TIDMLEF
RNS Number : 0693J
Ludgate Environmental Fund Limited
26 June 2017
Ludgate Environmental Fund Limited
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
26 June 2017
Proposed cancellation of the admission to trading on AIM of the
Ludgate Shares, adoption of new memorandum and articles of
association, change of regulatory status, change of name and Notice
of Extraordinary General Meeting
The Company will today post a circular to shareholders
("Circular") relating to the proposed cancellation of the admission
to trading on AIM of the Ludgate Shares, such cancellation to take
effect from 25 July 2017, adoption of new memorandum and articles
of association, change of regulatory status and change of name. The
Circular, which contains a notice of Extraordinary General Meeting
to take place on 14 July 2017 at which the relevant resolutions
will be put to shareholders, will also be available on the
Company's website www.ludgateenvironmental.com.
Expected Timetable:
Notice of proposed Cancellation announced 26 June 2017
Publication of the Circular 26 June 2017
Latest time and date for receipt of Forms of Proxy 10.00 a.m. on
12 July 2017
Extraordinary General Meeting 10.00 a.m. on 14 July 2017
Announcement of results of EGM 14 July 2017
Expected last day of dealings in Ludgate Shares on AIM
24 July 2017
Cancellation becomes effective from 7.00 a.m. on 25 July
2017
Future dates are indicative only and are subject to change, in
which event details of the new times and dates will be announced
via a Regulatory Information Service. References to times in this
announcement and the Circular are to London times.
1 Introduction
On 21 December 2016, the Ludgate Directors and Headway (acting
by its general partner, HIP III GP L.P., acting through its own
general partner, HIP III Management Limited) announced that they
had reached agreement on the terms of a recommended cash offer to
be made by Headway for the entire issued ordinary capital of
Ludgate, to be effected by means of a takeover offer within the
meaning of Article 116 of the Jersey Companies Law, at 16 pence per
Ludgate Share.
On 18 January 2017, Headway and Ludgate announced that the Offer
price had been increased to 16.3 pence per Ludgate Share and posted
the Offer Document, containing the full terms and conditions of the
Offer, the procedures for acceptance of the Offer, the notice of
the Independent Ludgate Shareholders Meeting to approve the
Proposed Amendments and the procedure for Independent Ludgate
Shareholders to vote at the Independent Ludgate Shareholders
Meeting, together with related forms of acceptance relating to the
Offer and forms of proxy for the Independent Ludgate Shareholders
Meeting, to Ludgate Shareholders.
On 8 February 2017, Ludgate announced that the Proposed
Amendments, a condition of the Offer, had been approved by a
requisite majority of Independent Ludgate Shareholders on a poll at
the Independent Ludgate Shareholders Meeting held on that date.
Later on the same date, Headway declared that the Offer was
unconditional in all respects and that the Offer would remain open
for acceptances until 1.00 p.m. on 22 February 2017 (the "Final
Closing Date").
By the Final Closing date Headway had received valid acceptances
pursuant to the Offer in respect of 30,732,659 Ludgate Shares
representing 57.6 per cent. of the Ludgate Shares in issue (the
"Headway Shareholding"). As the Headway Shareholding represents
more than 50 per cent. but not more than 74.99 per cent. of the
voting rights attaching to the Ludgate Shares, and now that Ludgate
has obtained the necessary regulatory approvals from the JFSC, as
set out in the Offer Document, the Ludgate Directors are convening
an extraordinary general meeting of Ludgate in accordance with AIM
Rule 41, at which a special resolution (the "Cancellation
Resolution") seeking the consent of Ludgate Shareholders to the
cancellation of the admission to trading on AIM of the Ludgate
Shares will be proposed. To be passed, the Cancellation Resolution
will require not less than 75 per cent. of votes cast by Ludgate
Shareholders (either in person or by proxy) to be in favour of the
Cancellation Resolution.
Headway has irrevocably undertaken to Ludgate an undertaking
that it will vote the Headway Shareholding (and any other Ludgate
Shares it becomes the registered holder of prior to the date of the
Extraordinary General Meeting) in favour of the Cancellation
Resolution. As at the date of this Circular, the Headway
Shareholding consisted of 30,732,659 Ludgate Shares, representing
57.6 per cent of the Ludgate Shares in issue.
