TIDMJADE
RNS Number : 3909O
Jade Road Investments Limited
31 January 2023
31 January 2023
JADE ROAD INVESTMENTS LIMITED
(" Jade Road Investments ", " JADE ", the " Company " or the "
Group ")
Circular, Notice of General Meeting, Change of Investing Policy
and Proposed Placing
Jade Road Investments Limited (AIM: JADE), the London quoted
pan-Asian diversified investment vehicle focused on providing
shareholders with attractive uncorrelated, risk-adjusted long-term
returns is pleased to announce today the publication of a circular
" Circular " containing a notice of general meeting to be held at
10 am on Monday 20 February at 29/F Infinitus Plaza, 199 Des Voeux
Road Central, Hong Kong .
The Company is intending to raise equity finance of up to
US$1,750,000 by issuing 191,256,831 new Ordinary Shares ("New
Ordinary Shares") at a price of GBP0.0075 per Ordinary Share
("Issue Price") (using a pre-determined exchange rate of US$1.22 to
GBP1) ("Equity Fundraise"). The Equity Fundraise is being entirely
underwritten by Heirloom, who has agreed to purchase any number of
New Ordinary Shares not otherwise purchased by prospective placees
introduced to the Company by the Placing Agent.
Completion of the Equity Fundraise is conditional, inter alia,
on all of the Resolutions being passed by the Shareholders at the
general meeting. They are as follows:
-- the waiver of the application of Article 46 (Takeover
Provisions) to the Underwriting in its entirety (the "Waiver
Resolution");
-- the approval of the New Investing Policy;
-- the adoption of an amended and restated Memorandum of Association; and
-- the resolutions regarding the Company's shares, including the
grant of authority to the Directors to buy back Ordinary
Shares.
The Circular provides the background and reasons for the Equity
Fundraise, the waiver of Article 46 (Takeover Provisions), the
proposed New Investing Policy, the adoption of an amended and
restated Memorandum of Association and the reasons for the
authority to allot and buy back Ordinary Shares.
The Circular, which includes the notice of the General Meeting
has been sent to shareholders on 31 January 2023, it will be
available on the company's website at
http://jaderoadinvetsment/documents .
The details of the circular are repeated below.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jade Road Investments Limited +44 (0) 778 531 5588
John Croft
WH Ireland Limited - Nominated
Adviser +44 (0) 20 7220 1666
James Joyce
Andrew de Andrade
Hybridan LLP - Corporate Broker +44 (0) 203 764 2341
Claire Noyce
Lionsgate Communications - Communications
Adviser +44 (0) 779 189 2509
Jonathan Charles
About Jade Road Investments
Jade Road Investments Limited is quoted on the AIM Market of the
London Stock Exchange and is committed to providing shareholders
with attractive uncorrelated, risk-adjusted long-term returns from
a combination of realising sustainable capital growth and
delivering dividend income.
The Company is focused on providing growth capital and financing
to emerging and established Small and Medium Enterprises (SME)
sector throughout Asia, and is well-diversified by national
geographies, instruments and asset classes. This vital segment of
the economy is underserved by the traditional banking industry for
regulatory and structural reasons.
The Company's investment manager, Harmony Capital, seeks to
capitalise on its team's established investment expertise and broad
networks across Asia. Through rigorous diligence and disciplined
risk management, Harmony Capital is dedicated to delivering
attractive income and capital growth for shareholders with
significant downside protection through selectively investing in
assets and proactively managing them.
Harmony Capital is predominately sourcing private opportunities
and continues to create a strong pipeline of attractive
income-generating assets from potential investments in growth
sectors across Asia, including healthcare, fintech, hospitality, IT
and property.
JADE ROAD INVESTMENTS LIMITED
(Incorporated and registered in the British Virgin Islands,
registered no. 1459602)
Underwritten equity fundraise of up to US$1,750,000
and
Waiver of Article 46 (Takeover Provisions) of the Articles
of Association
and
Proposed New Investing Policy
and
Adoption of an amended and restated Memorandum of Association
and
Authority to allot Ordinary Shares
and
Authority to buy back Ordinary Shares
================================================================
Your attention is drawn to the letter from the Executive
Chairman of the Company set out on pages 11 to 18 of this document,
which contains the unanimous recommendation of the Board that you
vote in favour of the resolutions to be proposed at the General
Meeting referred to below.
Notice of a General Meeting of the Company to be held on Monday
20 February 2023, commencing at 10:00 a.m. GMT/ 6:00 p.m. HKT is
set out at the end of this document. Shareholders should ensure
that the enclosed Form of Proxy is completed and returned in
accordance with the instructions printed on it to Computershare
Investor Services (BVI) Limited, c/o The Pavilions, Bridgwater
Road, Bristol BS99 6ZY or by hand (during normal business hours
only) to Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS13 8AE so as to be received by not later
than 10:00 a.m. (GMT) on Thursday 16 February 2023 or 48 hours
before any adjourned meeting. Depositary Interest Holders should
ensure that the Form of Instruction is received no later than 10:00
a.m. GMT / 6:00 p.m. HKT on Wednesday 15 February 2023 or 72 hours
before any adjourned meeting. Completion and return of a Form of
Proxy or a Form of Instruction will not preclude a Shareholder or a
Depositary Interest Holder from attending in person and voting at
the General Meeting.
The Company and the Directors accept responsibility for the
information contained in this document. To the best of the
knowledge and belief of the Directors (who have taken all
reasonable care to ensure that such is the case), the information
contained in this document is in accordance with the facts and
contains no omission likely to affect the import of such
information.
