TIDMADS
RNS Number : 6359H
Alexander David Securities Grp PLC
21 June 2013
21 June 2013
Alexander David Securities Group plc
('ADS' or the 'Company')
Publication of Circular & Notice of GM
Further to the announcement entitled "Disposals and Issue of
Equity" made by the Company on 21 May 2013, the board of ADS
announces that a circular has today been published convening a
general meeting of the Company be held at the offices of Peterhouse
Corporate Finance, 31 Lombard Street, London EC3V 9BQ at 11.00 a.m.
on 8 July 2013.
The circular may be downloaded from the Company's website at
www.ad-securities.com. A copy of the letter from the Chairman to
shareholders contained within the circular is copied below and all
defined terms in this announcement are defined therein.
As described in the circular, Peterhouse Corporate Finance
Limited has been appointed as broker to the Placing and, subject to
the completion of the Proposals and FCA approval, will be appointed
as Broker to the Company following the general meeting.
For further information please see www.ad-securities.com or
contact:
Michael Hicks, Chairman
David Scott, Chief Executive Alexander David Securities Group plc 020 7448 9800
Nominated Adviser
James Caithie/Avi Robinson Cairn Financial Advisers LLP 020 7148 7900
Broker to the Placing Peterhouse Corporate Finance Limited 020 7469 0932
Eran Zucker
Introduction
On 21 May 2013, the Company announced that the Board had
completed a review of the Company's options and had concluded that
it was in the best interests of Shareholders to undertake a number
of steps that would lead to a fundamental change in the nature of
the Company's business pursuant to AIM Rule 15.
As a result, the Directors of the Company have conditionally
agreed to dispose of the business and operations of the Company in
two separate transactions (the "Disposals") as follows (subject to
Shareholders' and FCA approval):
1. The PCB Business will be sold to Highstone, a company
wholly-owned by Trevor Coote, who is a director of the Company. The
consideration for the sale of the PCB Business comprises cash of
GBP100,000 plus the assumption by Highstone of liabilities of
GBP230,000 and contingent liabilities of GBP100,000. Further
details are set out under the sub-heading "Sale of the PCB
Business" below.
2. The CF Business will be sold to Rosendale, a company which
will be owned by the Shareholders within 14 days, of either the
General Meeting or FCA approval, whichever is the later, by way of
purchase of the shares in ADHL from ADSG. The sale of the CF
Business is being effected by a reorganisation resulting in a
consideration of GBP1.00 payable to the Company with a potential
for an earned consideration payable to a new entity owned by the
Shareholders of up to GBP300,000. Further details are set out under
the sub-heading "ADHL Share Transfer" below.
At the same time Shareholders will be asked to approve a new
investing policy for the Company as required by Rule 15 of the AIM
Rules and this is set out in the paragraph entitled "Investing
Policy" below.
Peterhouse Corporate Finance has conditionally raised GBP200,000
before expenses, by way of the Placing. The proceeds of the Placing
will be used by the Company to settle GBP125,000 due to existing
creditors in ADSG and the balance of the proceeds of the Placing
will be being used for general working capital purposes and to
pursue the Investing Policy.
A General Meeting of the Company has been convened to seek the
approval of Shareholders for the Proposals. The General Meeting,
notice of which is set out at the end of this Circular, will be
held at the offices of Peterhouse Corporate Finance, 31 Lombard
Street, London EC3V 9BQ at 11.00 a.m. on 8 July 2013. The Company
is now issuing this Circular to Shareholders setting out the
background to and the reasons for the Proposals, including details
of the Investing Policy, and recommending that Shareholders vote in
favour of the Resolutions.
In addition, the Proposals seek to convert the Preference
Shares, Warrants and outstanding Directors' salaries. This
conversion will vary the rights of the Preference Shares. In
accordance with the Articles, notice has been provided at the end
of this Circular to convene the Class Meeting and pass a special
resolution of the Preference Shareholders.
Background to and reasons for the Proposals
ADSG commenced activities in January 2007. ADSG was admitted to
trading on AIM on 31 December 2008, and was established for the
purpose of building a stockbroking business servicing private
clients, institutional investors and small quoted companies.
