TIDMMORT
RNS Number : 4492F
Mortice Limited
15 July 2019
Mortice Limited
("Mortice" or the "Company")
Proposed Cancellation of Admission to Trading on AIM
Proposed Share Buyback
and
Publication of Circular and Notice of Extraordinary General
Meeting
Mortice Limited (AIM: MORT), announces that, having carefully
considered whether Mortice should remain a quoted company, the
Board has concluded that the cancellation of admission of its
ordinary shares of nil par value ("Ordinary Shares") to trading on
AIM ("Cancellation") is in the best interests of the Company and
its Shareholders as a whole.
The Company will therefore seek Shareholders' approval for the
Cancellation at an Extraordinary General Meeting of the Company
("EGM"). An explanatory circular will be posted to Shareholders
today (the "Circular") setting out the background to and reasons
for the Cancellation, the reasons why the Directors believe that
this is in the best interests of the Company and its Shareholders
as a whole and their recommendation to Shareholders to vote in
favour of the resolution to approve the Cancellation ("Resolution
1").
The EGM has been convened for 5.30 p.m. (Singapore Time) /
10.30.a.m. (UK Time) on 7 August 2019 at the Company's Registered
office, 38 Beach Road, #29-11 South Beach Tower 189767, Singapore.
Cancellation is conditional upon Resolution 1 becoming effective by
way of approval of not less than 75 per cent. of the votes cast by
Shareholders (whether present in person or by proxy) at the
EGM.
If Resolution 1 is passed at the EGM, the expected last day of
dealings in Ordinary Shares on AIM will be 23 August 2019 and the
Cancellation will become effective at 7.00 a.m. (UK Time) on 27
August 2019.
Pursuant to Rule 41 of the AIM Rules, the Company, through its
Nominated Adviser, finnCap, has notified the London Stock Exchange
of the proposed Cancellation.
Exit Facility
The Board is aware that Shareholders may be either unable to
hold unquoted shares or are unwilling to continue to hold such
shares with the reduced level of marketability that is likely to
ensue following Cancellation. Therefore, if the Resolutions are
passed at the EGM, on the 7 August 2019, the Company will place an
order with finnCap Ltd, the Company's broker, to purchase in the
market any Ordinary Shares offered for sale at a price of 12 pence
per Ordinary Share ("Share Buy-Back Price") from 8 August 2019 to
21 August 2019 ("Exit Facility").
The Share Buy Back Price represents a premium of 9.1% over the
closing mid market price on the 12 July 2019, the last practicable
date before the release of this announcement. The Exit Facility
will enable such Shareholders to sell their shares immediately
following the EGM and ahead of Cancellation. The Exit Facility is
conditional on the approval by Shareholders of Resolution 1, the
Cancellation, and subject to the passing of resolution 2 at the EGM
authorising the Directors to implement the Exit Facility by way of
a share buy-back.
The Major Shareholder and the Directors, who collectively hold,
in total, 78.68 per cent of the Ordinary Shares, have undertaken to
and agreed with the Company that they shall not participate in the
Share Buy-Back and acknowledge that the Company will not be
purchasing any Ordinary Shares held by them, and that they will not
sell, transfer or otherwise dispose of their Ordinary Shares until
after the expiry of the Share Buy-Back Mandate.
The above summary should be read in conjunction with the full
text of this announcement and Circular. Extracts of the Circular,
which sets out the background to and reasons for the Company
seeking Cancellation are set out below and a copy of the Circular
will shortly be available on the Company's website:
https://tenonworld.com/mortice/about-us/documents/
A notice convening the Extraordinary General Meeting is set out
in the Circular to be sent to Shareholders today.
Mortice Limited www.morticegroup.com
For further information:
Manjit Rajain, Executive Chairman Tel: +91 981 800 0011
finnCap Ltd Tel: 020 7220 0500
Carl Holmes / Giles Rolls
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
1. Introduction
1.1 As announced by the Company today, the Directors have
concluded that it is in the best interests of the Company and its
Shareholders to cancel the admission of the Ordinary Shares to
trading on AIM. Pursuant to Rule 41 of the AIM Rules, the Company
(through its nominated adviser, finnCap Ltd) has notified the
London Stock Exchange of the date of the proposed Cancellation.
1.2 The Cancellation is conditional, pursuant to Rule 41 of the
AIM Rules, upon the approval of not less than seventy-five per cent
(75%) of the votes cast by Shareholders (whether present in person
or by proxy) at the Extraordinary General Meeting, notice of which
is set out in Part II of the Circular.
1.3 In connection with the proposed Cancellation, the Company
also wishes to put in place the Exit Facility to enable the
Shareholders who are either unable to hold unquoted shares or
unwilling to continue holding such shares to sell their Ordinary
Shares immediately following the Extraordinary General Meeting.
1.4 Due to the limited number of existing Shareholders and the
illiquidity of the Ordinary Shares prior to Cancellation the
Company will not maintain the Depositary Interest facility
following Cancellation and the Depositary Interests facility will
be cancelled. Depositary Interest holders will receive a share
certificate for their cancelled Depositary Interest holding.
Shareholders will be able to continue to trade their Ordinary
Shares in certificated form.
