TIDMKLN
RNS Number : 8444G
Kellan Group (The) PLC
09 November 2018
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
9 November 2018
The Kellan Group PLC
("Kellan" or the "Company")
Proposed cancellation of admission to trading on AIM
Notice of General Meeting
Further to its announcement on 18 September 2018, the Company
announces that, following discussions with the Company's major
shareholders, the Directors consider that it is in the best
interests of shareholders of Kellan ("Shareholders"), for the
Company to seek cancellation of admission of its ordinary shares
from trading on AIM ("Cancellation"), conditional, pursuant to Rule
41 of the AIM Rules for Companies, upon the consent of not less
than 75 per cent. of votes cast by Shareholders at a general
meeting of the Company.
The Directors consider the Cancellation to be in the best
interest of Shareholders, after considering, amongst other things,
the costs of maintaining trading in the Company's ordinary shares
("Ordinary Shares") on AIM and the limited free float and liquidity
in the Ordinary Shares. The Company will post to Shareholders a
circular (the "Circular") later today in connection with
Cancellation containing a notice convening a general meeting of the
Company (the "General Meeting") to be held 10.00 a.m. on 3 December
2018 at the Company's offices at 27 Mortimer Street, London W1T
3BL.
The Ordinary Shares will continue to be admitted to trading on
AIM, prior to the Cancellation. BMN Commercial Limited, a
shareholder of the Company, has agreed with the Company that with
effect from 12 November 2018, it will offer to purchase off market
up to 67,929,012 Ordinary Shares offered for sale at a price of
GBP0.004 (four-tenths of a penny) per Ordinary Share (the "BMN
Commercial Offer Facility"). BMN Commercial Limited intends that
the BMN Commercial Offer Facility will remain open until the
earlier of the date on which a total of 67,929,012 Ordinary Shares
are acquired and the day 21 business days after the last trading
day on AIM, expected to be 14 January 2019. If Shareholders wish to
sell their Ordinary Shares to BMN Commercial under the BMN
Commercial Offer Facility, they should consult with their own
independent financial adviser and/or broker. The BMN Commercial
Offer Facility will be fulfilled on a first come, first served
basis. Further details on the BMN Commercial Offer Facility are
contained within the Circular and in the extracts from the Circular
below.
The Company's has received irrevocable undertakings to vote or
to procure votes in favour of the resolutions at the General
Meeting in respect of 238,851,217 Ordinary Shares, representing
approximately 70.32 per cent. of the issued share capital of the
Company.
Extracts from the Circular, which sets out the reasons for
seeking Cancellation, are set out below and a copy of the Circular
will shortly be available on the Company's website,
http://www.kellangroup.co.uk/
For further information contact:
ENQUIRIES:
The Kellan Group PLC Tel: 020 7268 6200
Rakesh Kirpalani, Group Finance
Director
Allenby Capital Limited Tel: 020 3328 5656
David Worlidge / Asha Chotai
EXTRACTS FROM THE CIRCULAR
The following has been extracted without amendment from, and
should be read in conjunction with, the Circular to Shareholders
dated 9 November 2018, available from the Company's website,
http://www.kellangroup.co.uk/.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS(1)(2)
Publication and posting of this Document and Form of 9 November
2018
Proxy to Shareholders
Commencement of purchase of Ordinary Shares 12 November 2018
by BMN Commercial pursuant to the BMN Commercial Order
Facility(3)
Latest time and date for receipt of completed Forms of Proxy
10.00 a.m. on 29 November 2018
respect of the General Meeting
Time and date of the General Meeting 10.00 a.m. on 3 December
2018
Expected last day of dealings in Ordinary Shares on AIM 10
December 2018
Expected time and date of Cancellation (4) 7.00 a.m. on 11
December 2018
Notes:
(1) All of the times referred to in this Document refer to London time, unless otherwise stated.
(2) Each of the times and dates in the above timetable is
subject to change. If any of the above times and/or dates change,
the revised times and dates will be notified to Shareholders by an
announcement through a Regulatory Information Service.
(3) See paragraph 4.1 of Part I of this Document for further information.
(4) The Cancellation requires the approval of not less than 75
per cent. of the votes cast by Shareholders at the General
Meeting.
LETTER FROM THE CHAIRMAN OF
THE KELLAN GROUP PLC
1. Introduction
As announced by the Company today, the Directors have concluded
that it is in the best interests of the Company and its
Shareholders to cancel the admission of the Ordinary Shares to
trading on AIM. In accordance with Rule 41 of the AIM Rules, the
Company has notified the London Stock Exchange of the date of the
proposed Cancellation.