The year to 31 December 2012 continued to be challenging for the
Company which has been exacerbated by the difficulties in the
global economy and the stock market in the UK. The Directors
believe that in the current climate the public market is not
supportive of small brokerage companies and the costs of being
quoted on AIM far outweigh the benefits for securities firms such
as ADSG.
Against this background, the Board believes that the only option
to achieve value for Shareholders is to pursue an alternative
strategy, namely to dispose of the Company's existing assets,
become an investing company focused on natural resources and to
raise new funds for the implementation of this strategy. Upon
completion of the Disposals, ADSG would be treated as an investing
company and would have to make an acquisition or acquisitions which
constitute a Reverse Takeover or implement its Investing Policy
within 12 months of the passing of the Resolutions.
The Disposals
The business of ADSG comprises two separate streams of business,
being the PCB Business and the CF Business. The Disposals have been
agreed (conditional upon Shareholders' and FCA approval) upon the
terms more particularly described below. Rule 15 of the AIM Rules
requires the Company to obtain the approval of Shareholders for the
transfer of the PCB Business and the ADHL Share Transfer and also
for the Company's Investing Policy going forward.
The ADHL Share Transfer shall take place shortly after the
transfer of the PCB Business has occurred.
The sale of the PCB Business and the ADHL Share Transfer are
related party transactions under the AIM Rules as Trevor Coote is a
director of Highstone and David Scott and Angus Rose are directors
of Rosendale, as well as all being Directors of the Company.
Under the AIM Rules, if an AIM company enters into a related
party transaction, the independent directors are required to
consider, after consultation with the Company's nominated adviser,
whether the terms of the transaction are fair and reasonable
insofar as the shareholders are concerned. The Independent Director
considers, having consulted with Cairn, the Company's nominated
adviser, that the terms of the Disposals are fair and reasonable
insofar as the Company's Shareholders are concerned.
Sale of the PCB Business
ADSL has entered into the ADSL Business Transfer Agreement for a
total cash consideration of GBP100,000 plus the assumption by
Highstone of certain liabilities of ADSL amounting to GBP230,000 in
aggregate and contingent liabilities of GBP100,000. Highstone is
owned by Trevor Coote, who is a director of ADSG. As a result, the
transfer of the PCB Business is deemed to be a related party
transaction pursuant to AIM Rule 13.
The transfer of the PCB Business comprises the transfer of such
business and assets of ADSG, as relate to the PCB Business,
together with the goodwill attaching thereto, the records, all
property and assets relating to the PCB Business, but excludes the
use of the 'Alexander David' name.
Following the transfer of the PCB Business, it is proposed that
ADSL, which is authorised and regulated by the FCA, will continue
to offer a regulatory umbrella to Highstone, by means of an
Authorised Representative arrangement.
Completion of the transfer of the PCB Business is subject to,
and conditional upon,Shareholders' approval under section 190 of
the Act as it is deemed to be a substantial property transaction
involving a director of the Company.
ADHL Share Transfer
ADSG intends to enter into the ADHL Share Transfer Agreement,
pursuant to which it shall sell the entire issued share capital of
ADHL to Rosendale for GBP1.00. All intercompany loans between ADSG
and ADHL shall be cancelled immediately prior to such sale.
Rosendale, a company incorporated and proposed to have the same
shareholders in the same proportions as the Company, shall then
sell the entire issued share capital of ADHL to David Scott and
Angus Rose (or at their sole discretion to a corporate vehicle set
up by them) for GBP1.00 plus a deferred consideration of up to
GBP300,000. If the ADHL Share Transfer is approved then
Shareholders, through their shares in Rosendale, will be entitled
to a share of profits of ADSL over the three years ending 30 June
2016. The entitlement is to 25 per cent. of post tax profits up to
a maximum of GBP300,000 until the earlier of (i) the payment of an
aggregate total of GBP300,000; or (ii) the end of the three year
period.
David Scott and Angus Rose have agreed not to increase their
combined basic salaries of GBP120,000 as Directors of ADSL until
the earlier of (i) the payment of an aggregate total of GBP300,000;
or (ii) the end of the three year period and any bonus payable to
them will not be payable out of Rosendale's profit share (or the
profit share of any subsidiary company of Rosendale from time to
time).