1.5 The Company is therefore seeking Shareholders' approval of
the Cancellation and the Exit Facility at the Extraordinary General
Meeting, which has been convened for 5:30 p.m. (Singapore Time) on
7 August 2019 at 38 Beach Road, #29-11 South Beach Tower 189767,
Singapore. If Resolution 1 is passed at the Extraordinary General
Meeting, it is anticipated that the Cancellation will become
effective at 7.00 a.m. on 27 August 2019.
1.6 The purpose of the Circular is to seek Shareholders'
approval for the Resolutions, to provide you with the information
on the background and reasons for Cancellation and the Exit
Facility and to explain the consequences of the Cancellation and
the Exit Facility and why the Directors unanimously consider the
Cancellation and the Exit Facility to be in the best interests of
the Company and its Shareholders as a whole.
1.7 The Notice of the Extraordinary General Meeting is set out in Part II of the Circular.
2. Background and reasons for Cancellation
2.1 The Directors have conducted a review of the benefits and
drawbacks to the Company and its Shareholders in retaining its
quotation on AIM, and believe that Cancellation is in the best
interests of the Company and its Shareholders as a whole. In
reaching this conclusion, the Directors have considered the
following key factors:
-- the considerable cost, management time and the legal and
regulatory burden associated with maintaining the Company's
admission to trading on AIM are, in the Directors' opinion,
disproportionate to the benefits to the Company;
-- the Directors and the Major Shareholder hold, in total,
78.68% of the Company's current issued share capital, resulting in
a limited free float and liquidity in the Ordinary Shares with the
consequence that the AIM listing of the Ordinary Shares does not,
in itself, offer investors the opportunity to trade in meaningful
volumes or with frequency within an active market;
-- despite attempts to broaden the liquidity in the Company's
Ordinary Shares, including through a placing of Ordinary Shares in
2016, success in this regard has been limited;
-- during the last twelve months, the price of the Company's
Ordinary Shares has substantially fallen, which the Board believes
has led to a significant undervaluation of the Company's Ordinary
Shares by the public market;
-- the Company remains acquisitive and has certain obligations
due to vendors from previous acquisitions made by the Company and,
as such, may require a significant injection of capital to finance
these. It is the Directors' view that, given the price of the
Company's Ordinary Shares, the continued admission to AIM is
unlikely to provide the Company with access to equity capital, if
required, at a price that would be in the interest of the Company
or its Shareholder and that funding at a fair value could be
secured more easily if it is no longer admitted to AIM; and
-- due to the Company's limited liquidity in its shares and
modest market capitalisation, continuing admission to trading on
AIM no longer enables the Ordinary Shares to be used to effect
acquisitions.
2.2 Following careful consideration, the Directors believe that
it is in the best interests of the Company and Shareholders to seek
the proposed Cancellation at the earliest opportunity.
3. Process for, and principal effects of, the Cancellation
3.1 The Directors are aware that certain Shareholders may be
unable or unwilling to hold Ordinary Shares in the event that the
Cancellation is approved and becomes effective. Such Shareholders
should consider selling their interests in the market prior to the
Cancellation becoming effective and in deciding whether to sell
their Ordinary Shares through the Exit Facility.
3.2 Under the AIM Rules, the Company is required to give at
least 20 clear Business Days' notice of Cancellation. Additionally,
Cancellation will not take effect until at least 5 clear Business
Days have passed following the passing of Resolution 1. If
Resolution 1 is passed at the Extraordinary General Meeting, it is
proposed that the last day of trading in Ordinary Shares on AIM
will be 23 August 2019 and that the Cancellation will take effect
at 7.00 a.m. on 27 August 2019.
3.3 The principal effects of the Cancellation will be that:
-- there will be no formal market mechanism enabling the
Shareholders to trade Ordinary Shares.
-- while the Ordinary Shares will remain freely transferrable,
it is possible that the liquidity and marketability of the
Ordinary
Shares will, in the future, be even more constrained than at
present and the value of such shares may be adversely affected as a
consequence;
-- in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
-- Shareholders will no longer be afforded the protections given
by the AIM Rules, such as the requirement to be notified of certain
events and the requirement that the Company seek shareholder
approval for certain corporate actions, where applicable, including
substantial transactions, financing transactions, reverse
takeovers, related party transactions and fundamental changes in
the Company's business, including certain acquisitions and
disposals;
-- the levels of transparency and corporate governance within
the Company may not be as stringent as for a company quoted on
AIM;
-- the Company will cease to have an independent nominated adviser and broker; and
-- the Cancellation may have taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
3.4 The Company will remain registered with the Accounting and
Corporate Regulatory Authority of Singapore in accordance with and
subject to the Companies Act, notwithstanding the Cancellation.
3.5 The above considerations are not exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
3.6 The Company currently intends that it will continue to
provide certain facilities and services to Shareholders that they
currently enjoy as shareholders of an AIM company. The Company
will:
-- continue to hold annual general meetings; and
-- continue, for at least 12 months following the Cancellation, to maintain its website, https://tenonworld.com/mortice and to post updates on the website from time to time, although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under AIM Rule 26 or to update the website as required by the AIM Rules.
3.7 In addition, the Company confirms that there is currently no
intention to change the existing Directors following the
Cancellation.
