Proposed appointment of liquidators & members' voluntary liquidation,
Proposed Cancellation of Admission of Shares to trading on AIM,
Publication of Circular and Notice of AGM
Abaco Capital plc (AIM: ABA), today announces its intention to seek Shareholders' approval for the cancellation of admission of its Shares to trading on AIM (the "Delisting") and to place the Company into a Members Voluntary Liquidation. A circular to Shareholders will be published today 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 proposals (the "Circular").
The proposed Delisting is further to the announcement on 27 February 2018 whereby it was announced that following consultation with certain major Shareholders representing, in aggregate, over 70 per cent. of the total voting rights of the Company consensus as to a preferred acquisition target for the Company was unlikely to be reached and therefore the Board now believes that a return of capital to Shareholders is the best way to maximise value for Shareholders.
The Resolutions will be proposed at the Company's annual general meeting (the "AGM") to be held on 8 May 2018 at 11.30 a.m. at the offices of DWF LLP at 20 Fenchurch Street, London EC3M 3AG. The Circular and the Notice of AGM (together with the Annual Report and Accounts) will be posted to shareholders today and both documents will be available to download at the Company's website at www.abacoplc.com. At the AGM the Company will be seeking Shareholder approval for, inter alia, the Delisting and to place the Company into a Members Voluntary Liquidation.
The full text of the Chairman's Letter set out within the Circular and the Expected Timetable of Principal Events are reproduced in full below.
Definitions in this announcement are the same as those included in the Circular.
Notice of General Meeting to be held on 8 May 2018
Form of Proxy for General Meeting to be held on 8 May 2018
|Abaco Capital plc|
|Chris Hill, Chief Financial Officer||+44 207 554 5875|
|+44 20 7496 3000|
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR").
Proposed Delisting and Members' Voluntary Liquidation
Notice of AGM
1. Introduction and background relating to the Proposals
During the year to 31 December 2017, the Company demerged its wholly owned subsidiary, OPL, which held substantially all of the historic group's commercial assets, drug development assets and intellectual property to Shareholders in the same proportionate interest as their holdings in the Company, via a distribution in specie, thus allowing Shareholders to participate in any potential upside in the future performance of OPL.
Following the Demerger, the Company was classified as a Rule 15 Cash Shell requiring the Company to make an acquisition or acquisitions which constitute a reverse takeover under Rule 14 of the AIM Rules on or before the date falling six months from completion of the Demerger. At the time of the Demerger, it was announced that, should the Directors be unable to identify a compelling target and complete a reverse takeover within the required timeframe, or it if it would require less than the currently available cash of the Company to do so to fund the Group, the Board retained the option to return capital to Shareholders.
Since the date of the Demerger, the Board evaluated several potential reverse takeover opportunities. The Board also consulted with certain major Shareholders representing, in aggregate, over 70 per cent. of the total voting rights of the Company, to better understand their objectives for a potential transaction. The result of this process was that consensus as to a preferred target for the Company was unlikely to be reached, meaning that completion of an investment qualifying as an AIM Rule 14 reverse takeover was not deemed to be practical.
As a result of the above, the Board now believes that a return of capital to Shareholders is the best way to maximise value for Shareholders. The Board has assessed the most efficient mechanism through which to return capital and it has been decided that a distribution of all of the Company's liquid assets can best be achieved through a members' voluntary liquidation. The Board will therefore be seeking Shareholder approval to cancel the admission of the Shares to trading on AIM.
The purpose of this document is to provide you with details of the proposed Members' Voluntary Liquidation and the Delisting and set out the Directors' reasons for considering that the Proposals are in the best interests of the Shareholders as a whole. This document details the Resolutions to be put to the Shareholders at the Annual General Meeting to be held on 8 May 2018 in relation to the Proposals. The formal Notice of the Annual General Meeting is set out at the end of this document.