To the extent information has been sourced from a third party,
this information has been accurately reproduced and, as far as the
Directors and the Company are aware, no facts have been omitted
which may render the reproduced information inaccurate or
misleading. In connection with this document, no person is
authorised to give any information or make any representation other
than as contained in this document.
This document contains forward looking statements, including,
without limitation, statements containing the words "believe",
"anticipated", "expect", and similar expressions. Such forward
looking statements involve unknown risk, uncertainties and other
factors which may cause the actual results, financial condition,
performance or achievements expressed or implied by such forward
looking statements to be materially different. In light of these
issues, uncertainties and assumptions, the events described in the
forward looking statements in this document may not occur. Subject
to legal or regulatory requirements, the Company disclaims any
obligation to update any such forward looking statements in this
document to reflect future events or developments.
Copies of this document will be available free of charge during
normal business hours on any weekday (except public holidays) at
the offices of Locke Lord LLP, Second Floor, 201 Bishopsgate,
London EC2M 3AB from the date of this document until the expiry of
one month from that date. Please refer to page 15 of this document
for further details of the proposed New Investing Policy.
CONTENTS
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
STATISTICS
DIRECTORS AND ADVISERS
DEFINITIONS
PART 1 LETTER FROM THE EXECUTIVE CHAIRMAN
PART 2 NOTICE OF GENERAL MEETING
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
This Circular sent to Shareholders 31 January 2023
Latest time and date for receipt 10:00 a.m. GMT on 15 February
of Forms of Instruction 2023
Latest time and date for receipt 10:00 a.m. GMT on 16 February
of Forms of Proxy 2023
Date of General Meeting 20 February 2023
STATISTICS
Existing issued shares of the Company 117,925,673
Number of Placing Shares 191,256,831
Ordinary Shares to be issued to the Investment
Manager 2,179,011
Total issued shares of the Company upon completion
of the Placing ([1]) 309,182,503
Percentage of the total issued shares of the
Company represented by Placing Shares ([2]) 61.86%
Number of Existing Warrants 17,567,663
Number of Noteholder Warrants 15,435,686
Number of Underwriter Warrants up to 10,000,000
DIRECTORS AND ADVISERS
Directors: John Croft (Executive Chairman)
Hugh Viscount Trenchard (Non-Executive
Director)
Dr Lee George Lam (Non-Executive Director)
Stuart Crocker (Non-Executive Director)
John Batchelor (Non-Executive Director)
Registered Office: Commerce House, Wickhams Cay 1
PO Box 3140
Road Town, Tortola
British Virgin Islands VG1110
Principal Place of 29/F Infinitus Plaza
Business: 199 Des Voeux Road Central
Hong Kong
Company Secretary: Conyers Corporate Services (BVI) Limited
Commerce House, Wickhams Cay 1
PO Box 3140
Road Town, Tortola
British Virgin Islands VG1110
Investment Manager: Harmony Capital Investors Limited
Intertrust Corporate Services (Cayman)
Limited
190 Elgin Avenue, George Town
Grand Cayman, KY1-9007
Cayman Islands
English Lawyers to Locke Lord (UK) LLP
the Company: Second Floor
201 Bishopsgate
London EC2M 3AB
BVI Lawyers to the Conyers Dill & Pearman
Company: 29th Floor, One Exchange Square
8 Connaught Place
Central Hong Kong
Auditors: PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
Registrars: Computershare Investor Services (BVI)
Limited
Woodbourne Hall
PO Box 3162
Road Town, Tortola
British Virgin Islands
Depositary Interest Computershare Investor Services PLC
Registrars: The Pavilions
Bridgwater Road
Bristol BS13 8AE
Placing Agent: Hybridan LLP
1 Poultry
London EC2R 8EJ
Underwriter: Heirloom Investment Management LLC
Suite 105, 501 Silverside Road
Wilmington Delaware 19809
United States of America
Company Website: www.jaderoadinvestments.com
DEFINITIONS
"Admission" the admission of the New Ordinary Shares
to trading on AIM becoming effective in
accordance with the AIM Rules
"AIM Rules" the AIM Rules for Companies and AIM Note
for Investing Companies as published and
amended from time to time by the London
Stock Exchange
"Articles" the amended and restated articles of association
of the Company
"Buy Back Record the record date for the proposed buy back
Date" of Ordinary Shares to be undertaken by
the Company, being 5 p.m. GMT on 16 February
2023
"BVI" British Virgin Islands
"Circular" this document
"Company" or "Jade" Jade Road Investments Limited, a company
registered in the BVI with registered number
1459602
"CREST" the electronic systems for the holding
and transfer of shares in dematerialised
form operated by Euroclear UK & International
Limited
"Depositary" Computershare Investor Services PLC
"Depositary Interest a holder of Depositary Interests
Holder"
"Depositary Interests" the depositary interests in respect of
the underlying Ordinary Shares
"Directors" or "Board" the existing board of directors of the
Company
"Elypsis" Elypsis Solutions Limited, a company incorporated
under the laws of the British Virgin Islands
with company number 1651099
"Equity Fundraise" has the meaning given to it in paragraph
1 of Part 1
"Existing Warrants" the 17,567,663 warrants previously authorised
and constituted by the Company
"Form of Instruction" the depositary interest form of instruction
enclosed with this document for use at
the GM
"Form of Proxy" the form of proxy enclosed with this document
for use at the GM
"General Meeting" the general meeting of the Company to be
or "GM" held at 10.00 a.m. GMT/6.00 p.m. HKT time
on Monday 20 February 2023
"GMT" Greenwich Mean Time
"Gross Placing Proceeds" the gross amount raised by the Placing
Agent pursuant to the Equity Fundraise
