TIDMSQB
RNS Number : 5260U
Squarestone Brasil Limited
22 December 2011
22 December 2011
SQUARESTONE BRASIL LIMITED
("Squarestone Brasil" or the "Company")
PROPOSED ISSUE OF 2.6 MILLION CONVERTIBLE ZERO DIVIDEND
PREFERENCE SHARES AT A PRICE OF GBP1.00 PER SHARE
and
NOTICE OF EXTRAORDINARY GENERAL MEETING
and
NOTICE OF MEETING OF WARRANT HOLDERS
The Company is pleased to announce that it proposes to raise up
to GBP2.6 million by the issue of up to 2.6 million ZDP Shares
through the Open Offer at a price of GBP1.00 per ZDP Share. The
Open Offer is being made to all Qualifying Shareholders on a
pre-emptive basis. Qualifying Shareholders have the right to
subscribe for their Basic Entitlement in accordance with the terms
of the Open Offer. In addition, Qualifying Shareholders who apply
for their full Basic Entitlement may also apply for Excess Shares
at the Offer Price under the Excess Application Facility.
Details of the Open Offer and the terms and conditions on which
it is being made, including the procedure for application and
payment, are contained in a circular (the "Circular") which will be
posted to shareholders of the Company later today and will shortly
be available on the Company's website (www.squarestone.com.br).
Implementation of the Open Offer requires the adoption of the
New Articles by Shareholders as well as the approval of Warrant
Holders. Accordingly, the Circular also contains:
-- a Notice of an Extraordinary General Meeting, to be held on
16 January 2012 at 11.00 a.m. at 1st Floor, Royal Chambers, St.
Julian's Avenue, St. Peter Port, Guernsey GY1 3JX; and
-- a Notice of a Meeting of Warrant Holders, to be held on 16
January 2012 at 11.10 a.m., or as soon thereafter as the
Extraordinary General Meeting shall have concluded, at 1st Floor,
Royal Chambers, St. Julian's Avenue, St. Peter Port, Guernsey GY1
3JX.
Further details of the Open Offer are set out below. All
capitalised terms are as defined in the Circular.
In addition, the Board is seeking authority from Shareholders at
the EGM to disapply the pre-emption rights contained in the
Company's Articles in respect of 6,057,744 new Ordinary Shares
(representing 15 per cent. of the ordinary share capital currently
in issue). Following this disapplication, such Ordinary Shares may
be allotted at such price as is determined by the Board at the time
of allotment. Such authority would expire at the end of the
Company's next annual general meeting, or, if earlier, 15 months
after the date of the EGM. The Board believes that the ability to
issue new Ordinary Shares on a non-pre-emptive basis is in the best
interests of the Company as this affords flexibility and a
reduction in the time and costs involved in effecting additional
fund raisings.
FURTHER DETAILS OF THE OPEN OFFER
1. REASONS FOR THE OPEN OFFER
As stated in the Company's announcement of 7 December 2011, the
Company requires additional funds to support it continued
operation. The net proceeds of the Open Offer will be used for
operational working capital purposes and to fund known project
costs necessary for the continued operation of the Company.
Whilst offering pre-emption rights is not a statutory
requirement of companies registered in Guernsey, the Open Offer is
being made in accordance with the pre-emption rights contained in
the Articles and the Board recognises the importance of allowing
Shareholders to participate in this fundraising through the Open
Offer by applying for their respective Basic Entitlements and by
applying for Excess Shares under the Excess Application
Facility.
2. OPEN OFFER STATISTICS
Offer Price per ZDP Share GBP1.00
Number of Ordinary Shares currently
in issue 40,384,960
Number of ZDP Shares to be issued
pursuant to the Open Offer(1) 2,600,000
Entitlement under the Open Offer 1 ZDP Share for every
15.5327 Ordinary Shares
Percentage of total voting rights 6.05 per cent.
attached to the ZDP Shares immediately
following completion of the Open
Offer(1)(2)
Number of Ordinary Shares in issue
following Conversion of the ZDP
Shares into new Ordinary Shares(1)(2)(3) 71,844,960
Percentage of Enlarged Issued Share 43.79 per cent.
Capital represented by the new Ordinary
Shares issued on Conversion of the
ZDP Shares(1)(2)(3)
(1) Assuming that all Open Offer Entitlements are taken up in
full.
(2) Assuming that none of the outstanding Warrants have been
converted into new Ordinary Shares.
(3) Assuming that all ZDP Shares are converted into new Ordinary
Shares immediately prior to the Redemption Date.
