TIDMLBP
RNS Number : 2574Q
Lb-shell plc
05 June 2018
LB-shell plc
("LBS" or "the Company")
Conversion of Convertible Securities
Sub-division of Share Capital
and
Notice of General Meeting
LBS announces that it has posted to shareholders a Notice of
General Meeting to be held at the offices of Shakespeare Martineau,
6(th) Floor, 60 Gracechurch Street, London, EC3V 0HR at 11.30 a.m.
on 19 June 2018. The purpose of the General Meeting is to enable
inter alia the conversion of the convertible loan notes, which were
announced on 4(th) May 2018 and a sub-division of the Company's
existing share capital.
A copy of the AGM Notice has been uploaded to the National
Storage Mechanism and will shortly be available for inspection at
www.morningstar.co.uk/uk/NSM. The Circular is also available on the
Company's website at www.lb-shell.com.
The letter from the new Chairman of LB-Shell is contained within
the Circular and is copied below. References within it have the
same meanings as defined in the Circular.
Enquiries:
LB-Shell PLC
Melissa Sturgess Tel: +44 7787 942 777
Email: ir@lb-shell.com
Peterhouse Capital Limited
Heena Karani and Lucy Williams Tel: +44 207 469 0933
APPIX I
Circular to Shareholders
LETTER FROM THE CHAIRMAN OF LB-SHELL PLC
1. Introduction
On 3rd May 2018, Melissa Sturgess, Charles Morgan and Michael
Langoulant were appointed to the Board of the Company and Paul
Heiden (Chairman), Martin Bloom, Caroline Brown, Zed Cama, Flavio
Guidotti, John Maguire and Mike Muller stood down as directors. The
new Board was appointed to pursue an alternate path for the Company
rather than proceeding to an orderly winding-up or dissolution
following the acquisition of the Company's business and assets by
MEL on 25th October 2017.
On 4th May 2018, the Company announced the creation of
GBP300,000 unsecured convertible loan notes by way of deed poll,
with the aggregate principal amount being convertible into New
Ordinary Shares at a price of GBP0.00025. In addition, a further
GBP135,000 unsecured convertible loan notes have been created by
deed poll, also with the aggregate principal amount being
convertible into New Ordinary Shares at a price of GBP0.00025, in
settlement of fees and associated obligations relating to the
refinancing of the Company; GBP25,000 of the GBP135,000 CLNs have
been issued to Peterhouse Capital in satisfaction of its fees
incurred by the Company to date.
The purpose of this letter is to provide you with a background
to the creation and terms of the CLNs and for calling the General
Meeting. In addition, the letter explains why the Directors
consider the Resolutions to be in the best interests of the Company
and its Shareholders as a whole and why they recommend that
Shareholders vote in favour of the Resolutions to be proposed at
the General Meeting.
The ability of the CLNs to be converted into New Ordinary Shares
is conditional on the passing of the Resolutions. The maximum
number of New Ordinary Shares that can be issued pursuant to
conversion of the CLNs is 1,740,000,000 New Ordinary Shares which,
in aggregate, would represent 89.4 per cent. of the Fully Enlarged
Issued Capital.
The Board believes that creating and the issuing the CLNs to
raise funds for working capital purposes and settlement of fees and
associated obligations owed by the Company offers the greatest
prospect for the creation of additional value for Shareholders.
The Directors hold the following interests in the CLNs:
Director Amount of CLNs
Melissa Sturgess GBP150,000
Charles Morgan GBP100,000
Michael Langoulant GBP40,000
If the Resolutions are not approved, the Directors believe that
the only alternative is for the GBP300,000 CLNs to be redeemed and
the Company to be placed into liquidation. Having taken appropriate
professional advice the Directors believe it highly unlikely that
Shareholders would be able to recover any value for their shares or
that creditors would be able to recover the amounts owed to them by
the Company on a liquidation.
2. Background to the CLNs
On 25th October 2017, the Company completed the sale of its
business and assets to MEL and it was envisaged by the Previous
Directors that the Company would then proceed to an orderly
winding-up or dissolution.
Following an approach by Peterhouse Capital, the Previous
Directors announced that they had identified a viable continuation
option for the Company, which may provide a better return to
Shareholders than a winding-up of the Company (which was expected
to provide no return for Shareholders). This option would involve
the Company, under the leadership of a new board of directors and
subject to the requisite shareholder approvals, acquiring or
investing in a business (which is at this point unidentified),
using the proceeds of an initial GBP300,000 in convertible loan
funds and potential future additional funding.
