TIDMGPM TIDMGPSS
RNS Number : 1537G
Golden Prospect Precious Metals Ltd
11 November 2022
11 November 2022
Golden Prospect Precious Metals Limited
(the "Company")
Proposed Annual Subscription Right
Re-Publication of a Circular
Further to the announcement released on 4 November 2022 by the
Company in relation to the Publication of a Circular and Prospectus
pertaining to the Extraordinary General Meeting ("EGM") of the
Company due to be held on Wednesday, 20 November 2022 at 12 noon in
respect of the Proposed Annual Subscription Right, it is hereby
noted that the Form of Proxy was erroneously excluded from the
Circular and Prospectus published.
The Company will therefore re-publish today, the Circular
setting out details of the proposed Subscription Right, including
the Form of Proxy.
A reminder of the details of the Subscription Right are
summarised below.
Background
On 4 November 2022, the Board announced details of proposals to
introduce an annual Subscription Right for Shareholders to enable
Shareholders to subscribe for one new Ordinary Share for every five
Ordinary Shares held on 1 December in each year at a price equal to
the undiluted NAV per Share on 30 November one year prior (or if
such day is not a Business Day, the next following Business Day)
(the "Proposals"). The introduction of an annual Subscription Right
will require the Company to amend its Existing Articles.
The Board has been keen to grow the Company and although the
Directors consider that NAV performance has been strong in recent
years the Ordinary Shares have typically traded at a discount to
the Company's NAV per share. For a small fund, the Ordinary Shares
are relatively liquid, but the Board remains keen to grow to reduce
the total expense ratio and provide greater liquidity.
Following the Subscription Shares that were issued in 2017
maturing at the end of 2020 with all of the Subscription Shares
being exercised, the Board, together with its advisers have been
examining alternative options to grow the Company in the most cost
effective manner possible. The Board has explored a number of
different routes and structures to meet the Board's objectives of
growing the Company's asset base.
The conclusion of these deliberations is that the Board is
proposing to give Shareholders a right to subscribe, on an annual
basis, for additional Ordinary Shares at a predetermined price per
Ordinary Share set 12 months prior to the Subscription Date.
The Proposals are conditional on the passing of the EGM
Resolution to be proposed at an Extraordinary General Meeting of
the Company to be held on 30 November 2022.
A notice of the Extraordinary General Meeting to be held on 30
November 2022, at which Shareholders' approval for the Proposals
will be sought, is set out in Part 11 of the Circular and
Prospectus.
Proposals
If Shareholders approve the Proposals, Shareholders will have
the right, exercisable by notice to the Company, at any time during
the period of 30 days ending on the Business Day prior to the
relevant Subscription Date in each year, to subscribe, on the
Subscription Date, for one new Ordinary Share for every five
Ordinary Shares held on that date. The new Ordinary Shares
subscribed for will be issued within 14 days after the relevant
Subscription Date to those Shareholders in whose name the Ordinary
Shares are registered on the Subscription Date.
The Subscription Price will be equal to the undiluted NAV per
Share, as announced via a Regulatory Information Service, on 1
December the previous year (or if such day is not a Business Day,
the next following Business Day). Thus, if the NAV per Share has
risen over the course of the year, Shareholders will have the right
to buy new Ordinary Shares at a discount to the then prevailing NAV
per Share.
Fractions of Ordinary Shares will not be issued, and
entitlements will be rounded down to the nearest whole number of
Ordinary Shares.
The new Ordinary Shares issued as a result of the exercise of a
Subscription Right will rank in full for all dividends declared,
paid, or made on the Ordinary Shares and will rank pari passu with
the existing Ordinary Shares.
New Ordinary Shares issued as a result of the exercise of
Subscription Rights will have Subscription Rights attached to be
exercised on future Subscription Dates. Shareholders will have one
opportunity in each year to exercise their Subscription Right. Any
Subscription Rights not exercised will effectively lapse.
Immediately after the annual opportunity for exercise, all Ordinary
Shares outstanding (whether or not the Subscription Right has been
exercised) will effectively be given a new Subscription Right that
can be exercised on 30 November of the following year.
