TIDMDXR
RNS Number : 9207G
Directex Realisations Plc
10 February 2010
Directex Realisations plc
("DXR", "the Company" or "the Group")
(Formerly Interactive Prospect Targeting Holdings plc ("IPTH"))
Notice of General Meeting
Further to the Company's announcements of 20 and 29 January 2010, the Board of
DXR has posted a circular to shareholders dated 9 February 2010 (the
"Circular"), to convene a General Meeting of the Company (the "General Meeting")
to be held at the offices of Berwin Leighton Paisner, Adelaide House, London
Bridge, EC4R 9HA at 11.00 a.m. on Thursday, 4 March 2010.
The General Meeting has been called by the directors of the Company, as required
under section 303 and 304 of the Companies Act 2006, in order that shareholders
may consider and vote on those resolutions proposed by the Requisitionist and
those resolutions proposed by the Company.
This follows receipt of a requisition notice from Rock (Nominees) Limited (the
"Requisionist"), which holds ordinary shares in the Company as nominee on
behalf of Lionel Thain, a former CEO of the Group. The requisition notice calls
for the removal of Nicholas Ward, the Chairman, as a director and the
appointment of Jonathan Lander and Nicholas Lander as directors of the Company.
According to Jonathan Lander, also a shareholder, Lionel Thain is "acting in
concert" with him.
The Company intends to propose three Resolutions intended to facilitate the
business of the Company going forward and, in particular, the Company's
objective of returning value to Shareholders. These include Resolutions to
consider and, if thought fit, approve: the Investing Policy of the Company as
required by AIM Rule 15; the De-listing from AIM and subject to, and
conditional upon, the De-listing Resolution being passed and De-listing having
occurred, the re-registration of the Company as a private company under the
Companies Act 2006
The resolution to de-list the Company from trading on AIM is being proposed by
the Company to not only save significant costs, but also because it is an
essential first step towards effecting the Board's intention of returning value
to shareholders. The expected date for the de-listing is Friday, 12 March 2010.
Share transfers may still be effected after the date of de-listing by
depositing a duly executed and stamped stock transfer form together with an
appropriate share certificate with the Company's Registrars. The Ordinary Shares
will remain freely transferable and, for anyone wishing to buy or sell, the
Company is exploring introducing a low-cost share dealing service.
The Company has received an irrevocable undertaking to vote against the
resolutions proposed by the Requisitionist and in favour of the resolutions
proposed by the Company from Fortelus Capital Management LLC ("Fortelus"), an
institutional shareholder representing 9,563,987 ordinary shares which equates
to 18.93 per cent. of the Company's issued ordinary share capital as at the date
of this announcement.
The Directors unanimously recommend that shareholders VOTE AGAINST all of the
resolutions proposed by the Requisitionist and VOTE IN FAVOUR of the resolutions
proposed by the Company as they and Fortelus intend to do in respect of their
beneficial holdings of ordinary shares amounting to, in aggregate, 12,073,272
ordinary shares or 23.90 per cent. of the issued ordinary shares in the capital
of the Company.
The Circular, which also includes a Notice of General Meeting, is available on
the Company's website (www.directex.co.uk).
The letter to shareholders from Nicholas Ward, the reasons for the Board's
recommendations and details of the investing policy contained in the Circular
are attached to this announcement.
It is the Board's intention to continue to keep shareholders up to date on
developments in connection with the matters described in this announcement via
the Company's website (www.directex.co.uk) and by further circulars, if
necessary.