2. Members' Voluntary Liquidation
A meeting of the Board took place prior to the publication of this document, at which it was resolved:
(a) to seek approval from the Shareholders at the Annual General Meeting to:
(i) place the Company into members' voluntary liquidation; and
(ii) appoint Keith Marshall and James Miller of RSM as joint liquidators to the Company ("Joint Liquidators") to deal with the winding-up of the Company; and
(b) that each of the Directors would swear a declaration of solvency in relation to the Members' Voluntary Liquidation.
Following the meeting of the Board as referred to above, a declaration of solvency was sworn by each of the Directors ("Declaration of Solvency"). The Declaration of Solvency summarised the Company's assets and liabilities and confirmed that the Company is able to pay its creditors in full within a maximum period of 12 months from the date of the commencement of the Members' Voluntary Liquidation (after accounting for statutory interest and allowing for the costs and expenses of the Members' Voluntary Liquidation). In addition, the Declaration of Solvency detailed the estimated surplus amount available to Shareholders, being approximately £19 million.
Resolutions 6 and Resolutions 8 to 13 in the Notice of Annual General Meeting are proposed in relation to the Members' Voluntary Liquidation to seek Shareholder approval as follows:
(a) Special Resolution 6 - to approve the voluntary winding up of the Company and the appointment of Joint Liquidators;
(b) Special Resolution 8 - to authorise the Joint Liquidators to distribute the whole or any part of the assets of the Company in specie or in kind and authorise the Joint Liquidators to determine the division and distribution of such assets amongst the Shareholders (in accordance with the Company's articles of association);
(c) Special Resolution 9 - to authorise the Joint Liquidators to pay or make an advance distribution to Shareholders, if they consider it to appropriate or prudent to do so;
(d) Ordinary Resolution 10 - to approve the appointment of the Joint Liquidators, to act on a joint and several basis;
(e) Ordinary Resolution 11 - to authorise the Joint Liquidators to draw their remuneration in accordance with RSM's rates;
(f) Ordinary Resolution 12 - to authorise the Joint Liquidators to draw disbursements, out of the assets of the Company, as an expense of the Members' Voluntary Liquidation; and
(g) Ordinary Resolution 13 - to authorise the books and records of the Company to remain with the directors to the order of the Joint Liquidators.
Resolutions 9 to 13 are conditional on Resolution 6 being passed and taking effect. Resolutions 6, 8 and 9 will be passed upon the approval of not less than 75 per cent. of the votes cast by Shareholders and Resolutions 10 to 13 will be passed upon the approval a simple majority of the votes cast by Shareholders, (whether present in person or by Form of Proxy) at the Annual General Meeting.
Upon Resolution 6 being passed, the Joint Liquidators will become formally responsible for dealing with the Company's affairs. The appointment of the Joint Liquidators and the Members' Voluntary Liquidation will be advertised in The London Gazette and the Declaration of Solvency will be filed at Companies House.
Following the passing of Resolution 6 (relating to the voluntary winding up of the Company), Shareholders will be unable to transfer any of the Shares without the Joint Liquidators' sanction.
It will be the responsibility of the Joint Liquidators to realise the assets, to agree and pay creditor claims and to distribute the remaining funds to the Shareholders in accordance with the Company's articles of association (or as otherwise determined). Following consultation by the Company with RSM, subject to receipt by the Joint Liquidators of deeds of indemnity from Major Shareholders (which will cover the Joint Liquidators for any unforeseen claims that may arise at a future date that would otherwise have been paid from the assets of the Company), it is expected that an initial distribution of approximately £18 million will be made to Shareholders by 30 June 2018. The deeds of indemnity are required by the Joint Liquidators as the initial distribution will be made prior to receiving tax clearance from HM Revenue & Customs that the Company's tax position has been finalised.
Upon the completion of the winding-up process and the payment of expenses incurred in the winding-up process, the Company will then distribute any remaining assets to Shareholders.
