04:17 Sat 23 Jun 2018
Progility PLC - CANCELLATION OF ADMISSION TO TRADING ON AIM
FOR IMMEDIATE RELEASE:
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO
THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU NO. 596/2014 ("MAR").
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CANCELLATION OF ADMISSION OF ORDINARY SHARES TO TRADING ON AIM
AVAILABILITY OF PURCHASE FACILITY
AUTHORITY TO ALLOT NEW ORDINARY SHARES AND DISAPPLICATION OF STATUTORY
PRE-EMPTION RIGHTS
NOTICE OF GENERAL MEETING
Given that Praxis currently owns 1,034,352 Ordinary Shares, representing approximately 64.75 per cent. of the Company's issued share capital, the Independent Directors are aware that Praxis has the ability to formally requisition the convening of a general meeting for the purpose of proposing the Delisting. As a result, the Independent Directors have concluded that to demand a formal requisition from Praxis would only serve to increase the Company's costs in a situation where no advantage would be gained by the Company in so doing. It is for this reason that the Independent Directors have agreed to publish this document and to convene the General Meeting. The Company has also today given notice to AIM of the proposed Delisting.
Shareholders should note that, as Praxis,
As at the close of business on
Therefore, following consultation with the Panel, Praxis has agreed to arrange for the establishment of a purchase facility with a view to acquiring any or all of the 562,980 Ordinary Shares it does not currently own from any Minority Shareholders wishing to sell their Ordinary Shares. In order to treat all Shareholders equally, Praxis is prepared to offer the same price of
The price at which Praxis is prepared to acquire the Shares it does not currently own has been determined following detailed discussion with the Independent Directors, who in turn have consulted with the Company's financial advisers, SPARK. The Independent Directors have been particularly concerned that the intended Delisting is not used as a reason simply to coerce Minority Shareholders to sell or for the Minority Shareholders to be offered a price which undervalues the business of
Details of the Independent Directors' recommendation, and reasons for their recommendation, are set out further below.
Further details about the Purchase Facility, and what to do if you wish to sell your Shares to Praxis, are set out in paragraphs headed "Details about Praxis's Purchase Facility and action to be taken" and "Procedure for selling your Ordinary Shares" below.
Set out below are (i) the reasons for the Delisting, (ii) details about the Praxis purchase facility (and the action you should take if you wish to sell all or part of your shareholding in the Company prior to the proposed Delisting) and (iii) details of the General Meeting.
Notice of the General Meeting to be held on
Background to, and reasons for, the Delisting
The Board has previously been content to maintain the trading of the Shares on AIM as it preserved strategic and financial flexibility, particularly in terms of providing the Company with potential access to capital market funding or the possibility of enabling it to offer equity consideration for the acquisition of complementary businesses should appropriate opportunities arise. However, this has proved very difficult in practice with the Company needing to use debt funding, provided by Praxis, to execute its acquisition strategy.
