TIDMMIL
RNS Number : 8316S
Myanmar Investments Intl Ltd
09 November 2023
9 November 2023
Myanmar Investments International Limited
Proposed Cancellation of Admission to Trading on AIM and Notice
of a General Meeting
Myanmar Investments International Limited [AIM: MIL] ("MIL" or
the "Company"), the AIM-quoted Myanmar focused investment company,
today announces a proposal to cancel the admission of the Company's
ordinary shares to trading on AIM in accordance with Rule 41 of the
AIM Rules for Companies ("Cancellation").
A circular including a Notice of General Meeting and the
associated form of proxy (the "Circular") will be posted to
Shareholders today to convene the necessary general meeting of the
Company at 11.00 (GMT) on 1 December 2023 (the "General Meeting")
to approve the Cancellation. The Notice of General Meeting and the
associated form of proxy will be available on the Company's website
at: http://www.myanmarinvestments.com/
An extract of selected parts of the Circular is copied out
below, including the full text of the Chairman's letter contained
in the Circular, along with an expected timetable of principal
events related to the Cancellation. The definitions that apply
throughout this announcement can be found at the end of this
announcement.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
For further information please contact:
Nick Paris Jay Edwin
Managing Director CFO
Myanmar Investments International Myanmar Investments International
Limited Limited
+ 44 7738 470550 +95 9 262 277 338
nickparis@myanmarinvestments.com jayedwin@myanmarinvestments.com
Nominated Adviser
Philip Secrett / Jamie Barklem Broker
/ Ciara Donnelly William Marle
Grant Thornton UK LLP Cavendish Capital Markets Limited
+44 (0) 20 7383 5100 +44 (0) 20 7220 0500
Proposed Cancellation of Admission to Trading on AIM and
Notice of a General Meeting
1. Introduction
In June 2013, the Company was the first Myanmar-focused
investment company to be admitted to trading on AIM. The Company
was established with the intention of building long term
shareholder value by proactively investing in a diversified
portfolio of Myanmar businesses and it made investments in
businesses active in the telecom towers, microfinance and retail
pharmacy sectors. Since October 2019, the Company has however been
seeking to harvest its investments after Shareholders resolved to
make no new investments and to wind down the Company. As a result,
the retail pharmacy business was sold in December 2019.
The military coup in Myanmar took place in February 2021 and
there are increasing signs that it will be a long time before
business conditions normalise and the country again becomes
acceptable to broad range of international investors. As a result,
the Board of Directors has concluded that the realisation of the
remaining investments could be some time away and that urgent steps
are needed to conserve the Company's cash reserves which stood at
US$ 476,547.60 as at 6 November 2 023 in order to ensure that they
do not fall below 12 months forecast cash outflows which could then
mean that the Company is no longer a going concern.
The Company therefore announced on 12 June 2023 when issuing its
audited accounts to 31 March 2023 that further cost reduction
measures were under consideration including the cancellation of
admission of its Ordinary Shares to trading on AIM. Following
consultation with several Shareholders, 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.
Pursuant to Rule 41 of the AIM Rules, the Cancellation is
conditional on the approval of not less than 75 per cent. of those
votes cast by Shareholders (whether present in person, by corporate
representative or by proxy) at the General Meeting, notice of which
is set out on page 14 of this document. In connection with the
Cancellation, the Company proposes to amend and restate the
Articles to a form that, among others, reflects that the Company is
no longer AIM quoted. A summary of the proposed amendments to the
Articles is set out in paragraph 4 below. Pursuant to the Articles,
the Company may amend its Articles by a resolution approved by an
affirmative vote of 75 per cent. of the votes cast by Shareholders.
The amendments to the Articles are not effective until registered
with the BVI Registry of Corporate Affairs.
The purpose of the Circular is to provide notice of the General
Meeting, seek Shareholders' approval for the Resolutions, to
provide information on the background to and reasons for the
proposed Cancellation, to explain the consequences of the
Cancellation and provide reasons why the Directors unanimously
consider the Cancellation to be in the best interests of the
Company and its Shareholders as a whole.