Payments of this profit share to Rosendale in any period will be
made within 30 days of the accounts of the CF Business being signed
off by their auditors and will be after all expenses following the
same accounting policies as in the statutory accounts. Any payment
made will take into account FCA requirements to maintain adequate
capital.
The Company has received an independent valuation from its
auditors, Welbeck Associates LLP, confirming that the ADHL Share
Transfer at a consideration of GBP1.00 represents a fair and
reasonable offer for ADHL as the prospect of future earnings is
impossible to determine in the current market.
The ADHL Share Transfer is subject to, and conditional upon: (i)
approval from the FCA; (ii) Shareholders' approval under section
190 of the Act (as it is deemed to be a substantial property
transaction involving a director of the Company); and, in addition
to the conditions applicable to the sale of the PCB Business, (iii)
the entering into of the sale arrangements to David Scott and Angus
Rose (or at their sole discretion to a corporate vehicle set up by
them).
Rosendale has been established, firstly, in order to allow ADHL
to be transferred out of the control of ADSG in order that the
Placing may take place and in such a manner that the Placees have a
clean investing company through which the Proposed Board will be
able to pursue the Investing Policy. The ADHL Share Transfer taking
place prior to the Placing is a condition of the Placing. Secondly,
Rosendale has been set up in such a manner that, if the Proposals
are approved, each Shareholder (post the issue of Ordinary Shares
issued in conversion of the Preference Shares, Warrants, and
outstanding Directors' salaries, but prior to the Placing) will be
gifted such number of shares in Rosendale as represents their
proportional shareholding in ADSG prior to the date on which the
ADHL Share Transfer occurs following which the effecting of the
transfer of ADHL to David Scott and Angus Rose (or at their sole
discretion to a corporate vehicle set up by them)will leave the
consideration and the potential advantage of the payment of up to
GBP300,000 in earned consideration for the benefit of the holders
of Ordinary Shares (after the Capital Reorganisation but prior to
the Placing) net of any tax implications.
The arrangements negotiated with Rosendale (including the ADHL
Share Transfer Agreement) have been agreed to ensure that the
Shareholders (together with the Preference Shareholders,
Warrantholders and the Directors following the conversion detailed
on this page) retain the rights to any earn out payment on the
future sale of ADHL by Rosendale no matter how remote.
Following the approval of the Resolutions, approval from the FCA
and completion of the ADHL Share Transfer, ADSG will have no
subsidiaries.
Loan Agreement
The Company has entered into the Loan Agreement whereby
Highstone has agreed to lend the Company GBP100,000. One of the
terms of the Loan Agreement is that the Company (on behalf of ADSL,
which is authorised and regulated by the FCA) is required to submit
such forms to the FCA as may be required in order to appoint
Highstone as an Authorised Representative of the Company by no
later than 30 June 2013. In the event that such documents are not
submitted within that timeframe, all sums advanced under the Loan
Agreement are immediately repayable by the Company together with an
additional payment of 25% of the principal sum. The interest
payable on sums advanced under the Loan Agreement will be 1% per
month.
In the event that the transfer of the PCB Business is approved
and the ADHL Share Transfer Agreement is entered into, the monies
advanced under the Loan Agreement will be treated as the cash
consideration under the ADSL Business Transfer Agreement and will
therefore not be repayable.
In the event that the monies lent under the Loan Agreement
become repayable and the Company is unable to do so the monies lent
by Highstone shall automatically convert into 50 million Ordinary
Shares which shall be allotted to Highstone.
Conversion of Preference Shares, Warrants and outstanding
Directors' salaries
At the same time as Shareholders vote on the sale of the PCB
Business and the ADHL Share Transfer, the Directors propose that
all Preference Shares, Warrants and outstanding Directors' salaries
are converted such that that every GBP1.00 converted, will convert
into Ordinary Shares by a ratio of 1:10.63 and New Deferred Shares
by a ratio of 1:10.63 and any fraction less than one whole share
arising there from shall be rounded down to the nearest one whole
share. The New Deferred Shares will carry the rights attaching to
the existing Deferred Shares save as to par value as set out in the
Articles.