4. Exit Facility - Proposed Share Buy-Back
4.1 The Board is aware that Shareholders may be either unable to
hold unquoted shares or are unwilling to continue to hold such
shares with the reduced level of marketability that is likely to
ensue following Cancellation. Therefore, the Exit Facility is being
put in place to enable such Shareholders to sell their Ordinary
Shares immediately following the Extraordinary General Meeting.
4.2 The Exit Facility is by way of the Company buying back up to
a maximum 15.22% of total issued and paid-up the Ordinary Shares as
at the date of the last Annual General Meeting of the Company held
on 24 September 2018, subject to the passing of the
Resolutions.
4.3 The Cancellation is not conditional on any minimum number of
Ordinary Shares being purchased or acquired by the Company pursuant
to the Share Buy-Back Mandate. In the event that the Cancellation
is not approved by the requisite majority of Shareholders at the
Extraordinary General Meeting, the Share Buy-Back Mandate shall
automatically lapse.
4.4 All Shareholders, save those detailed in 4.7 below, who wish
to sell their Ordinary Shares in the market at the Share Buy-Back
Price will therefore have the opportunity to do so. Shareholders
should consult with their own independent financial adviser and/or
broker should they wish to consider selling their interests in the
market prior to the Cancellation becoming effective, as it will be
necessary to instruct a broker to place an order in the market for
the sale of the relevant shares.
4.5 Rationale for the Share Buy-Back Mandate
The rationale for the adoption of the Share Buy-Back Mandate is
to allow the Company to purchase Ordinary Shares held by those
Shareholders who do not wish to remain as Shareholders in view of
the Cancellation.
4.6 Authority and Limits of the Share Buy-Back Mandate
The authority and limits on the purchases of Ordinary Shares by
the Company under the Share Buy-Back Mandate, for which the
approval is sought, are as follows;
(a) Maximum Number of Shares
As at the date of the last Annual General Meeting (the "AGM")
held on 24 September 2018, the total number of issued Ordinary
Shares in the share capital of the Company was 53,417,440. The
total number of Ordinary Shares which may be purchased by the
Company is limited to the number of Ordinary Shares representing
not more than 20% of the issued Ordinary Shares as at the date of
the last AGM.
At an extraordinary general meeting held on 24 September 2018
(the "September EGM"), approval was obtained from Shareholders for
the Company to purchase 1,094,400 issued Ordinary Shares from Grae
Mcintosh Scott (627,640 Ordinary Shares) and Jonathan Smith
(466,760 Ordinary Shares) by way of a share buy-back mandate in
accordance with the terms of the sale and purchase agreement and
the share buy-back mandate.
The Company, on 1 November 2018, announced the buy-back of
1,094,400 Ordinary Shares comprising 2.05% of the issued share
capital as at the date of the last AGM.
At an extraordinary general meeting held on 17 May 2019 (the
"May EGM"), approval was obtained from Shareholders for the Company
to purchase 1,458,333 issued Ordinary Shares from Gerard Peter
McGrath (875,000 Ordinary Shares) and Kathleen Theresa Bernadette
McGrath (583,333 Ordinary Shares) by way of a share buy-back
mandate in accordance with the terms of the sale and purchase
agreement and the share buy-back mandate.
The Company, on 8 July 2019, announced the buy-back of 1,458,333
Ordinary Shares comprising 2.73% of the issued share capital as at
the date of the last AGM.
The total number of Ordinary Shares which may be purchased by
the Company pursuant to the Share Buy Back Mandate is therefore
limited to 15.22% of the issued share capital as at the date of the
last AGM, representing a maximum number of 8,130,755 Ordinary
Shares.
(b) Duration of Authority
Pursuant to the proposed Share Buy-Back Mandate, the Company may
buy back Ordinary Shares at any time and from time to time on and
from the day after the forthcoming Extraordinary General Meeting up
to the earliest of:
(i) The date on which the next Annual General Meeting of the
Company is held or required by law to be held;
(ii) The date on which the authority conferred by the Share
Buy-Back Mandate is revoked or varied by the Shareholders in a
general meeting;
(iii) The date falling two (2) weeks from the date the Share
Buy-Back Mandate is approved by the Shareholders; and
(iv) The date on which the Share Buy-Back is fulfilled up to the
full extent of the Share Buy-Back Mandate.
(c) Maximum Price to be paid for the Ordinary Shares
The purchase price (excluding brokerage, stamp duties,
applicable goods and services tax and other related expenses) to be
paid for each Ordinary Share will be the Share Buy-Back Price.
(d) Manner of Share Buy-Back
In this instance, if the Resolutions are passed at the EGM, on
the 7 August 2019, the Company will place an order with finnCap
Ltd, the Company's broker, to purchase in the market any Ordinary
Shares offered for sale at a price of 12 pence per Ordinary Share
from 8 August 2019 to 21 August 2019.
(e) Source of Funds
Under the Companies Act, any purchase of shares pursuant to the
Share Buy-Back Mandate may be made out of the Company's capital
and/or distributable profits that are available for payment as
dividends. In addition, the Companies Act permits the Company to
purchase its own shares out of capital, as well as from its
distributable profits, so long as the Company is solvent.