9 February 2010
Enquiries:
+------------------------------------+------------------------+
| | |
| DXR | |
+------------------------------------+------------------------+
| Nicholas Ward, Executive Chairman | Tel: +44 (0) 20 7932 |
| | 4410 |
+------------------------------------+------------------------+
| Martin Purvis, Director & Company | |
| Secretary | |
+------------------------------------+------------------------+
| | |
+------------------------------------+------------------------+
| Canaccord Adams | Tel: +44 (0) 20 7050 |
| | 6500 |
+------------------------------------+------------------------+
| Mark Williams, Corporate Finance | |
+------------------------------------+------------------------+
| Bhavesh Patel | |
+------------------------------------+------------------------+
| | |
+------------------------------------+------------------------+
| College Hill | Tel: +44 (0) 20 7457 |
| | 2020 |
+------------------------------------+------------------------+
| Mark Garraway | |
+------------------------------------+------------------------+
| Adam Aljewicz | |
+------------------------------------+------------------------+
REASONS WHY YOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST RESOLUTIONS
1, 2 AND 3 AND THAT YOU VOTE IN FAVOUR OF RESOLUTIONS A, B AND C SET OUT IN THE
NOTICE
· At a meeting with the Board immediately before the Company's recent
Annual General Meeting,
Jonathan Lander demanded the immediate resignation
of David Cicurel and Nicholas Ward and the immediate appointment of himself and
his brother, Nicholas Lander. If this had been accepted, it would have given
control of the then Board to the Proposed Directors.
· Shareholders should note that Jonathan Lander only acquired his
holding of Ordinary Shares in
January 2010 in advance of the Annual General
Meeting.
· The Requisitionist is acting as nominee on behalf of Lionel Thain
(the former CEO of the Company)
who, according to Jonathan Lander, is
"acting in concert" with him.
· Your Board is actively exploring strategic options in order to return
to Shareholders monies which
have been recovered over the last eighteen
months and further monies which the Board has reason to believe may be
recoverable in the future.
· It is the Board's intention to return monies to Shareholders this
year with the balance to be
distributed in the future. Any such distribution
can only occur if resolutions B and C in connection with the De-listing and
re-registration of the Company as a private company are approved.
· The Requisitionist has not provided the Company with any information
in respect of its two Proposed
Directors.
· Neither the Requisitionist nor Jonathan Lander has provided the
Company with any information in
respect of the strategy which the Proposed
Directors would (if appointed) seek to implement in relation to their future
intentions for the Company.
· If it were the intention of the Relevant Minority Shareholders to
return monies to Shareholders, the
Board is of the view that they would have
voted in favour of the resolution to De-list the Company when this was proposed
at the Annual General Meeting.
· Your Board has been consistent in its drive to deliver Shareholder
value.
LETTER FROM THE CHAIRMAN
DIRECTEX REALISATIONS PLC
(formerly Interactive Prospect Targeting Holdings plc)
(incorporated in England and Wales under the Companies Act 1985 with registered
number 05173250)
+------------------------------+------------------------------+
| Directors: | Registered office: |
| Nicholas Ward (Executive | 1 Vincent Square |
| Chairman) | London |
| Martin Kiersnowski | SW1P 2PN |
| (Director) | Tel: +44 (0)20 7932 4400 |
| John Lloyd (Director) | |
| Martin Purvis (Director) | 9 February 2010 |
| | |
+------------------------------+------------------------------+
To Shareholders and, for information purposes only, to Optionholders
Notice of Requisitioned General Meeting
Dear Shareholder,
On 19 January 2010 your Board received a Requisition Notice requiring the
Directors to convene a general meeting of the Company to propose three ordinary
resolutions in order to effect a change of your Board.
Your Board is writing to you to:
· give you notice that the Requisitioned General Meeting is to be held
at the offices of Berwin Leighton Paisner LLP, Adelaide House, London Bridge,
London EC4R 9HA at 11 a.m. on Thursday, 4 March 2010
· articulate the Company's strategy and explain to Shareholders why the
Directors recommend
unanimously that you VOTE AGAINST the Requisitioned
Resolutions which are set out in the Notice
· take the opportunity to recommend unanimously that you VOTE IN FAVOUR
of the Company
Resolutions which are also set out in the Notice.
1 The Requisition Notice and the Requisitioned General Meeting
Following receipt of the Requisition Notice, the Company is required to convene
the Requisitioned General Meeting at the Company's expense.
