Proposed Cancellation of Admission & Notice of GM
15 Janeiro 2010 - 5:00AM
UK Regulatory
TIDMTLT
RNS Number : 6015F
Tolent PLC
15 January 2010
Tolent plc
15 January 2010
PROPOSED CANCELLATION OF ADMISSION TO TRADING ON AIM AND NOTICE OF GENERAL
MEETING
Tolent plc, the AIM listed construction group, announces its intention to
convene a General Meeting to be held on 8 February 2010 for the purpose of
seeking shareholder approval for the cancellation of its trading on AIM.
An explanatory circular ('Circular') setting out the details of the proposal
together with a notice of General Meeting, has been posted to shareholders
today.
Extracts of the text of the Chairman's letter contained within the Circular are
set out below. Definitions in this announcement shall bear the same meaning as
those in the Circular to Shareholders.
Reason for the Cancellation of Admission
The perceived benefits of an AIM listing usually include access to funding,
enhanced corporate profile and liquidity in the company's shares. The Board has
reached the view that the Company is not receiving these benefits to any extent
that would justify the costs and management time associated with maintaining the
listing. Furthermore, the requirements to provide trading updates under the AIM
Rules are proving commercially disadvantageous in the current climate.The
Board therefore believes that the Company's interests would be better served if
the Company were to operate as an unlisted company without the requirements of
an AIM listing.
The Company has been listed on AIM since its demerger from Amco Corporation Plc
(now called Billington Holdings Plc) in 1999. At no time since joining AIM has
the Company sought to raise money from the markets, nor is it likely to attempt
to do so. Furthermore, if it were to attempt a significant capital raising by
way of a share issue, the Board does not believe it would be successful in the
current economic climate.
The Board considers that corporate profile as a public company can create a
perception of a more substantial business adding credibility with customers and
potential customers. However, the Company's competitors are often either very
large public companies or private companies. Large public companies are able to
carry out their activities through a number of different trading operations such
that announcements and disclosures of results for the public company as a whole
might not reveal the true performance of the business of any particular
subsidiary in its group. Private companies only have the requirement to produce
accounts annually, which can help them to delay customers becoming aware of any
deterioration in their performance, for example. However, Tolent is more
transparent owing to its relatively small size and AIM listing with its
requirement for regular trading updates and, in the current climate, where
activity levels are low, it is not difficult for customers to identify the
impact that their contract is having on the Company's results and to use that to
their commercial advantage.
Volatility in the share price and the apparent discount or premium to the
Group's net assets from time to time can also create a misleading view of the
Company. Tolent's management find that considerable effort is often required to
address the perceptions created with customers and suppliers before they will
deal with the Company and the Board considers that Cancellation will remove this
factor from discussions with customers and suppliers.
In addition, Cancellation will result in savings in management time and costs
associated with meeting the AIM Rules and related regulatory
requirements including reporting, disclosure and corporate governance
requirements.
Trading in the Ordinary Shares is already very limited and demand for the
Ordinary Shares from investors is low, as demonstrated by the share price
performance over the past three years. The Board acknowledges that Cancellation
will make it more difficult to trade in the Ordinary Shares but does not believe
that this outweighs the commercial benefits to be gained in de-listing from AIM.
However, it is important that Shareholders can trade in the Ordinary Shares and
the Company is making arrangements for a matched bargain trading facility to be
made available through Brewin Dolphin, further details of which are given at
section 4 below.
Following careful consideration, the Directors have therefore concluded that it
is no longer in the best interests of the Company or its Shareholders to
maintain the Company's admission to trading on AIM of the Ordinary Shares and
consider that the direct costs and commercial disadvantages of remaining listed
on AIM far outweigh the potential benefits. The Board has therefore decided to
propose the Cancellation. The Directors' intention is that the Company should
remain a public but unlisted company.
Effect of the Cancellation on Shareholders
The principal effects of the Cancellation would be that:
(a) there would no longer be a formal market mechanism enabling the
Shareholders to trade their Ordinary Shares on AIM or any other market or
trading exchange;
(b) the Company would not be bound to announce material events,
administrative changes or material transactions nor to announce interim or final
results;
(c) the Company would no longer be required to comply with any of the
additional specific corporate governance requirements for companies admitted to
trading on AIM; and
(d) the Company will no longer be subject to the AIM Rules and Shareholders
will no longer be required to vote on certain matters as provided in the AIM
Rules.