"Heirloom" Heirloom Investment Management LLC, or
any one of its affiliates, advised or managed
clients, or nominees
"HKT" Hong Kong Time
"Investing Policy" the investing policy of the Company from
time to time
"Investment Manager" the investment manager of the Company from
time to time and as at the date of this
document, Harmony Capital Investors Limited
"Issue Price" has the meaning given to it in paragraph
1 of Part 1
"Loan Note Instrument" has the meaning given to it in paragraph
1 of Part 1
"London Stock Exchange" London Stock Exchange plc
"New Investing Policy" the proposed new Investing Policy, further
details of which are set out in Letter
from the Executive Chairman on pages 11
to 18 of this document
"Noteholder Warrants" the 15,435,686 warrants constituted by
an instrument dated on or about the date
of this document and to be issued to Noteholders
pursuant to the terms of the Loan Note
Amendments
"Notice of General the notice of GM set out at the end of
Meeting" this document
"Ordinary Shares" ordinary shares of no par value each of
the Company
"New Ordinary Shares" has the meaning given to it in paragraph
1 of Part 1
"Placing Agent" Hybridan LLP of 1 Poultry, London, EC2R
8EJ
"Relationship Agreement" the relationship agreement entered into
on 29 January 2014 between the Company
and Elypsis setting out certain undertakings
and obligations of Elypsis in order to
ensure that its dealings with the Company
are carried out at arm's length, notwithstanding
its significant shareholding
"Resolutions" the resolutions proposed in the Notice
of General Meeting at the end of this document
"Shareholder(s)" holder(s) of Ordinary Shares
"Underwriter" Heirloom
"Underwriter Warrants" up to a maximum of 10,000,000 warrants,
constituted by an instrument dated on or
about the date of this document and to
be issued to the Underwriter pursuant to
the terms of the Underwriting Agreement
"Underwriting Agreement" the underwriting agreement entered into
by the Underwriter and the Company on or
about the date of this document
"United Kingdom" the United Kingdom of Great Britain and
or "UK" Northern Ireland
"US$" US dollars
"Waiver Resolution" has the meaning given to it in paragraph
1 of Part 1
All references to dates and times in this document are to GMT
unless otherwise stated. References to the singular shall include
references to the plural, where applicable, and vice versa.
PART 1
LETTER FROM THE EXECUTIVE CHAIRMAN
JADE ROAD INVESTMENTS LIMITED
(Incorporated in the British Virgin Islands with registration
number 1459602)
Directors: Registered Office:
John Croft (Executive Chairman) Commerce House, Wickhams
Hugh Viscount Trenchard (Non-Executive Cay 1
Director) PO Box 3140
Dr Lee George Lam (Non-Executive Road Town, Tortola
Director) British Virgin Islands, VG1110
Stuart Crocker (Non-Executive Director)
John Batchelor (Non-Executive Director)
31 January 2023
Dear Shareholder,
Underwritten equity fundraise of up to US$1,750,000
Waiver of Article 46 (Takeover Provisions) of the Articles
Proposed New Investing Policy
Adoption of an amended and restated Memorandum of
Association
Authority to allot Ordinary Shares
Authority to buy back Ordinary Shares
Introduction
The Company is intending to raise equity finance of up to
US$1,750,000 by issuing 191,256,831 new Ordinary Shares ("New
Ordinary Shares") at a price of GBP0.0075 per Ordinary Share
("Issue Price") (using a pre-determined exchange rate of US$1.22 to
GBP1) ("Equity Fundraise"). The Equity Fundraise is being entirely
underwritten by Heirloom, who has agreed to purchase any number of
New Ordinary Shares not otherwise purchased by prospective placees
introduced to the Company by the Placing Agent.
Completion of the Equity Fundraise is conditional, inter alia,
on all of the Resolutions being passed by the Shareholders at a
duly convened general meeting. They are as follows:
-- the waiver of the application of Article 46 (Takeover
Provisions) to the Underwriting (as defined in paragraph 2 ) in its
entirety (the "Waiver Resolution");
-- the approval of the New Investing Policy as set out in paragraph 4 below;
-- the adoption of an amended and restated Memorandum of Association; and
-- the resolutions regarding the Company's shares, including the
grant of authority to the Directors to buy back Ordinary
Shares.
Paragraphs 2 , 3 , 4 and 6 respectively provide the background
and reasons for the Equity Fundraise, the waiver of Article 46
(Takeover Provisions), the proposed New Investing Policy and the
adoption of an amended and restated Memorandum of Association.
Furthermore, paragraphs 6 and 7 provide details on the reasons
for the authority to allot further Ordinary Shares, the authority
to be granted to Directors to buy back Ordinary Shares and the
recent amendments to the Company's loan note instrument dated 20
October 2019 constituting up to US$10,000,000 12.5% fixed rate
secured loan notes 2022 ("Loan Note Instrument").
Background to and reasons for the Underwritten Equity
Fundraise
The Directors believe the Equity Fundraise is in the best
interests of all shareholders of the Company for the following
reasons:
-- it will provide the Company, in conjunction with managing its
creditors, with working capital until Q4 2023 allowing the Company
to pursue orderly disposals of its existing portfolio, recycle that
capital and potentially make modest initial new investment(s)
pursuant to the New Investing Policy;
-- allow the Company time to structure and market a more
significant equity fundraising, completion of which, together with
the returns from any material exits from the existing portfolio,
would allow the Company to pursue more significant investments
pursuant to the New Investing Policy; and
-- the proposals have the support of the Company's convertible
loan note holders who have accepted a restructuring of their debt,
including principally to extend its maturity until 31 December
2023.