Not earlier than 60 days nor later than 30 days before the
relevant Subscription Date, and at its discretion, the Company may
give notice in writing to the Ordinary Shareholders reminding them
of their Subscription Rights.
Subscription Rights that remain unexercised in any given year
will expire worthless for that year unless a trustee, appointed by
the Company, chooses to exercise on Shareholders' behalf. Within
seven days following a Subscription Date the Company shall appoint
a trustee who, provided that in such trustee's opinion the net
proceeds of sale after deduction of all costs and expenses incurred
by, and any fee payable to, such trustee will exceed the costs of
exercising the Subscription Rights, shall within the period of 14
days following the relevant Subscription Date, exercise all or some
of the Subscription Rights which shall not have been exercised on
the terms on which the same could have been exercised on the
relevant Subscription Date and sell in the market the Ordinary
Shares resulting from such exercise. The trustee's obligations to
exercise Subscription Rights shall be limited to its opinion of the
level of market demand to acquire Ordinary Shares at a price that
will generate net profit and the Board's overall discretion that
exercise of the Subscription Rights will be in the best interests
of the Company and Shareholders as a whole. No exercise of
Subscription Rights shall be permitted if the Directors, in their
absolute discretion, conclude that the Company cannot, or
immediately following the exercise of any Subscription Rights would
be unable to, satisfy the Solvency Test (as defined under the
Companies Law). The trustee shall distribute pro rata the net
profit to the persons entitled thereto at the risk of such persons
within 56 days of the relevant Subscription Date, provided that
entitlements of under GBP5 shall be retained for the benefit of the
Company.
The Board will have the limited ability under the New Articles
to scale back the number of Ordinary Shares that may be issued at
the time of the exercise of any particular Subscription Right. This
course of action will only be taken if the Board believes that the
requirement to issue a prospectus in respect of an offer to the
public in the UK, that complies with the then prevailing UK legal
requirements, would prove to be unduly burdensome and/or expensive
compared to the full issue of new Ordinary Shares pursuant to the
exercise of the relevant Subscription Right. Currently, the Company
can issue up to Euro 8 million (GBP6.9 million as at the latest
practicable date) of new Ordinary Shares at any Subscription Date
(less any shares that may have been offered to the public in the UK
in the previous 12 month period) without issuing a UK compliant
prospectus. If the Subscription Right became effective at the
Company's NAV per share at the latest practicable date (34.29p per
share), the value of new Ordinary Shares that would be issued if
the Subscription Rights were exercised in full would be GBP5.9
million. This is currently below the Euro 8 million threshold which
means that it is unlikely that the Board would scale back any
exercise of Subscription Right at the first exercise date in 2023.
However, following the exit of the UK from the European Union it is
possible that this Euro 8 million limit may change, and the Board
needs to ensure that it retains the flexibility to scale back if
required to minimize the costs involved in operating the scheme.
Whilst the Board may determine in its sole discretion how such
scale back should operate in the best interests of all Shareholders
at each Subscription Date, it is the Board's current intention that
it would scale back all Shareholders pro rata to their Subscription
Rights, whether or not they have sought to exercise such
Subscription Rights. To the extent that the trustee referred to in
the paragraph above determines not to exercise Subscription Rights
on behalf of a non-exercising Shareholder's behalf, or the trustee
is unable to secure market demand for all new Ordinary Shares to
arise on the exercise of unexercised Subscription Rights,
Shareholders that have exercised their Subscription Rights shall
have their entitlement increased on a pro rata basis up to any
threshold determined by the Board in accordance with the above
requirement to publish a prospectus.
Full details of the Subscription Rights are set out in Part 6 of
the Circular and Prospectus.
The Board considers it desirable that Shareholders should have
the opportunity to review the operation of the Subscription Right
mechanism after an initial period of five years. Accordingly, at
the annual general meeting of the Company in 2027 and at every
fifth subsequent annual general meeting thereafter, the Directors
intend to propose an ordinary resolution for the continuation of
the Subscription Right mechanism. If such resolution is not passed,
the Directors will formulate proposals to be put to Shareholders to
amend the Articles in order to remove the Subscription Right.