3. EXPECTED TIMETABLE OF PRINCIPAL EVENTS
The following dates and times are indicative and may be subject
to change:
Record Date for entitlement under 5.00 p.m. on 21 December
the Open Offer 2011
Announcement of the Open Offer, 22 December 2011
dispatch of the Circular, the Forms
of Proxy and Application Form
Ex-entitlement date for the Open 8.00 a.m. on 23 December
Offer 2011
Basic Entitlements and Excess Open 23 December 2011
Offer Entitlements credited to CREST
stock accounts for Qualifying CREST
Shareholders
Recommended latest time for requesting 4.30 p.m. on 9 January
withdrawal of Basic Entitlements 2012
and Excess Open Offer Entitlements
from CREST
Latest time for depositing Basic 3.00 p.m. on 10 January
Entitlements and Excess Entitlements 2012
into CREST
Latest time and date for splitting 3.00 p.m. on 11 January
Application Forms (to satisfy bona 2012
fide market claims only)
Latest time and date for the receipt 11.00 a.m. on 12 January
of EGM Forms of Proxy 2012
Latest time and date for the receipt 11.10 a.m. on 12 January
of Warrant Holder Meeting Forms 2012
of Proxy
Latest time and date for receipt 11.00 a.m. on 13 January
of completed Application Forms and 2012
payment in full under the Open Offer
or settlement of the relevant CREST
instruction
Time and date of the Extraordinary 11.00 a.m. on 16 January
General Meeting 2012
Time and date of the Warrant Holder 11.10 a.m. on (or as
Meeting soon thereafter as the
Extraordinary General
Meeting shall have concluded)
16 January 2012
Results of the Open Offer and the 16 January 2012
Extraordinary General Meeting published
on the website of the Company
Issue and allotment of ZDP Shares 16 January 2012
Certificates dispatched for the by 23 January 2012
ZDP Shares
4. DETAILS OF THE OPEN OFFER
4.1 Open Offer details
Qualifying Shareholders are being invited to apply to subscribe
for ZDP Shares, subject to the terms and conditions set out at Part
2 of the Circular and, in the case of Qualifying Non-CREST
Shareholders, the Application Form, at the Offer Price, on the
following basis:
1 ZDP Share for every 15.5327 Ordinary Shares
registered in their names on the Record Date and so in
proportion for any greater number of Ordinary Shares then held,
rounded down to the nearest whole number of ZDP Shares.
Qualifying Shareholders may apply for any number of ZDP Shares
up to, and including, their Basic Entitlement. Qualifying
Shareholders applying for their full Basic Entitlement may also
apply, under the Excess Application Facility, for Excess Shares at
the Offer Price. If there is an oversubscription resulting from
excess applications, allocations in respect of such excess
applications will be scaled down on a pro rata basis based on the
amount of the excess applications.
The Open Offer is not a rights issue. Qualifying CREST
Shareholders should note that, although the Basic Entitlements and
the Excess CREST Open Offer Entitlements will be admitted to CREST
and be enabled for settlement, applications in respect of
entitlements under the Open Offer may only be made by the
Qualifying CREST Shareholder originally entitled or by a person
entitled by virtue of a bona fide market claim raised by
Euroclear's Claims Processing Unit. Qualifying Non-CREST
Shareholders should note that Application Forms are not negotiable
documents and cannot be traded. ZDP Shares not applied for under
the Open Offer will not be sold in the market for the benefit of
Qualifying Shareholders who do not apply under the Open Offer.
4.2 General
The Open Offer is conditional on the Open Offer Resolutions
being passed. The final result of the EGM, the Warrant Holder
Meeting and the Open Offer is expected to be published on the
Company's website on 16 January 2012. The ZDP Shares will not be
admitted to trading on AIM or any other securities exchange.
Subject to the Open Offer Resolutions being passed, definitive
certificates in respect of the ZDP Shares are expected to be
dispatched by post by 23 January 2012. ZDP Shares will not be
eligible to be settled electronically in CREST. No temporary
documents of title will be issued. All documents or remittances
sent by or to an Applicant (or his agent as appropriate) will (in
the latter case) be sent through the post and will (in both cases)
be at the risk of the Applicant.
4.3 Overseas Shareholders
The distribution of the Circular and the making of the Open
Offer to persons who have registered addresses in, or who are
resident or ordinarily resident in, or citizens of, or which are
corporations, partnerships or other entities created or organised
under the laws of countries other than the United Kingdom or to
persons who are nominees of or custodians, trustees or guardians
for citizens, residents in or nationals of, countries other than
the United Kingdom may be affected by the laws or regulatory
requirements of the relevant jurisdictions. Those persons should
consult their professional advisers as to whether they require any
governmental or other consents, need to observe any applicable
legal requirement or other formalities to enable them, or would
otherwise be permitted, to apply for ZDP Shares under the Open
Offer.
No action has been taken or will be taken by the Company or any
other person, to permit a public offering or distribution of the
Circular (or any other offering or publicity materials or
application form(s) relating to the ZDP Shares) in any jurisdiction
where action for that purpose may be required.
Receipt of the Circular and/or an Application Form and/or a
credit of Open Offer Entitlements to a stock account in CREST will
not constitute an invitation or offer of securities for
subscription, sale or purchase in those jurisdictions in which it
would be illegal to make such an invitation or offer and, in those
circumstances, the Circular and/or the Application Form must be
treated as sent for information only and should not be copied or
redistributed.
