TIDMPGR
RNS Number : 7508U
Phoenix Global Resources PLC
03 August 2022
The following amendment has been made to the "Cancellation, Exit
Opportunity & Notice of GM" announcement released on 3 August
2022 at 7.00 a.m. under RNS No 6928U.
The words "this announcement" have been replaced with the words
"the Circular" in the following sentence: "AIM Minority
Shareholders who hold Ordinary Shares in CREST who wish to
participate in the Exit Opportunity should comply with the
procedures set out in Part III of the Circular headed "Terms and
Conditions of the Exit Opportunity" in respect of transferring
uncerti cated Ordinary Shares in escrow through CREST."
All other details remain unchanged.
The full amended text is shown below .
THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT
QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION FOR THE
PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014
AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018.
3 August 2022
Phoenix Global Resources plc
("Phoenix" or the "Company")
Proposed cancellation of listings,
Exit Opportunity
and
Notice of General Meeting
Further to its announcement on 22 June 2022, Phoenix Global
Resources plc (AIM: PGR; BCBA: PGR), the upstream oil and gas
company, announces the proposed cancellation of admission of its
Ordinary Shares to trading on AIM, delisting from public offer and
trading in Argentina on the Buenos Aires Stock Exchange ("BASE")
and cancellation of its secondary listing on BASE ("Cancellation")
and a cash exit opportunity for shareholders.
The Company will be posting a circular to shareholders later
today convening a general meeting of the Company at which a
resolution will be proposed to shareholders to approve the
Cancellation, together with resolutions in respect of the proposed
re-registration of Phoenix as a private limited company and the
consequential adoption of new articles of association,
incorporating consequential changes to reflect the new legal nature
of the Company.
The Circular will set out the background to, the reasons for and
the implications of Cancellation and to explain why the Board
considers the Cancellation, the re-registration and the adoption of
the new articles to be in the best interests of Shareholders as a
whole. Pursuant to Rule 41 of the AIM Rules for Companies,
Cancellation is conditional upon the approval of not less than 75
per cent. of the votes cast by the Company's shareholders (whether
in person or by proxy) at the General Meeting.
The general meeting will be held at 11.00 a.m. on 1 September
2022 at the Company's registered office, 1st Floor, 62 Buckingham
Gate, London, SW1E 6AJ.
In connection with the Cancellation, the Circular also provides
details of a cash exit opportunity for other shareholders in the
Company ("Minority Shareholders") who may not wish to remain
shareholders in the Company following the Cancellation (the "Exit
Opportunity"). The Exit Opportunity is being provided by Mercuria
Energy Group Limited, the 83.72 per cent. majority shareholder in
the Company, ("Mercuria") and is not conditional upon
Cancellation.
The terms of the Exit Opportunity are a purchase price of 7.5
pence per Ordinary Share in respect of Ordinary Shares listed on
AIM and a purchase price of US$ 0.0916 per Ordinary Share (using
the US$/GBP exchange rate at London market close on 2 August 2022)
in respect of Ordinary Shares listed on BASE, which represents a 25
per cent. premium to the closing mid-market price per Ordinary
Share on AIM on 21 June 2022 and an approximate 67 per cent.
premium to the 30 day VWAP per Ordinary Share on AIM on 21 June
2022 (being the last practicable date prior to the publication of
the announcement of 22 June 2022 ).
The Exit Opportunity shall remain open from 3 August 2022 until
1.00 p.m. on 7 September 2022 and any sale of Ordinary Shares by
Minority Shareholders will be free of trading costs to the seller
applied by Share Registrars Limited (the Receiving Agent for the
Exit Opportunity), which will be borne by Mercuria.
A copy of the expected timetable and letter from the
Non-Executive Chairman of the Company extracted from the Circular
are set out below.
For further information, please contact:
Phoenix Global Resources Nigel Duxbury T: +44 20 3912 2800
plc
Shore Capital Toby Gibbs T: +44 20 7408 4090
Nominated Adviser and Joint David Coaten
Broker
Panmure Gordon John Prior T: +44 20 7886 2500
Joint Broker Atholl Tweedie
About Phoenix
Phoenix Global Resources is an independent oil and gas
exploration and production company focused on Argentina and listed
on both the London Stock Exchange (AIM: PGR) and the Buenos Aires
Stock Exchange (BCBA: PGR) and offers its investors an opportunity
to invest directly into Argentina's Vaca Muerta shale formation and
other unconventional resources. The Company has over 0.8 million
licenced working interest acres in Argentina (of which
approximately 0.7 million are operated), 71.1 million boe of
working interest 2P reserves and average working interest
production of 4,553 boepd in 2021. Phoenix has signi cant exposure
to the unconventional opportunity in Argentina through its
approximately 0.4 million working interest acres with Vaca Muerta
and other unconventional potential.