The Company may use internal sources of funds (comprising cash,
liquidation of investments and fixed deposits) or borrowings or a
combination of both to finance the purchases of its Ordinary
Shares.
Where the consideration paid by the Company for the Share
Buy-Back is made out of profits, such consideration will
correspondingly reduce the amount of profits available for the
distribution of cash dividends by the Company. However, where the
consideration paid by the Company for the Share Buy-Back is made
out of capital, the amount of profits available for the
distribution of cash dividends by the Company will not be
reduced.
4.7 Shareholders Undertakings
The Major Shareholder and the Directors, who collectively hold,
in total, 78.68 per cent of the Ordinary Shares, have undertaken to
and agreed with the Company that, among others, they shall not
participate in the Share Buy-Back and acknowledge that the Company
will not be purchasing any Ordinary Shares held by them, and that
they will not sell, transfer or otherwise dispose of their Ordinary
Shares until after the expiry of the Share Buy-Back Mandate.
Such undertakings shall lapse upon the earlier of the expiry of
the Share Buy-Back Mandate or the termination of the Cancellation
(for whatever reason, including failure to obtain Shareholders'
approval).
4.8 Right of Compulsory Acquisition
The Cancellation will not result in any right of compulsory
acquisition or squeeze-out of any minority Shareholders.
4.9 Intention to Privatise
While the Cancellation is not a privatization exercise, it is
the intention of the Company, following the Cancellation, to take
necessary steps to privatize the Company (including, without
limitation, the amendment of the Constitution of the Company to be
commensurate with its status as a private limited company, and
reducing the number of Shareholders to not more than 50).
4.10 Status of purchased Ordinary Shares
(a) Any Ordinary Share which is purchased or acquired by the
Company under the Share Buy-Back Mandate shall be treated as
cancelled immediately on purchase, and all rights and privileges
attached to that Ordinary Share will expire upon cancellation.
(b) All Ordinary Shares purchased by the Company (other than
treasury shares held by the Company to the extent permitted under
the Companies Act) will be automatically cancelled following
settlement of any such purchase or acquisition.
4.11 Takeover Obligations pursuant to the Takeover Code
Appendix 2 to the Takeover Code contains the Share Buy-Back
Guidance Note applicable as at the Latest Practicable Date. The
take-over implications arising from any purchase or acquisition by
the Company of its Ordinary Shares are set out below:
(a) Obligation to Make a Takeover Offer
If, as a result of any purchase or acquisition by the Company of
its Ordinary Shares, the percentage voting rights held by a
Shareholder and persons acting in concert with him increases, such
increase will be treated as an acquisition for the purposes of Rule
14 of the Takeover Code. If such increase results in a change of
effective control, or, as a result of such increase, a Shareholder
or group of Shareholders acting in concert obtains or consolidates
effective control of the Company, such Shareholder or group of
Shareholders acting in concert could become obliged to make a
mandatory take-over offer for the Company under Rule 14 of the
Takeover Code.
(b) Persons Acting in Concert
Under the Takeover Code, persons acting in concert comprise
individuals or companies who, pursuant to an agreement or
understanding (whether formal or informal), cooperate, through the
acquisition by any of them of shares in a company, to obtain or
consolidate effective control of that company.
Unless the contrary is established, the following persons will
be presumed to be acting in concert:
(a) The following companies:
(i) a company;
(ii) the parent company of (i);
(iii) the subsidiaries of (i);
(iv) the fellow subsidiaries of (i);
(v) the associated companies of any of (i), (ii), (iii) or (iv);
(vi) companies whose associated companies include any of (i),
(ii), (iii), (iv) or (v); and
(vii) any person who has provided financial assistance (other
than a bank in the ordinary course of business) to any of the above
for the purchase of voting rights;
(b) A company with any of its directors (together with their
close relatives, related trusts as well as companies controlled by
any of the directors, their close relatives and related
trusts);
(c) A company with any of its pension funds and employee share schemes;
(d) A person with any investment company, unit trust or other
fund whose investment such person manages on a discretionary basis,
but only in respect of the investment account which such person
manages;
(e) A financial or other professional adviser, including a
stockbroker, with its client in respect of the shareholdings of the
adviser and the persons controlling, controlled by or under the
same control as the adviser;
(f) Directors of a company (together with their close relatives,
related trusts and companies controlled by any of such directors,
their close relatives and related trusts) which is subject to an
offer or where the directors have reason to believe a bona fide
offer for their company may be imminent;
(g) Partners; and
(h) The following persons and entities:
(i) an individual;
(ii) the close relatives of (i);
(iii) the related trusts of (i);
(iv) any person who is accustomed to act in accordance with the instructions of (i);
(v) companies controlled by any of (i), (ii), (iii) or (iv); and
(vi) any person who has provided financial assistance (other
than a bank in the ordinary course of business) to any of the above
for the purchase of voting rights.
For this purpose, ownership or control of at least 20% but not
more than 50% of the voting rights of a company will be regarded as
the test of associated company status.
The circumstances under which Shareholders, including Directors
and persons acting in concert with them respectively, will incur an
obligation to make a takeover offer under Rule 14 after a purchase
or acquisition of Ordinary Shares by the Company are set out in
Appendix 2 to the Takeover Code.