In addition, as highlighted in the Offer Document, Headway has
received irrevocable undertakings from certain other Ludgate
Shareholders to vote, inter alia, in favour of the Cancellation
Resolution in respect of 15,964,139 Ludgate Shares in aggregate,
representing approximately 29.9 per cent. of the Ludgate Shares in
issue (the "Cancellation Undertakings").
The Ludgate Shares represented by the Headway Shareholding and
the Cancellation Undertakings equate, in aggregate, to 87.5 per
cent. of the Ludgate Shares in issue.
As a consequence of the passing of the Cancellation Resolution,
the Company will no longer meet the criteria to be regulated as a
Listed Fund pursuant to the JFSC's Listed Fund Guide and related
legislation, regulation and guidance and, therefore, its regulatory
status in Jersey needs to change. Following consultation with the
JFSC, the Ludgate Directors have agreed with the JFSC that, with
effect from the Cancellation, the Company will be subject to
Deregulation.
Subject to the passing of the Cancellation Resolution, and in
order to better reflect the position of the Company following the
Cancellation and Deregulation, the Change of Status Resolutions are
being proposed in order to:
(i) change the status of the Company from a public company to a private company;
(ii) change the name of the Company to "Ludgate Environmental Limited"; and
(iii) adopt the New Articles.
The Change of Status Resolutions will require not less than two
thirds of votes cast by Ludgate Shareholders on a poll (either in
person or by proxy) to be in favour of each of the Change of Status
Resolutions.
On behalf of the Ludgate Directors the Chairman is now writing
to Shareholders to outline details of the Proposals and to give
notice of the Extraordinary General Meeting. In this context,
Shareholders' attention is also drawn to the recent announcement
made by the Company on 21 April 2017 which referred to potential
transactions in relation to the Ludgate Assets. Commercial
negotiations remain ongoing in respect of these transactions, one
of which may potentially lead to the Ludgate Directors recommending
that a distribution be made to Ludgate Shareholders, however the
outcome remains uncertain at this point in time.
2.1 Reasons for the Cancellation
The Ludgate Directors note the following statements which were
contained in the Offer Document:
"Headway Capital advised Headway to evaluate Ludgate as an
investment opportunity as it believed that Headway could positively
influence the run-off of the Ludgate Assets once it became a major
Ludgate Shareholder.
Headway believes that the financial burden of managing and
operating Ludgate as a company with shares admitted to trading on
AIM has been disproportionate to the value of the Ludgate Assets.
It further believes that very low liquidity in the Ludgate Shares
will present significant difficulties for Ludgate Shareholders who
seek to realise their investment in Ludgate at market prices."
(p.18)
and
"...On the assumption that the Cancellation occurs... and that
Ludgate is operated and regulated as an unlisted entity, Headway
believes that, excluding the Management Fee and any Carried
Interest payable under the New IMA, cost savings may be able to be
achieved over the current cost base of Ludgate which will help to
minimise the cash expense drag on the value of the Ludgate Assets."
(p.22)
The Ludgate Directors further note that, in aggregating the
Ludgate Shares represented by the Headway Shareholding and the
Cancellation Undertakings, at least 87.5 per cent. of the Ludgate
Shares in issue will be voted in favour of the Cancellation
Resolution, a percentage which is in excess of the 75 per cent.
minimum threshold required to approve the Cancellation
Resolution.
In light of the above and in accordance with their intentions
set out in the Offer Document, the Ludgate Directors believe that
the Cancellation is in the best interests of Ludgate and the
Ludgate Shareholders as a whole.