2. Background to and reasons for the cancellation
The Directors believe that the military coup in Myanmar has
created significant uncertainty to the business prospects of the
Company's remaining investments and to the possibility of selling
them as planned (as further explained below). As neither of the
Company's investments pay dividends to the Company, its operating
costs have to be paid out of the Company's cash holding and
although the Directors have undertaken significant cost cutting in
recent years reflecting the decision to wind down the Company, the
current rate of annual operating costs, without the Cancellation,
is such that the cash reserves could be used up within a period of
approximately 22 months from the date of this document.
The Directors have identified that the costs of remaining on AIM
are significant and believe that approximately US$115,185 of direct
costs per annum could be saved in a full year through the
Cancellation, although the exercise of doing so will involve one
off costs including professional advisory costs of approximately
US$182,131, much of which have already been incurred by the
Company. In addition, the Company will after Cancellation make
other cuts to operating costs amounting to US$113,600 per annum as
a result of the reduced complexity of running the Company as an
unquoted business and all costs will be kept under constant review
to see if they can be reduced further. Shareholders need to be
aware that there is still no visibility on when the Company is
likely to be able to sell its interest in either of its two
remaining investments or any certainty that this will happen before
the current cash balances are used up by September 2025. In the
absence of a sale which brings in cash proceeds, the Company would
need to raise additional finance from its Shareholders or face the
prospect of being put into liquidation by the Directors.
The Directors have conducted a review of the benefits and
drawbacks to the Company and its Shareholders of remaining admitted
to trading on AIM and believe that the Cancellation is in the best
interests of the Company and the Shareholders as a whole. In
reaching this conclusion the Directors have considered the
following key factors:
-- the current investment objective of the Company is to realise
its remaining investments in an orderly fashion and return the net
proceeds to Shareholders. The Board remains committed to this
objective and will continue to do so should the Cancellation become
effective;
-- the considerable costs and legal and regulatory requirements
associated with maintaining the admission of the Ordinary Shares to
trading on AIM are, in the Director's opinion, now disproportionate
to the benefits to the Company and are not conducive to maximising
distributions to Shareholders;
-- the Company needs to ensure that its existing cash reserves
will last as long as possible given the current uncertainty to the
exit plans for its two remaining investments and reducing the
operating costs by implementing the Cancellation will extend the
time over which the current cash reserves can be expected to last
and preserving cash should enable the best possible exit prices to
be negotiated for the remaining investments as it will avoid the
situation where potential purchasers reduce their offer prices in
the anticipation that the Company has insufficient cash to allow it
time to seek other purchase offers; and
-- the Directors believe that the low levels of turnover in the
Ordinary Shares since the decision was taken to wind down the
Company in October 2019 indicate that few Shareholders have wanted
to trade their Ordinary Shares whilst they await the sale of the
Company's investments.
3. THE PROCESS FOR THE CANCELLATION
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Ordinary Shares if the Cancellation is
approved and becomes effective. Such Shareholders should consider
selling their interests in the market prior to the Cancellation
becoming effective.
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 the General Meeting. Accordingly, the Notice of
General Meeting set out at the end of this document contains a
resolution of the Shareholders 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 clear 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 Resolutions being passed at the General Meeting, to cancel the
Company's admission of the Ordinary Shares to trading on AIM on 12
December 2023.
Accordingly, if the Cancellation Resolution is passed, the last
day of dealings in Ordinary Shares on AIM will be 11 December 2023
and the Cancellation will take effect at 7.00 a.m. on 12 December
2023. If the Cancellation becomes effective, Grant Thornton UK LLP
will cease to be the Nominated Adviser of the Company and the
Company will no longer be required to comply with the AIM Rules. If
the Resolutions relating to the amendment and restatement of the
Articles are passed, then the amended and restated Articles will be
in effect on or after the Cancellation.
If the Resolutions are not approved at the General Meeting and
Cancellation does not become effective, the admission of the
Ordinary Shares to trading on AIM will be maintained and the
Company's investment objective will remain unchanged. However, the
Company will then be unable to make the reductions in operating
costs that would have come as the result of the Cancellation.