4.5 Action to be taken
If a Qualifying Non-CREST Shareholder wishes to take up his
entitlements in whole or in part, he should lodge his Application
Form in accordance with the instructions printed on it, together
with the appropriate remittance for the full amount payable on
acceptance, by post or by hand during normal business hours only
with Capita Registrars, Corporate Actions, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU so as to arrive no later
than 11.00 a.m. on 13 January 2012. Further details are set out in
paragraph 2.1 of Part 2 of the Circular and are also set out in the
Application Form.
A Qualifying CREST Shareholder will receive credits to his
appropriate CREST stock account in respect of his entitlements
under the Open Offer. A Qualifying CREST Shareholder should refer
to the procedures for application in paragraph 2.2 of Part 2 of the
Circular and should refer to his CREST sponsors regarding the
action to be taken in connection with the Circular and the Open
Offer.
5. THE ZDP SHARES
The principal rights attaching to the ZDP Shares are set out
below. A copy of the New Articles setting out the rights of the ZDP
Shares in full can be found on the Company's website
(www.squarestone.com.br).
The ZDP Shares:
-- will be issued by the Company at a price of GBP1.00 per ZDP
Share;
-- if not converted, will be redeemed on the second anniversary
of the Settlement Date (expected to be 16 January 2014);
-- have a fixed cash entitlement of GBP1.21 payable on the
Redemption Date;
-- do not entitle ZDP Shareholders to any income
distributions;
-- entitle ZDP Shareholders to vote at general meetings of the
Company on the basis of one vote per ZDP Share except that the ZDP
Shares shall have no right to vote in respect of a resolution to
declare a dividend on the Ordinary Shares;
-- are convertible into new Ordinary Shares at a conversion
price of GBP0.10 per Ordinary Share (equivalent to an approximate
91.77 per cent. discount to the market price of an Ordinary Share
as at the close of business on 20 December 2011) at the option of
the ZDP Shareholder; and
-- carry with them certain protections for ZDP Shareholders.
ZDP Shareholders will receive such number of new Ordinary Shares
on Conversion as equals the Principal Amount (i.e. the Offer Price
per ZDP Share plus a compounding rate of return of 10 per cent. per
annum) which will then be divided by the Conversion Price.
6. THE TAKEOVER CODE
The Takeover Code applies to the Company and will do so for a
period of 10 years following cancellation of the Ordinary Shares
from trading on AIM so long as its place of central management and
control is in Guernsey. Under the Takeover Code, if an acquisition
of Ordinary Shares were to increase the aggregate holding of the
acquirer and its concert parties to Ordinary Shares carrying 30 per
cent. or more of the voting rights in the Company, the acquirer
and, depending upon the circumstances, its concert parties, would
be required (except with the consent of the Takeover Panel) to make
a cash offer for the outstanding Ordinary Shares in the Company at
a price not less than the highest price paid for the Ordinary
Shares in the Company by the acquirer or its concert parties during
the previous 12 months. A similar obligation to make such a
mandatory offer would also arise on the acquisition of Ordinary
Shares by a person holding (together with its concert parties)
Ordinary Shares carrying between 30 to 50 per cent. of the voting
rights in the Company if the effect of such acquisition were to
increase that person's percentage of the voting rights.
Qualifying Shareholders applying for Excess Shares should be
aware of the potential mandatory bid implications of an increase in
their percentage shareholding in the Company (pursuant to being
issued Excess Shares and/or the conversion of ZDP Shares into new
Ordinary Shares) under rule 9 of the Takeover Code, including those
of any of the Qualifying Shareholder's concert parties.
7. WARRANTS
There are, as at today's date, 26,923,315 Warrants in issue. The
Warrants are convertible into new Ordinary Shares on a one for one
basis at GBP1.20 per new Ordinary Share and contain certain
standard provisions to adjust the conversion price following the
Company making any offer or invitation to Shareholders (whether by
way of rights issue or otherwise) in a manner which the Company's
auditors believe is fair and reasonable. Accordingly, the issue of
the ZDP Shares will result in the conversion price of the Warrants
to be adjusted and Warrant Holders will be notified of such
adjustment in due course.
For further information contact:
Squarestone Brasil Tel: +44 (0) 20 7074 1800
Robert Sloss, interim Joint Email: squarestone@kreabgavinanderson.com
CEO
Tim Barlow, interim Joint
CEO
Liberum Capital (Nominated Tel: +44 (0) 20 3100 2000
Adviser and Broker)
Chris Bowman
Christopher Britton
Kreab Gavin Anderson (PR Tel: +44 (0) 20 7074 1800
Adviser)
James Benjamin Email: squarestone@kreabgavinanderson.com
Natalie Biasin
This information is provided by RNS
The company news service from the London Stock Exchange
END
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