The Requisitionist has put forward ordinary resolutions calling for the removal
of me - Nicholas Ward - from my office as a Director of the Company with
immediate effect (Resolution 1) and for the appointment of Jonathan Lander
(Resolution 2) and Nicholas Lander (Resolution 3) as directors of the Company
with immediate effect.
YOUR BOARD IS RESOLUTE IN UNANIMOUSLY RECOMMENDING THAT YOU VOTE AGAINST THE
REQUISITIONED RESOLUTIONS FOR THE REASONS SET OUT
The Company intends to propose the Company Resolutions being three Resolutions
intended to facilitate the business of the Company going forward and, in
particular, the Company's objective of returning value to Shareholders. These
include Resolutions to consider and, if thought fit, approve:
· the Investing Policy of the Company as required by AIM Rule 15
(Resolution A)
· the De-listing (Resolution B)
· subject to, and conditional upon, the De-listing Resolution being
passed and De-listing having
occurred, the re-registration of the Company as a private company under
the Companies Act 2006(Resolution C).
YOUR BOARD IS RESOLUTE IN UNANIMOUSLY RECOMMENDING THAT YOU VOTE IN FAVOUR OF
THE COMPANY RESOLUTIONS FOR THE REASONS SET OUT
2 Details of the Requisitionist and Lionel Thain
The Requisitionist is acting as nominee on behalf of Lionel Thain (a beneficial
Shareholder holding, as at 8 February 2010 (being the last dealing date prior to
the publication of this document) 5,740,280 Ordinary Shares being 11.36 per
cent. of the issued Ordinary Share capital in the Company). Lionel Thain was the
founder and former CEO of the Group who left the Group as part of the sale of
the Core UK Business in September 2008 to a subsidiary of Volvere plc,
Interactive Prospect Targeting Limited, of which he is now a director.
3 Details of the Proposed Directors
Jonathan Lander is the CEO of Dawnay Day Lander Limited and Volvere plc. Volvere
plc now owns Interactive Prospect Targeting Limited together with its former
management, including Lionel Thain and others. Jonathan Lander's brother,
Nicholas Lander, is COO and CFO of Volvere plc. Both Jonathan Lander and
Nicholas Lander are directors of Interactive Prospect Targeting Limited.
Jonathan Lander has informed the Company that he is acting in concert with
Lionel Thain.
4 Background to events surrounding the receipt of the Requisition
Notice
At the recent Annual General Meeting of the Company, ordinary resolutions were
proposed to reappoint Martin Kiersnowski and David Cicurel as directors of the
Company following their retirement in accordance with the articles of
association of the Company. These resolutions required a simple majority of
votes to be cast in favour of the resolutions in order to be passed. In fact,
they were narrowly defeated (50.57 per cent. of the Ordinary Shares at the
Annual General Meeting were voted against the resolutions) as a result of votes
cast by the Relevant Minority Shareholders. Only 51.8 per cent. of the issued
Ordinary Shares were voted at the Annual General Meeting.
Immediately before the Annual General Meeting, Jonathan Lander requested to meet
with the Board (comprising David Cicurel, Martin Kiersnowski and myself -
Nicholas Ward). During this meeting, Jonathan Lander demanded the immediate
resignation of David Cicurel and myself and the immediate appointment of himself
and his brother, Nicholas Lander. It was made clear to the Board that, if this
was rejected, he and the other Relevant Minority Shareholders would vote against
the resolutions to approve the re-appointment of Martin Kiersnowski and David
Cicurel. This was rejected and the resolutions were defeated as a result of
votes cast by the Relevant Minority Shareholders.
A third resolution to de-list the Company from AIM was also defeated at the
Annual General Meeting as a result, again, of votes cast by the Relevant
Minority Shareholders. Your Board put this resolution to Shareholders at the
Annual General Meeting, not only to save significant costs for your Company, but
also because it is an essential first step towards effecting your Board's
objective of returning value to Shareholders.