4. THE PRINCIPAL EXPECTED EFFECTS oF THE cancellation
The principal expected effects of the Cancellation include the
following:
-- there will no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares and no other recognised
market is intended to be put in place to facilitate the trading of
Ordinary Shares;
-- the Company will no longer have an independent Nominated
Adviser or a broker after the Cancellation;
-- whilst the Ordinary Shares will still be freely transferable
and held within the CREST settlement system, it is likely that
their liquidity and marketability will be significantly reduced and
the current secondary market value of them may be adversely
affected as a consequence;
-- in the absence of a formal market and quote, it will be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time. There is no guarantee
that Shareholders will be able to realise their investment in the
Company following the Cancellation;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply to the Company;
-- Shareholders will lose certain protections to minority
shareholders under the AIM Rules, such as the independence of the
Board and scrutiny of transactions with related parties,
potentially allowing larger shareholders to exercise more influence
and control;
-- the Company may no longer be required to seek Shareholder
approval, where applicable, for reverse takeovers and fundamental
changes in the Company's business;
-- the Company will not be required to announce material
developments as required by the AIM Rules, such as interim results,
final results, substantial transactions, related party
transactions, and the information maintained on the Company's
website under AIM Rule 26. However, the Company will continue to
maintain its website (https://www.myanmarinvestments.com/ ) and the
Directors intend to make all significant information available on
it and to continue to publish audited annual and unaudited interim
accounts of the Company;
-- the Company will no longer be subject to UK MAR regulating
inside information and other matters;
-- the Company will no longer be required to publicly disclose
any change in major shareholdings in the Company under the
Disclosure Guidance and Transparency Rules, although the Articles
do retain certain similar requirements;
-- whilst the Company's CREST facility will remain in place
immediately 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. Post the Cancellation, additional formalities, such as a
written instrument of transfer, will be required pursuant to BVI
law in order to effect a transfer of Ordinary Shares; and
-- the Company will remain (and will comply with all regulatory
requirements to remain) registered as a company limited by shares
in the British Virgin Islands and will also remain subject to the
provisions of the Articles, pursuant to which Shareholder approval
is required for certain matters.
Pursuant to the Cancellation, the Company proposes to amend and
restate its Articles to reflect the consequences of the
Cancellation and to introduce certain protections for minority
shareholders. The form of the proposed amended and restated
Articles can be found on the Company's website
(https://www.myanmarinvestments.com/). In summary, the key proposed
amendments are set out below:
-- Deletion of definitions related to the listing, including
"Admission", "Securities Regulations", "Stock Exchange" and "UK
Companies Act", together with the corresponding provisions
throughout the M&A, including Takeover Provisions.
-- The maximum number of directors of the Company shall now be five, instead of twelve.
-- New share transfer restrictions have been incorporated with
the inclusion of pre-emption rights in favour of existing
Shareholders for transfers exceeding 3 per cent. of the issued
share capital and drag rights and tag-along rights for existing
Shareholders where other Shareholders intend to sell or transfer
more than 75 per cent. of the Ordinary Shares.
-- The Company shall not issue new shares at a discount without
the approval of not less than 75 per cent. of those votes cast by
Shareholders (whether present in person, by corporate
representative or by proxy) at a general meeting.
-- The emoluments of all directors and officers shall be fixed
by the Directors and shall be subject to an annual cap of US$50,000
per director or officer (as applicable).
-- In order to transfer shares in the Company after the
Cancellation, a share transfer form will be required pursuant to
BVI law and this has been reflected in the proposed amendments to
the Articles.
-- For convenience purposes, flexibility has been provided so
that for future Shareholder meetings, a form of proxy may be
delivered to the Company via email.
-- In light of the Cancellation, references to the rules and
legislation applicable to companies listed on the London Stock
Exchange have been removed. Regulation 24 (Disclosure of Interest
in Shares and Failure to Disclose) and Regulation 25 (Untraced
Shareholders) of the Articles have been retained with certain
appropriate amendments to reflect that the Company is no longer
trading on AIM.