The Cancellation Resolution is conditional, pursuant to Rule 41
of the AIM Rules, upon the approval of not less than 75 per cent.
of the votes cast by Shareholders (whether present in person or by
proxy) at the General Meeting, notice of which is set out at the
end of this Document. The Company has received irrevocable
undertakings to vote in favour of the Cancellation Resolution in
respect of 70.32 per cent. of the issued share capital of the
Company.
The Company is seeking Shareholders' approval of the
Resolutions, including the Cancellation Resolution, at the General
Meeting, which has been convened for 10.00 a.m. on 3 December 2018
at the Company's offices at 27 Mortimer Street, London W1T 3BL. If
the Cancellation Resolution is passed at the General Meeting, it is
anticipated that the Cancellation will become effective at 7.00
a.m. on 11 December 2018.
The purpose of this Document is to seek Shareholders' approval
for the Resolutions, to provide information on the background and
reasons for, and consequences of, the Cancellation, Re-registration
and the adoption of the New Articles and why the Directors
unanimously consider the Cancellation, Re-registration and adoption
of the New Articles to be in the best interests of the Company and
its Shareholders as a whole.
Shareholders should note that BMN Commercial has agreed with the
Company that it will offer to purchase, off market, up to
67,929,012 Ordinary Shares offered for sale at a price of GBP0.004
(four-tenths of a penny) per Ordinary Share. Further details of the
BMN Commercial Offer Facility are set out in paragraph 4.1 of this
Document.
The Notice of the General Meeting is set out at the end of this
Document.
2. Background and reasons for Cancellation
The Directors have conducted a review of the benefits and
drawbacks to the Company and its Shareholders in retaining its
quotation on AIM and maintaining its existing corporate structure.
The Board believes that the Cancellation is in the best interests
of the Company and its Shareholders as a whole. In reaching this
conclusion, the Directors have considered the following key
factors, amongst others:
l the ten largest Shareholders hold, in aggregate, approximately
88 per cent. of the Company's current issued share capital,
resulting in limited free float and liquidity in the Ordinary
Shares with the consequence that the Company's admission to trading
on AIM does not, in itself, offer investors the opportunity to
trade in meaningful volumes or with frequency within an active
market;
l the Board believes, as a result of the liquidity issues
outlined above and other historic factors, the current share price
of the Ordinary Shares, and therefore the market capitalisation of
the Company, does not accurately reflect the Company's value and
adversely affects the ability of the Board to pursue certain
strategic objectives;
l in light of the limited trading in the Ordinary Shares, with
an average daily volume of 0.36 per cent. of the issued share
capital of the Company traded, the considerable cost associated
with maintaining the Company's admission to trading on AIM (such as
nominated adviser and broker fees, London Stock Exchange fees and
the costs associated with being a quoted company in having higher
level corporate governance and audit scope) are, in the Directors'
opinion, disproportionately high, when compared to the benefits,
and the Board believes that funds could be better utilised; and
l the management time and the legal and regulatory burden
associated with maintaining the Company's admission to trading on
AIM is, in the Directors' opinion, disproportionate to the benefits
to the Company.
Following careful consideration, the Directors believe that it
is in the best interests of the Company and Shareholders to seek
the proposed Cancellation at the earliest opportunity.
3. Principal effects of the Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Ordinary Shares in the event that the
Cancellation is approved and becomes effective. Such Shareholders
should consider selling their Ordinary Shares to BMN Commercial
under the BMN Commercial Offer Facility (details of which are set
out in paragraph 4.1 below) or in the market prior to the
Cancellation becoming effective.
Under the AIM Rules, the Company is required to give at least 20
clear Business Days' notice of Cancellation. Additionally,
Cancellation will not take effect until at least 5 clear Business
Days have passed following the passing of the Cancellation
Resolution. If the Cancellation Resolution is passed at the General
Meeting, it is proposed that the last day of trading in Ordinary
Shares on AIM will be 10 December 2018 and that the Cancellation
will take effect at 7.00 a.m. on 11 December 2018.
