TIDMTPS
RNS Number : 6427C
Turbo Power Systems Inc
19 April 2017
This announcement is released by Turbo Power Systems Inc and
contains inside information for the purpose of Article 7 of the
Market Abuse Regulation (EU) 596/2014 (MAR), encompassing
information relating to the Transaction, and is disclosed in
accordance with the Company's obligations under Article 17 of
MAR.
For the purposes of MAR and Article 2 of the Commission
Implementing Regulation (EU) 2016/1055, this announcement is being
made on behalf of the Company by the Board of the Company.
Turbo Power Systems Inc
("TPS" or the "Company")
Proposed Cancellation of Admission of Common Shares to Trading
on AIM
Proposed Share Consolidation
and Notice of Annual General and Special Meeting
TPS, the innovative high-speed electrical machines and power
electronic systems provider, announces that it will today post its
Annual Report and Accounts for the financial year ended 31 December
2016, together with notice of the Company's Annual General and
Special Meeting and a Management Proxy and Information Circular, to
shareholders. The Information Circular sets out, inter alia,
information regarding the intention to seek Shareholder approval
for the cancellation of admission of its Ordinary Shares to trading
on AIM and for the proposed share consolidation of 5,000 Common
Shares into one New Common Share.
The Company has received a letter of intent from the Company's
Major Shareholder to vote in favour of the Cancellation Resolution
and Consolidation Resolution in respect of 2,982,444,445 Common
Shares representing 89.4 per cent. of the issued share capital of
the Company. As a result the Directors believe it will be highly
likely that the Cancellation Resolution and Consolidation
Resolution will be passed at the Annual General and Special
Meeting.
Subject to the Cancellation Resolution being passed at the
Annual General and Special Meeting, the expected last day of
dealings in Common Shares on AIM will be Friday 2 June 2017 and the
Cancellation will become effective at 7.00 a.m. on Monday 5 June
2017. Pursuant to Rule 41 of the AIM Rules, the Company, through
its nominated adviser, finnCap, has notified the London Stock
Exchange of the proposed Cancellation.
An extract from the Management Proxy and Information Circular,
regarding the background to and principal effects of the
Cancellation and Consolidation is set out at the bottom of this
announcement. The Management Proxy and Information Circular should
be read by Shareholders in full.
Notice of Annual General and Special Meeting
The Annual General and Special Meeting will be held at 1.00 p.m.
(London, GMT + 1) on Thursday 25 May 2017 at the Company's
registered office at 1 Queens Park, Queensway North, Team Valley
Trading Estate, Gateshead, NE11 0QD. Copies of these documents will
shortly be available to view on the Company's website
(http://turbopowersystems.com).
For further information, please contact:
Turbo Power Systems Tel: +44 (0)191
Ric Piper, Chairman 482 9200
Carlos Neves, Chief Executive
Officer
Charles Rendell, Chief Financial
Officer
finnCap (NOMAD and broker) Tel: +44 (0)20
Henrik Persson, Emily Watts 7220 0500
Kreab (financial public relations) Tel: +44 (0)20
Robert Speed 7074 1800
1. Proposed Cancellation of Admission of Common Shares to Trading on AIM
On March 30, 2017, the Company announced that TWC3N, a company
controlled principally by certain members of the Company's existing
management team, had acquired the entire issued and to be issued
share capital of TAO UK. The Company also announced on March 30,
2017 that TWC3N, in a separate transaction, had acquired all of the
A Ordinary Shares (the "A Shares") in the capital of TPSL, the
Company's subsidiary, at a price of 0.00112 pence each. The A
Shares are convertible into an equal number of Common Shares of no
par value in the Company on request by the holder, having given 61
days' notice. As a result of TWC3N's acquisition of TAO UK and the
A Shares, the ultimate parent undertaking of the Company is TWC3N,
a company entirely owned by Carlos Neves, Chief Executive Officer
of the Company (26.5% voting rights of TWC3N), Charles Rendell,
Chief Financial Officer of the Company (26.5% voting rights of
TWC3N), Nigel Jakeman, Engineering and Business Development
Director of the Company (26.5% voting rights of TWC3N), and
Adderstone Group Limited, a group comprising a diverse range of
businesses involving property and investment within the UK, whose
Chief Executive Officer and Founder is Ian Baggett (20.5% voting
rights of TWC3N)..