In addition, the Company has a dormant subsidiary, ONL, that has not traded for some time. The Directors will commence the voluntary strike off procedure for ONL prior to the date of the AGM and the appointment of the Joint Liquidators.
Due to the Board's proposal to return capital to Shareholders through the Members' Voluntary Liquidation, the Board believes that subject to shareholder approval for the Members' Voluntary Liquidation it will no longer be in the best interests of the Company or its Shareholders to maintain the Company's admission to trading on AIM. The Board is therefore seeking the Delisting which is conditional on the approval of not less than 75 per cent. of votes cast by Shareholders (in person or by proxy) at the Annual General Meeting. Resolution 7 contained in the Notice of the Annual General Meeting seeks Shareholder approval for the Delisting.
Under the AIM Rules, cancellation of a company's listing of shares to trading on AIM requires the expiration of a period of not less than 20 clear business days from the date on which notice of the intended cancellation is given to the London Stock Exchange. Delisting will occur no earlier than five clear Business Days after the Annual General Meeting and it is expected that trading in the Shares on AIM will be suspended with effect from 7.30 a.m. on 8 May 2018 with the Delisting expected to take effect at 7.00 a.m. on 9 May 2018.
The principal effects of the Delisting would be that:
(a) there would no longer be a formal market mechanism enabling Shareholders to trade their shares on AIM or any other market or trading exchange;
(b) the Company would not be bound to announce material events, such as interim or final results, material transactions or administrative changes; and
(c) the Company would no longer be required to comply with the AIM Rules or be required to have a nominated adviser, and Shareholders would no longer be required to vote on certain matters prescribed by the AIM Rules.
Following the Delisting, although the Shares will remain transferable, the Shares will no longer be quoted or tradable on AIM. Consequently, it is likely to be more difficult for a Shareholder to purchase or sell any Shares following the Delisting.
It is the Company's intention to cancel the CREST facility following the passing of the Delisting Resolution and arrangements will be made to send share certificates to those Shareholders (at their risk) currently using CREST.
Following the Delisting, N+1 Singer will cease to be the nominated adviser and broker to the Company.
Shareholders should note however that the Company will remain subject to the provisions of the City Code for a period of 10 years from the Delisting.
4. Annual General Meeting Resolutions
Details of the resolutions which are to be proposed at the AGM and relate to customary matters outside of the Proposals are set out below.
Ordinary Resolution 1: Annual Report and Accounts
In accordance with the requirements of section 437 of the Act, the Company will lay before the AGM the annual report and accounts of the Company in respect of the year ended 31 December 2017. Shareholders will have the opportunity to put questions on the annual report and accounts of the Company to the Directors of the Company before the resolution is proposed to the AGM.
Ordinary Resolution 2: Re-election of David Norwood as a director
David Norwood retires by rotation in accordance with the Company's articles of association and, being eligible, offers himself for re-election.
Ordinary Resolution 3: Re-appointment of auditors
Shareholders will be asked to confirm the re-appointment of Grant Thornton UK LLP as the Company's auditors to hold office until the conclusion of next year's annual general meeting and to grant authority to the Directors to determine the auditors' remuneration.
Ordinary Resolution 4: Grant of authority to the Directors to allot Shares
It is proposed to authorise the Directors to allot Shares up to a maximum nominal value of £4,018.87 (representing 401,887,000 Shares) which is approximately equal to one-third of the Company's issued share capital as at 5 April 2018 (being the last practicable date prior to the publication of this document). In addition, the proposed resolution also authorises the Directors to allot Shares up to a maximum nominal value of £4,018.87 in connection with a rights issue in favour of Shareholders.
This authority replaces the similar authority passed at the annual general meeting of the Company in 2017 and, if passed, will expire at the conclusion of next year's annual general meeting.