The Board will review on an annual basis the effectiveness and
appropriateness of the Subscription Right mechanism. If the Board
considers that it would be in the best interests of the Company and
its Shareholders to suspend or discontinue the programme, the
review of the operation of the Subscription Right mechanism by
Shareholders will be brought forward to the next following annual
general meeting.
The creation of the Subscription Rights for Shareholders
pursuant to the Proposals is conditional on the approval by
Shareholders of the EGM Resolution.
Directors holding Ordinary Shares amounting in aggregate to
1,311,250 Ordinary Shares, representing approximately 1.53 per
cent. of the issued Ordinary Share capital of the Company as at the
date of the Circular and Prospectus, have informed the Company that
they intend to vote in favour of the EGM Resolution.
Benefits and impact of the Proposals
The Board believes the Proposals have the following principal
benefits:
* Shareholders will gain an embedded Subscription Right that
will allow them to subscribe for new Ordinary Shares in the future
at a predetermined price;
* If the NAV per Share increases following the date by reference
to which the Subscription Price is calculated, the Subscription
Right will allow Shareholders to subscribe for new Ordinary Shares
on the Subscription Date at a discount to the prevailing NAV per
Share;
* If the Subscription Rights were to be fully exercised for each
of the next five years, and absent any other changes to the
Company's capital structure, the number of Ordinary Shares in issue
would more than double. This potential increase in the Company's
Ordinary Share capital should have a significant impact on the
liquidity of the Ordinary Shares in the market;
* An increase in the Company's issued Ordinary Share capital and
total assets through the exercise of Subscription Rights should
reduce the Company's expense ratio as the fixed operating costs of
running the Company would be spread over a greater asset base;
* As a result of the intrinsic option value of the Subscription
Right, the value of an Ordinary Share should increase. If this
increase in the intrinsic value of an Ordinary Share is reflected
in the share price, then it should help to narrow any discount to
NAV per Share at which the Ordinary Shares may trade;
* Any exercise of the Subscription Rights of the Company should
increase the market capitalisation and total assets of the Company.
As these grow, the Company may widen its appeal to new investors
thus increasing demand for the Company's Ordinary Shares which
could have a positive effect on the Company's share price which
should lower the discount to NAV per share at which the Company's
shares typically trade and should potentially allow those shares to
trade at a premium to NAV per Share in the future;
* The Subscription Right gives Shareholders a choice: they have
the ability to maintain their pro ratapercentage shareholding in
the Company but does not oblige them to do so;
* To protect the interests of Shareholders who are unable or
fail to exercise their Subscription Rights and subject to the
Board's overall discretion that exercise of the Subscription Rights
will be in the best interests of the Company, following a
Subscription Date the Board shall appoint a trustee. The trustee,
provided that in such trustee's opinion, on the basis of
considerations including the then market demand for the Ordinary
Shares, the net proceeds of sale after deduction of all costs and
expenses incurred by, and any fee payable to, such trustee will
exceed the costs of exercising the Subscription Rights, shall
exercise all or part of the Subscription Rights which shall not
have been exercised on the terms on which the same could have been
exercised on the relevant Subscription Date and sell in the market
the Ordinary Shares resulting from such exercise;
* The Subscription Price is reset every year, meaning that if a
Subscription Right is 'out of the money' for the purposes of a
Subscription Date, the Ordinary Shares will nevertheless offer a
future opportunity to subscribe for new Ordinary Shares at the
rebased Subscription Price set on the following Business Day (the
undiluted NAV per Share) for the Subscription Date in the following
year.
Extraordinary General Meeting
The Proposals require the approval of Shareholders. A notice
convening an EGM to be held at the offices of Maitland
Administration (Guernsey) Limited at 3rd Floor, 1 Le Truchot, St.
Peter Port, Guernsey GY1 1WD, on 30 November 2022 at 12 noon is set
out in Part 11 of the Circular and Prospectus.
The EGM Resolution is to approve the adoption of New Articles .
The New Articles will set out the particulars of the Subscription
Rights. These are set out in full in Part 6 of the Circular and
Prospectus. Save for the introduction of the Subscription Rights,
the New Articles will be identical to the Existing Articles. The
New Articles will be on display at the registered office of the
Company from the date of the Circular and Prospectus until the end
of the Extraordinary General Meeting and at the Extraordinary
General Meeting itself for the duration of the meeting and for at
least 15 minutes prior to the EGM.