(c) Effect and Application of Rule 14 and Appendix 2 to the Takeover Code
In general terms, the effect of Rule 14 and Appendix 2 to the
Takeover Code is that, unless exempted, Directors and persons
acting in concert with them will incur an obligation to make a
takeover offer for the Company under Rule 14 of the Takeover Code
if, as a result of the Company purchasing or acquiring its Ordinary
Shares, the voting rights of such Directors and their concert
parties, being in aggregate less than 30% before such purchase or
acquisition, would increase to 30% or more, or if the voting rights
of such Directors and their concert parties fall between 30% and
50% of the Company's voting rights, the voting rights of such
Directors and their concert parties would increase by more than 1%
in any period of six (6) months.
Under Appendix 2 to the Takeover Code, a Shareholder not acting
in concert with the Directors of the Company will not be required
to make a takeover offer under Rule 14 of the Takeover Code if, as
a result of the Company purchasing or acquiring its Ordinary
Shares, the voting rights of such Shareholder in the Company would
increase to 30% or more, or, if such Shareholder holds between 30%
and 50% of the Company's voting rights, the voting rights of such
Shareholder would increase by more than 1% in any period of six (6)
months. Such Shareholder need not abstain from voting in respect of
the resolution authorising the Share Buy-Back Mandate.
Based on the information set out in paragraph 4.12 and assuming
that there is no change in the shareholding interests of the
Directors and the Substantial Shareholders in Ordinary Shares
recorded in the Register of Directors' Shareholdings and Register
of Substantial Shareholders maintained by the Company as at the
Latest Practicable Date, none of the Directors and the Substantial
Shareholders would become obliged to make a takeover offer for the
Company under Rule 14 of the Takeover Code as a result of any
purchase or acquisition of Ordinary Shares by the Company pursuant
to the Share Buy-Back Mandate of the maximum limit of 15.22% of its
total number of issued Ordinary Shares (excluding treasury shares
and subsidiary holdings) as at the date of the May EGM.
Shareholders who are in doubt as to their obligations, if any,
to make a mandatory takeover offer under the Takeover Code as a
result of any purchase or acquisition of Ordinary Shares by the
Company should consult the Securities Industry Council and/or their
professional advisers at the earliest opportunity.
4.12 Interests of Directors and Substantial Shareholders
The interests of the Directors and Substantial Shareholders of
the Company as at the Latest Practicable Date, as recorded in the
Company's Register of Directors' Shareholdings and Register of
Substantial Shareholders, respectively, were as follows:-
Shareholder Number of
Ordinary Shares
purchased
Mancom Singapore
Pte. Ltd. 40,000,000
-----------------
Manjit Rajain 1
-----------------
Keith Hellawell 20,000
-----------------
4.13 Previous Purchases of Ordinary Shares by the Company
As at the Latest Practicable Date, the Company had purchased or
acquired an aggregate of 2,552,733 Ordinary Shares in the twelve
(12) months preceding the Latest Practicable Date, pursuant to the
share buy-back mandate approved by the Shareholders at the May
EGM.
The 2,552,773 Ordinary Shares had been purchased or acquired by
the Company by way of a selective off-market purchase, details of
which are as set out below:
Shareholder Number of Date of Purchase Price per Cancelled
Ordinary Shares Announcement Share or held as
purchased treasury
shares?
Grae Mcintosh 627,640 1 November British Pound Cancelled
Scott 2018 One (GBP1)
----------------- ----------------- ----------------- ------------
Jonathan Smith 466,760 1 November British Pound Cancelled
2018 One (GBP1)
----------------- ----------------- ----------------- ------------
Gerard Peter 875,000 8 July 2019 British Pound Cancelled
McGrath One and Twenty
Pence (GBP1.20)
----------------- ----------------- ----------------- ------------
Kathleen Theresa 583,333 8 July 2019 British Pound Cancelled
Bernadette One and Twenty
McGrath Pence (GBP1.20)
----------------- ----------------- ----------------- ------------
4.14 Reporting Requirements
Within thirty (30) days of the passing of a Shareholders'
resolution to approve the Share Buy-Back Mandate, the Company shall
lodge a copy of such resolution with ACRA. The Company shall also
lodge a notice with ACRA within thirty (30) days of a Share
Buy-Back. Such notification is to include details such as the date
of the Share Buy-Back; the number of Ordinary Shares purchased or
acquired by the Company; the number of Ordinary Shares cancelled;
the number of Ordinary Shares held as treasury shares; the
Company's issued share capital before and after the Share Buy-Back;
the amount of consideration paid by the Company for the Share
Buy-Back; whether the Ordinary Shares were purchased out of the
profits or the capital of the Company; and such other particulars
that might be prescribed.
5. Impact of Share Buy-Back Mandate on Company's Financial Position
5.1 The financial effects on the Company and the Group arising
from the Share Buy-Back will depend on, inter alia, the number of
Ordinary Shares purchased or acquired, whether such purchase or
acquisition is made out of capital and/or profits of the Company,
the amount (if any) borrowed by the Company to fund the purchases
or acquisitions and whether the Ordinary Shares purchased or
acquired are cancelled or held as treasury shares.