The principal effects of the Cancellation will be that:
l there will be no formal market mechanism enabling Shareholders
to trade their Ordinary Shares on AIM or any other recognised
market or trading facility;
l whilst the Ordinary Shares will remain freely transferrable,
it is possible that the liquidity and marketability of the Ordinary
Shares will, in the future, be even more constrained than at
present and the value of such shares may be adversely affected as a
consequence;
l in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time;
l the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
l Shareholders will no longer be afforded the protections given
by the AIM Rules, such as the requirement to be notified of certain
events and the requirement that the Company seek shareholder
approval for certain corporate actions, where applicable, including
substantial transactions, financing transactions, reverse
takeovers, related party transactions and fundamental changes in
the Company's business, including certain acquisitions and
disposals;
l the Company will cease to have an independent nominated
adviser and broker;
l whilst the Company's CREST facility will remain in place post
the Cancellation, the Company's CREST facility may be cancelled in
the future and, although the Ordinary Shares will remain
transferable, they may cease to be transferable through CREST. In
this instance, Shareholders who hold Ordinary Shares in CREST will
receive share certificates; and
l the Cancellation may have personal taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
The Company will remain registered with the Registrar of
Companies in England & Wales in accordance with and subject to
the Companies Act 2006, notwithstanding the Cancellation.
Shareholders should also note that the Takeover Code will continue
to apply to the Company following the Cancellation for the period
of 10 years from the date of Cancellation (although it should also
be noted that, as the Major Shareholder owns in excess of 50 per
cent. of the existing Ordinary Shares, he is free to acquire
further Ordinary Shares without incurring any obligation under Rule
9 of the Takeover Code).
The Resolutions to be proposed at the General Meeting include
the adoption of the New Articles with effect from completion of the
Cancellation. A summary of the principal changes being made by the
adoption of the New Articles is included in Part II of this
Document.
The above considerations are not exhaustive, and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
4. Transaction in the Ordinary Shares prior to and post the proposed Cancellation
4.1 Prior to Cancellation
Shareholders should note that they are able to trade in the
Ordinary Shares on AIM prior to Cancellation. In addition, BMN
Commercial has agreed with the Company that with effect from 12
November 2018 it will offer to purchase off market up to 67,929,012
Ordinary Shares offered for sale at a price of GBP0.004
(four-tenths of a penny) per Ordinary Share. BMN Commercial intends
that the BMN Commercial Offer Facility will remain open until the
earlier of the date on which a total of 67,929,012 Ordinary Shares
are acquired and the day 21 business days after the last trading
day on AIM, expected to be 14 January 2019. BMN Commercial has
lodged the necessary funds with the Company, which will administer
the process on BMN Commercial's behalf, to complete the BMN
Commercial Offer Facility in full.
If Shareholders wish to sell their Ordinary Shares to BMN
Commercial under the BMN Commercial Offer Facility, they should
consult with their own independent financial adviser and/or broker.
The BMN Commercial Offer Facility will be fulfilled on a first
come, first served basis.
If Shareholders wish to sell their Ordinary Shares pursuant to
the BMN Commercial Offer Facility, it will be necessary to follow
the procedures set out below:
4.1.1 If you hold your Ordinary Shares in certificated form
Please complete the enclosed stock transfer form by filling in
your name and address, the number of shares you hold and signing
(if shares held in joint names then all shareholders should sign
the form). Return the original ink signed form and your valid share
certificate(s) to: Martin Kumar, Company Secretary, at the offices
of the Company at 4th Floor, 27 Mortimer Street, London, W1T 3BL
(martin.kumar@kellangroup.co.uk - 020 7268 6294) as soon as
possible.
If your share certificate(s) are lost, stolen or destroyed, you
should contact our registrar, Link Asset Services, on Tel: 0871 664
0300 (calls cost 12p per minute plus your phone company's access
charge. Lines are open between 9.00am - 5.30 pm, Monday to Friday,
excluding public holidays in England and Wales). Link Asset
Services will arrange for you to complete an indemnity covering the
company for any loss arising from a dispute over who owns the
shares and you may be charged for this if the value of the shares
is over a certain limit. Once this is done, Link Asset Services
will send you a duplicate certificate.
In order to receive your proceeds from the sale to BMN
Commercial, please provide your bank details on the form provided
on the reverse of the stock transfer form.
Proceeds will be paid within 14 days from the transfer of your
shares to BMN Commercial.
4.1.2 If you hold your Ordinary Shares in CREST (uncertificated
form)
You should contact your independent financial adviser and/or
Nominee manager to withdraw your shares into certificated form. You
will then be able to sell your Ordinary Shares under the BMN
Commercial Offer Facility in accordance with the procedures set out
in 4.1.1 above, using the stock transfer form.
