TIDMEIH
RNS Number : 9801I
EIH PLC
07 April 2020
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014.
EIH plc ("EIH" or the "Company")
Proposed Cancellation of Admission to Trading on AIM
Publication of Circular and Notice of Extraordinary General
Meeting
EIH today announces its intention to seek Shareholder approval
for the cancellation of admission of its Shares to trading on AIM
(the "Cancellation").
A circular will be published and posted to Shareholders shortly
setting out the background to, and the reasons for, the
Cancellation and the implications for the Company's Shareholders
("Circular"). The Circular will also contain a notice convening an
extraordinary general meeting of the Company ("Extraordinary
General Meeting") at which Shareholders are invited to consider a
resolution to approve the proposed Cancellation (the
"Resolution").
The Directors consider these proposals to be in the best
interests of Company and its Shareholders as a whole after
considering, amongst other things, that there is a clear lack of
liquidity in the Shares of the Company; there is considerable
financial cost associated with maintaining the Company's admission
to trading on AIM, which the Directors believe is disproportionate
to the benefits to the Company; and, as announced on 29 November
2019, the vast majority of Shareholders consulted regarding the
proposed Cancellation were in favour of the Cancellation in the
interest of saving costs.
The Resolution is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75 per cent. of the votes
cast by Shareholders (whether present in person or by proxy) at the
Extraordinary General Meeting. In the event that the Cancellation
proceeds, it is intended that the admission of Shares to trading on
AIM will be cancelled with effect from 7.00 a.m. on 18 May 2020 and
there will be no market facility for dealing in the Shares and no
price will be publicly quoted for Shares as from close of business
on 15 May 2020. As such, interests in Shares are unlikely to be
readily capable of sale and where a buyer is identified, it may be
difficult to place a fair value on any such sale.
The Extraordinary General Meeting of the Company will be held at
11.00 a.m. on 7 May 2020 at First Names House, Victoria Road,
Douglas, Isle of Man, IM2 4DF.
The full text of the Letter from the Chairman of the Company set
out within the Circular and the Expected Timetable of Principal
Events are reproduced in full below. A copy of the Circular,
including the notice convening the Extraordinary General Meeting,
will shortly be available on the Company's website at
http://www.eihplc.co.uk/.
Definitions in this announcement are the same as those included
in the Circular.
For further information, please contact:
EIH plc
Rhys Davies
Tel: +41 (0) 796200215
N+1 Singer (Nominated Adviser)
James Maxwell
+44 (0)20 7496 3000
EXPECTED TIMETABLE OF PRINCIPAL EVENTS (1)(2)
Notice provided to the 3 April 2020
London Stock
Exchange to notify it
of the proposed
Cancellation
Publication and 7 April 2020
posting of this
document
and Form of Proxy to
Shareholders
Latest time and date 11.00 a.m. on 5 May
for receipt of 2020
completed Forms of
Proxy for the EGM
Time and date of the 11.00 a.m. on 7 May
EGM 2020
Expected last day of 15 May 2020
dealings in the
Shares on AIM
Expected time and date 7.00 a.m. on 18 May
of Cancellation 2020
(1) All of the times referred to in this document refer to London time, unless otherwise stated.
(2) Each of the times and dates in the above timetable are
subject to change. If any of the above times and/or dates change,
the revised times and dates will be notified to Shareholders by an
announcement through a Regulatory Information Service.
1. Introduction
As announced by the Company today, the Directors have concluded
that it is in the best interests of the Company and its
Shareholders to seek Shareholder approval for the Cancellation of
the admission of the Shares to trading on AIM. In accordance with
Rule 41 of the AIM Rules, the Company has notified the London Stock
Exchange of the date of the proposed Cancellation.
The Resolution is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75 per cent. of the votes
cast by Shareholders (whether present in person or by proxy) at the
EGM, notice of which is set out on page 13 of this document.
The purpose of this document is to:
-- give Shareholders further information about the background to
and reasons for the proposed Cancellation and to seek Shareholders'
approval to the Resolution at the Extraordinary General Meeting
convened for this purpose. This letter also sets out why the Board
believes the proposed Cancellation to be in the best interests of
Shareholders as a whole, and also includes a recommendation from
the Directors to vote in favour of the Resolution; and
-- convene an extraordinary general meeting of the Company for
the purpose of seeking your approval of the proposed
Cancellation.
Your attention is drawn to the recommendation from the
Directors, on page 9, that you vote in favour of the
Resolution.
If the Resolution to approve the Cancellation is passed at the
Extraordinary General Meeting, it is proposed that Cancellation
will take effect at 7.00 a.m. on 18 May 2020.