Special Resolution 5: Disapplication of statutory pre-emption rights on allotment of Shares
If the Directors wish to allot unissued shares or other equity securities for cash or sell any shares which the Company may hold in treasury following a purchase of its own shares, the Act requires that such shares or other equity securities are offered first to existing shareholders in proportion to their existing holdings. Therefore, the Directors have proposed resolution 5 in the Notice of Annual General Meeting to do this.
The authority is sought to grant the Directors authority to allot equity securities or sell treasury shares for cash up to a maximum aggregate nominal value of £904.25 (representing 90,425,000 Shares and which would constitute approximately 7.5 per cent. of the issued share capital of the Company as at 5 April 2018 (being the last practicable date prior to the publication of this document)) without first offering the securities to existing shareholders. The total number of Shares in issue as at 5 April 2018 was 1,205,661,619. The proposed resolution also disapplies the statutory pre-emption provisions in connection with a rights issue and allows the Directors, in the case of a rights issue, to make arrangements in relation to fractional entitlements or other legal or practical problems which might arise.
5. Overseas Shareholders
The implications of the Proposals for Overseas Shareholders may be affected by the laws of the jurisdiction in which they are resident or otherwise located. Overseas Shareholders should inform themselves about and observe all applicable legal requirements. It is the responsibility of any person into whose possession this document comes to satisfy themselves as to the full observance of the laws of the relevant jurisdiction in connection with the Proposals, including compliance with necessary formalities which are required to be observed and the payment of any taxes or levies due in such jurisdiction.
6. Action to be taken
A reply-paid Form of Proxy for use in connection with the Annual General Meeting is enclosed with this document. Whether or not you intend to be present at the Annual General Meeting, you are requested to complete, sign and return the Form of Proxy in accordance with the instructions printed thereon to the Company or the Company's Registrars as soon as possible and, in any event, not later than 11.30 a.m. on 6 May 2018, being 48 hours before the time of the Annual General Meeting. The completion and return of the Form of Proxy will not preclude you from attending the Annual General Meeting and voting in person should you subsequently wish to do so.
The Proposals can only be implemented if the Resolutions are approved by the requisite majority at the Annual General Meeting and the Delisting is confirmed by London Stock Exchange. It is therefore important that you either vote in person or by proxy at the Annual General Meeting.
Shareholders are reminded that, if their Shares are held in the name of a nominee, only that nominee or its duly appointed proxy can be counted in the quorum at the Annual General Meeting.
The Board considers that the Proposals and the passing of the Resolutions to be proposed at the Annual General Meeting is in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board of Directors unanimously recommend that you vote in favour of the Resolutions set out in the Notice of Annual General Meeting as the Board of Directors intend to do in respect of their own (and connected persons') beneficial shareholdings totalling 105,938,633 Shares, representing approximately 8.79 per cent. of the Company's issued voting share capital as at the date of this document.
Whether or not you are able to attend the Annual General Meeting in person, please read the Notice of Annual General Meeting set out at the end of this document and the enclosed Form of Proxy, including the notes thereto, carefully to ensure you are able to record your votes in respect of the Resolutions to be proposed at the Annual General Meeting.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
|Date of the Circular||6 April 2018|
|Expected last day for dealings in Shares on AIM||4 May 2018|
|Latest time and date for receipt of Forms of Proxy for the Annual General Meeting||11.30 a.m. on 6 May 2018|
|Suspension of Shares to trading on AIM||7.30 a.m. on 8 May 2018|
|Annual General Meeting||11.30 a.m. on 8 May 2018|
|Expected date of appointment of Joint Liquidators||8 May 2018|
|Expected time and date of cancellation of admission of the Shares to trading on AIM||7.00 a.m. on 9 May 2018|
(1) Each of the times and dates set out in the above timetable and mentioned in this document is subject to change by the Company, in which event details of the new times and dates will be notified by an appropriate announcement to a Regulatory Information Service.
(2) References to times in this document are to London times unless otherwise stated.
(3) All events in the above timetable are conditional upon the passing of the Delisting Resolution and the resolutions relating to the Members' Voluntary Liquidation.