In the announcement made by the Board on March 30, 2017, the
Board concluded that it is in the best interests of the Company to
cancel the admission of the Common Shares to trading on AIM.
Pursuant to Rule 41 of the AIM Rules, the Company, by way of its
nominated adviser, finnCap Ltd, has notified the London Stock
Exchange of the date of the proposed Cancellation.
The Cancellation is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75 per cent (75%) of the
votes cast by Shareholders (whether present in person or by proxy)
at the Annual General and Special Meeting, notice of which is set
out in the Management Proxy and Information Circular.
The Company is therefore seeking Shareholders' approval of the
Cancellation at the Annual General and Special Meeting, which has
been convened for 1:00 p.m. (London, GMT +1) on May 25, 2017 at the
Company's offices at 1 Queens Park, Queensway North, Team Valley
Trading Estate, Gateshead, NE11 0QD, United Kingdom.
If the Cancellation Resolution is passed at the Annual General
and Special Meeting, it is anticipated that the Cancellation will
become effective at 7:00 a.m. on June 5, 2017.
The purpose of the Management Proxy and Information Circular is
to seek Shareholders' approval for the Cancellation Resolution, to
provide you with the information on the background and reasons for
Cancellation and to explain the consequences of the Cancellation
and why the Directors unanimously consider the Cancellation to be
in the best interests of the Company and its Shareholders as a
whole.
1.1 Background and reasons for Cancellation
The Board has conducted a review of the benefits and drawbacks
to the Group and its Shareholders in retaining its quotation on
AIM, and believes that Cancellation is in the best interests of the
Company and its Shareholders as a whole. In reaching this
conclusion, the Board has considered the following key factors:
-- the considerable cost, management time and the legal and
regulatory burden associated with maintaining the Company's
admission to trading on AIM which, in the Directors' opinion, are
disproportionate to the benefits to the Company;
-- the Directors and the Major Shareholder hold in total 89.4
per cent (89.4%) of the Company's current issued share capital and,
as a result, the free float and liquidity of the Common Shares is
limited;
-- the AIM listing of the Common Shares does not, in itself,
offer investors the opportunity to trade in meaningful volumes or
with frequency within an active market. With little trading volume,
the Company's share price can move up or down significantly
following trades of small numbers of shares; and
-- due to the Company's limited liquidity in its shares and, in
practical terms, a small free float and market capitalisation,
continuing admission to trading on AIM no longer sufficiently
provides the Company with the advantages of providing access to
capital or enabling the Common Shares to be used to effect
acquisitions.
Following careful consideration, the Board believes that it is
in the best interests of the Company and Shareholders to seek the
proposed Cancellation at the earliest opportunity.
1.2 Process for, and principal effects of, the Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Common Shares in the event that 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, the Company is required to give at least
twenty (20) clear Business Days' notice of Cancellation.
Additionally, Cancellation will not take effect until at least five
(5) clear Business Days have passed following the passing of the
Cancellation Resolution. If the Cancellation Resolution is passed
at the Annual General and Special Meeting, it is proposed that the
Cancellation will take effect at 7.00 a.m. on June 5, 2017.