In the opinion of the Directors, the actions of the Relevant Minority
Shareholders were not in the best interests of the Company:
· by voting David Cicurel and Martin Kiersnowski off the Board, the
Company was left with an inquorate Board of only one Director
· the Company was unable to cancel its AIM registration on 22 January
2010 as originally anticipated, resulting in the Company continuing to incur
unnecessary costs associated with such a listing. If the De-listing Resolution
and the resolution to re-register the Company as a private company are not
passed at the Requisitioned General Meeting, this will delay and/or prevent the
Company from returning monies to Shareholders
· as a result of the Company's continued AIM listing, the AIM Rules
require the Company to convene a meeting of Shareholders to gain approval of the
Company's Investing Policy in respect of a small quantum of funds that the
Company is proposing to keep as working capital to cover liabilities that may
arise in the period until the French tax losses may be recouped
· the cost of convening the Requisitioned General Meeting will impact
on what is available for
distribution to Shareholders this year
· all of this is a major unnecessary distraction which is preventing
progress on a number of important
issues that have to be addressed urgently.
Since the Annual General Meeting, your Company has announced the appointment of
new Directors, who have re-affirmed their commitment to optimise returns to
Shareholders.
Shareholders should know that, on 20 January 2010, a meeting was held between
the Company, Jonathan Lander and Nicholas Lander. The Board considers that the
requests that were made by the Proposed Directors at that meeting were
unreasonable including, in particular, continual requests for the supply of
information regarding the costs incurred in the recent restructuring of the
Company and projections going forward. These requests were made with no regard
to selective briefing restrictions. The Board offered to make certain
information available on receipt of a signed non-disclosure agreement and the
prior withdrawal of the Requisition Notice. This offer was rejected.
5 The last eighteen months
To appreciate fully the background to the current situation, it is helpful to
remind Shareholders of the events of the last year and a half and, in
particular, the actions that the Board has had to take following the decline in
the Company's fortunes and share price.
I was appointed Executive Chairman of your Company on 19 June 2008, following
the announcement on 15 April 2008 of disappointing results for the year to 31
December 2007. These results came after a number of profit warnings and the
withdrawal, after extensive due diligence, of a preferred bidder for the Group
as a whole.
I implemented an urgent review of the financial health of the Group and it was
apparent that the Board faced a number of serious strategic and operational
problems.
There had been a considerable deterioration in the performance of the Core UK
Business which had been forced to write off significant bad debts. The Board
concluded that it was essential that these businesses be disposed of as quickly
as possible.
Taken together, the smaller UK businesses were not profitable and had no
strategic relevance to the Group. The Board concluded that they too should be
sold.
The Group's three French Businesses were profitable and cash generative.
However, the Old Board did not take effective control over the French Businesses
and were therefore unable to control the remittance to the UK of the surplus
cash resources within Directinet and NP6. There were earn-out commitments agreed
to by the Old Board which the Company could not afford to meet, the president of
Directinet had resigned from the Old Board and the Group was being sued by the
five senior managers of Directinet.
The Group's loan from the Bank (taken out by the Old Board to purchase NP6) was
in default and the Company was unable to make the first repayment which fell due
in July 2008. In addition, the same asset had been promised by the Old Board as
security to both the Bank and the Directinet vendors and neither promise had
been implemented. This prompted renegotiations with the Bank regarding the
Group's indebtedness position and funding requirements.
In effect, what started as a strategic review turned into a fight for the
survival of the Group, with the real prospect that Shareholders would lose
everything.
A detailed account of the actions that the Board has undertaken over the last
eighteen months was included in the Company's report and accounts for the year
ended 31 December 2008 and in the circular which convened the general meeting of
the Company held on Monday, 4 January 2010 both of which are available on the
Company's website.
6 What your Board has achieved
We are pleased to inform you that, as a result of our efforts over the last year
and a half, your Board has successfully salvaged some value for Shareholders who
can now look forward to the prospect of receiving some monies this year and the
balance in the future.
Notwithstanding the Company's contractual obligation to issue a significant
number of shares to the vendors of the French Businesses due to the Company's
low share price, your Board has successfully avoided the dilution of
Shareholders' holdings.