The Equity Fundraise is being undertaken at the following
discounts:
70.59% to the share price of 2.55p on 25 January 2023, being the
last trading day before this Circular was approved for publication;
and
98.47% to the last published Net Asset Value per share of
GBP0.49 on 30 June 2022.
The Directors note the fact that there is a significant
disparity between the market capitalization of the Company at the
Issue Price (assuming the Equity Fundraise is completed) and the
last published net asset value of the Company's portfolio of
assets. The Directors remind Shareholders of the difficulty of
realizing the full value of those assets, which the Directors
believe can be achieved, but will likely take a material amount of
time and money to complete.
The Company has instructed the Placing Agent to identify
prospective placees, and Heirloom will subscribe for all New
Ordinary Shares not otherwise purchased by a placee. The Equity
Fundraise will result in the issue of a total of 191,256,831 New
Ordinary Shares, representing, in aggregate, approximately 61.86%
of the issued shares of the Company as enlarged by the issue of the
New Ordinary Shares.
Subject to the approval of the Resolutions, application will be
made to London Stock Exchange for the New Ordinary Shares to be
admitted to trading on AIM and such admission is expected to occur
on Tuesday 21 February 2023 and in any event no later than 8:00
a.m. on Wednesday 22 February 2023.
The New Ordinary Shares, when issued and fully paid, will rank
pari passu in all respects with the existing Ordinary Shares in
issue and therefore will rank equally for all dividends or other
distributions declared, made or paid after the issue of the New
Ordinary Shares on Admission.
Accordingly, the Company has engaged the Placing Agent to carry
out the Placing pursuant to an engagement letter dated 17 January
2023 and expects to enter into a placing agreement with the Placing
Agent on market standard terms.
The Equity Fundraise is being underwritten by Heirloom pursuant
to an underwriting agreement with the Company entered into on the
date of this document (the "Underwriting" and "Underwriting
Agreement"), the terms of which are as follows:
-- Heirloom will underwrite the entirety of the US$1,750,000 to
be raised under the Equity Fundraise;
-- Heirloom will be paid a fee ("Underwriting Fee") comprising
(i) 5% of an amount equalling US$1,750,000 less the Gross Placing
Proceeds, to be satisfied by the issue of such number of new
Ordinary Shares at the Issue Price as shall equal that amount, and
(ii) 5% of the Gross Placing Proceeds, to be satisfied by the grant
of the resulting number of Underwriter Warrants at an exercise
price per Ordinary Share equalling the Issue Price, to be
exercisable over a three-year period from the date of grant;
and
-- the Underwriting is conditional, inter alia, on (i) the
publishing of this Circular; and (ii) the passing of the
Resolutions contemplated herein.
The Underwriter Warrants will not be admitted to trading on AIM
or any other stock market and are not transferable (save to
affiliates of Heirloom).
Waiver of Article 46 (Takeover Provisions)
The Company is registered in the British Virgin Islands and is
not subject to the UK City Code on Takeovers and Mergers.
In accordance with Article 46 (Takeover Provisions), where a
Shareholder (or persons acting in concert with such Shareholder)
acquires Ordinary Shares which, in aggregate, carry 30 per cent. or
more of the voting rights of the Company, such Shareholder is
required to make an offer to all other Shareholders.
Should Heirloom be required to underwrite the entirety of the
Equity Fundraise, Heirloom will acquire, in aggregate, more than 30
per cent. of the Company's total issued shares post-Equity
Fundraise, and unless waived pursuant to the Waiver Resolution,
Article 46 would require Heirloom to make an offer to all other
Shareholders ("Mandatory Offer"). In the event that Heirloom was
required to make such a Mandatory Offer and it was completed upon
its terms, Heirloom would become the sole Shareholder of the
Company. In addition, executing such a Mandatory Offer would incur
significant costs for the Company.
To avoid Heirloom being required to make a Mandatory Offer, the
Directors are proposing that Article 46 be waived in its entirety
to the extent that it applies to the Underwriting. Pursuant to
Article 46, Heirloom will not be able to vote on the Waiver
Resolution. Heirloom currently owns 10,068,676 Ordinary Shares,
representing 8.73 per cent. of the current issued shares of the
Company entitled to vote.
The proposed New Investing Policy
Current Investing Policy
The current Investing Policy, as set out in the Company's
circular to Shareholders dated 3 May 2017, is as follows :
The Company has an indefinite life and is targeting both capital
gains and income distributions for its Shareholders over time.
The Company will provide equity and credit funding to companies,
principally in the Pan-Asia region or with a connection to Asia. It
will seek to do this by:
providing funding directly to companies via the provision of
loans or other credit instruments which may be secured against
assets of the borrower or its affiliates;
providing funding to companies to accelerate their growth,
expand the scale of their business and/or to consolidate their
organizational structure in preparation for a public listing.
Investments could be in the form of structured equity, debt and
hybrid debt securities;
providing growth, development and acquisition capital in the
form of equity or quasi-equity to companies within growth
industries;
providing funding to transactions structured around significant
corporate events such as recapitalisations, debt restructurings,
buybacks of shares, asset spin-offs and corporate
reorganisations;
investing in publicly traded or 'over the counter' traded equity
or credit securities, such as preferred stock, common stock, high
yield bonds, senior loans, warrants, where the market is mispricing
a company's securities and thereby offering an attractive risk
adjusted return due to one-off or short term factors; and
investing (in addition to securing co-investment rights for the
Company) as a limited partner or shareholder in third party managed
vehicles which have a strategy to provide credit and/or equity
funding to companies in a specific industry.
The Company will be sector agnostic in its investment
activities.
New investments will be managed actively, including through
appropriate investor protections which will be negotiated on each
transaction as appropriate and relevant.