The principal effects of the Cancellation will be that:
-- there would be no formal market mechanism enabling the
Shareholders to trade Common Shares on AIM and, furthermore, no
other recognised market or trading facility (other than the
proposed Matched Bargain Facility referred to in paragraph below)
will be available to enable trading of the Common Shares;
-- while the Common Shares will remain freely transferrable, it
is possible that following publication of the Management Proxy and
Information Circular, the liquidity and marketability of the Common
Shares may be significantly reduced and the value of such shares
may be adversely affected as a consequence;
-- it may be more difficult for Shareholders to determine the
market value of their investment in the Company at any given
time;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
-- Shareholders will no longer be afforded the protections given
by the AIM Rules, such as the requirement to be notified of certain
events, or required to obtain shareholder approval, 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;
-- the levels of transparency and corporate governance within
the Company are unlikely to be as stringent as for a company quoted
on AIM;
-- the Company will cease to have an independent nominated adviser and broker;
-- the Company's CREST facility will remain for the foreseeable
future and the Common Share will remain transferable through CREST
for the purposes of the Matched Bargain Facility. This will enable
shareholders to continue to hold and trade their shares in
uncertificated form post Cancellation; and
-- the Cancellation may have 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 subject to Business Corporation Act
(Yukon). Shareholders should also note that the Takeover Code does
not apply to the Company and, therefore, the rights of the
shareholders may be different from the rights of shareholders in UK
incorporated companies (for example statutory pre-emption rights on
new share issues. The Company will also continue to be bound by the
Articles (which requires shareholder approval for certain matters)
following the Cancellation.
It is presently expected that on Cancellation, the Company will
still be a "Reporting Issuer" under Canadian securities laws, until
such time, if any, that is takes steps to cease to be a "Reporting
Issuer".
The above considerations are non-exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
The Company will endeavour to continue to provide certain
facilities and services to Shareholders that they currently enjoy
as shareholders of an AIM company. Following the Cancellation, the
Company will:
-- continue to communicate information about the Company
(including annual accounts) to its Shareholders, as required by
law, and the Company will continue to hold annual general meetings;
and
-- continue to maintain its website, www.turbopowersystems.com
and to post updates on the website from time to time (being at
least every six months), although Shareholders should be aware that
there will be no obligation on the Company to include all of the
information required under AIM Rule 26 or to update the website as
required by the AIM Rules.
1.3 Transactions in the Common Shares following the proposed
Cancellation
The Board is aware that the proposed Cancellation, should it be
approved by Shareholders at the Annual General and Special Meeting,
would make it more difficult for Shareholders to buy and sell
Common Shares should they wish to do so.
Immediately following the proposed Cancellation, the Company
intends put in place a Matched Bargain Facility to assist
Shareholders to trade in the Common Shares.
The Matched Bargain Facility will be made available either
directly through the a third party provider. Under the Matched
Bargain Facility, Shareholders or persons wishing to acquire or
dispose of Common Shares would be able to leave an indication with
the Matched Bargain Facility that they are prepared to buy or sell
at an agreed price.
In the event that the Matched Bargain Facility is able to match
that order with an opposite sell or buy instruction, the Matched
Bargain Facility would contact both parties and then effect the
bargain.
Details of the Matched Bargain Facility, will be made available
to Shareholders on the Company's website at
www.turbopowersystems.com and directly by letter or e-mail (where
appropriate).
In due course, the Company and/or TWC3N may decide to purchase
Common Shares tendered through the Matched Bargain Facility however
there can be there is no guarantee that either the Company and / or
TWC3N will ultimately proceed with purchasing further Common
Shares.
1.4 Letters of Intent
The Company has received a letter of intent from the Company's
Major Shareholder to vote in favour of the Cancellation Resolution
in respect of 2,982,444,445 Common Shares representing 89.4 per
cent. (89.4%) of the issued share capital of the Company as at the
date of the Management Proxy and Information Circular. As a result
the Directors believe it will be highly likely that the
Cancellation Resolution will be passed at the Annual General and
Special Meeting.
1.5 Process for Cancellation
Under the AIM Rules, it is a requirement that the Cancellation
must be approved by not less than 75 per cent (75%) of votes cast
by Shareholders at an Annual General and Special Meeting.