In addition, the Cancellation might have either positive or negative taxation
consequences for Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent adviser.
The Board will, however, continue to:
(a)post information relating to the Company on its website at www.Tolent.co.uk;
(b) continue to hold general meetings in accordance with the applicable
statutory requirements and the Company's articles of association; and
(c)continue to provide access to and/or provide copies of the Company's audited
accounts in line with the recently adopted electronic communications policy and
in accordance with the applicable statutory requirements and the methods agreed
with each Shareholder.
Shareholders should note that following the Cancellation the Company will remain
subject to the provisions of The City Code on Takeovers and Mergers on the basis
set out in those provisions.
The Company's CREST trading facility will remain in place for so long as it
remains economic to do so.
Share dealing following the Cancellation
Whilst the Board believes that the Cancellation is in the interests of
Shareholders as a whole, it recognises that Cancellation will make it more
difficult for Shareholders to buy and sell Ordinary Shares should they so wish.
Accordingly, the Board intends to set up a matched bargain arrangement, provided
by Brewin Dolphin, to enable Shareholders to trade the Ordinary Shares. Under
this facility, it is intended that Shareholders or persons wishing to
trade Ordinary Shares will be able to leave an indication with Brewin Dolphin
that they are prepared to buy or sell at an agreed price. In the event that the
matched bargain settlement facility is able to match that indication with an
opposite sell or buy instruction, Brewin Dolphin will contact both parties to
effect the bargain. Shareholders who do not have their own broker may need to
register with Brewin Dolphin as a new client. This can take some time to process
and therefore Shareholders who consider they are likely to use this facility are
encouraged to commence it at the earliest opportunity. Once the facility has
been arranged, details will be made available to Shareholders on the Company's
website at www.tolent.co.uk.
Approving the Cancellation and General Meeting
Under the AIM Rules, it is a requirement that the Cancellation must be approved
by not less than 75 per cent. of the Shareholders voting in the General Meeting.
Accordingly, the notice of General Meeting to be held at 11 a.m. on 8 February
2010 at the offices of the Company set out at the end of this document contains
a special resolution to approve the application to the London Stock Exchange for
the Cancellation.
If the Resolution is approved, it is expected that the Cancellation will take
effect at 7.00 a.m. on 16 February 2010 being at least 20 business days
following the date of this letter and 5 clear business days following the date
of the General Meeting.
Letters of intent
The Company has received letters of intent from Gutenga Investments PCC Limited,
Gutenga Holdings Limited (Trustee of the Tolent Employee Share Ownership Trust)
and Tarom Foundation in respect of the 9,421,318 Ordinary Shares held by them,
representing 73.4 per cent. in aggregate of the issued share capital of the
Company confirming their intention to vote in favour of the Resolution.
Action to be taken by Shareholders
A Form of Proxy for use by Shareholders in connection with the General Meeting
accompanies this document. Whether or not you intend to be present at the
General Meeting, you are requested to complete and sign the Form of Proxy and
return it to the Company Secretary at Ravensworth House, 5th Avenue Business
Park, Team Valley, Gateshead, Tyne & Wear, NE11 0HF, so as to be received no
later than 11.00 a.m. on 4 February 2010.
Unless the Form of Proxy is received by the date and time mentioned in the
instructions, it will be invalid. The completion and return of the Form of Proxy
will not prevent you from attending the General Meeting and voting in person, if
you so wish.
Recommendation
The Directors consider the Resolution to be in the best interests of the Company
and Shareholders as a whole and consider that it is most likely to promote the
success of the Company for the benefit of Shareholders as a whole. The Directors
therefore unanimously recommend Shareholders to vote in favour of the Resolution
at the General Meeting, as they intend to do in respect of their own beneficial
holdings of 63,000 Ordinary Shares representing 0.5 per cent. of the issued
share capital of the Company at the date of this document.
For further information, please contact:
Tolent plc 0191 487 0505
Peter Hems, Chairman
John Woods, Chief Executive Officer
Andy Clark, Finance Director
Brewin Dolphin Investment Banking 0845 270 8610
Andrew Emmott
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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