The Company will consider using debt to finance transactions on
a case by case basis and may assume debt on its own balance sheet
when appropriate to enhance returns to Shareholders and/or to
bridge the financing needs of its investment pipeline.
The Company may decide to dispose of or exit, partially or
fully, existing investments in the Company's portfolio where
appropriate and based on the recommendations of the Investment
Manager.
The Company intends to pursue its publicly stated objective of
monetising its legacy portfolio and will report on its progress
when dispositions are achieved.
Modified Investing Policy
The Directors believe that there is an excellent long-term
opportunity to provide financing, primarily backed by real assets,
with a primary focus on income-production and a secondary focus on
capital gains. The Directors believe that by investing in
asset-backed assets that are income-generating, the Company will be
provided with more certainty when predicting future cash flows,
thus allowing it to plan an appropriate dividend policy in due
course. It is believed that this will allow for the optimal
delivery of shareholder value in the form of the payment of a safe,
consistent dividend yield at an attractive spread to other yielding
options, while growing the underlying capital base of the
Company.
In order to take advantage of this opportunity and to deliver
this shareholder value, the Company requires an updated Investing
Policy that will permit it to take advantage of the best
risk-adjusted investments globally, provided the majority of them
are asset-backed and/or income producing and backed by legal
jurisdictions that the Directors are comfortable with and provide a
safe underpinning to allow for the Company to earn its return and
recoup its investment as per the terms of the financing that it
agrees to.
Moreover, given the long-term nature of the Company's investment
horizon, the Directors believe that an updated Investing Policy
should enable the Company to navigate changes in the relative
attractiveness of various financing opportunities through varying
economic cycles and geopolitical shifts.
Finally, and most importantly, the Board expects the Company's
investment portfolio to be repositioned over time such that it
generates both income and capital gains.
In order to facilitate the Company's strategic objectives, the
Company is proposing the Resolution to amend the Investing Policy
to the following:
1) The Company has an indefinite life, is sector agnostic and is
targeting assets in any class which will produce income returns,
with a secondary focus on capital gains over time for its
Shareholders.
2) The Company will seek the best risk-adjusted returns
globally, with a preference for investments governed by legal
systems that the Company understands and believes to be
reliable.
3) The Company may invest directly into listed securities,
over-the-counter traded securities, currencies, companies, real
assets, contractual obligations, or commodities ("Direct
Financings").
4) The Company may provide financing to entities, becoming a
lender to, or a limited partner or shareholder of, an affiliated or
third party which itself has a strategy to invest in underlying
listed securities, over-the-counter traded securities, currencies,
companies, real assets, contractual obligations or commodities
("Indirect Financings").
5) The Company shall ensure that at the time of entering into a
Direct Financing, it shall represent not more than 30% of the
Company's net asset value immediately following the relevant
transaction. There is no limit on the number of investments the
Company may take.
6) The Company shall ensure that at the time of entering into an
Indirect Financing, no underlying asset of the indirectly financed
entity shall represent more than 30% of the Company's net asset
value immediately following the relevant transaction.
7) There is no restriction on the duration the Company will hold
any investment nor any restriction on the time for the Company to
make its investments in such assets.
8) The Company will pursue a predominantly passive management
strategy. However, on a case by case basis, it may consider
securing additional governance rights such as observer or board
appointments where the situation or asset dictates such additional
oversight.
9) The Company may utilise gearing when appropriate. The Company
will continue to exercise prudence in determining whether
prevailing market conditions and investor expectations warrant the
utilisation of any leverage over its portfolio.
10) The Company will consider issuing its own shares as
consideration for interests in other companies but such cross
holdings will be limited to 20 per cent. of the Company's issued
shares in aggregate from time to time.
The Directors believe that the proposed change of Investing
Policy will broaden the Company's activities and allow it to build
a portfolio of investments producing income and with the potential
for capital gains. The Directors further believe that the change of
Investing Policy also enables the Company to:
-- increase the breadth of the transactions and opportunities it can consider;
-- lower its overall investment risk by increasing
diversification and shifting geographic focus toward more stable
geographies with stronger legal systems; and
-- implement its long-term objective of providing Shareholders
with a stock that produces income and retains the potential for
appreciation.
The Board and the Investment Manager each have extensive
international experience across a range of industries and asset
classes. Income-producing assets which are backed by real assets
have already been indicatively assessed as part of the Investment
Manager's internal processes and while no specific commitments have
been entered into, the Board and Investment Manager are comfortable
in their ability to execute the New Investing Policy.
Increase in maximum number of shares authorised for issue;
adoption of an amended and restated Memorandum and Association
The Company proposes to increase the maximum number of shares it
is authorized to issue to a maximum of 2,348,233,198 shares. The
Company will amend clause 5 of its memorandum of association and
adopt an amended and restated Memorandum of Association, reflecting
such amendment, as follows:
"5. NUMBER AND CLASSES OF SHARES
The Company is authorised to issue up to a maximum of
2,348,233,198 ordinary shares of a single class without a par
value".
The amendment will increase the maximum number of shares being
available for issue by the Directors going forwards and will also
ensure that the Company will have sufficient headroom to allot
outstanding Ordinary Shares owed to the Investment Manager, to
complete the Equity Fundraise, and to raise further equity capital
when required (please see paragraph 6 for further information).