Having carefully kept the matter under review, the Board and Praxis have now concluded that it is not appropriate for the Company to maintain the trading of its Shares on AIM, an assessment supported by the Independent Directors for the following reasons:
• only 327,853 of the Company's Ordinary Shares (representing approximately 20.53 per cent of the issued Shares) are held in public hands, as both Praxis and Mmilt own more than 10 per cent. each of the Company's issued share capital and are therefore excluded from this figure. There is very little liquidity in the Ordinary Shares. As at the close of business on
• in the opinion of Praxis and the Independent Directors, market conditions are currently such that a fundraising, should one be pursued, would unlikely be achieved at a suitable share price in the near future;
• given the illiquidity of the Shares, it is unlikely that any company identified in the short to medium term as an acquisition opportunity would be prepared to accept Shares as consideration;
• the current capital structure of the Company, which includes substantial debt from Praxis accruing interest means that without a significant restructuring it is unlikely that a significant return will be generated for Shareholders in the foreseeable future. Praxis, as at
Resolutions 1 and 2 set out in the Notice have been proposed to enable the Company to proceed with any such restructuring. Resolution 1, proposed as an ordinary resolution (the passing of which will require more than 50 per cent. of the votes cast voting in favour of it), seeks approval for the Directors to allot Ordinary Shares up to a maximum nominal value of
• although the financial year ended
• at present the annual costs associated with the maintenance of the trading of Shares on AIM are approximately
Future strategy of Praxis
As a result of the Proposals, Praxis does not anticipate there will be any change in the terms and conditions of employment of
Details about Praxis's Purchase Facility and action to be taken
The Independent Directors and Praxis recognise that cancelling the trading of the Company's Ordinary Shares on AIM will make it significantly more difficult for Minority Shareholders to sell (or to buy) Ordinary Shares should they so wish. Accordingly, in consultation with the Panel and with the support of the Independent Directors, upon advice from SPARK, Praxis has agreed to purchase the Ordinary Shares it does not currently own from the Minority Shareholders if they so wish. The price at which Praxis will buy such Ordinary Shares is the same for all the Minority Shareholders and is
Furthermore, the Independent Directors consider the price of
• it represents a premium of 4.8 per cent. over the average Closing Price for Ordinary Shares in the month to
• given the absence of any liquidity for any larger holdings of stock all Shareholders are able to obtain this price; and
• the current level of debt means the Company is dependent on the continuing support of Praxis and with a level of debt with Praxis, including accrued interest being just over
As a result, the Independent Directors, having been so advised by SPARK, believe that the price at which Praxis is prepared to acquire Shares held by Minority Shareholders is fair and reasonable and that the Proposals are in the best interests of Shareholders. In providing advice to the Board, SPARK has taken account the Independent Directors' commercial assessments. They therefore recommend that those Minority Shareholders who wish to realise their investment in
Subject to the passing of the necessary Resolution at the General Meeting, it is anticipated that trading in Ordinary Shares on AIM will cease at close of business on
The procedure for selling Ordinary Shares is set out further below in the paragraph headed "Procedure for selling your Ordinary Shares" below.
The City Code and transfers
Following the Delisting (and for at least 10 years thereafter), the City Code will continue to apply to the Company. In addition, whilst the Ordinary Shares will remain freely transferable, there will be no public market for any Ordinary Shares not purchased by Praxis and they will cease to be transferable through CREST. Shareholders who currently hold Ordinary Shares in uncertificated form (that is, in CREST) and who do not sell their Ordinary Shares to Praxis will receive share certificates in due course following the Delisting taking effect. Share transfers may still be effected after the date of Delisting, or the end of the Sale Period (assuming there is a willing buyer) by depositing a duly executed and stamped stock transfer form together with an appropriate share certificate with the Company's Registrar. Since
Financial Information on
Copies of the report and accounts of
The following paragraphs, which are intended as a general guide only and are based on current
(a)
Liability to
(b) Stamp Duty and Stamp Duty Reserve Tax ("SDRT")
No stamp duty or SDRT will be payable by Minority Shareholders as a result of their sale of Ordinary Shares.
Procedure for selling your Ordinary Shares
Praxis is willing to purchase Ordinary Shares from Minority Shareholders at a fixed price of
Shareholders do not have to sell any Ordinary Shares if they do not wish to, but, once submitted a Purchase Facility Form and/or TTE Instruction are irrevocable and cannot be withdrawn.