On 3rd May 2018, the Previous Directors resolved to implement
this continuation option rather than proceed to a winding up of the
Company. In accordance with this resolution the Previous Directors
agreed to amend the October 2017 sale agreement with MEL to enable
the continuation option to proceed. This amendment provided for any
residual cash remaining in the Company ahead of the commencement of
any refinancing to be paid to MEL, which reflected the original
commercial terms of the October 2017 sale agreement. In addition,
MEL, which holds 20.36 per cent. of the Existing Ordinary Shares,
committed to voting in favour of some of the Resolutions necessary
to enable the continuation option to proceed.
In addition, the New Directors (who are being advised by
Peterhouse Capital) were appointed with a view to taking the
Company in a new direction in 2018.
The initial priority of the New Directors was to recapitalise
the Company and, with the assistance of Peterhouse Capital, raise
GBP300,000 before expenses through the issue of CLNs. The New
Directors will utilise the proceeds received from the GBP300,000
CLNs to maintain the Company's listing on the standard segment of
the main market of the London Stock Exchange plc, while seeking to
acquire or invest in a business. The New Directors are agnostic as
to which sector the Company will invest in but will focus on an
acquisition or investment that the New Directors believe will
create significant value for Shareholders in the form of capital
growth and/or dividends.
3. Principal Terms of the CLNs
Each CLN is convertible into New Ordinary Shares at a price of
GBP0.00025 per New Ordinary Share. Conversion of the CLNs into New
Ordinary Shares is conditional on approval of the Resolutions.
The CLNs are non-interest bearing, unsecured and rank pari passu
with all other unsecured liabilities of the Company.
The GBP300,000 CLNs are freely transferrable, while the
GBP135,000 CLN are only transferable with the prior consent of the
Company.
Unless converted, the GBP300,000 CLNs will be redeemed in full
on the date which is 3 years from the execution of the instrument
(the "Maturity Date") creating the GBP300,000 CLNs, or upon an
event of insolvency of the Company (as defined in section 123 of
the UK Insolvency Act 1986), or at any time at the election of the
holder of the GBP300,000 CLNs.
Unless converted, the GBP135,000 CLNs will be redeemed in full
on the Maturity Date or, in the event of insolvency of the Company
(as defined in section 123 of the UK Insolvency Act 1986) only, at
the election of the holder of the GBP135,000 CLNs.
Each GBP300,000 CLN will be convertible at the election of the
holder at any time upon 10 business days' notice prior to the
Maturity Date, into New Ordinary Shares at the Conversion Price,
provided that any such conversion is effected in respect of not
less than GBP1,000 worth of New Ordinary Shares.
Each GBP135,000 CLN will be convertible at the election of the
Company and the holder at any time upon 10 Business Days' notice
before the Maturity Date into New Ordinary Shares at the Conversion
Price, provided that any such conversion is effected in respect of
not less than GBP1,000 worth of New Ordinary Shares.
The CLNs are convertible into New Ordinary Shares at the
Conversion Price, only to the extent that, immediately following
such conversion, the New Ordinary Shares to be issued to the holder
would not together with persons "acting in concert" (as defined in
the Takeover Code) with the holder, carry 30% or more of the voting
rights of the Company, unless such conversion is effected as part
of a sale of the entire issued ordinary share capital of the
Company, is with Takeover Panel approval; or is part of a mandatory
offer for the remaining units in the Company, under Rule 9 of the
Takeover Code. In addition, the Company has the right to refuse to
act upon a Conversion Notice should such conversion be in breach of
any Listing Rules and in such circumstances whereby a Prospectus is
required to lawfully issue the relevant shares.
4. Sub-division
The existing ordinary share capital comprises 206,239,331
ordinary shares of GBP0.05 in issue. As each CLN is convertible
into New Ordinary Shares at a price of GBP0.00025 per Ordinary
Share, a re-organisation of the Company's share capital is required
to enable the CLNs to be converted into New Ordinary Shares. It is
proposed that the share capital of the Company be sub-divided by
each Existing Ordinary Share being divided into one New Ordinary
Share of GBP0.0001 each and one Deferred Share of GBP0.0499
each.
The New Ordinary Shares will continue to carry the same rights
as to voting, distributions and participant on a liquidation or
winding up of the Company as are attached to the Existing Ordinary
Shares.
The Deferred Shares will not entitle Shareholders to receive
notice of or attend and vote at any general meeting of the Company,
or to receive a dividend or other distribution, or to participate
in any return on capital on a winding up other than the nominal
amount paid on such shares following a substantial distribution to
holders of ordinary shares in the Company. Share certificates will
not be issued in respect of the New Deferred Shares.
The practical effect of the Sub-division, if approved, will be
that each Shareholder will hold the same number of New Ordinary
Shares as they hold Existing Ordinary Shares, together with one
Deferred Share for each Existing Ordinary Share held.
5. Amendments to the Articles of Association
In connection with the sub-division and creation of the Deferred
Shares pursuant to resolution 1 it is proposed that the articles of
association of the Company be amended to record the rights
attaching to the Deferred Shares.