Authority to allot and buy back Ordinary Shares
In order to ensure that the Company can complete the Equity
Fundraise and raise further equity capital when required, the Board
is proposing that the Directors be granted a mandate to allot up to
a maximum of 743,435,842 Ordinary Shares for cash consideration,
representing 33.33% (one-third) of the unissued Ordinary Shares of
the Company and comprising (a) 191,256,831 Ordinary Shares pursuant
to the Equity Fundraise, (b), 2,179,011 Ordinary Shares due to the
Investment Manager pursuant to a meeting of the Board dated 14
September 2021, and (c) 650,000,000 Ordinary Shares for any future
equity fundraise as may be required (including, for the avoidance
of doubt, the allotment of Ordinary Shares following any exercise
of warrants). Subject to satisfaction of the Fundraising Condition,
the Board is further proposing to offer all Shareholders holding
Shares on the Buy Back Record Date the opportunity to sell those
Ordinary Shares back to the Company and accordingly it is proposed
that the Directors be granted a mandate to buy back up to
117,925,673 Ordinary Shares of the Company. These authorities will
revoke the authorities previously granted at the Company's annual
general meeting held on 14 September 2021, and will expire at the
conclusion of the first annual general meeting of the Company
following the passing of this resolution, unless otherwise renewed
by ordinary resolution.
Related Party Transaction
On 30 January 2023, in consideration for Elypsis Solutions
Limited ("Elypsis") and Asia Private Credit Fund ("APCF"), which
are associated with each other and together represent the Company's
largest shareholding with 47.91% of the issued voting shares (the
"Shareholding"), providing an irrevocable undertaking to vote in
favour of the Resolutions, the Company entered into a conditional
put option agreement with Elypsis and APCF (the "Put Option
Agreement"). Under the terms of the Put Option Agreement the
Company has conditionally agreed to buy back a pro-rated amount of
the Shareholding at a price equal to or greater than 2p per share
on each occasion that the Company completes an equity fundraising
(unless and to the extent any part or all of the Shareholding is
sold into any placing) until the Shareholding has either been
entirely bought back or sold, as the case may be. Such a buy back
is conditional, inter alia, on the passing of the Resolutions. If
the put option is exercised, the Company will make a buyback offer
in relation to the same pro rata amount of all other current
existing shares held by Depositary Interest Holders on the Buy Back
Record Date on the same terms.
The Directors (other than John Batchelor who is not independent)
consider, having consulted with WH Ireland plc, the Company's
nominated adviser, that the terms of the Put Option Agreement are
fair and reasonable insofar as Shareholders are concerned for the
purposes of AIM Rule 13 (Related Party Transactions).
Amendment to the loan note instrument
As announced on 1 December 2022, on 29 November 2022, the
holders of loan notes ("Noteholders") in the Company issued
pursuant to the Loan Note Instrument ("Notes") resolved by a 91.71%
majority to amend the terms of the Loan Note Instrument by way of a
supplemental instrument dated 1 December 2022 ("Loan Note
Amendments").
The terms of the Loan Note Amendments include, among others:
-- the extension of the maturity date to 31 December 2023 ("Maturity Date");
-- the increase of the interest rate payable to Noteholders on
the outstanding principal amount of the Notes from 12.5% per annum
to 15% per annum; and
-- should US$1,800,000 of the principal amount of the Notes
remain outstanding by 30 June 2023, the interest rate will increase
to 16% per annum until the Maturity Date.
Noteholders will also be issued with warrants equalling 5% of
the net proceeds of the Equity Fundraise, exercisable over a
three-year period with an exercise price equalling 150% of the
Issue Price ("Noteholder Warrants") . The Noteholder Warrants will
not be admitted to trading on AIM or any other stock market and are
not transferable (save to affiliates of the transferring
Warrantholder).
Working Capital
The Company is currently needing to manage its creditors and its
working capital position is tight. The completion of the Equity
Fundraise, in conjunction with the management of its creditors,
would provide additional working capital until Q4 2023 and provide
time to seek to realise funds from the divestment of its current
investment portfolio and to seek to raise further new funds both
for working capital and to make new investments in accordance with
the proposed new investing policy.
Action to be taken
You will find the Notice of General Meeting set out at the end
of this document. The GM (at which the Resolutions will be
proposed) will be held at 10.00 a.m. GMT/6.00 p.m. HKT on Monday 20
February 2023. All the Shareholders are entitled to vote for or
against the Resolution.
Shareholders will find a Form of Proxy enclosed for use at the
General Meeting. Whether or not you intend to be present at the
General Meeting, you are requested to complete and return the Form
of Proxy in accordance with the instructions printed thereon as
soon as possible. To be valid, completed Forms of Proxy must be
received by the Company's registrars, Computershare Investor
Services (BVI) Limited, c/o at The Pavilions, Bridgwater Road,
Bristol BS99 6ZY no later than 10.00 a.m. GMT on Thursday 16
February 2023, being 48 hours before the time appointed for holding
the General Meeting (excluding non-business days). Completion and
return of a Form of Proxy will not preclude you from attending in
person and voting at the General Meeting.
Depositary Interest Holders will find a Form of Instruction
enclosed for use at the General Meeting. Whether or not you wish to
be present at the General Meeting, you are requested to complete
and return the Form of Instruction or lodge a vote through the
CREST system in accordance with the instructions printed thereon as
soon as possible. To be valid, completed Forms of Instruction must
be received by the Depositary at The Pavilions, Bridgwater Road,
Bristol BS99 6ZY no later than 10.00 a.m. GMT /6.00 p.m. HKT on
Wednesday 15 February 2023, being 72 hours before the time
appointed for holding the General Meeting (excluding non-business
days). Completion of the Form of Instruction will not preclude you
from attending and voting at the General Meeting in person if you
so wish.
Recommendation and irrevocable undertaking
The Directors note the fact that there is a significant
disparity between the market capitalization of the Company at the
Issue Price (assuming the Equity Fundraise is completed) and the
last published net asset value of the Company's portfolio of
assets. The Directors remind Shareholders of the difficulty of
realizing the full value of those assets, which the Directors
consider will likely take a material amount of time and money to
complete.