Subject to the passing of the necessary Resolution at the General Meeting, after the close of business on
a) Shares held in certificated form
Qualifying Shareholders who hold Ordinary Shares in certificated form and who wish to participate in the Purchase Facility should follow the instructions on the Purchase Facility Form that will accompany the document and return it to the Receiving Agent by post or by hand (during normal business hours only) to
The execution of the Purchase Facility Form will constitute the irrevocable appointment of any director or officer of the Company, or other person(s) nominated by Praxis, as a Shareholder's attorney and/or agent and an irrevocable instruction and authorisation for the Attorney to complete and execute all or any instruments of transfer and/or other documents at the Attorney's absolute discretion in relation to the Ordinary Shares being tendered by that Qualifying Shareholder. Further details of the procedures for the Purchase Facility and settlement will be set out in the Circular and, in the case of Qualifying Shareholders selling Ordinary Shares held in certificated form, in the Purchase Facility Form. Further copies of the Purchase Facility Form may be obtained on request from the
b) Interest in Ordinary Shares held in uncertificated form in CREST
Qualifying Shareholders who hold their interest in Ordinary Shares in uncertificated form in CREST and who wish to sell all or any of their Ordinary Shares under the Purchase Facility should sell electronically through CREST so that the TTE Instruction settles no later than the Closing Time.
The input and settlement of a TTE Instruction shall constitute an instruction to sell the specified number of Ordinary Shares at the purchase price, by transferring such Ordinary Shares to the relevant escrow account as detailed below.
If a Shareholder is a CREST sponsored member, the Shareholder should refer to his/her CREST sponsor before taking any action. A Shareholder's CREST sponsor will be able to confirm details of the Shareholder's Participant ID and the member account ID under which the Shareholder's Ordinary Shares are held. In addition, only the Shareholder's CREST sponsor will be able to send the TTE Instruction to Euroclear in relation to the Shareholder's Ordinary Shares.
To sell Shares in uncertificated form you should send (or, if you are a CREST sponsored member, procure that your CREST sponsor sends) a TTE Instruction to Euroclear, which must be properly authenticated in accordance with Euroclear's specifications for transfers to escrow and which must contain, in addition to the other information that is required for the TTE Instruction to settle in CREST, the following details:
(A) the ISIN for the Ordinary Shares which is: GB00BF5L3580;
(B) the number of Ordinary Shares to be transferred to an escrow balance;
(C) your Member Account ID;
(D) your Participant ID;
(E) the Participant ID of the Receiving Agent, in its capacity as a CREST receiving agent, which is RA10;
(F) the member account ID of the escrow agent, which is 29743PRO;
(G) the Corporate Action Number of the Purchase Facility, which is allocated by Euroclear and is available by viewing the relevant corporate action detail, in CREST;
(H) the intended settlement date for the transfer to escrow. This should be as soon as possible and, in any event, no later than the Closing Time of
(I) the standard delivery instruction with Priority 80; and
(J) contact name and telephone number inserted in the shared note field.
After settlement of the TTE Instructions, Shareholders will not be able to access their Ordinary Shares, the subject of such TTE Instruction in CREST for any transaction or charging purposes, notwithstanding that, the Ordinary Shares will be held by the Receiving Agent until they are transferred to the Receiving Agent, as escrow agent for Praxis, unless the Exit Facility becomes void or is terminated. Shareholders are recommended to refer to the CREST Manual published by Euroclear for further information on the CREST procedures outlined above.