4.2 Following Cancellation
The Board is aware that the proposed Cancellation, should it be
approved by Shareholders at the General Meeting, would make it more
difficult for Shareholders to buy and sell Ordinary Shares should
they wish to do so.
Following Cancellation, the Company intends to use reasonable
endeavours to facilitate introductions and communication among
Shareholders who wish to sell their Ordinary Shares and those
persons who wish to purchase Ordinary Shares. To do this,
Shareholders or persons wishing to acquire or sell Ordinary Shares
will be able to leave an indication with the Company that they are
prepared to buy/sell Ordinary Shares at a specified price. In
carrying out such introductions, the Company will not arrange
transactions and will take no responsibility to match up
Shareholders wishing to sell and purchase Ordinary Shares, and no
responsibility in respect of the time frame and manner in which
introductions or communications (if any) are made or as to the
price at which any trades might take place. Shareholders wishing to
make such an indication to the Company should do so by writing to
Martin Kumar, Company Secretary, at the offices of the Company at
4th Floor, 27 Mortimer Street, London, W1T 3BL
(martin.kumar@kellangroup.co.uk - 020 7268 6294).
5. Re-registration
Following the Cancellation, the Board believes that the
requirements and associated costs of the Company maintaining its
public company status will be difficult to justify and that the
Company will benefit from the more flexible requirements and lower
costs associated with private limited company status. It is
therefore proposed to re-register the Company as a private limited
company. In connection with the Re-registration, it is proposed
that the New Articles be adopted to reflect the change in the
Company's status to a private limited company. The principal
effects of the Re-registration and the adoption of the New Articles
on the rights and obligations of Shareholders and the Company are
summarised in Part II of this Document.
Application will be made to the Registrar of Companies for the
Company to be re-registered as a private limited company.
Re-registration will take effect when the Registrar of Companies
issues a certificate of incorporation on Re-registration. The
Registrar of Companies will not issue the certificate of
incorporation on Re-registration until the Register of Companies is
satisfied that no valid application can be made to cancel the
resolution to re-register as a private limited company.
6. Irrevocable Undertakings
The Company has received irrevocable undertakings from the
directors who hold Ordinary Shares, the Major Shareholder and BMN
Commercial to vote or procure votes in favour of the Resolutions in
respect of, in aggregate, 238,851,217 Ordinary Shares, representing
approximately 70.32 per cent. of the issued share capital of the
Company.
Accordingly, the Directors believe it is likely that the
Resolutions will be passed at the General Meeting.
7. General Meeting and process of Cancellation
Under the AIM Rules, it is a requirement that the Cancellation
must be approved by not less than 75 per cent. of votes cast by
Shareholders at a General Meeting. Accordingly, the Notice of
General Meeting set out at the end of this Document contains a
special resolution to approve the Cancellation.
Furthermore, Rule 41 of the AIM Rules requires any AIM company
that wishes the London Stock Exchange to cancel the admission of
its shares to trading on AIM to notify shareholders and to
separately inform the London Stock Exchange of its preferred
cancellation date at least 20 Business Days prior to such date. In
accordance with AIM Rule 41, the Directors have notified the London
Stock Exchange of the Company's intention, subject to the
Cancellation Resolution being passed at the General Meeting, to
cancel the Company's admission of the Ordinary Shares to trading on
AIM. Accordingly, if the Cancellation Resolution is passed the
Cancellation will become effective at 7.00 a.m. on 11 December
2018. If the Cancellation becomes effective, Allenby Capital
Limited will cease to be nominated adviser and broker to the
Company and the Company will no longer be required to comply with
the AIM Rules.
The General Meeting will be held at the Company's offices at 27
Mortimer Street, London W1T 3BL commencing at 10.00 a.m. on 3
December 2018.
8. Action to be taken
You will find enclosed with this Document a Form of Proxy for
use at the General Meeting. Whether or not you propose to attend
the General Meeting in person, you are requested to complete and
return the Form of Proxy to the Company's registrars Link Asset
Services, PXS1, 34 Beckenham Road, Beckenham, Kent BR3 4ZF, in
accordance with the instructions printed thereon as soon as
possible but, in any event, to be received no later than 10.00 a.m.
on 29 November 2018. Completion and return of a Form of Proxy will
not preclude you from attending and voting at the General Meeting
in person if you so wish.