The Company's website is www.phoenixglobalresources.com
This announcement is released by the Company and contains
information that qualified or may have qualified as inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 ("MAR") as it forms part of UK domestic
law by virtue of the EUWA ("UK MAR"), encompassing information
relating to the Cancellation, the re-registration and the adoption
of the new articles. For the purposes of UK MAR and Article 2 of
the binding technical standards published by the Financial Conduct
Authority in relation to MAR as regards Commission Implementing
Regulation (EU) 2016/1055, this announcement is made by Nigel
Duxbury, Company Secretary.
Shore Capital and Corporate and Shore Capital Stockbrokers,
which are authorised and regulated in the United Kingdom by the
Financial Conduct Authority, are acting for the Company in
connection with the Cancellation and are not acting for any other
person nor will it otherwise be responsible to any person for
providing the protections afforded to customers of Shore Capital,
or for advising any other person in respect of the
Cancellation.
Shore Capital and Corporate's responsibilities as the Company's
nominated adviser under the AIM Rules are owed solely to the London
Stock Exchange and are not owed to the Company or to any Director
or to any other person in respect of the Cancellation.
Panmure Gordon, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting for the
Company in connection with the Cancellation and is not acting for
any other person nor will it otherwise be responsible to any person
for providing the protections afforded to customers of Panmure
Gordon, or for advising any other person in respect of the
Cancellation.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Company announced it was in discussions
with Mercuria regarding intention to cancel
its admission to trading on AIM and BASE
and the Exit Opportunity 22 June 2022
Posting of the Circular, Forms of Proxy
and Exit Opportunity Forms and related announcement
by the Company 3 August 2022
Exit Opportunity opens 3 August 2022
Latest time and date for receipt of Forms 11.00 a.m. on 30 August
of Proxy 2022
11.00 a.m. on 1 September
Time and date of General Meeting 2022
Company's announcement of result of General 12.00 p.m. on 1 September
Meeting 2022
1.00 p.m. on 7 September
Exit Opportunity closes 2022
Company's announcement of number of Shares
sold pursuant to the Exit Opportunity 9 September 2022
Expected last day of dealings in Ordinary
Shares on AIM 14 September 2022
Expected last day of dealings in Ordinary
Shares on BASE 14 September 2022
7.00 a.m. on 15 September
Expected time and date of the AIM Cancellation 2022
Expected time and date of the BASE Cancellation 15 September 2022
Expected date of Re-registration 29 September 2022
Notes:
1. Each of the times and dates in the above timetable are
subject to change. If any of the above times or dates change, the
revised times or dates will be notified to Shareholders by means of
an announcement made through a Regulatory Information Service (as
defined in the AIM Rules). All references to times in announcement
are to London times unless otherwise stated.
2. The Cancellation requires the approval of not less than 75
per cent. of the votes cast by Shareholders, whether voting in
person or by proxy, at the General Meeting.
3. Re-registration requires the approval of not less than 75 per
cent. of the votes cast by Shareholders, whether voting in person
or by proxy, at the General Meeting.
LETTER FROM THE NON-EXECUTIVE CHAIRMAN
1. Introduction
On 22 June 2022 the Company announced it was in discussions with
Mercuria, the Company's majority shareholder, in relation to the
Company's potential delisting from trading on AIM and cancellation
of its secondary listing on BASE, together with Mercuria providing
Minority Shareholders with an exit opportunity. Earlier today, the
Company announced the intended cancellation of admission of its
Ordinary Shares to trading on AIM, delisting from public offer and
trading in Argentina on BASE and cancellation of its secondary
listing on BASE together with a proposed re-registration as a
private limited company and details of an exit opportunity for
Minority Shareholders, to be provided by Mercuria.
The Board believes that it is in the best interests of the
Company to seek the Cancellation, Re-registration and, in agreeing
to give their consent to Mercuria voting on the AIM Cancellation
pursuant to the Relationship Agreement (as further detailed below),
the Independent Directors consider it appropriate for Mercuria to
provide Minority Shareholders with the Exit Opportunity. This
letter sets out the reasons for, and implications of, the proposed
Cancellation and Re-registration and provides further details on
the expected process for the Cancellation, Re-registration and Exit
Opportunity.