Contrary to the announcement made on 21 May 2013, the Preference
Shares, Warrants and outstanding Directors' salaries are currently
valued in aggregate at approximately GBP2.9m rather than GBP3.8m.
This reduction in value is due to (i) a write down against the
value of the Ordinary Shares against outstanding liabilities, and
(ii) the fact that the Options have not been exercised at the date
of this Circular.
A separate meeting of the Preference Shareholders has been
convened in order to approve the conversion of the relevant class
rights afforded to the Preference Shareholders in accordance with
Article 11.1(b) of the Articles and a copy of the relevant notice
is attached for information.
Pursuant to the proposed conversion of Preference Shares,
Warrants and outstanding Directors' salaries and fees payable to
Peterhouse Corporate Finance (please see section entitled
'Directors Dealings" below for further details); the shareholdings
of current Directors will be comprised as follows:
Following the Proposals Preference Shareholders' positions in
terms of Ordinary Shares and Preference Shares can be calculated as
follows:
holding prior to the conversion holding post conversion
-------------------------------- ------------------------
1,000 Preference Shares 10,630 Ordinary Shares
-------------------------------- ------------------------
Pursuant to the proposed conversion of Preference Shares,
Warrants and outstanding Directors' salaries and fees payable to
Peterhouse Corporate Finance (please see section titled 'Directors
Dealings below), the shareholdings of the Directors and all other
shareholders (including new investors in the Placing) will be
comprised as follows:
Name Ordinary Shares given Ordinary Ordinary Peterhouse Ordinary % Share-holding
in lieu of conversion Shares Shares Corporate Shares
of issued following Finance's following
as part the Fee General
of the conversion Meeting
Placing & fee
------------ ----------------------------------- ----------- ----------- ----------- ----------- ----------------
Salaries Preference Warrants
Shares plus
plus any
any interest
interest
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
David
Scott 1,275,600 3,377,034 1,483,023 - 1,459,307 (863,033) 6,731,931 11.10%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
Trevor
Coote 446,460 2,933,614 2,024,132 - 746,272 (863,033) 5,287,445 8.72%
---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
Alon
Bull 106,300 5,115,538 255,566 - 680,338 (863,033) 5,294,709 8.73%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
Angus
Rose 888,668 - - - 784,574 - 1,673,242 2.76%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
Michael
Hicks 47,835 60,931 - - 5,825 - 114,591 0.19%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
Antony
Cowling
* 19,484 - - - - - 19,484 0.03%
---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
Others - 10,683,670 1,795,205 - 4,223,094 - 16,701,969 27.55%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
New
investors - - - 22,222,222 - - 22,222,222 36.65%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
Peterhouse - - - - - 2,589,099 2,589,099 4.27%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
TOTAL 2,784,347 22,170,787 5,557,926 22,222,222 7,899,410 - 60,634,692 100%
------------ ---------- ----------- ---------- ----------- ----------- ----------- ----------- ----------------
* Antony Cowling was formerly a director of the Company and
resigned on 20 June 2012
Other Preference Shareholders and Warrant holders will receive
12,478,875 Ordinary Shares in addition to the Ordinary Shares
issued to the current Directors.
All Options will be cancelled as part of the Proposals.
Appointment of Broker
Subject to the completion of the Proposals and FCA approval,
Peterhouse Corporate Finance will be appointed as Broker to the
Company with immediate effect.
Placing
Peterhouse Corporate Finance has conditionally raised GBP200,000
(before expenses) for the Company through the placing of the
Placing Shares at the Placing Price conditional on the Proposals
being approved by Shareholders at the General Meeting. The net
proceeds of the Placing are estimated at GBP197,000 and will be
used to repay certain creditors of ADSG, in aggregate, GBP125,000,
to provide the Company with general working capital and to enable
the Company to take initial steps to implement the Investing
Policy. Once the Placing Shares are admitted to trading on AIM, the
Placees will, in aggregate, hold approximately 36.43 per cent. of
the Enlarged Share Capital.
