconsolidate its Legacy Assets, which will become
independently owned by the SPV, which will be responsible for the
administration and management of those assets and transfer its
obligations under the Loan Notes to the SPV.
The Legacy Asset Transfer is subject to shareholder approval.
The Company therefore intends to convene a general meeting to
propose the necessary resolution to approve the proposals, further
details of which will be given in due course.
The Company will need to further execute its new investment
strategy within 12 months as the divestment is deemed a fundamental
disposal under the AIM Rules.
The Legacy Assets and have a net book value of USD20m as at 30
June 2023, while the asset retained in the Company is a USD0.5m
investment in the Heirloom Investment Fund SPC - Heirloom Fixed
Return Fund SP. The loss attributable to the assets being disposed
of was USD51.36m in the year ended 31 December 2022.
John Croft, Executive Chairman commented: "The pace and
intricacy of extracting proper value from the Legacy Assets has
acted as a serious inhibitor to the Company's ability to grow and
raise new capital. The transfer of its Legacy Assets to a separate
and fully independent company will enable JADE to present itself as
a clean investment platform which can invest in new assets in line
with its investment policy of seeking opportunities with the best
risk-adjusted returns globally. I look forward to providing further
updates on our plans in due course."
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jade Road Investments Limited +44 (0) 778 531 5588
John Croft
WH Ireland Limited - Nominated
Adviser +44 (0) 20 7220 1666
James Joyce
Andrew de Andrade
Hybridan LLP - Corporate Broker +44 (0) 203 764 2341
Claire Noyce
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