2.2 Effects of the Cancellation and Deregulation
The principal effects of the Cancellation are considered by the
Ludgate Directors to be as follows:
(a) the liquidity and marketability of Ludgate Shares is likely
to be significantly reduced as there will be no secondary market in
the Ludgate Shares and no price for Ludgate Shares will be quoted
by any market maker. As such, interests in Ludgate Shares are
unlikely to be readily capable of sale and, even where a buyer is
identified, it may be difficult to place a fair value on any such
sale;
(b) under Jersey law Ludgate will still be subject to reporting
and corporate governance obligations following the Cancellation,
however, these will be less onerous for the Company to comply with
than the level of compliance and disclosure required by the AIM
Rules;
(c) the Company would no longer be required to comply with the
ongoing obligations set out in the AIM Rules (or to have a
nominated adviser), including the requirements to follow an
investment policy in accordance with AIM Rule 8 and to disclose
material events, such as interim or final results, substantial
transactions or other developments to the market, and Ludgate
Shareholders would no longer have the ability to vote on certain
matters prescribed by the AIM Rules, thereby removing the layer of
protection in respect of the interests of minority Ludgate
Shareholders afforded by the AIM Rules; and
(d) the Company would cease to be a regulated collective
investment fund in Jersey and as such will no longer be subject to
the requirements set out in the CIF Law and the Listed Fund Guide
published by the JSFC; instead becoming a private holding vehicle
for the Ludgate Assets.
2.3 The Cancellation procedure
Under the AIM Rules, the Cancellation can only be effected by
the Company after securing the consent of Ludgate Shareholders by
special resolution in a general meeting, whereby at least 75 per
cent. of votes cast by Ludgate Shareholders (either in person or by
proxy) must be in favour of the resolution. A period of at least
five Business Days following the Ludgate Shareholders' approval of
the Cancellation Resolution is required before the Cancellation may
take place.
Resolution 1 contained in the Notice of EGM at the end of this
Circular seeks Ludgate Shareholder approval for the Cancellation.
Assuming that Ludgate Shareholders approve the Cancellation
Resolution, it is expected that the Cancellation will take place no
earlier than 7:00 a.m. on 25 July 2017.
3 Possible on-market purchases of Ludgate Shares by Headway
Headway has informed Ludgate that (subject always to ongoing
compliance with the City Code) it is willing to acquire additional
Ludgate Shares at prices of up to 16.3 pence per Ludgate Share by
way of on-market purchases prior to the Cancellation. The Ludgate
Directors note that this should provide any Ludgate Shareholders
who did not accept the Offer but who wish to sell their Ludgate
Shares and exit their investment in the Company with a further
opportunity to do so prior to the Cancellation.
Headway has informed Ludgate that any Ludgate Shareholder
wishing to sell their Ludgate Shares should contact Marc Downes or
Paul Brotherhood at Arden Partners, whom Headway has appointed to
act on its behalf for this purpose, on +44 (0) 20 7614 5950.
Neither Headway, Ludgate nor the Ludgate Directors nor any of
their respective advisers will be responsible for advising or
providing any recommendation to Ludgate Shareholders with regard to
any sale of their Ludgate Shares. Ludgate Shareholders wishing to
sell their Ludgate Shares therefore do so at their own risk and are
advised to seek their own independent financial advice from a duly
authorised independent financial adviser before taking any
action.
4 Regulatory status of Ludgate following the Cancellation and Deregulation
The Company is currently a regulated collective investment fund
in Jersey pursuant to the CIF Law and the Listed Fund Guide
published by the JFSC. Once the Cancellation and Deregulation takes
effect this regulated status will cease and the Company will become
a holding vehicle for the Ludgate Assets. As such, the Company will
no longer be subject to the requirements, set out in the CIF Law
and the Listed Fund Guide published by the JFSC.
5 The Board following the Cancellation and Deregulation
It is the intention of the Ludgate Directors to step down from
the board of Ludgate as soon as reasonably practicable after the
Cancellation and Deregulation become effective.
6 The investment policy of the Company following the Cancellation
Following the Cancellation, the Company will no longer be
required to state and follow an investment policy in accordance
with AIM Rule 8 and there will be no requirement under Jersey law
or regulations for the Company to have an investment policy.
Accordingly, the Ludgate Directors intend that the investment
policy of the Company shall cease to apply from the date on which
the Cancellation becomes effective.
7 Proposed conversion to private company, change of name and
adoption of the New Articles following the Cancellation
The Change of Status Resolutions are being proposed in order
to:
(i) change the status of the Company from a public company to a private company;
(ii) change the name of the Company to "Ludgate Environmental Limited"; and
(iii) adopt the New Articles.