A copy of the articles of association, as amended by resolution
4 will be available for inspection at the General Meeting and will
be made available on the Company's website at www.lb-shell.com.
6. Warrants
Subject to the passing of Resolutions 1, 3, 4 and 6, the Company
proposes issuing to Peterhouse Capital warrants to subscribe for up
to such number of New Ordinary Shares as is equal to 3 per cent. of
the Fully Enlarged Issued Capital. These Peterhouse Warrants shall
be exercisable at the Conversion Price for a period of 3 years from
the date of their issue and are proposed to be issued as part of
the remuneration arrangements entered into with Peterhouse Capital
in connection with the CLNs.
Subject to the passing of Resolutions 1, 2,, 4 and 5, the
Company also proposes issuing to each of the Directors warrants to
subscribe for up to such number of New Ordinary Shares as is equal
to 5 per cent. of the Fully Enlarged Issued Capital (being, in
aggregate, up to 15 per cent. of the Fully Enlarged Issued
Capital). These Director Warrants shall be exercisable at the
Conversion Price for a period of 5 years from the date of their
issue.
7. General Meeting
The Notice of General Meeting, which is to be held at the
offices of Shakespeare Martineau, 6th Floor, 60 Gracechurch Street,
London, EC3V 0HR at 11.30 a.m. on 19 June 2018, is set out at the
back of this document. At the General Meeting, the following
Resolutions will be proposed. Resolutions 1, 2, 4 and 5 are each
conditional on the other being passed, while Resolutions 3 and 6
are each conditional on the other, as well as Resolutions 1 and 4,
being passed:
1. Resolution 1, which is an ordinary resolution to approve the Sub-division;
2. Resolution 2, which is an ordinary resolution to authorise
the Directors to allot relevant securities up to an aggregate
nominal amount of GBP149,194 being equal to 1,491,940,000 New
Ordinary Shares;
3. Resolution 3, which is an ordinary resolution to authorise
the Directors to allot relevant securities up to an aggregate
nominal amount of GBP59,839 being equal to 598,390,000 New Ordinary
Shares;
4. Resolution 4, which is a special resolution to amend the
Company's articles of association to provide for rights attaching
to the Deferred Shares; and
5. Resolution 5, which is a special resolution to authorise the
Directors to allot the Ordinary Shares referred to in Resolution 2
on a non-pre-emptive basis.
6 Resolution 6, which is a special resolution to authorise the
Directors to allot the Ordinary Shares referred to in Resolution 3
on a non-pre-emptive basis.
MEL, which holds 20.36 per cent. of the Existing Ordinary
Shares, has agreed to vote in favour of Resolutions 1, 2, 4 and 5
to be proposed at the General Meeting.
The authorities to be granted pursuant to Resolutions 2, 3, 5
and 6 shall expire on the date of the next annual general meeting
of the Company.
8. Sale of New Ordinary Shares
In the event that all Resolutions are passed, Shareholders who
wish to dispose of any of their New Ordinary Shares may do so by
contacting Peterhouse Capital within 15 days of the announcement of
results of the General Meeting. Peterhouse Capital has agreed to
use its reasonable endeavours, to arrange the execution of a sale
of any New Ordinary Shares held by Shareholders on the date of the
General Meeting who wish to dispose of their New Ordinary Shares at
a price of GBP0.00025 each, being the Conversion Price of the
CLNs.
Any Shareholder wishing to take advantage of the above sale
facility should contact Peterhouse Capital directly on 020 7469
0933.
9. Action to be taken
Shareholders will find a Form of Proxy enclosed for use at the
General Meeting. Whether or not you intend to be present at the
General Meeting, you are requested to complete and return the Form
of Proxy in accordance with the instructions printed thereon as
soon as possible. To be valid, completed Forms of Proxy must be
received by 15 June 2018, no later than 48 hours before the time
appointed for holding the meeting. You are entitled to appoint a
proxy to attend and to exercise all or any of your rights to vote
and to speak at the General Meeting instead of you. Completion of
the Form of Proxy will not preclude you from attending and voting
at the General Meeting in person if you so wish. Your attention is
drawn to the notes to the Form of Proxy.
10. Recommendation
The Directors consider the Resolutions to be in the best
interests of the Company and the Shareholders as a whole. The
Directors therefore recommend that you vote in favour of the
Resolutions.
MEL which holds 20.36 per cent of the Existing Ordinary Shares,
has agreed to vote in favour of Resolutions 1, 2, 4 and 5 to be
proposed at the General Meeting, notice of which is set out in this
Document.
Yours faithfully,
For and on behalf of the Board
Melissa Sturgess
Chairman
This information is provided by RNS, the news service of the
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END
NOGLLFVRRFISIIT
(END) Dow Jones Newswires
June 05, 2018 02:01 ET (06:01 GMT)
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