The Independent Directors for the purposes of the Relationship
Agreement are Sir Michael Rake, John Bentley, Martin Bachmann and
Tim Harrington. Nicolas Mallo Huergo is not considered an
Independent Director by the Board for the purposes of the
Relationship Agreement, which is based on the Board's determination
of independence (under the UK Corporate Governance Code), as he is
a board representative for certain Minority Shareholders. Magid
Shenouda is not an Independent Director, as he is a board
representative for Mercuria.
The Cancellation and Re-registration are conditional upon the
respective Resolutions being passed at the General Meeting to be
held at 11.00 a.m. on 1 September 2022, notice of which is set out
at Part V of the Circular. Subject to the approval of the AIM
Cancellation, the Company will take steps to cancel the admission
of its Ordinary Shares to trading on AIM and to delist from public
trading in Argentina on BASE and cancel its secondary listing on
BASE, such that the Company will no longer be listed on any
regulated exchanges. The Exit Opportunity is not conditional upon
the approval of the Resolutions at the General Meeting and will be
open for acceptance from 3 August 2022 until 1.00 p.m. on 7
September 2022.
The Relationship Agreement provides that the Independent
Directors must give their consent in order for Mercuria to be
permitted to vote its Ordinary Shares on the Resolution in respect
of the AIM Cancellation. The Independent Directors have agreed to
consent to Mercuria voting its Ordinary Shares on the Resolution in
respect of the AIM Cancellation for the reasons set out in the
Circular, including Mercuria agreeing to make available the Exit
Opportunity now as described in Section 4 below and given that
Mercuria may not offer an Exit Opportunity in the future. Mercuria
has irrevocably undertaken to vote its Ordinary Shares in favour of
the Resolutions, as further explained in Section 14 below.
2. Relationship with Mercuria
Mercuria is the major shareholder of the Company and its primary
lender under the terms of a Bridging Facility and a Convertible
Facility. The principal amount drawn down under the Mercuria
Facilities is equal to US$390.5 million (as at 30 June 2022). The
Bridging Facility provides for a repayment date (principal and
interest) and maturity date of 31 December 2022. The Convertible
Facility provides for an interest payment grace period from 1
January 2019 to 30 September 2022 with a rst repayment and maturity
date of 31 December 2022. Mercuria has the right to convert all or
part of the outstanding principal of the Convertible Facility into
additional new ordinary shares of the Company at prices which vary
between GBP0.45, GBP0.28 and GBP0.23 per share. These conversion
rights can be exercised at any time up to 10 business days prior to
the maturity date. The maximum dilution in respect of the Company's
issued share capital assuming full exercise of the Convertible
Facility is 3.2 per cent. Whilst the Conversion Price remains signi
cantly above the current market price, Mercuria is unlikely to
exercise these rights under the Convertible Facility. If, however,
the Company is unable to repay any of the Mercuria Facilities when
they become due and payable, the Company may be forced to agree
that Mercuria converts the Convertible Facilities at prices which
are signi cantly below the current conversion prices, which will
result in greater dilution than the maximum dilution stated
above.
Save for the Mercuria Facilities, as at 30 June 2022, the
Company currently has US$3.1 million of outstanding third-party
debt obligations, by way of a loan agreement entered into with
Banco de la Ciudad de Buenos Aires entered in 2017 and subsequently
restructured and amended on 22 December 2020. It is expected that
this loan will be repaid in full on 23 December 2022.
In its nal results announcement for the nancial year ended 31
December 2021, dated 27 May 2022, the Company announced that
Mercuria had written to the Company stating its intention to
continue to provide nancial support to the Company, in order that
it may continue to operate and service the Company's liabilities as
they fall due in the period to 30 June 2023 and fund the planned
work programs. Mercuria had also speci cally agreed not to demand
repayment of the existing loans (principal and interest) during
this period. This letter, which by its nature is not legally
binding, represents a letter of comfort stating Mercuria's
intention, when the letter was provided, to continue to provide
nancial support until June 2023. With the existing maturity dates
of each of the Mercuria Facilities being 31 December 2022, the
Company and Mercuria will be required to reach agreement as to a
restructure or extension of the Mercuria Facilities, in order to
create legally binding obligations in respect of this
intention.