The Board believes that, as a result of our actions, the Group may, this year,
have up to the equivalent of 1.5p per Ordinary Share in surplus cash which may
be available for distribution to Shareholders. This figure is calculated on the
basis of assumptions which the Board currently considers to be reasonable, but
which are potentially subject to significant variation.
For various technical reasons regarding distributable reserves and intra-group
balances, the Board must await the completion of the Company's report and
accounts for the year ended 31 December 2009 and the resolution of certain legal
issues before it can be more specific about how and when it will be possible to
make a distribution to Shareholders. Any such distribution can only occur if
resolutions B and C in connection with the De-listing and re-registration of the
Company as a private company are approved.
Looking further ahead, the Board believes it may be at least five years before
it is able to complete the process of maximising Shareholder value along the
lines previously set out, particularly the realisation of the full amount of any
tax recoveries that may be available to the Group in France.
However, on the basis of the projections currently available to the Board, it
may be possible, at the end of this process, for the Board to return a further
amount of cash to Shareholders, possibly of up to a further 4.6p per Ordinary
Share, albeit that this outcome cannot be certain and the process is likely to
take at least five years.
We appreciate that, in the context of your original investment, this may be of
little comfort to Shareholders but, in view of the former state of the Company
and the significant issues it has faced as a result, your Board regards any
recoveries of any Shareholder value to be a major achievement.
7 What next?
Your Board's immediate tasks for the next three months are to:
· secure the funds due from the successful disposal of Directinet and
Netcollections
· implement the proposed Investing Policy
· recover the tax refunds due in the current year
· finalise the Group's report and accounts for the financial period
ended 31 December 2009 once the Board knows the final position on the sale of
Directinet and Netcollections
· put in place new arrangements for the management of the Group for
the next five years in the UK
and in France
· review options for how best to return funds to Shareholders.
Meanwhile, the Board is determined to keep the Group's overheads as low as
possible and, in accordance with the Company's base case business plan prepared
in December 2009, is exploring a range of options including outsourcing of
various functions, reducing headcount and remuneration levels and introducing a
low-cost share dealing service. We also remain committed to the De-listing
particularly since, as previously mentioned, the costs incurred in maintaining
the Company's AIM listing are prohibitive, being over GBP80,000 in 2009
comprising direct fees and levies as well as more intensive and expensive audit
work.
To do all this and to return monies to Shareholders, we need your support to
defeat the Requisitioned Resolutions
The Board has a detailed operational strategy and an Investing Policy as
required by the AIM Rules, details of which are contained in Part 2 of this
document. A key component of the operational strategy is to manage and discharge
any remaining liabilities, for which the Company has made provision for
GBP300,000, and to ensure that sufficient funds are available, estimated at
GBP200,000, for the ongoing management of the Group over a five year run-off
period. The Board hopes that it will not have to utilise all of this provision
and will be able to return some of it to Shareholders.
8 Costs
It has been alleged by Jonathan Lander that the Company has significantly
overspent on advisory and interim management fees and Board remuneration. The
Board has no hesitation in advising Shareholders of the costs that have been
incurred to date.
Shortly after my appointment as Chairman, it became clear that, as a result of
the financial position the Company, if any value were to be salvaged for
Shareholders, extensive action would be required and that this would require
high quality advisory and interim management support.
The only realistic alternative was that the Company, which was in default, would
have to enter administration. This would have resulted in Shareholders losing
everything. The choice was therefore clear. Due to the financial state of the
Group, the Board had a statutory duty to have regard to the other stakeholders
including creditors and employees and who, in an administration, would rank
ahead of the Shareholders.
To salvage any value for Shareholders would require an exhaustive and drawn-out
series of disposals, restructurings, bank negotiations, due diligence
investigations, property settlements and legal actions.
Fees
Professional fees for the nineteen months from 1 July 2008 to 31 January 2010
total approximately GBP4.7 million. This was in the main for legal, accounting
and corporate advisory services. In addition, the Company has incurred a total
of approximately GBP730,000 on interim managers employed in the UK during the
process. I can assure Shareholders that the Board only used advisers and interim
managers where necessary to develop and implement the Boards' strategy to deal
with the many issues it faced and kept their fees to a minimum.