5.2 The financial effects on the Company and the Group arising
from the proposed Share Buy-Back pursuant to the Share Buy-Back
Mandate based on the audited financial statements of the Group for
the financial year ended 31 March 2018 (the "Audited Financial
Statements"), are based on the following principal assumptions:
(a) Purchase or acquisition out of capital and/or profits
Under the Companies Act, purchases or acquisitions of Ordinary
Shares by the Company may be made out of the Company's capital
and/or profits so long as the Company is solvent.
Where the consideration paid by the Company for the purchase or
acquisition of Ordinary Shares is made out of capital and from
liquidation of investments. the amount available for the
distribution of cash dividends by the Company will not be
reduced.
Where the consideration paid by the Company for the purchase or
acquisition of Ordinary Shares is made out of profits, such
consideration will correspondingly reduce the amount available for
the distribution of cash dividends by the Company.
(b) Maximum Price paid for Ordinary Shares purchased or acquired
Based on 52,417,440 issued Ordinary Shares (excluding treasury
shares and subsidiary holdings) as at the date of the last AGM, the
purchase or acquisition by the Company of 15.22% of such Ordinary
Shares will result in the purchase or acquisition of 8,130,755
Ordinary Shares.
Assuming that the Company purchases or acquires the 8,130,755
Ordinary Shares at the Exit Facility Price for each Ordinary Share,
the maximum amount of funds required is approximately GBP1.0
million pound.
5.3 For illustrative purposes only, on the basis of the
assumptions set out above as well as the following:
(A) the Share Buy-Back had taken place on 8 August 2019;
(B) there was no issuance of Ordinary Shares after the Latest Practicable Date;
(C) the Share Buy-Back are assumed to be financed by internal
and external funding of the Group; and
(D) related expenses incurred for the Share Buy-Back are assumed
to be insignificant and have been disregarded for the purpose of
computing the financial effects,
the financial effects on the Audited Financial Statements are
set out below.
Company Group
Before Share After Share Before Share
Buy-Back Buy-Back Buy-Back After Share Buy-Back
Mortice - (US$) - (US$) - (US$) - (US$)
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
As at 31
March 2018
(Audited)
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Total Equity 10,894,926 10,915,010 22,223,575 17,312,029
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
NTA 10,894,926 10,915,010 12,666,190 7,754,645
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Current
Assets 10,081,685 10,101,769 56,271,212 56,271,212
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Current
Liabilities 3,742,226 3,742,226 56,187,276 56,187,276
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Total
borrowing 3,120,000 3,120,000 22,615,489 27,527,035
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Number of
Shares 53,417,440 42,733,952 53,417,440 42,733,952
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Financial Ratios
NTA Per
Share 0.20 0.26 0.24 0.18
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Gearing
(%) 29% 29% 102% 159%
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
Current
Ratio
(Times) 2.69 2.70 1.00 1.00
-------------------------------------------- ----------------------------------------- ------------------------------------------ -----------------------------------------
5.4 Shareholders should note that the proforma financial effects
set out above are for illustrative purposes only (based on the
aforementioned assumptions). In particular, it is important to note
that the above pro-forma financial analysis is based on the
historical numbers for the financial period ended 31 March 2018,
and is not necessarily representative of future financial
performance.
6. Tax Implications
Shareholders who are in doubt as to their respective tax
positions or the tax implications of a Share Buy-Back by the
Company and the Exist Facility or who may be subject to tax,
whether in our outside Singapore, should consult their own
professional advisers.
7. WARNINGS
7.1 The Share Buy-Back Price is final and will not be further increased or revised.
7.2 As the Cancellation is subject to the fulfilment of
conditions stipulated herein, it may not become unconditional and
the Cancellation and the Share Buy-Back may or may not proceed.
Dealings in the Ordinary Shares will continue notwithstanding the
Cancellation has not become unconditional. During such period,
persons dealing in the Ordinary Shares will bear the risk that the
Cancellation may not proceed.
8. Transaction following Cancellation
8.1 Ordinary Shares
The proposed Cancellation, should it be approved by Shareholders
at the Extraordinary General Meeting, would make it more difficult
for Shareholders to buy and sell Ordinary Shares should they wish
to do so.
The Exit Facility provides the majority of Shareholders the
opportunity to sell their Ordinary Shares before Cancellation
becomes effective, save those who have provided a commitment not to
do so. Should any Shareholders wish to sell their Ordinary Shares
following Cancellation, they should contact the Company directly
who will consider alternative arrangements such as putting in place
a matched bargain facility. The Company will consider this
following the close of the Exit Facility and will depend on take up
under the Exit Facility.
8.2 Depositary Interests
Due to the limited number of existing Shareholders and the
illiquidity of the Ordinary Shares prior to Cancellation the
Company will not maintain the Depositary Interest facility
following Cancellation and the Depositary Interests facility will
be cancelled. Depositary Interest holders will receive a share
certificate for their cancelled Depositary Interest holding.
Shareholders will be able to continue to trade their Ordinary
Shares in certificated form.