In order to facilitate the Placing, and to enable the Company to
raise further funds to implement its Investing Policy with minimal
limitations, it is necessary for the Company to increase its
authority to issue shares and dis-apply pre-emption rights in
relation to any such issue. Resolution 2 seeks the authority to
allot shares and to grant rights to subscribe for or to convert any
security into such shares up to a nominal value of GBP500,000. It
is proposed, in Resolution 4 that the Directors should be able to
(i) allot shares and equity securities to complete the Placing,
(ii) conduct rights issues and (iii) otherwise allot further shares
and equity securities up to an additional nominal amount of
GBP276,000 other than on a pre-emptive basis. In each case, the
authorities conferred by Resolution 2 and 4 shall expire fifteen
months after the passing of the relevant resolutions or at the
conclusion of the next annual general meeting of the Company
following the passing of these resolutions, whichever occurs first.
The Directors may look to raise additional funds for the Company
following the General Meeting subject to the resolutions being
approved by Shareholders.
Directors' Dealings
As part of Peterhouse Corporate Finance's fee in relation to the
Placing, Peterhouse Corporate Finance will receive from certain
Directors (as set out in the table above), a total of 2,589,099
Ordinary Shares (representing 4.27% of Ordinary Shares in the
Enlarged Share Capital) at the Placing Price, subject to the
Resolutions being passed at the General Meeting. Please refer to
the table on page 14 for further information.
Change of Name
Subject to Shareholders' approval by way of special resolution,
it is proposed, pursuant to Resolution 7, that the name of the
Company be changed to Mercer Resources Plc.
If the special resolution to approve the change of name of the
Company is passed at the General Meeting, the Company will apply to
change its AIM symbol and its website address will be changed
following the General Meeting.
Proposed Board
It is proposed, immediately following the General Meeting, and
subject to FCA approval that: (i) Michael Hicks, David Scott, Angus
Rose, Trevor Coote and Alon Bull will resign from the Board; and
(ii) Trevor Wells and Shahed Mahmood will join the Board as
Non-Executive Chairman and Non-Executive Director respectively.
Michael Hicks, David Scott, Angus Rose, Trevor Coote and Alon
Bull will each submit a letter of resignation to the Company
wherein they shall waive all claims (if any) they may have against
the Company.
Trevor John Wells (Non-Executive Chairman - aged 51)
Trevor Wells holds a Law Degree and has 29 years' experience in
the financial sector gained at Legal & General, Barclays Bank,
Everett Financial, Apollo Asset Management LLP and Stanhill Capital
Partners Limited (formerly Crosby Capital Partners Limited).
Trevor specialises in Compliance, Corporate Finance and
Corporate Governance and has acted as Company Secretary for AIM
quoted Touchstone Gold Limited and Hameldon Resources Limited.
Current Directorships: Previous Directorships:
---------------------------- --------------------------------
Crosby Capital (UK) Limited Crosby Asset Management (UK)
Limited
---------------------------- --------------------------------
Rovert Sllew Limited Crosby Capital Partners Limited
---------------------------- --------------------------------
Stanhill Operations Limited London Matched Markets Exchange
Limited
---------------------------- --------------------------------
Shahed Mahmood (Non-Executive Director - aged 43)
Shahed Mahmood is a business consultant based on the Isle of
Man, with over 20 years of wide-ranging experience in the economic
development field. He has previously given consultancy advice in
both the business and human resource sectors to numerous
governmental organisations in the UK and the Isle of Man.
Shahed has been a founding shareholder and director of several
investing companies which have been admitted to trading on AIM and
gone on to make successful reverse takeovers of larger companies
operating in the financial and resources sector including Skiddaw
Capital Inc. (which was renamed Crosby Capital Partners Inc.),
Lodore Resources Inc. and Raven Capital Inc. (which was renamed
Upstream Marketing & Communications Inc.).
Current Directorships: Previous Directorships:
----------------------------- --------------------------------------
Bleachers Ltd Centaurus Global Resources Pte
Ltd
----------------------------- --------------------------------------
Bushveld Investments Ltd Leblanc Resources Pte Ltd
----------------------------- --------------------------------------
Khanna Ltd Superb Investments Stronghold
Ltd
----------------------------- --------------------------------------
Milnshaw Holdings Ltd Touchstone Gold Holdings SA
----------------------------- --------------------------------------
Precious Metals Holdings Ltd Upstream Marketing and Communications
Inc.