2. Background
The Company has been quoted on AIM since 23 March 2007. On 28
June 2010, the Shareholders voted in favour of a resolution to
implement a revised investment policy focused on the active
management of assets and seeking to realise investments in a
managed way at an appropriate time, returning proceeds to
Shareholders as soon as practicable. Since the adoption of this
policy, 74 cents per Share (US$47.8m) have been returned to
Shareholders in the form of returns of capital, and US$500,000 has
been returned by way of share buy-back.
The Directors have concluded that, while they remain confident
that further realisations from the underlying portfolio of the
Company's limited partnership interest in the Evolvence India Fund
PCC ("EIF") will be achieved, there is now a higher level of
uncertainty as to both the value of the remaining assets to be
realised and the timing of distributions to Shareholders. In
particular, EIF's Investment Manager has advised that the life of
EIF has been extended until 31 October 2020, with the likelihood
that further extensions will be required thereafter. Moreover,
EIF's Investment Manager has indicated that certain assets are the
subject of negotiations for sale at a discount to the carrying
value stated in the Company's interim results as at 30 June
2019.
The Shares seldom trade (72% of the issued share capital is held
by four Shareholders and as at 3 April 2020 (being the latest
practicable date before the publication of this document), the most
recent trade occurred on 11 December 2019). The main source of
liquidity for Shareholders has been regular returns of capital as
the Company has realised its assets and the Directors expect this
to continue to be the case after de-listing.
In light of the situation, the Board has reviewed the merits of
the AIM quotation and concluded that the cost does not justify
continued listing on AIM.
3. Rationale for the Cancellation
The Directors have concluded that a resolution should be put to
Shareholders to approve a Cancellation. In reaching this
conclusion, the Directors have considered the following key
factors, amongst others:
-- there is a clear lack of liquidity in the Shares of the Company;
-- there is considerable financial cost associated with
maintaining the Company's admission to trading on AIM, which in the
Directors' opinion is disproportionate to the benefits to the
Company. It is estimated that Cancellation will reduce the
Company's recurring costs by at least GBP75,000 per annum; and
-- as announced on 29 November 2019, the vast majority of the
Shareholders consulted regarding the proposed Cancellation were in
favour of the Cancellation in the interest of saving costs.
4. Process for, and Principal Effects of, the Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Shares in the event that the proposed
Cancellation is approved and becomes effective.
To the extent that Shareholders are unable or unwilling to hold
Shares in the Company following the Cancellation becoming
effective, such Shareholders should consider selling their
interests in the market prior to the Cancellation becoming
effective.
Under the AIM Rules the Company is required to give at least 20
clear Business Days' notice of Cancellation. Additionally,
Cancellation will not take effect until at least 5 clear Business
Days have passed following the passing of the Resolution. If the
Resolution is passed at the Extraordinary General Meeting, it is
proposed that Cancellation will take effect at 7.00 a.m. on 18 May
2020.
In the event that the Cancellation proceeds, there will be no
market facility for dealing in the Shares and no price will be
publicly quoted for Shares as from close of business on 15 May
2020. As such, interests in Shares are unlikely to be readily
capable of sale and where a buyer is identified, it may be
difficult to place a fair value on any such sale.
While there can be no guarantee that Shareholders will be able
to sell any Shares, any Shareholder seeking to do so following
Cancellation should contact the Company in writing at the
registered office of the Company, First Names House, Victoria Road,
Douglas, Isle of Man, IM2 4DF. The Company will then be able to
advise as to whether the Directors are aware of any prospective
buyers for any Shares which the holder thereof wishes to sell at
that time.
As announced on 21 November 2019, the Board confirms that
following Cancellation, the Company will continue with its stated
objective to realise assets at the appropriate time and value, and
to return the proceeds, less expenses, to Shareholders, while at
the same time managing the Company's operating costs carefully.
It is the Board's current intention to assess at the time of
future annual general meetings whether the Company's financial
position will enable it to propose a further return of capital;
this may provide a further opportunity for Shareholders to realise
their investment. There can be no certainty that any further
returns of capital by the Company will be made and the Board makes
no commitment in this respect.
The Company will continue to post information about the Company
on its website http://www.eihplc.co.uk/ and will continue to send
its Annual Report and Accounts to Shareholders and to hold general
meetings in accordance with the applicable statutory requirements
and the Articles.
Shareholders should note that following the Cancellation, the
Company will remain subject to the City Code on Takeovers and
Mergers (the "Takeover Code") for the period of at least 10 years
from the date of Cancellation. Accordingly, Shareholders will
continue to receive the protections afforded by the Takeover Code
in the event that an offer is made to Shareholders to acquire their
Shares. Further details are set out in Part II of this
document.