Accordingly the Notice of Annual General and Special Meeting within
the Management Proxy and Information Circular contains a special
resolution to approve the Cancellation.
Furthermore, Rule 41 of the AIM Rules requires an 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 AIM of the
Company's intention, subject to the Resolution being passed at the
Annual General and Special Meeting, to cancel the Company's
admission of the Common Shares to trading on AIM on June 5, 2017.
Accordingly, if the Resolution is passed the Cancellation will be
effective at 7:00 a.m. on June 5, 2017.
2. Approval of Share Consolidation
The Company is seeking Shareholder approval to effect the Share
Consolidation. The Company currently has over 1,000 registered
shareholders and has 3,336,865,922 Common Shares in issue, of which
1,008 shareholders represent in aggregate 99.90 per cent. (99.90%)
of the total number of shareholders but only 10.57 per cent.
(10.57%) of the total issued share capital of the Company. The size
of the shareholder register (relative to the Company's current
market value) places an unwarranted financial and administrative
burden on the Company. The Company is therefore seeking shareholder
approval to rationalise the share capital of the Company by way of
a consolidation of share capital, with a view to reducing costs and
streamlining the shareholdings in the Company.
The proportion of the total issued share capital of the Company
held by each Shareholder following the Consolidation will, save for
fractional entitlements, be unchanged. Each New Common Share will
carry the same rights as a Common Share as set out in the Company's
Articles. However, it is expected that if the value of the
shareholding of New Common Shares post consolidation is less than
GBP2.00 (or Canadian Dollar equivalent) then these shares will be
aggregated and the total value gifted to a local independent
charity. The Company considers that the total cost of
administrating these small individual payments is less than the
value to the individual shareholders, and therefore, considers a
gift to charity to be appropriate.
The sole Independent Director has considered the share
consolidation and considers it to be in the best interest of the
Company and Shareholders to undertake a share consolidation. The
sole Independent Director therefore recommends the share
consolidation to the Board and approval of the consolidation.
At the Meeting, Shareholders will be asked to consider and, if
thought fit, approve an amendment to the articles of the Company to
effect the consolidation (the "Consolidation") of the Common Shares
on a 5,000 for one (1) basis. Pursuant to the consolidation, if
carried out, 5,000 Common Shares will be consolidated into one (1)
New Common Share in the capital of the Company. As of April 11,
2017, the Company currently has 3,336,865,922 Common Shares issued
and outstanding. If the Common Shares are consolidated on a 5,000
for one (1) basis, the Company will have 667,116 Common Shares
issued and outstanding. Instead of receiving fractional Common
Shares, the remaining Shareholders will be paid in cash per
fractional Common Share held by them prior to the Consolidation,
upon delivery of certificates representing their Common Shares, a
duly completed Letter of Transmittal and such other documents as
Computershare may reasonably require. All fractional Common Shares
will be cancelled. It is expected no amount will be paid to any
Shareholders who would be entitled to receive, net of withholding
taxes, less than GBP2.00 (or Canadian Dollar equivalent), but the
aggregated amount will be gifted to a local independent
charity.
The Board estimate that around 460 registered shareholders each
own less than 5,000 shares, a total of 738,569 shares (0.022% of
the current issued share capital; 0.017% of the diluted issued
share capital)
In order to give effect to the consolidation of the Common
Shares, the articles of the Company must be amended by a special
resolution of shareholders (the "Consolidation Resolution"). The
text of the Consolidation Resolution is set out below. To be
effective, the Consolidation Resolution must be approved in
accordance with the YBCA, by not less than two-thirds of the Common
Shares represented and voted at the meeting.