----------------------------- --------------------------------------
Thanet Ltd
----------------------------- --------------------------------------
Save as set out in this Circular, there are no further
disclosures in respect of these proposed board appointments that
are required pursuant to paragraph (g) of Schedule 2 of the AIM
Rules for Companies.
Investing Policy
Resolution 1 to be proposed at the General Meeting proposes the
adoption of the Investing Policy.
The Company will seek to invest in opportunities within the
natural resources, energy and precious metals sectors that the
Directors believe are either of strategic value or represent a
significant value opportunity.
The Company may invest by way of purchasing quoted shares in
appropriate companies, outright acquisition or by the acquisition
of assets, including the intellectual property, of a relevant
business, or by entering into partnerships or joint venture
arrangements. Such investments may result in the Company acquiring
the whole or part of a company, asset or project (which in the case
of an investment in a company may be private or listed on a stock
exchange, and which may be pre-revenue), and such investments may
constitute a minority stake in a company, asset or project in
question.
The Company may be both an active and a passive investor
depending on the nature of the individual investments.
The Company's investments may take the form of equity, debt,
convertible instruments and licence rights. Possible investments
could include direct or indirect investments in bullion, permits
and licences, exploration, mining and production operations and
processing, and development projects. The Company may make indirect
investments via quoted companies, unquoted companies seeking a
public quotation and candidates for reverse transactions into
quoted investment companies. The Company may invest in these types
of opportunities through acquisitions, partnerships, joint venture
arrangements, as finance for management buy-outs or buy-ins, as
finance for pre-IPO, seed and underwriting positions.
The Company expects to be an active investor in situations where
the Company can make a clear contribution to the progress and
development of the investment. In respect of other, principally
more substantial opportunities, the Company expects to be a passive
investor.
The Company intends to invest for the medium to long-term.
However, should an opportunity arise to realise its investments,
the Company will consider these on a case-by-case basis and seek to
maximise value for shareholders. The Company intends to utilise
industry experts in the analysis of proposed investments, and it is
intended that the decision making process will be a collegiate,
team-based approach, driven by intrinsic value or informed
opinion.
Capital Reorganisation
The Placing is conditional upon the approval and completion of
the Proposals, including the Capital Reorganisation taking place.
The Company's Ordinary Share capital immediately prior to the
Placing comprises 742,544,869 Ordinary Shares.
Resolution 2 to be proposed at the General Meeting proposes that
every GBP1 of Preference Shares be converted into Ordinary Shares
by a ratio of 1:10.63 and New Deferred Shares by a ratio of
1:10.63(the "Conversion").
Resolution 3 to be proposed at the General Meeting proposes that
every 94 of the Ordinary Shares of the Company be consolidated into
one ordinary share of GBP0.094 (the "Consolidation")
Resolution 4 to be proposed at the General Meeting proposes that
every one Ordinary Share with a par value of GBP0.094 be
sub-divided into one Ordinary Share with a par value of GBP0.001
and one New Deferred Share with a par value of GBP0.093 (the
"Sub-Division").
Any fractions of Ordinary Shares created by the Consolidation
will be aggregated and sold for the benefit of the Company prior to
the Sub-Division.
The Ordinary Shares will continue to carry the same rights as
attached to them immediately prior to the Placing as set out in the
Articles and will continue to be traded on AIM.
The New Deferred Shares will carry the rights attaching to the
existing Deferred Shares save as to par value as set out in the
Articles.
New share certificates will be issued in respect of the Ordinary
Shares to take account of the Company's name change and the Capital
Reorganisation and share certificates in issue immediately prior to
the Capital Reorganisation will be cancelled. No new share
certificates will be issued in respect of the New Deferred
Shares.
Each Resolution is conditional upon the passing of all other
Resolutions and the special resolution of the Preference
Shareholders at the Class Meeting.
The existing Deferred Shares will not be affected by the Capital
Reorganisation.