Whilst it has taken more time than anticipated, the Company and
Mercuria are still seeking to restructure the Mercuria Facilities.
The Board still believes , if the Company remains listed on AIM
with the Relationship Agreement in place and with a majority of
Independent Directors on the Board, that it will be able to agree
the renegotiation of the Mercuria Facilities and formalise an
agreement for new funding and that the Group and Company can
continue as a going concern for the foreseeable future. However,
the Board recognises that if the Company is unable to restructure
the existing loan agreements from Mercuria or obtain funding from
alternative sources (at an equivalent amount and on materially the
same terms) and nancial support is not, therefore, available over
the period to 30 June 2023, this gives rise to a material
uncertainty that may cast signi cant doubt on the Group's and
Company's ability to continue as a going concern. If the Company
was unable to fund its licence commitments, among other things, and
subject to the terms of respective licences, this could result in
nancial penalties and/or termination of licences.
Given the substantial shareholding held by Mercuria in the
Company and the potential dilutive impact of the Convertible
Facility, combined with the Argentina country risk, the Board
considers it unlikely that the Company will be able to attract
material new investment from third party equity investors (i.e.
investors with no current connection to the Company). The Company
has not as yet been successful in identifying alternative sources
of capital of suf cient size and on acceptable terms to fund the
Company's operations and capital expenditure programs and to ful l
its licence commitments. Potential investors have been approached
by the Company in the past but were deterred by the early
development stage of its assets and the Argentina country risk and
its political and economic situation.
The Board has also considered the availability of third-party
bank debt in the UK and Argentina to replace or reduce the
dependence of the Company on Mercuria's ongoing nancial support but
have concluded that no such bank debt is presently available of suf
cient size and on commercially reasonable and acceptable terms.
The Board considers that the Group is therefore currently almost
exclusively dependent upon Mercuria's continued willingness to
provide nancial support to enable the Group to realise its business
plan and exploration programs and satisfy the capital expenditure
requirements which underpin this.
3. Other reasons for the Cancellation and Exit Opportunity
The Board has considered the Company's ongoing suitability and
eligibility to remain traded on AIM, given its increasing
dependence on Mercuria and the level of Mercuria's shareholding in
the Company.
The Board has also considered the shareholding structure of the
Company which is such that there is both a limited free oat and
limited liquidity in the Ordinary Shares, with the consequence that
the AIM quotation does not offer investors the opportunity to trade
in meaningful volumes or with frequency within an active
market.
In addition, the Board notes that the Company's secondary
listing on BASE is pursuant to a special regime granted by the CNV
with speci c reference to and reliance on the Company's compliance
with the AIM Rules. Therefore, following the AIM Cancellation, the
Company would not be able to maintain its secondary listing on BASE
in its current form.
4. Minority Shareholders and the Exit Opportunity
As at the close of business on 1 August 2022 (being the latest
practicable date prior to the publication of the Circular):
-- Mercuria holds an interest in 2,332,816,686 Ordinary Shares
representing 83.72 per cent. of the existing issued Ordinary Shares
and voting rights in the Company; and
-- the Minority Shareholders hold, in aggregate, 16.28 per cent.
of the existing issued Ordinary Shares and voting rights in the
Company.
Cancellation would materially affect the position of the
Minority Shareholders in the Company. In particular, both the Board
and Mercuria recognise that cancelling the trading of the Ordinary
Shares on AIM and BASE will make it considerably more dif cult for
Shareholders to sell or buy Ordinary Shares should they wish to do
so.
As Mercuria currently holds more than 50 per cent. of the
Company's voting rights, it is able to acquire further interests in
Ordinary Shares without incurring any obligation to make a general
offer to all shareholders under Rule 9 of the Takeover Code.
Mercuria has, therefore, agreed with the Independent Directors of
the Company that, as part of the Independent Directors granting
their consent to Mercuria voting on the Cancellation Resolution
pursuant to the Relationship Agreement, Mercuria would provide the
Exit Opportunity to Minority Shareholders, to enable Minority
Shareholders to sell their Ordinary Shares in the Company to
Mercuria, in advance of the Cancellation taking effect. Mercuria
has not undertaken to provide a dealing facility or similar trading
arrangement following the Cancellation.