Following Cancellation there will be a reduction in the number
of Directors. Subject to the Cancellation Resolution being approved
by Shareholders it is intended that I will resign effective
immediately after the Cancellation. It is also proposed that,
subject to the Cancellation Resolution being approved by
Shareholders, Nick Paris will resign on 31 December 2023.
The above considerations are not exhaustive, and all
Shareholders should seek their own independent advice when
assessing the likely impact of the Cancellation and of any possible
tax effects on them.
Certain Shareholders may be unable or unwilling to hold Ordinary
Shares following the Cancellation and they should consider selling
their Ordinary Shares on AIM prior to the Cancellation becoming
effective. The Board is however making no recommendation as to
whether or not Shareholders should buy or sell Ordinary Shares.
5. The Employee Share Option Plan
Cancellation will have the effect of accelerating the exercise
date of all of the outstanding options under the ESOP to the date
of Cancellation and thereafter all unexercised options would
expire. The ESOP holds options on behalf of current and former
employees of MIL which can be converted into 2,180,527 Ordinary
Shares representing approximately 5.7 per cent. of the number of
Ordinary Shares already in issue and the exercise prices of the
options vary according to the date that they were issued and range
between US$1.100 and US$1.265 per option. The options currently
expire at varying times up to November 2026 but as the price of MIL
shares was US$0.06 per Ordinary Share on 6 November 2023 they are
significantly out of the money.
The carried interest scheme that was put into effect in
September 2018 and which replaced the ESOP will not be affected by
the Cancellation, although this scheme would not result in any
payments if the investments were sold at their current net asset
values.
6. The Company's remaining investments and their disposal plans
The Company currently owns investments in Asia Pacific Towers
("APT") and Myanmar Finance International Limited ("MFIL") as
follows:
-- the investment in APT represents a holding of 4.1 per cent.
in the equity of this telecom towers business and it is held
alongside a stake of 2.1 per cent. owned by LIM Asia Special
Situations Master Fund Limited, a co-investor giving a combined
stake in APT of 6.2 per cent. MIL's stake was valued by the
Directors at US$10.0 million in the audited interim accounts for
the eighteen months ended 31 March 2023 before the portfolio level
discount of 25 per cent. was applied to calculate the net asset
value. The Directors anticipated being able to exit from APT via a
trade sale or flotation of APT on an Asian stock exchange although
the military coup in Myanmar on 1 February 2021 has delayed the
possibility of this happening and it is currently unclear when such
an exit can be achieved.
-- the investment in MFIL represents a holding of 37.5 per cent.
in the equity of this microfinance lender and MIL's stake was
valued by the Directors at US$0.5 million in the audited accounts
for the eighteen months ended 31 March 2023 before the portfolio
level discount of 25 per cent. was applied to calculate the net
asset value. On 1 April 2020, MIL announced that terms had been
agreed for all the equity shareholders in MFIL to sell 100 per
cent. of the company to Thitikorn plc, a Thai finance company.
However, on 31 August 2023, the Company announced that it had
mutually agreed with Thitikorn plc not to extend the terms with
respect to the sale by the Company and its co-shareholders of 100
per cent. of MFIL. MIL, and its co-shareholders, will continue to
explore other exit options, including with Thitikorn plc, to enable
a sale at the earliest opportunity.
In the audited accounts for the eighteen months ended 31 March
2023, the Directors also imposed a 25 per cent. valuation discount
on the value of the Company's two investments to reflect the added
uncertainty to their business prospects and to the possibilities of
selling them following the military coup which valued APT at US$7.5
million and MFIL at US$0.5 million.
The Company had net assets attributable to Shareholders as at 31
March 2023 of US$8.7 million or US$0.23 per Ordinary Share.