Class Rights
The notice convening to the Class Meeting is included in this
Circular together with the relevant proxy form. The meeting seeks
approval of the conversion of the relevant class rights afforded to
the Preference Shareholders in accordance with Article 11.1(b) of
the Articles.
General Meeting
The Notice convening the General Meeting to be held at the
offices of Peterhouse Corporate Finance, 31 Lombard Street, London
EC3V 9BQ at 11.00 a.m. on 8 July 2013 at which the Resolutions will
be proposed is set out at the back of this Circular. A summary of
the Resolutions is set out below. If any of the Resolutions is not
passed, the General Meeting will be adjourned and the Board will
consider the Company's future position in respect of its current
trading and working capital position. The Board will seek immediate
advice regarding insolvency proceedings in relation to its
assets.
Ordinary Resolutions
Resolution 1, which will be proposed as an ordinary resolution,
seeks approval for the Investing Policy.
Resolution 2, which will be proposed as an ordinary resolution,
seeks approval for the Conversion
Resolution 3 which will be proposed as an ordinary resolution,
seeks approval for the Consolidation.
Resolution 4, which will be proposed as an ordinary resolution,
seeks approval for the Sub-Division.
Resolution 5, which will be proposed as an ordinary resolution,
seeks to grant the directors of the Company authority to allot
Ordinary Shares in the capital of the Company. To enable the
Placing Shares to be issued pursuant to the Placing, the Company is
seeking authorisation for the Directors to exercise the powers of
the Company to allot Ordinary Shares up to an aggregate par value
of GBP25,000. This includes the amount required to effect the
Placing. Such authority is to expire at the conclusion of the next
annual general meeting of the Company or the date which is fifteen
months after the date of the passing of the resolution, whichever
is the earlier.
Resolution 6, which will be proposed as an ordinary resolution,
seeks to approve the Company entering into the ADSL Business
Transfer Agreement and the ADHL Share Transfer Agreement.
Special Resolutions
Resolution 7, which will be proposed as a special resolution,
seeks to disapply the pre-emption provisions in respect of the
allotment for cash of Ordinary Shares pursuant to the Placing and
the Warrant Instrument and up to an additional aggregate par value
of GBP25,000,such disapplication to expire on the same date as the
expiration of any authority given in terms of Resolution 5.
Resolution 8, which will be proposed as a special resolution,
seeks approval to change the name of the Company to Mercer
Resources Plc.
Action to be taken
Preference Shareholders will find a Form of Proxy enclosed for
use at the Class Meeting. Whether or not you intend to be present
at the Class 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 at the Company's registrars, Capita Registrars, no later
than 10.30 a.m. on 6 July 2013, being 48 hours before the time
appointed for holding the Class Meeting. Completion of the Form of
Proxy will not preclude you from attending and voting at the Class
Meeting in person if you so wish.
Shareholders will find a Form of Proxy enclosed 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 at the Company's registrars, Capita Registrars, no later
than 11.00 a.m. on 6 July 2013, being 48 hours before the time
appointed for holding the General Meeting. Completion of the Form
of Proxy will not preclude you from attending and voting at the
General Meeting in person if you so wish.
Recommendation
The Directors consider the special resolution proposed at the
Class Meeting of the Preference Shareholders to be in the best
interests of the Company and the Shareholders as a whole. The
Directors therefore recommend that you vote in favour of the
special resolution proposed at the Class Meeting as they intend to
do themselves in respect of their direct and indirect
shareholdings.
The Directors consider the Proposals and the passing of the
Resolutions to be in the best interests of the Company and the
Shareholders as a whole. The Directors therefore recommend that you
vote in favour of the Resolutions as they intend to do themselves
in respect of their direct and indirect shareholdings totalling
346,000,000 Ordinary Shares (the Preference Shares and the Deferred
Shares hold no voting rights) representing approximately 46.7 per
cent of the share capital of the Company immediately prior to the
Placing.
Should the Resolutions not be passed at the General Meeting and
the Proposals not be implemented, further proposals will be
required.
Yours faithfully,
Michael Hicks
Non-Executive Chairman
for and on behalf of the Board
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFMGZVKMNGFZM
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