TAO UK has advised the Company that it intends to vote all of
its Common Shares in favour of the Consolidation Resolution.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Notice provided to the London April 19, 2017
Stock Exchange to notify
it of the proposed Cancellation
Publication and posting of April 19, 2017
the Management Proxy and
Information Circular and
Instrument of Proxy to Shareholders
Latest time and date for 1:00 p.m. (London,
receipt of Instrument of GMT+1) on May 23,
Proxy and Form of Instruction 2017
Annual General and Special 1:00 p.m. (London,
Meeting GMT+1) on May 25,
2017
Expected last day of dealings June 2, 2017
in Common Shares on AIM(2)
Expected time and date of 7:00 a.m. on June
Cancellation(3) 5, 2017
Notes:
(1) All of the times referred to in the Management Proxy and
Information Circular 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) The Cancellation requires the approval of not less than 75
per cent of the votes cast by Shareholders at the Annual General
and Special Meeting.
DEFINITIONS
"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
"Annual General the Annual General and Special
and Special Meeting" Meeting of the Company convened
or "Meeting" for 1:00 p.m. (GMT +1) on May
25, 2017 and any adjournment
thereof, notice of which is
set out in the Management Proxy
and Information Circular
"Articles" the articles of association
of the Company as at the date
of this announcement
"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 Common Shares to trading
on AIM, subject to passing
of the Cancellation Resolution
and in accordance with Rule
41 of the AIM Rules
"Cancellation Resolution" the resolution to be proposed
at the Annual General and Special
Meeting regarding the Cancellation,
in the form set out in this
Notice of Annual General and
Special Meeting
"Common Shares" the common shares of no par
value in the capital of the
Company, and "Common Share"
means any one of them
"Company" or "Turbo Turbo Power Systems Inc.
Power"
"CREST" a relevant system (as defined
in the CREST Regulations) in
respect of which Euroclear
is the Operator (as defined
in the CREST Regulations)
"Directors" or "Board" the board of directors of the
Company
"Effective date" June 05, 2017
"Form of Instruction" the form of instruction that
accompanies the Management
Proxy and Information Circular
for use at the Annual General
and Special Meeting or at any
adjournment thereof
"Instrument of Proxy" the instrument of proxy that
accompanies the Management
Proxy and Information Circular
for use at the Annual General
and Special Meeting or at any
adjournment thereof
"London Stock Exchange" London Stock Exchange plc
"Major Shareholder" Tao Sustainable Power Solutions
or "TAO UK" (UK) Ltd, which has an interest
in 2,982,444,445 Common Shares.
It is a wholly owned subsidiary
of TWC3N Limited, a company
controlled principally by certain
members of the Company's existing
management team.
"Management Proxy the circular dated April 19,
and Information 2017
Circular"
"Matched Bargain An online marketplace to buy
Facility" and sell shares in UK private
companies provided by a third
party
"Minority Shareholder" Shareholder who does not have
the voting control of the Company
by virtue of their shareholding
being less than 50% of the
total common shares of the
Company.
"New Common Share" A Common Share after the proposed
share consolidation
"Notice of Annual the notice of Annual General
General and Special and Special Meeting
Meeting"
"Regulatory Information has the meaning given to it
Service" in the AIM Rules 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
"Reporting issuer" For the purposes of the Management
Proxy and Information Circular,
the Company
"Shareholders" holders of Common Shares from
time to time and "Shareholder"
means any one of them
"Share Consolidation" The proposed consolidation
of 5,000 Common Shares into
one New Common Share
"Takeover Code" The Company is a Canadian Business
Corporation, registered in
Yukon, Canada and is not subject
to the provisions of the UK
City Code on Takeovers and
Mergers.
"TPSL A Shares" TPSL A Shares are non-voting
shares of Turbo Power Systems
Limited ("TPSL"), the Company's
subsidiary, that carry with
them the right to be exchanged
for the same number of Common
Shares
"TWC3N" means TWC3N Limited, a company
controlled principally by members
of the Company's management
team, and which owns all of
the issued and outstanding
shares of TAO UK
"United Kingdom" the United Kingdom of Great
Britain and Northern Ireland
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGUWUCUPMGQR
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April 19, 2017 02:00 ET (06:00 GMT)
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