If Shareholders are in any doubt as to the procedure for acceptance under the purchase facility, please contact
Terms and Conditions
Each Shareholder by whom, or on whose behalf, a Purchase Facility Form is executed, irrevocably undertakes, represents, warrants and agrees to and with Praxis (so as to bind him, his personal representatives, heirs, successors and assigns) to the following:
(a) that the execution of the Purchase Facility Form shall constitute an irrevocable offer to sell the total number of Ordinary Shares as are specified on the Purchase Facility Form, subject to the terms and conditions set out or referred to in this document and the Purchase Facility Form;
(b) that he is the sole beneficial owner of the Ordinary Shares in registered form in respect of which the Ordinary Shares specified on the Purchase Facility Form and he is the legal owner of such Ordinary Shares and he has the necessary capacity and authority to execute the Purchase Facility Form;
(c) that such Shareholder has full power and authority to sell, assign or transfer the Ordinary Shares and when such Ordinary Shares are purchased by Praxis, Praxis will acquire such Ordinary Shares free and clear from all liens, charges, restrictions, claims, equitable interests and encumbrances and together with all rights attaching thereto and such representation and warranty will be true in all respects at the time Praxis purchases such Ordinary Shares as if it had been entered into anew at such time and shall not be extinguished by such purchase;
(d) that the execution of the Purchase Facility Form will constitute the irrevocable appointment of Praxis and any director of Praxis, or other person nominated by Praxis, as such Shareholder's Attorney and an irrevocable instruction and authorisation to the Attorney to do all acts and things as may in the Attorney's opinion be necessary or expedient for the purpose of, or in connection with, the Ordinary Shares being tendered by the Shareholder pursuant to the Purchase Facility;
(e) that he agrees to ratify each and every act or thing which may be done or effected by the Attorney or Praxis or any of its directors or any person nominated by Praxis in the proper exercise of his powers and/or authorities hereunder;
(f) that he shall do all such acts and things as shall be necessary or expedient and execute any additional documents deemed by Praxis to be desirable to complete the purchase of the Ordinary Shares by Praxis and/or to perfect any of the authorities expressed to be given hereunder;
(g) that the terms and conditions in this document shall be deemed to be incorporated in, and form part of, the Purchase Facility Form, which shall be read and construed accordingly;
(h) that, such Shareholder, if an Overseas Shareholder, has fully observed any applicable legal requirements and that he may tender his Shares under the Purchase Facility under the laws of the relevant jurisdiction;
(i) that such Shareholder is participating in the Purchase Facility from outside any Restricted Jurisdiction;
(j) that such Shareholder has not received or sent copies or originals of this document, the Purchase Facility Form or any related documents in, into or from a Restricted Jurisdiction.
Each Shareholder by whom, or on whose behalf, an electronic acceptance is made by submission of a TTE instruction, irrevocably undertakes, represents, warrants and agrees to and with Praxis (so as to bind him, his personal representatives, heirs, successors and assigns) to the following:
(a) that the input of a TTE Instruction shall constitute an irrevocable offer to sell the total number of Ordinary Shares specified in the TTE Instruction, in each case subject to the terms and conditions set out or referred to in this document;
(b) that he is the sole beneficial owner of the Ordinary Shares in respect of which the Ordinary Shares specified in the TTE Instruction and he is the legal owner of such Ordinary Shares and he has the necessary capacity and authority to effect the electronic acceptance;
(c) that such Shareholder has full power and authority to sell, assign or transfer the Ordinary Shares (as the case may be) and when such Ordinary Shares are purchased by Praxis, Praxis will acquire such Ordinary Shares free and clear from all liens, charges, restrictions, claims, equitable interests and encumbrances and together with all rights attaching thereto and such representation and warranty will be true in all respects at the time Praxis purchases such Ordinary Shares as if it had been entered into anew at such time and shall not be extinguished by such purchase;
(d) that the input of the TTE Instruction will constitute the irrevocable appointment of Praxis and any director of Praxis, or other person nominated by Praxis, as such Shareholder's Attorney and an irrevocable instruction and authorisation to the Attorney to do all acts and things as may in the Attorney's opinion be necessary or expedient for the purpose of, or in connection with, the Ordinary Shares being tendered by the Shareholder pursuant to the Purchase Facility;
(e) that he agrees to ratify each and every act or thing which may be done or effected by the Attorney or Praxis or any of its directors or any person nominated by Praxis in the proper exercise of his powers and/or authorities hereunder;
(f) that he shall do all such acts and things as shall be necessary or expedient and execute any additional documents deemed by Praxis to be desirable to complete the purchase of the Ordinary Shares by Praxis and/or to perfect any of the authorities expressed to be given hereunder;
(g) that if, for any reason, any Ordinary Shares in respect of which a TTE Instruction has been made are, prior to the end of the Sale Period, converted into certificated form, the electronic tender in respect of such Ordinary Shares shall cease to be valid and the Shareholder will need to comply with the procedures for tendering Ordinary Shares in certificated form as set out above in respect of the Ordinary Shares so converted, if he wishes to make a valid tender of such Ordinary Shares pursuant to the Purchase Facility;
(h) that, such Shareholder, if an Overseas Shareholder, has fully observed any applicable legal requirements and that he may tender his Shares under the Purchase Facility under the laws of the relevant jurisdiction;
(i) that such Shareholder is participating in the Purchase Facility from outside any Restricted Jurisdiction;
(j) that such Shareholder has not received or sent copies or originals of this document, the Purchase Facility Form or any related documents in, into or from a Restricted Jurisdiction.