Computershare Investor Services PLC (the 'Depositary) hereby
gives 32 days' notice of termination under clause 14.1 of the Deed
dated 6rd May 2008 in respect of Mortice Limited Depositary
Interests. Accordingly, Computershare Investor Services PLC shall
cease to act as depositary for the purpose of issuing Mortice
Limited Depositary Interests with effect from the close of business
on 23 August 2019 (the 'Effective Date').
On the Effective Date the Depositary Interest facility shall
terminate and Depositary Interests will be cancelled in accordance
with the terms of the Deed.
All Depositary Interests remaining as at the Effective Date will
be cancelled, and DI holders will be entered as shareholders, in
the same name as they were recorded on the DI records, on the
Company's share register.
9. Current Trading, Strategy and Prospects
The Company expects to report revenue of approximately $228
million for the year ended 31 March 2019.
The Company strategy remains to create a global facilities
management and security business.
10. Shareholder's Undertakings
The Company has received undertakings from all Directors and
from the Major Shareholder, to vote in favour of the Resolutions,
in respect of all Ordinary Shares held by each of them on the date
of the Extraordinary General Meeting that currently amounting to
40,020,001 Ordinary Shares in aggregate, representing approximately
78.68% of the issued share capital of the Company.
Accordingly, the Directors believe it is likely that the
Resolution will be passed at the Extraordinary General Meeting.
11. Process for Cancellation
11.1 Under the AIM Rules, it is a requirement that the
Cancellation must be approved by not less than 75% of votes cast by
Shareholders at an Extraordinary General Meeting. Accordingly the
Notice of Extraordinary General Meeting set out in Part II of the
Circular contains a special resolution to approve the
Cancellation.
11.2 Furthermore, Rule 41 of the AIM Rules requires any AIM
company that wishes the London Stock Exchange to cancel the
admission of its shares to trading on AIM to notify shareholders
and to separately inform the London Stock Exchange of its preferred
cancellation date at least 20 Business Days prior to such date. In
accordance with AIM Rule 41, the Directors have, on 10 July 2019,
notified the London Stock Exchange of the Company's intention,
subject to the Resolution being passed at the Extraordinary General
Meeting, to cancel the Company's admission of the Ordinary Shares
to trading on AIM. Accordingly, if Resolution 1 is passed the
Cancellation will become effective at 7.00 a.m. on 27 August 2019.
If the Cancellation becomes effective, finnCap Ltd will cease to be
nominated adviser of the Company and the Company will no longer be
required to comply with the AIM Rules.
12. Extraordinary General Meeting
The Extraordinary General Meeting will be held on Wednesday, 7
August 2019 commencing at 5:30 p.m. (Singapore Time)
13. Action to be taken by Shareholders
You will find enclosed with the Circular a Form of Proxy for use
at the Extraordinary General Meeting. Whether or not you propose to
attend the Extraordinary General Meeting in person, you are
requested to complete and return the Form of Proxy to 38 Beach
Road, #29-11 South Beach Tower 189767, Singapore, in accordance
with the instructions printed thereon as soon as possible but, in
any event, to be received no later than 5:30 p.m. (Singapore Time)
on 5 August 2019. Completion and return of a Form of Proxy will not
preclude you from attending and voting at the Extraordinary General
Meeting in person if you so wish.
14. Recommendation
14.1 The Directors consider that the Cancellation is in the best
interests of the Company and its Shareholders as a whole and
therefore unanimously recommend that you vote in favour of the
Resolution.
14.2 In light of the proposed Cancellation, the Directors are of
the opinion that the Shareholders who are unable or unwilling to
hold Ordinary Shares in the Company following the Cancellation
should be given an opportunity to realise their investment under
the Exit Facility, and that providing the opportunity to
participate in the Exit Facility via the Share Buy-Back is in the
best interests of the Shareholders and recommend that Shareholders
vote in favour of the Share Buy-Back. However, the Directors make
no recommendation to the Shareholders in relation to their
participation in the Share Buy-Back and recommend that all
Shareholders consult their duly authorized independent advisers
before they make a decision as to whether to tender some, all or
none of their Ordinary Shares for the Share Buy-Back, in order to
obtain advice relevant to their particular circumstances.
14.3 The Directors, in rendering their recommendations, have not
had regard to the specific investment objectives, financial
situation, tax position or unique needs and constraints of any
individual Shareholder. As different Shareholders may have
different investment objectives and profiles, the Directors
recommend that any individual Shareholder who may require advice in
the context of his specific investment portfolio consult his
stockbroker, bank manager, solicitor, accountant or other
professional advisers immediately.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS(1)
Notice provided to the London Stock 10 July 2019
Exchange to notify it of the proposed
Cancellation
Announcement of proposed Cancellation 15 July 2019
Publication and posting of the Circular 15 July 2019
and Form of Proxy to Shareholders
Latest time and date for receipt of 5:30 p.m. (Singapore
completed Forms of Proxy in respect time) on 5 August 2019
of the Extraordinary General Meeting
Time and date of the Extraordinary General 5:30 p.m. (Singapore
Meeting time) on 7 August 2019
Commencement of market purchases of 8 August 2019
Ordinary Shares(2)
Expected last day of market purchases 21 August 2019
of Ordinary Shares(2)
Expected last day of dealings in Ordinary 23 August 2019
Shares on AIM(4)
Expected time and date of Cancellation(4) 7.00 a.m. on 27 August
2019
Despatch of balance share certificates By 30 August 2019
Notes:
(1) All of the times referred to in the Circular refer to London
time, unless otherwise stated.