7. POTENTIAL DISTRIBUTION TO SHAREHOLDERS FOLLOWING DISPOSALS
The Directors are intent on disposing of the remaining two
investments owned by the Company in an orderly fashion and
subsequently, and subject to the requirements of applicable law,
consider a potential distribution to Shareholders and wind up the
Company. However, given the uncertain timing of the sale of both
APT and MFIL, the Directors believe that the cash reserves should
be conserved within the Company to pay future operating expenses as
they are incurred. When the sale of an investment has been
completed, the Directors will re-consider this decision and
consider capital distributions to Shareholders. If the investments
have not been sold before the time that the Company reaches a cash
level representing one year's forecast expenses, the Directors will
need to arrange alternative funding such as a loan from or
placement of new Shares with Shareholders or new investors.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Event Time and/or date (1)(2)
Announcement of the proposed Cancellation 9 November 2023
Publication and posting of the Circular 9 November 2023
Latest time and date for receipt 11.00 a.m. (GMT) on 29
of Form of Proxy for General Meeting November 2023
Record date in respect of the General close of business on 29
Meeting November 2023
General Meeting 11.00 a .m. (GM T ) on
1 December 2023
Announcement of the results of the 1 December 2023
General Meeting
Last day of dealings in the Ordinary 11 December 2023
Shares on AIM
Cancellation of the Company's admission 7.00 a.m. on 12 December
of the Ordinary Shares to trading 2023
on AIM
DEFINITIONS
The following words and expressions shall have the following
meanings in this document unless the context otherwise
requires:
'AIM' AIM, the market operated by the London
Stock Exchange;
'AIM Rules' the rules for AIM companies as published
by the London Stock Exchange from time
to time;
'Announcement' the Company's announcement relating
to the contents of this Circular, dated
9 November 2023;
'Articles' the amended and restated memorandum
and articles of association of the Company;
'Board' or 'Directors' the directors of the Company;
'Business Day' any day which is not a Saturday, Sunday
or public holiday) on which banks are
open for business in the City of London;
'certificated' or 'in a share or other security which is not
certificated form' in uncertificated form;
'Cancellation' cancellation of the admission to trading
on AIM of the Ordinary Shares, in accordance
with Rule 41 of the AIM Rules, subject
to passing of the Cancellation Resolution;
'Cancellation Resolution' Resolution 1 to be proposed at the General
Meeting;
'Circular' or 'this the circular dated 9 November 2023;
document'
'Company' or 'MIL' Myanmar Investments International Limited,
a company incorporated in the British
Virgin Islands with registration number
1774652 and having its registered office
at Jayla Place, Wickhams Cay I, Road
Town, Tortola VG1110, British Virgin
Islands;
'CREST' the computerised settlement system to
facilitate transfer of title to or interests
in securities in uncertificated form
operated by Euroclear UK & Ireland Limited;
'ESOP' the employee share option plan that
operated from June 2013 to November
2016;
'Form of Proxy' the form of proxy for use at the General
Meeting, which accompanies this document;
'General Meeting' the general meeting of the Shareholders,
notice of which is set out on page 14
at the end of this document;
'London Stock Exchange' London Stock Exchange plc;
'Notice of General the notice of the General Meeting, which
Meeting' is set out on page 14 at the end of
this document;
'Ordinary Shares' ordinary shares of nil par value each
in the Company;
'Registrars' Link Market Services (Guernsey) Limited
of Mont Crevelt House, Bulwer Avenue,
St. Sampson, Guernsey, GY2 4LH, Channel
Islands;
'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, as set out in the Notice
of General Meeting;
'Shareholder(s)' holder(s) of Ordinary Shares;
'UK' or 'United Kingdom' the United Kingdom of Great Britain
and Northern Ireland;
'UK MAR' Regulation (EU) (No 596/2014) of the
European Parliament and of the Council
of 16 April 2014 on market abuse to
the extent that it forms part of the
domestic law of the United Kingdom including
by virtue of the European Union (Withdrawal)
Act 2018 (as amended by virtue of the
European Union (Withdrawal Agreement)
Act 2020);
'uncertificated' or a share or security recorded in the
'in uncertificated form' Company's register of members as being
held in uncertificated form, title to
which may be transferred by means of
CREST (subject to BVI law requirements);
and
'US' or 'United States' the United States of America.
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END
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