These costs reflect the complexity of the issues we faced. I am pleased to
report, however, that they are more than covered by the GBP6 million in savings
we were able to negotiate by reducing earnouts and terminating the leases in
respect of the Company's premises at Vincent Square.
Shareholders should be reminded that the Board was forced into a position where,
if the Company was to repay the secured Bank loan which was already in default,
it had no option but to dispose of certain businesses immediately. In a rapidly
deteriorating economy, and with due diligence revealing the extent to which the
businesses had declined, sale prices were significantly less than the indicative
offers that had been submitted. Notwithstanding the foregoing, the Board
achieved better sale values for the Core UK Business and the French Businesses
than would have been the case on an administration.
Remuneration
Jonathan Lander, acting in concert with Lionel Thain, has also claimed that
Board remuneration is excessive. Your Board does not accept this allegation.
There is currently a Board of four: myself and three others, of whom two are
part-time. With limited head office resource, the Board has also had to take on
significant day to day executive responsibilities.
In terms of remuneration, I was appointed as Executive Chairman on a part-time
basis and with a base salary of GBP90,000 per annum. At the time of my
appointment, the Company was not thought to be in a turnaround or workout
situation and I was not therefore appointed on a daily rate as would be typical
in such instances. During the last eighteen months, the Company most certainly
has been in a workout scenario, and my time commitment has risen significantly.
The Remuneration Committee agreed in October 2008 that I should be paid
GBP100,000 in recognition of the additional services I had provided over and
above the duties and services contemplated at commencement of my appointment. In
April 2009, the Remuneration Committee decided that I should be paid a further
sum of GBP100,000 in recognition of the additional services that I had been
required to provide in the period from October 2008 to April 2009.
In April 2009, the Remuneration Committee also put in place a new arrangement to
incentivise me to stay and see the job through to the completion of the sale of
the Group's remaining French businesses, Directinet and Netcollections. This
involved two components - (a) a payment of a further GBP100,000 following the
sale of Directinet and Netcollections - this has now been paid - and (b) five
per cent of any amount received by Shareholders by way of any form of dividend
capital or revenue distribution or other payment received by Shareholders - this
has now vested. It can be seen, therefore, that for the entire time at the
Company, I will have been paid the equivalent of approximately GBP300,000 on an
annualised basis.
Martin Kiersnowski is paid from January to April 2010 at the equivalent of
GBP20,000 per annum (having previously been paid GBP79,200 when working three
days a week for the Company). John Lloyd has taken a significant reduction to
his daily rate to E1,000 as has Martin Purvis who is also Company Secretary and
who is paid GBP925 per day. All three are acting as Directors at no extra cost.
My fellow Directors are incentivised via a bonus arrangement to ensure that
returns to Shareholders are maximised and such amount will be determined by the
Remuneration Committee.
In anticipation of the reduced scope of my role, I indicated to the Board in
December 2009 that I wanted to relinquish my Executive position and that I was
prepared to become Non Executive Chairman to see the job through for a
Director's fee of GBP12,000 per annum, save that I would not draw my entitlement
until, and at the same time as, monies have been returned to Shareholders which
could take up to 5 years.
The Board does not consider the costs or remuneration incurred to be in any way
excessive, particularly in light of the state of the business and the issues
that have had to be addressed
9 Shareholder undertakings
Martin Kiersnowski, being the only Director who holds Ordinary Shares as at the
date of this document, intends to VOTE AGAINST all of the Requisitioned
Resolutions in respect of his own legal and beneficial holding of Ordinary
Shares amounting, in aggregate, to 2,509,285 Ordinary Shares or 4.96 per cent.
of the issued Ordinary Share capital of the Company (as at 8 February 2010 being
the last dealing day prior to publication of this document.)