The Independent Directors of the Company have provided their
consent to Mercuria voting on the AIM Cancellation Resolution for
the reasons set out in the Circular, including Mercuria agreeing to
make available the Exit Opportunity now as described in this
Section 4 and given the possibility that Mercuria may not offer an
Exit Opportunity in the future. In reaching their conclusion to
give their consent to Mercuria to vote on the AIM cancellation, the
Independent Directors have considered the independent nancial
advice and the asset valuation reports prepared for the Independent
Directors by independent nancial advisers.
The terms of the Exit Opportunity are:
-- a purchase price of 7.5 pence per Ordinary Share in respect
of Ordinary Shares listed on AIM and a purchase price of US$ 0.0916
per Ordinary Share (using the US$/GBP exchange rate at London
market close on 2 August 2022) in respect of Ordinary Shares listed
on BASE, which represents:
o a 25 per cent. premium to the closing mid-market price per
Ordinary Share on AIM on 21 June 2022 (being the latest practicable
date prior to the publication of the Announcement of discussions
with Mercuria); and
o an approximate 67 per cent. premium to the 30 day VWAP per
Ordinary Share on AIM on 21 June 2022 (being the last practicable
date prior to the Announcement of discussions with Mercuria);
-- the Exit Opportunity shall remain open from 3 August 2022
until 1.00 p.m. on 7 September 2022; and
-- any sale of Ordinary Shares by Minority Shareholders will be
free of trading costs to the seller applied by the Receiving Agent,
which will be borne by Mercuria.
Whilst Nicolas Mallo Huergo considers it appropriate for
Mercuria to provide Minority Shareholders with an exit opportunity,
he does not agree with the Exit Opportunity price as he considers
that it undervalues the Company. Although the Independent Directors
make no recommendation to Minority Shareholders in relation to
their participation in the Exit Opportunity, they do not agree with
Nicolas's view for the reasons set out in this announcement.
Nicolas Mallo Huergo intends to sell all of his holding of Ordinary
Shares through the Exit Opportunity.
Minority Shareholders who wish to sell their Ordinary Shares to
Mercuria pursuant to the Exit Opportunity should refer to Section 5
below.
Minority Shareholders do not have to sell any Ordinary Shares
pursuant to the Exit Opportunity if they do not wish to do so.
However, Minority Shareholders who elect not to sell their Ordinary
Shares pursuant to the Exit Opportunity or otherwise in the market
by other means prior to the Cancellation will, on completion of the
Cancellation and Re-registration, hold Ordinary Shares in a private
limited company.
Furthermore, as set out in further detail in Section 10 below,
following the AIM Cancellation:
-- Mercuria has not agreed to provide any dealing facility for
dealing in the Ordinary Shares and no price will be publicly quoted
for the Ordinary Shares and so it will be signi cantly more dif
cult for Shareholders to sell their shares;
-- the Relationship Agreement between the Company and Mercuria
will terminate, with the effect that, inter alia, there shall be no
ongoing contractual obligation upon Mercuria to ensure that the
Company carries on its business independently of Mercuria;
-- the Company will be a private limited company registered with
the Registrar of Companies in England and Wales in accordance with
and subject to the Companies Act 2006 and the New Articles;
-- the Company will no longer be required to comply with the AIM
Rules or CNV regulations (and accordingly, Shareholders will no
longer be afforded the protections given by the AIM Rules and CNV
regulations). Speci cally, and among other things, there will be no
obligation on the Company to include the information required under
Rule 26 of the AIM Rules or to make announcements and/or update the
website as required by the AIM Rules;
-- each of the Independent Directors (other than Sir Michael
Rake and Martin Bachmann) have agreed to resign. Therefore,
following the AIM Cancellation, the Company will only have two
independent directors;
-- there may be positive or negative taxation consequences for
Shareholders. Stamp duty or Stamp Duty Reserve Tax (SDRT) will be
payable on any transfers post the AIM Cancellation; and
-- it is expected the Takeover Code will cease to apply to the Company.
The Exit Opportunity is not conditional upon the Resolutions
being passed at the General Meeting.
5. Participation in the Exit Opportunity
For Minority Shareholders who hold their Ordinary Shares in
certi cated form and AIM Minority Shareholders, please refer to
Part III of the Circular for full details as to how to participate
in the AIM Exit Opportunity. A summary of the process for
acceptance is included below:
-- Minority Shareholders who hold their Ordinary Shares in certi
cated form who wish to participate in the Exit Opportunity should
complete the Exit Opportunity Form as soon as possible in
accordance with the instructions set out therein and return the
completed Exit Opportunity Form by post or by hand (during normal
business hours) to Share Registrars Limited, 3 The Millennium
Centre, Crosby Way, Farnham, Surrey GU9 7XX to arrive no later than
1.00 p.m. on 7 September 2022. A pre-paid reply envelope for use in
the United Kingdom is enclosed for your convenience.