5. Current trading
The Board is closely monitoring the Coronavirus (COVID-19)
situation in India and while they remain confident that further
realisations from the underlying portfolio of the Company's limited
partnership interest in EIF will be achieved, there is now a
considerably higher level of uncertainty as to both the value of
the remaining assets to be realised and the timing of distributions
to Shareholders.
6. Risks associated with retaining an interest in the Company following the Cancellation
The Directors draw to the attention of Shareholders the
following factors which should be taken into account in assessing
whether or not to retain their interests in Shares in the event
that the Cancellation is approved and becomes effective:
-- as indicated above, there will be no market facility for
dealing in the Shares and no price will be publicly quoted for
Shares. As such, interests in Shares are unlikely to be readily
capable of sale and where a buyer is identified, it may be
difficult to place a fair value on any such sale;
-- as an unquoted company, it will no longer be subject to the
AIM Rules and Shareholders will only be able to rely on the
protections afforded to minority shareholders under general company
law;
-- the Company will no longer be subject to the rules relating
to disclosure of interests in Shares set out in the DTR, such that
it may be difficult to ascertain the ownership of Shares from time
to time;
-- the levels of disclosure and corporate governance within the
Company are unlikely to be as stringent as for a company quoted on
AIM;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
-- N+1 Singer will cease to act as Nominated Adviser to the Company; and
-- certain existing or prospective investors may be unwilling to
trade or continue to trade in the Shares in the event that the
Shares are no longer traded on AIM.
The Company will remain registered with the Registrar of
Companies in the Isle of Man in accordance with and subject to the
Isle of Man Companies Act 2006, notwithstanding the Cancellation.
Shareholders should also note that the Takeover Code will continue
to apply to the Company following the Cancellation for the period
of at least 10 years from the date of Cancellation. However, the
Takeover Code may cease to apply earlier, if a majority of the
Directors cease to be resident in the UK, Channel Islands or Isle
of Man.
The above considerations are non-exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
In addition, the Company confirms that there is currently no
intention to change the existing Directors following the
Cancellation.
7. Taxation
If you are in any doubt about your tax position, and/or are
subject to tax in a jurisdiction other than the UK, you should
consult an appropriate independent professional adviser. You should
note that following the Cancellation the Shares will no longer be
quoted on AIM or any other public market.
8. Extraordinary General Meeting
Under the AIM Rules, it is a requirement that the Cancellation
must be approved by not less than 75 per cent. of votes cast by
Shareholders in a general meeting. Accordingly, the Notice set out
at the end of this document contains a special resolution:
1. to approve the application to London Stock Exchange for
cancellation of admission of the Shares to trading on AIM; and
2. to approve such cancellation.
The EGM will be held at First Names House, Victoria Road,
Douglas, Isle of Man, IM2 4DF commencing at 11.00 a.m. on 7 May
2020. If approved it is expected that the Cancellation will take
effect from 7.00 a.m. on 18 May 2020.
The Board is closely monitoring the Coronavirus (COVID-19)
situation. In order to safeguard the well-being of our
Shareholders, physical attendance at the EGM is restricted only to
the minimum number of Shareholders of the Company permissible and
to those based in the Isle of Man. Please do not therefore seek to
attend the EGM in person as you will not be granted admittance. We
recommend Shareholders appoint Stephen Edmonds or, failing him,
Stuart Gibson as their proxy in accordance with the instructions on
proxy voting set out below. The EGM will end immediately following
the formal business of the EGM.
We are, as always, committed to engagement with our
Shareholders. Shareholders may therefore dial-in to follow the
proceedings on +44 (0)1624 653191. Shareholders should email
Stephen.Edmonds@iqeq.com to obtain the access code, which will be
made available on request.
9. Action to be taken
You will find enclosed with this document a Form of Proxy for
use at the EGM. Shareholders are requested to complete and sign the
Form of Proxy and return it to the Company Secretary at First Names
House, Victoria Road, Douglas, Isle of Man, IM2 4DF as soon as
possible and, in any event, not later than 11.00 a.m. on 5 May
2020. Unless the Form of Proxy is received by this date and time,
it will be invalid.
10. Further Information
Copies of this document may be inspected at the Company's
registered office during usual business hours on any weekday
(Saturdays, Sundays and public holidays excepted) for one month
from the date of this document. The document will also be available
on the Company's website, http://www.eihplc.co.uk/.
11. Recommendation
The Directors consider that the Resolution is in the best
interests of the Company and the Shareholders as a whole.
Accordingly, your Directors unanimously recommend that Shareholders
vote in favour of the Resolution to be proposed at the EGM.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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