The Change of Status Resolutions will require not less than two
thirds of votes cast by Ludgate Shareholders on a poll (either in
person or by proxy) to be in favour of each of the Change of Status
Resolutions.
These proposals are designed better to reflect the position of
the Company as a deregulated holding vehicle after the Cancellation
has become effective.
Given the small number of Ludgate Shareholders and the fact that
the Ludgate Shares will no longer be admitted to trading on AIM or
any other public market following the Cancellation, the Ludgate
Directors consider that converting the Company to a private company
is more appropriate than retaining the Company's status as a public
company.
The proposed change of name is to reflect the fact that the
Company will no longer be a fund after the Cancellation.
The proposed New Articles are short form private company
articles which are considered by the Ludgate Directors (in
consultation with their professional advisers) better to reflect
the nature and intended operation of the Company going forward than
the Articles. A copy of the New Articles are available on the
Company's website www.ludgateenvironmental.com and will be
available for inspection during the EGM.
8 Corporate governance following the Cancellation and Deregulation
Historically, the Ludgate Directors have considered it to be
best practice for Ludgate (as a public company with shares admitted
to trading on AIM) to voluntarily adopt the AIC Code of Corporate
Governance.
The Ludgate Directors believe that, following the Cancellation
and Deregulation, it will no longer be relevant or appropriate for
the Company to comply with this code and the Company will instead
have regard to its obligations under Jersey law as a private
company.
9 Ludgate Shareholder communications and compliance with
anti-money laundering legislation following the Cancellation and
Deregulation
Following the Cancellation and Deregulation the Company will
conduct an overarching review of its administration to ensure that
it is appropriate for its status as a private company. The outcome
of this review and any action which results from it will be
communicated to Ludgate Shareholders in due course.
Following the Cancellation the Company will continue to be
subject to applicable anti-money laundering (AML) and know your
client (KYC) legislation, regulations and guidance in Jersey. In
order to ensure compliance with these requirements, Ludgate
Investments will, on behalf of the Company, write to Ludgate
Shareholders to check that any verification of identity information
held by the Company remains up to date or to request verification
of identity information where this information is either not held
or is out of date. Failure to provide information which is required
to ensure compliance with the applicable legislation, regulations
and guidance in Jersey may result in Ludgate being unable to make
distributions to Ludgate Shareholders or to otherwise allow any
dealings by Ludgate Shareholders in Ludgate Shares until such time
as these requirements are complied with.
10 Trading in Ludgate Shares following the Cancellation
In the event that the Cancellation proceeds in accordance with
the expected timetable, there will be no ongoing market facility
for dealing in Ludgate Shares and no price will be publicly quoted
for Ludgate Shares as from the close of business on 24 July 2017.
As a result, interests in Ludgate Shares are unlikely to be readily
capable of sale and, even where a buyer is identified, it may be
difficult to place a fair value on any such sale.
Following the Cancellation, it is intended that the Company will
cancel the facility for the Ludgate Shares to be settled
electronically through CREST and that any Ludgate Shares then held
in uncertificated form will be rematerialised. The Company intends
to make arrangements to send share certificates to those Ludgate
Shareholders (at their risk) which currently hold their Ludgate
Shares in uncertificated form.
Following the Cancellation, transfers of Ludgate Shares may be
effected in accordance with those provisions of the Articles or (in
the event the relevant Change of Status Resolution is passed) the
New Articles concerning off-market transfers of shares as
summarised below.
All transfers of Ludgate Shares under the New Articles shall be
effected using an instrument of transfer. The instrument of
transfer of any Ludgate Share shall be in writing in any usual
common form or any form approved by the Board. The instrument of
transfer of any Ludgate Share shall be signed by or on behalf of
the transferor and in the case of an unpaid or partly paid Ludgate
Share by the transferee. The transferor shall be deemed to remain
the holder of the Ludgate Share until the name of the transferee is
entered in the register of members in respect thereof. The Board
may in its absolute discretion and without assigning any reason
therefor refuse to register the transfer of a Ludgate Share
including without limitation a transfer of Ludgate Shares to a
person of whom they do not approve and a transfer of a Ludgate
Share on which the Company has a lien.