9. Recommendation
The Directors consider that the Cancellation, the adoption of
the New Articles and the Re-registration are in the best interests
of the Company and its Shareholders as a whole and therefore
unanimously recommend that you vote in favour of the Resolutions at
the General Meeting as those Directors who hold Ordinary Shares
intend to do in respect of their own beneficial holdings amounting
to, in aggregate 15,599,511 Ordinary Shares representing 4.59 per
cent. of the total voting rights in the Company.
Yours faithfully,
Richard Ward
Chairman of the Company
DEFINITIONS
The following definitions apply throughout this Document, unless
the context requires otherwise:
"AIM" AIM, the market operated by the London
Stock Exchange;
"AIM Rules" the rules and guidance for companies
whose shares are admitted to trading
on AIM entitled "AIM Rules for Companies"
published by the London Stock Exchange,
as amended from time to time;
"BMN Commercial" BMN Commercial Limited, a company incorporated
in England and Wales with the registered
number 10416788, which is owned by the
family of the Major Shareholder and deemed
to be acting in concert with the Major
Shareholder;
"BMN Commercial Offer the offer by BMN Commercial to purchase,
Facility" off market, up to 67,929,012 Ordinary
Shares offered for sale at a price of
GBP0.004 (four-tenths of a penny) per
Ordinary Share, further details of which
are set out in paragraph 4.1 of Part
I of this Circular;
"Business Day" a day (excluding Saturday, Sunday and
public holidays in England and Wales)
on which banks are generally open for
business in London for the transaction
of normal banking business;
"Cancellation" the cancellation of admission of the
Ordinary Shares to trading on AIM, subject
to passing of the Cancellation Resolution
and in accordance with Rule 41 of the
AIM Rules;
"Cancellation Resolution" Resolution number 1 to be proposed at
the General Meeting;
"Circular" this Document, containing information
about the Cancellation, Re-registration,
adoption of New Articles and the General
Meeting;
"Company" or "Kellan" The Kellan Group PLC, a company incorporated
or "Group" in England and Wales with registered
number 02228050;
"CREST" the relevant system (as defined in the
CREST Regulations) in respect of which
Euroclear is the operator (as defined
in those regulations);
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI2001/3755), as amended;
"Current Articles" the articles of association of the Company
at the date of this Document;
"Directors" or "Board" the directors of the Company, whose names
are set out on page 4 of this Document.
The Board comprises the directors at
any time or the directors present at
a duly convened meeting at which a quorum
is present or, as the case may be, the
directors assembled as a committee of
such Board;
"Disclosure Guidance the disclosure rules and transparency
and Transparency Rules" rules made by the UK Financial Conduct
Authority pursuant to section 73A of
FSMA;
"Form of Proxy" the form of proxy enclosed with this
Document for use at the General Meeting
or at any adjournment thereof;
"General Meeting" the General Meeting of the Company convened
for 10.00 a.m. on 3 December 2018 and
any adjournment thereof, notice of which
is set out at the end of this Document;
"London Stock Exchange" London Stock Exchange plc;
"Major Shareholder" Mr Paul Bell, an individual who holds
210,591,840 Ordinary shares, representing
62.00 per cent. of the voting rights
in the Company;
"New Articles" the new articles of association of the
Company to be adopted following the passing
of the Resolution number 2 to be proposed
at the General Meeting;
"Notice of General Meeting" the notice of General Meeting which is
or "Notice" set out at the end of this Document;
"Ordinary Shares" ordinary shares of GBP0.0001 each in
the capital of the Company, and "Ordinary
Share" means any one of them;
"Re-registration" the re-registration of Kellan as a private
limited company and the consequential
adoption of the New Articles;
"Registrars" or "Link Link Asset Services is a trading name
Asset Services" of Link Market Services Limited and Link
Market Services Trustees Limited. Share
registration and associated services
are provided by Link Market Services
Limited (registered in England and Wales,
No. 2605568).
"Regulatory Information has the meaning given to it in the AIM
Service" Rules for any of the services approved
by the London Stock Exchange for the
distribution of AIM announcements and
included within the list maintained on
the website of the London Stock Exchange;
"Resolutions" the resolutions to be proposed at the
General Meeting in the form set out in
the Notice of General Meeting (and each
of which shall be a "Resolution");
"Shareholders" holders of Ordinary Shares from time
to time and "Shareholder" means any one
of them;
"Takeover Code" the City Code on Takeovers and Mergers;
"Takeover Panel" The Panel on Takeovers and Mergers; and
"United Kingdom" the United Kingdom of Great Britain and
Northern Ireland.
A reference to "GBP" is to pounds sterling, being the lawful
currency of the UK.
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
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