The EGM Resolution will be proposed as a special resolution in
accordance with the requirements of the Companies Law and will
require a majority of not less than 75% in order to be passed. The
Board is recommending that Shareholders vote in favour of the EGM
Resolution.
All Shareholders are entitled to vote at the Extraordinary
General Meeting. At the EGM, every member present by proxy shall,
on a poll, have one vote for every Share held. The quorum
requirement for the EGM is not less than two Shareholders present
in person or by proxy (or, if a corporation, by a representative)
and entitled to vote.
Detailed procedures in respect of the EGM are included in the
Circular and Prospectus.
The Circular and Prospectus will shortly be available to view on
the section of the Investment Manager's website dedicated to the
Company (http://ncim.co.uk/geiger-counter-ltd/). Capitalised terms
used in this announcement shall have the same meaning ascribed to
them in the Circular and Prospectus.
Enquiries:
CQS (UK) LLP
Craig Cleland +44 (0) 20 7201 5368
finnCap Limited
William Marle / Milesh Hindocha +44 (0) 20 7220 0500
Maitland Administration (Guernsey)
Limited
Elaine Smeja / Aimee Gontier +44 (0) 1481 749 368
Important Information
The information contained in this announcement does not
constitute an offer of securities for sale in any jurisdiction.
Definitions
The words and expressions listed below have the meanings set out
opposite them throughout this announcement except where the context
otherwise requires.
"Articles" the articles of incorporation of the Company from time to time, including
the Existing Articles
or the New Articles (as appropriate)
"Board" the board of directors of the Company (or any duly authorised committee
thereof) from time
to time
"Business Day" any day on which banks are open for business in both Guernsey and London
(excluding Saturdays,
Sundays, and public holidays)
"Company" Golden Prospect Precious Metals Limited
"Directors" the directors of the Company from time to time
"EGM" or "Extraordinary General Meeting" the extraordinary general meeting of the Company convened for 30 November
2022, commencing
at 12 noon (or any adjournment of that meeting), and notice of which is set
out in Part 11
of the Circular and Prospectus
"EGM Resolution" the special resolution set out in the notice convening the EGM in Part 11 of
the Circular
and Prospectus
"EU" the European Union
"Existing Articles" the articles of incorporation of the Company as at the date of the Circular
and Prospectus
"Companies Law" the Companies (Guernsey) Law 2008, as amended
"GFSC" the Guernsey Financial Services Commission
"latest practicable date" 26 October 2022
"NAV" in relation to (i) the Company, the value of the assets of the Company less
its liabilities
and (ii) the Ordinary Shares, the value of the assets of the Company less
its liabilities
divided by the number of Ordinary Shares in issue, in each case calculated
in accordance with
the Company's accounting policies from time to time
"New Articles" the memorandum and articles of incorporation of the Company as proposed to
be adopted by the
EGM Resolution
"Ordinary Shareholders" holders of Ordinary Shares
"Ordinary Shares" ordinary shares of GBP 0.01 pence in the capital of the Company
"Proposals" the introduction of an annual Subscription Right and adoption of the New
Articles conditional
on the passing of the EGM Resolution
"Shareholders" holders of Ordinary Shares
"Shares" the Ordinary Shares
"Subscription Date" as defined in paragraph 1.1 of Part 6 of the Circular and Prospectus
"Subscription Price" as defined in paragraph 1.1 of Part 6 of the Circular and Prospectus
"Subscription Right" the right conferred by each Ordinary Share as detailed in Part 6 of the
Circular and Prospectus
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
Notes:
1. All references to "GBP","pounds sterling" and "pence"
(including the abbreviation "p") are to the lawful currency of the
United Kingdom.
2. All references in the Circular and Prospectus to laws, rules
and regulations should be regarded as references to all such laws,
rules and regulations as amended from time to time.
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END
CIREAEFFFAFAFFA
(END) Dow Jones Newswires
November 11, 2022 05:25 ET (10:25 GMT)
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