The Board may also refuse to register the transfer of a Ludgate
Share unless the instrument of transfer:
(i) is lodged at the registered office or at such other place as
the Board may appoint accompanied by the certificate for the
Ludgate Shares to which it relates and such other evidence as the
Board may reasonably require to show the right of the transferor to
make the transfer;
(ii) is in respect of only one class of shares; and
(iii) is in favour of not more than four transferees.
If the Board refuses to register a transfer of a Ludgate Share
it shall within two months after the date on which the instrument
of transfer was lodged with the Company send to the proposed
transferor and transferee notice of the refusal.
All instruments of transfer relating to transfers of Ludgate
Shares which are registered shall be retained by the Company but
any instrument of transfer relating to transfers of Ludgate Shares
which the Board declines to register shall (except in any case of
fraud) be returned to the person depositing the same.
The registration of transfers of Ludgate Shares or of transfers
of any class of shares may be suspended at such times and for such
periods as the Board may determine.
Unless otherwise decided by the Board in its sole discretion no
fee shall be charged in respect of the registration of any
instrument of transfer or other document relating to or affecting
the title to any Ludgate Share.
11 The application of the City Code following the Cancellation
The City Code is issued and administered by the Panel. The City
Code currently applies to the Company and will continue to apply to
the Company notwithstanding the Cancellation. The City Code will
only cease to apply to the Company upon the expiry of the 10-year
period from the date of the Cancellation or, if earlier, the date
on which the Company is dissolved.
12 Taxation
Shareholders who are in any doubt about their tax position
should consult an appropriate independent professional adviser.
Following the Cancellation, the Ludgate Shares will no longer be
admitted to trading on AIM or any other public market and Ludgate
will no longer be a regulated collective investment fund in
Jersey.
13 Extraordinary General Meeting
Set out at the end of the Circular is a notice convening the EGM
to be held at 10.00 a.m. on 14 July 2017 at Lime Grove House, Green
Street, St Helier, Jersey, JE1 2ST. At the EGM, the Cancellation
Resolution and the Change of Status Resolutions will be
proposed.
14 Voting intentions
Headway has irrevocably undertaken to Ludgate that it will vote
the Headway Shareholding (and any other Ludgate Shares it acquires
and becomes the registered holder of prior to the date of the
Extraordinary General Meeting) in favour of all of the Resolutions.
As at the date of this Circular, the Headway Shareholding consisted
of 30,732,659 Ludgate Shares represented 57.6 per cent of the
Ludgate Shares in issue.
Ludgate Investments and Ocean Capital Holdings II B.V. (the
investment vehicle of Gijs and Jeroen Voskamp who are both
directors of Ludgate Investments) have irrevocably undertaken to
Headway to vote in favour of all of the Resolutions in respect of
6,503,757 Ludgate Shares in aggregate, representing approximately
12.2 per cent. of the Ludgate Shares in issue.
In addition, as set out in the Offer Document, the Ludgate
Directors note that Headway has received irrevocable undertakings
from Flintshire County Council and South Yorkshire Pensions
Authority to vote in favour of the Cancellation Resolution in
respect of 9,460,382 Ludgate Shares in aggregate, representing
approximately 17.7 per cent. of the Ludgate Shares in issue.
In aggregate, therefore, Ludgate Shareholders controlling at
least 46,696,798 Ludgate Shares in aggregate, representing
approximately 87.5 per cent of the Ludgate Shares in issue, have
undertaken to vote in favour of the Cancellation Resolution and
Ludgate Shareholders controlling at least 37,236,416 Ludgate Shares
in aggregate, representing approximately 69.8 per cent of the
Ludgate Shares in issue, have undertaken to vote in favour of the
Change of Status Resolutions.
Save for expressions defined in this announcement, words and
expressions defined in the Circular shall have the same meaning in
this announcement.
Enquiries
Ludgate Environmental Fund Limited Tel: +44 (0) 1534 609034
John Shakeshaft (Chairman)
Panmure Gordon (Nominated Adviser) Tel: +44 (0) 20 7886 2500
Paul Fincham / Jonathan Becher
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCPGUCAQUPMGAW
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