TIDMGMX
RNS Number : 5642L
Reliance GeneMedix PLC
05 September 2012
FOR IMMEDIATE RELEASE 5 September 2012
Reliance GeneMedix plc
(AIM: GMX)
Proposed cancellation of admission of ordinary shares to trading
on AIM
Proposed re-registration as a private limited company
and
Proposed adoption of new articles of association
Reliance GeneMedix plc (the "Company"), the AIM listed
biopharmaceutical company, announces the following:
-- The proposed cancellation of admission of the Company's Ordinary Shares to trading on AIM.
-- The proposed re-registration of the Company as a private
limited company and the associated adoption of new articles of
association.
-- The Annual General Meeting ("AGM") of the Company will be
held at 11:00 a.m. on 28 September 2012 to consider, inter alia,
the above proposals.
These proposals are conditional on Shareholder approval. Full
details of the proposed De-listing and Re-registration, including
details of what action Shareholders should take, are set out in the
circular posted to Shareholders today. A copy of the circular will
be made available on the Company's website and a summary is given
below. Unless otherwise defined, terms used in this announcement
have the meaning given to them in the circular.
Rationale for delisting from AIM
The primary purpose of the admission to trading of the Ordinary
Shares on AIM was for the Company to access public funds. The
Directors believe that this has now been severely compromised given
the trading price of the Ordinary Shares, the substantial decline
in the trading volume and liquidity in the Ordinary Shares
mentioned below and the prevailing market conditions. The Directors
also believe that the Company would not be able to raise additional
capital independently on AIM to fund the operations of the business
at a valuation that would be acceptable to both the Company and the
Shareholders in the foreseeable future.
The admission to trading of the Ordinary Shares on AIM does not,
in itself, offer Shareholders meaningful liquidity or marketability
of their shareholding or the opportunity to trade in meaningful
volumes or with frequency. The Ordinary Shares are suffering from a
lack of liquidity and, in practical terms, a small free float and
market capitalisation has reduced demand. Only a limited proportion
of the issued share capital of the Company is in public hands.
The Directors believe that the Company will continue to struggle
to attract and retain sufficient coverage, institutional interest
and level of market rating that would make retaining the admission
of the Ordinary Shares to trading on AIM worthwhile.
If the Ordinary Shares are de-listed from AIM and are
subsequently acquired by a third party, then proceeds from a
potential trade sale could be maximised without reference to, what
the Directors believe to be, an underperforming share price.
In addition, the Company would benefit from substantial
administrative cost savings as a result of the De-listing. Such
cost savings include professional fees associated with the
admission of the Ordinary Shares to trading on AIM (including
legal, accounting, broking, London Stock Exchange and nominated
adviser costs). Similarly, the De-listing would result in reduced
internal administrative costs by removing the Company's ongoing
compliance obligations as a publicly quoted company and free up
further management time.
The reduction of the costs referred to above would help to
reduce the Company's ongoing requirement for funding and also
provide the Company with resources to invest in business
development. The Directors believe that the De-listing would enable
the Company to implement its strategy with more flexibility and
without needing to comply with the reporting and other requirements
imposed by AIM.
Based on the above factors, the Directors believe that it is in
the best interests of the Company and Shareholders as a whole that
the Company be delisted from AIM.
The Company has been informed by its majority shareholder,
Reliance Life Sciences B.V. ("RLS"), which holds 79.6 per cent. of
the Ordinary Shares, that it intends to vote in favour of the
De-Listing. Therefore, it is expected that the resolution to
de-list from AIM will be passed at the AGM.
Rationale for re-registering as a private limited company
The Directors also propose that, conditional on the De-listing,
the Company be re-registered as a private limited company. This
will reduce both the costs and complexities of operating the
Company and, in particular, will facilitate returns of capital to
Shareholders without the need to apply to the Court.
Principal effects of de-listing and process
The principal effects that the De-listing will have on the
Company are as follows:
-- Shareholders will no longer be able to buy and sell Ordinary
Shares through AIM or any other public stock market and therefore
liquidity and marketability of the Ordinary Shares will be reduced.
The Company does not intend to offer a matched bargain settlement
facility;
-- the Company will no longer be required to announce price
sensitive information or other material developments or interim
results; and
-- the Company will cease to have a nominated adviser and broker
and will no longer be required to comply with the AIM Rules.
Under the AIM Rules, the De-listing can be effected following
the expiry of 20 business days from the date on which notice of the
De-listing is given to the London Stock Exchange provided that the
De-listing has been approved by not less than 75 per cent. in value
of votes cast by Shareholders and can only become effective once
five business days have passed since the date on which the
requisite Shareholder approval is given.
Principal effects of re-registration
The principal effects that the Re-registration will have on the
Company are as follows:
-- as a private company, the Company will be prohibited from
offering its securities to the public;
-- following Re-registration, the Company will be able to use
the solvency statement procedure for a reduction of capital (and
will not be required to obtain Court approval);
-- as a private company, the Company will be able to use the
statutory written resolution procedure and will not be required to
hold an annual general meeting; and
-- the provisions of the City Code will cease to apply to the
Company following the tenth anniversary of the De-listing.
It is also proposed to adopt the New Articles with effect from
Re-registration so as to reflect the Company's status as a private
limited company.
Annual General Meeting
The Company will hold its AGM on 28 September 2012 at 11:00 a.m.
at IDA Business & Technology Park, Srah, Tullamore, County
Offaly, Ireland where among other things, the De-listing and the
Re-registration will be considered and if deemed fit, approved as
special resolutions.
Subject to approval of the De-listing by the requisite majority,
it is anticipated that trading of the Ordinary Shares on AIM will
cease at the close of business on 5 October 2012 and the effective
date of the De-listing will be 8 October 2012. Further, conditional
on the De-listing and subject to the approval of the
Re-registration by the requisite majority, the earliest date the
Company will be re-registered as a private company is 26 October
2012.
Recommendation
The Directors consider that all the Proposals to be considered
at the Annual General Meeting are in the best interests of the
Company and its Shareholders as a whole and are most likely to
promote the success of the Company for the benefit of its
Shareholders as a whole. The Directors will unanimously recommend
that Shareholders vote in favour of all the Resolutions. RLS, a
shareholder of the Company, holding 79.6 per cent. of the Ordinary
Shares, has indicated to the Company that it intends to vote in
favour of the Resolutions. As a result of this intention and given
RLS's level of shareholding, it is expected that the Resolutions
will be passed at the AGM.
In accordance with AIM Rule 26, a copy of this announcement is
available on the Company's website at www.genemedix.com.
ENQUIRIES:
Reliance GeneMedix plc Tel: +353 57 932 3572
Vinay Ranade, Chief Executive Officer
Deloitte Corporate Finance Tel: +44 (0)20 7936 3000
Jonathan Hinton, John Ball
Lothbury Financial Services Tel: +44 (0)20 7868 2567
Michael Padley
This information is provided by RNS
The company news service from the London Stock Exchange
END
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