Following receipt by the Company of the Requisition Notice, your Board sought
the views of Fortelus in respect of Ordinary Shares in the Company representing
9,563,987 Ordinary Shares or 18.93 per cent. of the Company's issued Ordinary
Share capital (as at 8 February 2010 being the last dealing day prior to the
publication of this document.). Your Board is pleased to inform Shareholders
that Fortelus remains supportive of the Board's stated strategy and has given an
irrevocable undertaking to your Board to procure that the Ordinary Shares in the
Company under its management are VOTED AGAINST Resolutions 1, 2 and 3 and VOTED
IN FAVOUR of Resolutions A, B and C.
10 Action to be taken
Shareholders will find enclosed with the Notice in this document a Form of Proxy
for use in connection with the Requisitioned General Meeting. Whether or not you
intend to be present at the Requisitioned General Meeting you are requested to
complete, sign and return the Form of Proxy in accordance with the instructions
printed on it so as to be received by the Company's Registrar, Capita
Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU, as soon as possible
and, in any event, so as to arrive no later than 11 a.m. on Tuesday, 2 March
2010, being 48 hours before the time appointed for the holding of the
Requisitioned General Meeting. Completion and return of the Form of Proxy will
not prevent a Shareholder from attending and voting in person at the
Requisitioned General Meeting.
11 Board recommendation
For the reasons given above, the Directors unanimously consider that the
Requisitioned Resolutions, as put forward by the Requisitionist, are NOT in the
best interests of the Company and its Shareholders as a whole and the Directors
unanimously recommend that Shareholders VOTE AGAINST all of the Requisitioned
Resolutions to be proposed at the Requisitioned General Meeting as they and
Fortelus intend to do in respect of their beneficial holdings of Ordinary Shares
amounting to, in aggregate, 12,073,272 Ordinary Shares or 23.90 per cent. of the
issued Ordinary Shares in the capital of the Company.
For the reasons given above, the Directors unanimously consider that the Company
Resolutions, as put forward by your Board, ARE in the best interests of the
Company and its Shareholders as a whole and the Directors unanimously recommend
that Shareholders VOTE IN FAVOUR of the Company Resolutions to be proposed at
the Requisitioned General Meeting as they and Fortelus intend to do in respect
of their beneficial holdings of Ordinary Shares amounting to, in aggregate,
12,073,272 Ordinary Shares or 23.90 per cent. of the issued Ordinary Shares in
the capital of the Company.
Yours faithfully,
NICHOLAS WARD
Chairman
PROPOSED INVESTING POLICY
Assets or company in which it can invest
· It is the intention that assets are held by the French branch of a
wholly owned subsidiary of DXR
· This French branch will hold approximately GBP500,000 in cash which
will be used to invest in low risk
UK or French listed securities
· The French branch will also hold the 12.2% interest in Web-Clubs
Limited (a private UK Company)
· A minimum level of cash will be held by the AIM listed Company in
the UK to cover day to day
running costs
The means or strategy by which the investing policy will be achieved
· A local broker will be mandated to invest and manage the GBP500,000
to be invested
· Limited active management expected for the 12.5% interest in
Web-Clubs Limited
Whether such investments will be active or passive and, if applicable, the
length of time that investments are likely to be held for
· Passive investments, although the DXR board will from time to time,
adjust the portfolio mix and
mandate the French broker accordingly
· Investments likely to be held/managed over a five year period, based
on the tax loss position
How widely it will spread its investments and its maximum exposure limits, if
applicable
· Investments limited to low risk UK or French listed securities
· Maximum exposure is the approximately GBP500,000 to be invested
· The amount of GBP500,000 will reduce over time as liabilities are
settled and operating expenses
incurred.
Its policy in relation to gearing and cross-holdings, if applicable
· N/A
Details of investing restrictions, if applicable
· Low risk investments in UK or French listed companies
The nature of returns it will seek to deliver to shareholders and, if
applicable, how long it can exist before making an investment and/or before
having to return funds to shareholders
· These investments are being held as part of a strategy for
preserving possible tax recoveries in
France, as set out above.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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