Settlement
Unless the Purchase Facility becomes void or is terminated or is extended, the outcome of the Purchase Facility is expected to be announced on or about
Settlement of the consideration to which any Shareholder is entitled pursuant to the Purchase Facility, will be made as follows:
Ordinary Shares held in uncertificated form
Where the Purchase Facility is accepted in relation to Ordinary Shares held in CREST any cash consideration will be paid by means of CREST by
Ordinary Shares in certificated form
Where an acceptance of the Purchase Facility relates to Ordinary Shares in certificated form cheques for the consideration will be despatched by first class post, expected to be not later than five Business Days after the day that the outcome of the Purchase Facility is announced at the risk of the person entitled thereto. All cash payments will be made in pounds sterling by cheque drawn on a branch of a
Overseas Shareholders
The Purchase Facility is not available to Shareholders whose address, as stated on the Register, is in a Restricted Jurisdiction, or who are resident in a Restricted Jurisdiction. The Board shall use its discretion in deciding whether the Purchase Facility is made available to Shareholders whose address or place of residence is not in a Restricted Jurisdiction but is outside the
The availability of the Purchase Facility in, or to persons resident in, jurisdictions outside the
These provisions and any other terms of the Purchase Facility relating to Overseas Shareholders may be waived, varied or modified as regards specific Shareholders or on a general basis by the Company in its absolute discretion.
General Meeting and action to be taken
The Delisting is conditional upon the approval of Shareholders holding not less than 75 per cent. of the votes cast (whether in person or by proxy) at the General Meeting. The meeting will be held at
Recommendation by the Independent Directors
The Independent Directors, who have been so advised by SPARK, consider the price of
Expected timetable of principal events
|
|
|
2018 |
Circular and Form of Proxy posted to Shareholders |
22 June |
Latest time and date for receipt of Form of Proxy |
|
General Meeting |
|
Last day for dealings in Shares on AIM |
20 July |
Cancellation of trading of Shares on AIM |
|
Sale Period opens |
22 June |
Sale Period closes |
|
Record Time |
|
Announcement of take up of the Purchase Facility |
on or about 6 August |
Cheques despatched and payment through CREST for the Purchase Facility |
by |
Documents
In compliance with AIM Rule 20, the circular to Shareholders will be available on its website www.progility.com pursuant to AIM Rule 26 later today.
Terms in this announcement will have the same meaning as in the circular.
Further announcements will be made as appropriate.
For further information, please contact:
Executive Chairman
020 7371 4444
020 3368 3551
(Broker)
020 7220 1666
Cautionary notice regarding forward looking statements
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "prepares", "anticipates", "projects", "expects", "intends", "may", "will", "seeks", or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Company's, the Directors' and Praxis' intentions, beliefs or current expectations concerning, amongst other things, the Company's prospects, growth and strategy. No statement in this announcement is intended to be a profit forecast and no statement in this document should be interpreted to mean that earnings per ordinary share of the Company for the current or future years would necessarily match or exceed the historical published earnings per ordinary share of the Company.
By their nature, forward-looking statements involve risks and uncertainties because they relate to future events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, achievements and financial condition may differ materially from those expressed or implied by the forward-looking statements in this document. In addition, even if the Company's results of operations, performance, achievements and financial condition are consistent with the forward-looking statements in this document, those results or development may not be indicative of results or developments in subsequent periods.
Any forward-looking statements that the Company or Praxis makes in this announcement speak only as of the date of such statement, and none of the Company or the Directors or Praxis undertake any obligation to update such statements unless required to do so by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
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