The Directors have approached Elypsis and APCF, together
representing the Company's largest shareholding with 47.91% of the
issued voting shares, to seek their support for the proposals, in
particular the Equity Fundraise. The Directors are pleased to
report that Elypsis and APCF have entered into an irrevocable
undertaking to vote in favour of all of the Resolutions.
The Directors (other than John Batchelor who is not considered
independent) recommend Shareholders vote in favour of the
Resolutions to be proposed at the General Meeting, as they intend
to do in respect of the 383,732 Ordinary Shares in aggregate held
by them at the date of this Circular.
Yours faithfully,
John Croft
Executive Chairman
Jade Road Investments Limited
PART 2
NOTICE OF GENERAL MEETING
_________________________________________________________________________________
JADE ROAD INVESTMENTS LIMITED
(Incorporated in the British Virgin Islands under the BVI
Business Companies Act, 2004)
(the "Company")
_________________________________________________________________________________
NOTICE IS HEREBY GIVEN that the general meeting (the "Meeting")
of the members of the Company will be held at 10.00a.m. GMT/6.00
p.m. HKT on Monday 20 February 2023 at 29/F Infinitus Plaza, 199
Des Voeux Road Central, Hong Kong, to consider and, if thought fit,
pass the following resolutions as ordinary resolutions:
1) WAIVER OF ARTICLE 46
THAT Article 46 (Takeover Provisions) as it applies to the
subscription of ordinary shares of no par value each in the Company
by Heirloom Management Investment LLC pursuant to an underwriting
letter with the Company dated 30 January 2023 be waived in its
entirety in accordance with Article 46.2.
2) NEW INVESTING POLICY
THAT the existing investing policy of the Company be replaced
with a new investing policy as follows:
(a) The Company has an indefinite life, is sector agnostic and
is targeting assets in any class which will produce income returns,
with a secondary focus on capital gains over time for its
Shareholders.
(b) The Company will seek the best risk-adjusted returns
globally, with a preference for investments governed by legal
systems that the Company understands and believes to be
reliable.
(c) The Company may invest directly into listed securities,
over-the-counter traded securities, currencies, companies, real
assets, contractual obligations, or commodities ("Direct
Financings").
(d) The Company may provide financing to entities, becoming a
lender to, or a limited partner or shareholder of, an affiliated or
third party which itself has a strategy to invest in underlying
listed securities, over-the-counter traded securities, currencies,
companies, real assets, contractual obligations or commodities
("Indirect Financings").
(e) The Company shall ensure that at the time of entering into a
Direct Financing, it shall represent not more than 30% of the
Company's net asset value immediately following the relevant
transaction. There is no limit on the number of investments the
Company may take.
(f) The Company shall ensure that at the time of entering into
an Indirect Financing, no underlying asset of the indirectly
financed entity shall represent more than 30% of the Company's net
asset value immediately following the relevant transaction.
(g) There is no restriction on the duration the Company will
hold any investment nor any restriction on the time for the Company
to make its investments in such assets.
(h) The Company will pursue a predominantly passive management
strategy. However, on a case by case basis, it may consider
securing additional governance rights such as observer or board
appointments where the situation or asset dictates such additional
oversight.
(i) The Company may utilise gearing when appropriate. The
Company will continue to exercise prudence in determining whether
prevailing market conditions and investor expectations warrant the
utilisation of any leverage over its portfolio.
(j) The Company will consider issuing its own shares as
consideration for interests in other companies but such cross
holdings will be limited to 20% percent of the Company's issued
shares in aggregate from time to time.
3) AMED AND RESTATED MEMORANDUM OF ASSOCIATION
(a) THAT the Company increase the maximum number of shares it is
authorized to issue to a maximum of 2,348,233,198 shares.
(b) THAT clause 5 of the Company's currently adopted memorandum
of association be deleted in its entirety and replaced with the
following new clause :
5. NUMBER AND CLASSES OF SHARES
The Company is authorised to issue up to a maximum of
2,348,233,198 ordinary shares of a single class without par
value.
(c) THAT the Company adopts a new amended and restated
memorandum and articles of association reflecting the Amendment in
the form produced to the Meeting.
(d) THAT the members of the Company be and hereby approve and
ratify all issues of shares under all general mandates granted to
the directors of the Company ("Directors") since 17 August
2018.
4) AUTHORITY TO ALLOT SHARES
THAT:
(a) subject to paragraphs (b) and (c) of this Resolution and in
accordance with the amended and restated articles of association of
the Company (the "Articles"), the exercise by the board of
Directors during the Relevant Period (as defined below) of all the
powers of the Company to allot, issue and otherwise deal with the
unissued shares of the Company (the "Shares") and to allot, issue
or grant securities convertible into Shares, or options, warrants
or similar rights to subscribe for any Shares or such convertible
securities, and to make or grant offers, agreements, options and
warrants which would or might require the exercise of such powers
be generally and unconditionally approved ;
(b) the approval in paragraph (a) of this Resolution shall not
extend beyond the Relevant Period but shall authorise the Directors
during the Relevant Period to make or grant offers, agreements,
options and warrants which would or might require the exercise of
such power after the end of the Relevant Period ; and
(c) the number of Shares allotted or agreed conditionally or
unconditionally to be allotted (whether pursuant to an option or
otherwise) by the Directors for cash consideration pursuant to the
approval in paragraph (a) of this Resolution, and otherwise than
pursuant to the exercise of the subscription or conversion rights
attaching to any warrants or any securities convertible into Shares
or the exercise of the subscription rights under any option scheme
or similar arrangement for the time being adopted for the grant or
issue to persons such as officers and/or employees of the Company
and/or any of its subsidiaries of Shares or rights to acquire
Shares or any scrip dividend providing for the allotment of Shares
in lieu of the whole or part of a dividend on Shares in accordance
with the Articles, shall not exceed 33.33% (one -- third) of the
unissued Shares of the Company and the said approval shall be
limited accordingly .