(2) See paragraph 4 of Part I of this Circular for further information
(3) Each of the times and dates in the above timetable is
subject to change. If any of the above times and/or dates change,
the revised times and dates will be notified to Shareholders by an
announcement through a Regulatory Information Service.
(4) The Cancellation requires the approval of not less than 75%
of the votes cast by Shareholders at the Extraordinary General
Meeting.
DEFINITIONS
The following definitions apply throughout the announcement,
unless the context requires otherwise:
"AIM" AIM, the market operated by the London Stock Exchange
"AIM Rules" the rules and guidance for companies whose shares
are admitted to trading on AIM entitled "AIM Rules for Companies"
published by the London Stock Exchange, as amended from time to
time
"Board" the Board of Directors of the Company
"Business Day" a day (excluding Saturday, Sunday and public
holidays in England and Wales) on which banks are generally open
for business in London for the transaction of normal banking
business
"Cancellation" the cancellation of admission of the Ordinary
Shares to trading on AIM, subject to passing of Resolution 1 and in
accordance with Rule 41 of the AIM Rules
"Circular" the circular sent to Shareholders on 15 July 2019,
containing information about the Cancellation, the Share Buy-Back
and the Extraordinary General Meeting
"Companies Act" the Companies Act (Cap. 50) of Singapore, as
amended and modified from time to time
"Company" or "Mortice" Mortice Limited, a public limited company
incorporated on 9 January 2008 and registered in Singapore
"Constitution" Constitution of the Company, as amended from time
to time
"CREST" the relevant system (as defined in the CREST
Regulations) in respect of which Euroclear is the operator (as
defined in those regulations)
"CREST Regulations" the Uncertificated Securities Regulations
2006 of the Isle of Man
(Statutory Document Number 743/06) including any modifications
or any regulations made in substitution under sections 48 and 215
of the IoM 2006 Act and for the time being in force
"Depositary Interests" Mortice depositary interests issued in uncertificated form from time to time by the Depositary on the terms and conditions of the Deed in respect of Depositary Interests entered into between the Company and Computershare Investor Services PLC, such depositary interests representing shares of Mortice held by participants in CREST;
"Directors" or "Board" the directors of the Company, whose names
are set out on page 6 of the Circular. The Board comprises the
directors at any time or the directors present at a duly convened
meeting at which a quorum is present or, as the case may be, the
directors assembled as a committee of such Board
"Exit Facility" the facility to be provided by the Company for
Shareholders to sell their Ordinary Shares before the delisting by
way of on-market Share Buy-Back Scheme, as described in paragraph 4
of Part 1 of the Circular
"Extraordinary General Meeting" the Extraordinary General
Meeting of the Company convened for
5:30 p.m. (Singapore Time) on 7 August 2019 and any adjournment
thereof, notice of which is set out at the end of the Circular
"Form of Proxy" the form of proxy enclosed with the Circular for
use at the Extraordinary General Meeting or at any adjournment
thereof
"Group" the Company and its subsidiaries
"Latest Practicable Date" 12 July 2019 being the latest
practicable date prior to the printing of this Circular
"London Stock Exchange" London Stock Exchange plc
"Major Shareholder" Mancom Singapore Pte. Limited, a company
controlled by the Executive Chairman and registered in Singapore
with company number 201706444Z
"Notice of Extraordinary the notice of Extraordinary General
Meeting which is set out in General Meeting" or "Notice" Part II of
the Circular
"Ordinary Shares" ordinary shares of no par value in the capital
of the Company, and "Ordinary Share" means any one of them
"Registrars" Computershare Investor Services (Channel Islands)
Limited
"Regulatory Information Service" has the meaning given to it in
the AIM Rules any of the services
approved by the London Stock Exchange for the distribution of
AIM announcements and included within the list maintained on the
website of the London Stock Exchange
"Resolutions" the resolutions to be proposed at the
Extraordinary General Meeting in the form set out in the Notice of
Extraordinary General Meeting
"Shareholders" holders of Ordinary Shares from time to time and
"Shareholder" means any one of them
"Share Buy-Back" the purchase or acquisition of Ordinary Shares
by the Company pursuant to the Share Buy-Back Mandate
"Share Buy-Back Mandate" the general and unconditional mandate
given by the Shareholders to authorize the Directors to purchase,
on behalf of the Company, Ordinary Shares in accordance with the
terms of the Notice and this Circular as well as the rules and
regulations set forth in the Companies Act and the AIM Rules
"Share Buy-Back Price" 12 pence per Ordinary Share
"Substantial Shareholder" A Shareholder who has an interest in
not less than 5% of the Ordinary Shares of the Company
"Takeover Code" the Singapore Code on Takeovers and Mergers
"United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
A reference to "GBP" is to pounds sterling, being the lawful
currency of the UK. A reference to "EUR" is to the euro, being the
official currency of the Eurozone.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCRTMPTMBBBBBL
(END) Dow Jones Newswires
July 15, 2019 02:00 ET (06:00 GMT)
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