-- AIM Minority Shareholders who hold Ordinary Shares in CREST
who wish to participate in the Exit Opportunity should comply with
the procedures set out in Part III of the Circular headed "Terms
and Conditions of the Exit Opportunity" in respect of transferring
uncerti cated Ordinary Shares in escrow through CREST. The Transfer
To Escrow instruction must settle by no later than 1.00 p.m. on 7
September 2022.
Shareholders who return an Exit Opportunity Form or who complete
an acceptance in CREST are still be permitted to vote their
Ordinary Shares at the General Meeting and so should also return a
Form of Proxy as set out in Section 13 below.
For BASE Minority Shareholders, who hold their Ordinary Shares
through Caja de Valores in Argentina, you will need to follow the
procedures to be communicated to you by the CVSA to accept the BASE
Exit Opportunity and accordingly the detail set out in Part III of
the Circular in respect of the AIM Exit Opportunity is not relevant
to you. BASE Minority Shareholders will not be permitted to accept
the AIM Exit Opportunity. Neither Euroclear nor Caja de Valores in
Argentina are permitted to participate in the AIM Exit
Opportunity.
6. Payment of Consideration
The following methods and currencies will be available for the
payment of the purchase price in respect of the Exit
Opportunity:
-- to Minority Shareholders who hold their Ordinary Shares in
certi cated form will be made, by way of cheque, in GBP;
-- to AIM Minority Shareholders who hold their Ordinary Shares
in CREST will be made through CREST, by Share Registrars Limited
(on behalf of Mercuria) procuring the creation of a payment
obligation in favour of the payment banks of accepting Shareholders
in accordance with the CREST payment arrangements, in GBP; and
-- to BASE Minority Shareholders who hold their Ordinary Shares
through Caja de Valores in Argentina in US$, in accordance with the
notice to be issued by the CVSA once it has received the
corresponding information from the international central
depositary, Euroclear or by any other procedure determined by such
entities. Delivery of cash to BASE Minority Shareholders for the
Ordinary Shares to be purchased pursuant to the Exit Opportunity
will be made by the CVSA in accordance with these procedures. The
CVSA will act as depositary and paying agent in the Exit
Opportunity, for the purpose of receiving the cash and transmitting
such cash to BASE Minority Shareholders.
7. Re-registration
Following the proposed Cancellation, the Board believes that the
requirements and associated costs of the Company maintaining its
public company status will be dif cult to justify and that the
Company will bene t from the more exible requirements and lower
overhead costs associated with private limited company status. It
is therefore proposed to re-register the Company as a private
limited company.
In connection with the Re-registration, it is proposed that the
New Articles be adopted to re ect the change in the Company's
status to a private limited company. The principal effects of the
adoption of the New Articles on the rights and obligations of
Shareholders and the Company are summarised in Part II of the
Circular and a blackline version of the New Articles, showing the
proposed amendments to the Company's existing articles of
association, is available on the Company's website at the following
link (and will also be available for inspection at the General
Meeting): www.phoenixglobalresources.com.
Subject to and conditional upon the AIM Cancellation and the
BASE Cancellation and the passing of the Re-registration
Resolution, an application will be made to the Registrar of
Companies for the Company to be re-registered as a private limited
company. Re-registration will take effect when the Registrar of
Companies issues a certi cate of incorporation on Re-registration.
The Registrar of Companies will not issue the certi cate of
incorporation on Re-registration until the Registrar of Companies
is satis ed that no valid application can be made to cancel the
resolution to re-register as a private limited company. Any such
application must be made within 28 days after the passing of the
Re-Registration resolution and may be made on behalf of the persons
entitled to make it by such one or more of their number as they may
appoint for the purpose.
Under the Companies Act 2006, it is a requirement that
Re-registration and adoption of the New Articles must be approved
by not less than 75 per cent. of votes cast by shareholders at a
general meeting. Accordingly, the Notice of General Meeting set out
at Part V of the Circular contains special resolutions to approve
the Cancellation, Re-registration and the adoption of the New
Articles.