5) AUTHORITY TO BUY BACK SHARES
THAT:
(a) subject to paragraph (b) of Resolution 4, the exercise by
the Directors during the Relevant Period (as defined below) of all
the powers of the Company to purchase or repurchase on AIM, a
market operated by the London Stock Exchange plc on which the
securities of the Company are traded and recognised by AIM for this
purpose, Shares (including any form of depositary interests
representing the right to receive such Shares issued by the
Company) and the exercise by the Directors of all powers of the
Company to repurchase such securities, subject to and in accordance
with all applicable laws and the requirements of both the AIM Rules
for Companies and the AIM Rules for Nominated Advisers, be and are
hereby generally and unconditionally approved; and
(b) the number of Shares which may be purchased or repurchased
by the Company pursuant to the approval in paragraph (a) of this
resolution during the Relevant Period shall not exceed 117,925,673
Shares of the Company, and the said approval shall be limited
accordingly.
For the purposes of Resolutions 4 and 5:
" Relevant Period " means the period from the passing of the
resolution until the conclusion of the first annual general meeting
of the Company following the passing of the resolution, unless
otherwise renewed by ordinary resolution passed at that
meeting.
6) AUTHORITY OF DIRECTORS TO EXECUTE RELEVANT DOCUMENTS
THAT any director or officer of the Company be and is hereby
authorised for and on behalf of the Company to execute and deliver
all such other documents, instruments and agreements, whether under
the seal of the Company or otherwise, and to do all such acts or
things as may be necessary or desirable to give effect to the
foregoing.
Notes to the Notice of General Meeting
1. In order to be entitled to attend and vote at the Meeting, a
registered member must be on the Company's share register by close
of business on 15 February 2023 or 48 hours for any adjourned
meeting.
2. Subject to notes 3 and 5 below, only members are entitled to
attend and vote at the Meeting.
3. A member entitled to attend and vote at the Meeting is
entitled to appoint one or more proxies (for holder of two or more
shares) to attend and vote instead of that member. A proxy need not
be a member of the Company. To be valid, the form of proxy,
together with the power of attorney or other authority (if any)
under which it is signed, or a certified copy of such power or
authority, must be lodged with the Company's share registrar,
Computershare Investor Services (BVI) Limited, c/o The Pavilions,
Bridgwater Road, Bristol, BS99 6ZY no later than 10.00 a.m.
(GMT)/6.00 p.m. (HKT) on Thursday 16 February 2023 or 48 hours
before any adjourned meeting.
4. At the Meeting, the chairman of the Meeting will exercise his
power under Article 15.1(a) of the Articles to put the above
resolution to the vote by way of a poll.
5. Depositary Interest Holders who are CREST members and who
wish to issue an instruction through the CREST electronic voting
appointment service may do so by using the procedures described in
the CREST manual (available from www.euroclear.com). CREST personal
members or other CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should refer to
their CREST sponsor or voting services provider(s), who will be
able to take the appropriate action on their behalf.
In order for instructions made using the CREST service to be
valid, the appropriate CREST message (a CREST Voting Instruction)
must be properly authenticated in accordance with the
specifications of Euroclear UK & International Limited (EUI)
and must contain the information required for such instructions, as
described in the CREST Manual (available via
www.euroclear.com).
The message, regardless of whether it relates to the voting
instruction or to an amendment to the instruction given to the
Depositary must, in order to be valid, be transmitted so as to be
received by the issuer's agent (ID 3RA50) no later than 10.00 a.m.
(GMT)/6.00 p.m. (HKT) on Wednesday 15 February 2023. For this
purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the CREST Voting Instruction
by the CREST applications host) from which the issuer's agent is
able to retrieve the CREST Voting Instruction by enquiry to CREST
in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsors or
voting service providers should note that EUI does not make
available special procedures in CREST for any particular messages.
Normal system timings and limitations will therefore apply in
relation to the transmission of CREST Voting Instructions. It is
the responsibility of the CREST member concerned to take (or, if
the CREST member is a CREST personal member or sponsored member or
has appointed a voting service provider(s), to procure that the
CREST sponsor or voting service provider(s) take(s)) such action as
shall be necessary to ensure that a CREST Voting Instruction is
transmitted by means of the CREST service by any particular time.
In this connection, CREST members and, where applicable, their
CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Voting Instruction in
the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
Alternatively, holders of Depositary Interests can complete a
Form of Instruction to appoint Computershare Company Nominees
Limited, the Depositary's custodian, to vote on the holder's behalf
at the General Meeting or, if the General Meeting is adjourned, at
the adjourned meeting. To be effective, a completed and signed Form
of Instruction (and any power of attorney or other authority under
which it is signed) must be delivered to the offices of the
custodian, Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZY, UK by no later than 10.00 a.m.
(GMT)/6.00 p.m. (HKT) on Wednesday 15 February 2023 or 72 hours
before any adjourned meeting.
Entitlement to attend and vote at the meeting and the number of
votes which may be cast thereat will be determined by reference to
the Depositary Interest register at close of business on 14
February 2023. Changes to entries on the register after that time
shall be disregarded in determining the rights of any person to
attend and vote at the meeting.
[1] Excluding any Ordinary Shares allotted by way of
commission.
[2] Excluding any Ordinary Shares allotted by way of
commission.
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END
CIRWPUAPGUPWURG
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