Proposed Cancellation of Admission
24 September 2009 - 8:30AM
UK Regulatory
TIDMMDCG
RNS Number : 5712Z
Money Debt & Credit Group Plc
24 September 2009
Money Debt & Credit Group plc (the 'Company')
Proposed cancellation of admission to trading on AIM
The Company today announces that it is seeking Shareholders' approval for the
cancellation of admission to trading on AIM of the Ordinary Shares.
Background to and reasons for the proposal to De-list
The Company's Ordinary Shares were admitted to trading on AIM on 13 December
2006 with a market capitalisation at the issue price of GBP10 million and a
share price of 25.0 pence. The reasons for admission were, inter alia, to raise
the profile of the Company, to raise capital to support its growth strategy and
to provide a mechanism to incentivise existing and future employees.
Since admission the Company has incurred substantial trading losses. At 30 June
2009 the accumulated deficiency on the profit and loss account stood at GBP8.8
million. In part this reflects investment made in developing the Company's
infrastructure and resources to facilitate growth in the current year and
beyond. However, it also reflects a toughening within our markets. Recognising
this, significant investment has been made in developing other products and
services to broaden the Company's portfolio of debt solutions. This investment
has largely been funded through cash resources made available to the Company by
Simon Johnson.
At the date of admission of the Ordinary Shares to trading on AIM Simon Johnson
entered into a GBP3.1 million loan facility with the Company, which was
subsequently increased to GBP4.8 million on 26 October 2007. A further increase
was announced on 30 June 2009 taking the aggregate unsecured loan facility Simon
Johnson has made available to the Company to GBP5.5 million.
The debt solutions sector continues to benefit from favourable macro economic
conditions. However, whilst the Directors believe the Company's prospects remain
sound, it is not expected it to be profitable in the current year. This has led
the Directors to review the Company's cost base in order to maximise the
available resources for continued investment in the development of the business.
As part of this exercise the Directors have undertaken a review of the benefits
of the Ordinary Shares continuing to be traded on AIM, recognising the following
key factors:
* the costs involved in maintaining the admission to trading on AIM of the
Ordinary Shares;
* the disproportionate amounts of senior management time consumed by maintaining
the admission to trading on AIM of the Ordinary Shares, which could be more
appropriately deployed by the Company;
* the low liquidity of the Ordinary Shares with only 12 days in the 12 months
ended 22 September 2009, being the latest date practical date prior to the date
of this announcement, when more than 40,000 Ordinary Shares traded and 178
trading days during which no Ordinary Shares were traded (70% of all trading
days); and
* admission to trading on AIM of the Ordinary Shares no longer serve a useful
function for the Company in terms of its ability to access capital.
Following this review the Directors do not consider that the Company can justify
any longer the costs associated with it being publically listed and, following
careful consideration, have concluded that it is no longer in the best interests
of the Company and its shareholders to maintain admission to trading on AIM of
the Ordinary Shares.
The De-Listing
In accordance with Rule 41 of the AIM Rules, the Company has notified the London
Stock Exchange of the De-Listing which is conditional upon the consent of not
less than 75 per cent of votes cast by Shareholders in a general meeting.
Consequently, the Company is convening the General Meeting on 21 October 2009.
Subject to Shareholder approval the De-Listing is expected to be effective from
7.00 a.m. on 29 October 2009. The Notice of General Meeting is set out on page 7
of the circular being sent to Shareholders today.
Recommendation
The Board believe that the De-Listing is in the best interests of the Company
and its Shareholders as a whole and recommend that Shareholders vote in favour
of the Resolutions to be proposed at the General Meeting.
Circular
A circular is being posted to Shareholders today, incorporating the Notice of
General Meeting to approve the De-Listing.
Contacts:
+------------------------------+--------------------------------+------------------+
| Money Debt & Credit Group | Simon Johnson, Chairman and | Tel: 01923 636 |
| plc | CEO | 800 |
+------------------------------+--------------------------------+------------------+
| Smith & Williamson Corporate | Martyn Fraser/Barrie Newton | Tel: 0117 376 |
| Finance Limited | | 2213 |
+------------------------------+--------------------------------+------------------+
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
+-------------------------------------+-------------------------------------+
| Publication date of this | 24 September 2009 |
| announcement | |
+-------------------------------------+-------------------------------------+
| Latest time and date for receipt of | 11.00 a.m. on 19 October 2009 |
| Forms of Proxy | |
+-------------------------------------+-------------------------------------+
| General Meeting | 11.00 a.m. on 21 October 2009 |
+-------------------------------------+-------------------------------------+
| Cancellation of admission of the | with effect from 7.00 a.m. on 29 |
| Ordinary Shares to trading on AIM | October 2009 |
+-------------------------------------+-------------------------------------+
DEFINITIONS
+--------------------------------------+--------------------------------------+
| "AIM" | AIM, the market operated by the |
| | London Stock Exchange |
+--------------------------------------+--------------------------------------+
| "AIM Rules" | the London Stock Exchange AIM Rules |
| | for Companies |
+--------------------------------------+--------------------------------------+
| "Company" or "Money Debt & Credit" | Money Debt & Credit Group plc |
+--------------------------------------+--------------------------------------+
| "De-Listing" | the proposed cancellation of |
| | admission to trading on AIM of the |
| | Ordinary Shares |
+--------------------------------------+--------------------------------------+
| "Directors" or "Board" | the board of directors of Money Debt |
| | & Credit whose names appear on page |
| | 4 of the circular being sent to |
| | Shareholders today |
+--------------------------------------+--------------------------------------+
| "General Meeting" | the general meeting of the Company |
| | convened for 11.00 a.m. on 21 |
| | October 2009 and any adjournment |
| | thereof |
+--------------------------------------+--------------------------------------+
| "Group" | Money Debt & Credit and its |
| | subsidiary and associated |
| | undertakings |
+--------------------------------------+--------------------------------------+
| "Form of Proxy" | the form of proxy for use at the |
| | General Meeting or at any |
| | adjournment of such meeting |
+--------------------------------------+--------------------------------------+
| "London Stock Exchange" | London Stock Exchange plc |
+--------------------------------------+--------------------------------------+
| "Notice of General Meeting" | the notice of the General Meeting |
| | which is incorporated into the |
| | circular being sent to Shareholders |
| | today |
+--------------------------------------+--------------------------------------+
| "Optionholders" | holders of outstanding options under |
| | the Money Debt & Credit Group plc |
| | share option scheme |
+--------------------------------------+--------------------------------------+
| "Ordinary Shares" | fully paid ordinary shares of 10 |
| | pence each in the capital of the |
| | Company |
+--------------------------------------+--------------------------------------+
| "Resolutions" | the resolutions referred to in the |
| | Notice of General Meeting |
+--------------------------------------+--------------------------------------+
| "Shareholders" | holders of Ordinary Shares |
+--------------------------------------+--------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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