If the Re-registration Resolution is passed at the General
Meeting and the Registrar of Companies issues a certi cate of
incorporation on Re-registration, it is anticipated that the
Re-registration will become effective by 29 September 2022.
8. Process for AIM Cancellation
Under Rule 41 of the AIM Rules, it is a requirement that AIM
Cancellation must be approved by not less than 75 per cent. of
votes cast by shareholders at a general meeting. In addition, any
AIM listed company that wishes for the London Stock Exchange to
cancel the admission of its shares to trading on AIM is required to
notify shareholders and to separately inform the London Stock
Exchange of its preferred cancellation date at least 20 Business
Days prior to such date.
Accordingly, the Board are hereby convening the General Meeting
to vote on the AIM Cancellation Resolution and have noti ed the
London Stock Exchange of the Company's intention, subject to the
AIM Cancellation Resolution being passed at the General Meeting, to
cancel the Company's admission of the Ordinary Shares to trading on
AIM on 15 September 2022. AIM Cancellation will not take effect
until at least ve clear Business Days have passed following the
passing of the AIM Cancellation Resolution and a dealing notice has
been issued.
If the AIM Cancellation Resolution is passed at the General
Meeting, it is proposed that the last day of trading in Ordinary
Shares on AIM will be 14 September 2022 and that AIM Cancellation
will take effect at 7.00 a.m. on 15 September 2022.
As set out in Section 14 below, Mercuria, the Company's largest
shareholder, which is currently interested in approximately 83.72
per cent. of the Ordinary Shares, has given an irrevocable
undertaking to the Company to vote in favour of the Resolutions.
Given the Independent Directors have, pursuant to the Relationship
Agreement, consented to Mercuria voting its Ordinary Shares on the
AIM Cancellation Resolution for the reasons explained in the
Circular and Mercuria has irrevocably undertaken to vote in favour
of the Resolutions, the Directors believe it is very likely that
the Resolutions will be passed at the General Meeting. This does
not, however, preclude Shareholders from attending and voting
(whether in person or proxy) at the General Meeting.
9. CNV and BASE lings
The Company will le with the CNV and BASE the relevant
information in connection with the Exit Opportunity and will
request the delisting from the public offer and trading in
Argentina on BASE. If the AIM Cancellation is approved at the
General Meeting, supporting documentation will then be submitted to
the CNV and BASE. The CNV will then issue a resolution authorising
the delisting and inform BASE of such decision, in order for BASE
to cancel the public trading of the Company's shares in Argentina
on BASE without any further requirement.
10. Principal disadvantages and advantages of voting in favour of the Cancellation
The Board considers that, in deciding whether or not to vote in
favour of the Cancellation, Minority Shareholders should take their
own independent advice and consider carefully the disadvantages and
advantages of the Cancellation (including, but not limited to,
those set out below) in light of their own nancial circumstances
and investment objectives.
Disadvantages of voting in favour of the Cancellation
(i) the Relationship Agreement between the Company and Mercuria
would terminate on the date on which the AIM Cancellation is
effective, with the effect that, inter alia, there shall be no
ongoing contractual obligation upon Mercuria to ensure that the
Company carries on its business independently of Mercuria or that
transactions and relationships between Mercuria and the Company are
at arm's length and on normal commercial terms. In addition,
following termination of the Relationship Agreement, there will no
longer be any contractual obligation on Mercuria to ensure that the
Company has a majority of independent directors on the Board, nor
that the Company has an independent director appointed to the Board
to represent the interests of minority shareholders;
(ii) there will no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares on AIM, through the
secondary listing on BASE or any other recognised market or trading
exchange. Whilst the Ordinary Shares will remain freely
transferable, Mercuria has not committed to providing any dealing
facility post Cancellation and the Ordinary Shares will be more dif
cult to sell compared to shares of companies traded on AIM, BASE or
any other recognised market or trading exchange. It may also be
more dif cult for Shareholders to determine the market value of
their investment in the Company at any given time;
(iii) the Company will be a private limited company registered
with the Registrar of Companies in England and Wales in accordance
with and subject to the Companies Act 2006 and the New Articles.
The Company will no longer be required to comply with the AIM Rules
or CNV regulations (and accordingly, Shareholders will no longer be
afforded the protections given by the AIM Rules and CNV
regulations). In particular, and among other things: (i) the
Company will not be required to make any public announcements of
material events, announce its interim or nal results, comply with
any of the corporate governance practices applicable to AIM
companies, announce substantial transactions and related party
transactions, comply with the requirement to obtain shareholder
approval for reverse takeovers and fundamental changes in the
Company's business, or maintain a website containing the
information required by the AIM Rules; (ii) Shore Capital and
Corporate will cease to be the Company's nominated adviser and the
Company will cease to retain a nominated adviser; and (iii) Shore
Capital Stockbrokers and Panmure Gordon will cease to be the
Company's broker and the Company will cease to retain a broker. The
Company will no longer be subject to the Market Abuse Regulation
regulating inside information (among other things). The Company
will no longer be subject to the Disclosure Guidance and
Transparency Rules and will therefore, among other things, no
longer be required to publicly disclose major shareholdings in the
Company;
(iv) each of the Independent Directors, other than Sir Michael
Rake and Martin Bachmann, have signed an agreement with the
Company, con rming their resignation as Directors with effect from
the date on which the AIM Cancellation is effective. Therefore,
following the AIM Cancellation, the Company will only have two
independent directors;
(v) it is expected that the Company's CREST facility will
continue for a period of up to six months post the AIM Cancellation
becoming effective, following which it will be cancelled and,
although the Ordinary Shares will remain transferable following
such cancellation, they will cease to be transferable through
CREST. Shareholders who currently hold Ordinary Shares in CREST
will, following such cancellation, receive share certi cates;
(vi) the Board understands that Mercuria proposes to procure
that the Company continues to maintain its website
www.phoenixglobalresources.com and to post updates on that website
from time to time, although as described above, Shareholders should
be aware that there will be no obligation on the Company to include
the information required under Rule 26 of the AIM Rules or to make
announcements and/or update the website as required by the AIM
Rules and there is no obligation on the Company or future Board
directors to maintain the website or post updates to it;
(vii) the Cancellation might have either positive or negative
taxation consequences for Shareholders (Shareholders who are in any
doubt about their tax position should consult their own
professional independent adviser immediately). Following
cancellation of the AIM listing, all transfers of Ordinary Shares
in the Company will be liable for stamp duty or SDRT; and
(viii) following the AIM Cancellation and Re-registration and
the Independent Director Resignations, it is expected that the
Company will no longer remain subject to the Takeover Code, in
relation to which further details are set in Section 11 below.
Advantages of voting in favour of the Cancellation
(i) As set out above, the Group's ability to continue as a going
concern beyond June 2023 is currently dependent exclusively upon
Mercuria's continued willingness to provide nancial support. If
Mercuria withdrew its nancial support and the Company was unable to
source alternative nance, this may cast doubt on the Company's
ability to continue as a going concern. The Directors cannot assure
Minority Shareholders of this continued support following
Cancellation, but believe the Cancellation (including the
associated reduction in administrative costs) will be attractive to
Mercuria and enhance the likelihood of the continuance of their
nancial support.
The above considerations are not exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them, and their shareholding in the
Company and whether or not to vote in favour of the
Cancellation.
As stated in Section 14 below, as the Company has received an
irrevocable undertaking from Mercuria (representing approximately
83.72 per cent. of the Ordinary Shares) to vote in favour of the
Resolutions, the Resolutions are expected to be passed at the
General Meeting and the Cancellation is expected to occur.
11. Takeover Code
The Takeover Code currently applies to the Company. However, as
noted above, given Mercuria currently holds more than 50 per cent.
of the Company's voting rights, it is able to acquire further
interests in Ordinary Shares without incurring any obligation to
make a general offer to all shareholders under Rule 9 of the
Takeover Code.
Following the AIM Cancellation and Re-registration and the
Independent Director Resignations, it is expected that the Company
will no longer remain subject to the Takeover Code, as a result of
its failure to satisfy the residency test (i.e. where the majority
of the Board continue to be resident in the UK, Channel Islands or
Isle of Man).
This may change should the Board appoint additional directors to
the Company as, if the Company had a majority of directors resident
in the United Kingdom, Channel Islands or the Isle of Man, the
Takeover Code would continue to apply, in the period of 10 years
following the AIM Cancellation.
A summary of the protections afforded to Shareholders by the
Takeover Code, which are expected to be lost on AIM Cancellation
and Re-registration, is set out in Part IV of the Circular.
12. Current trading
Since the Company's nal results for the year ended 31 December
2021, announced on 27 May 2022 and the drilling update announced on
25 July 2022, the Group has continued trading without any material
changes and continues to be reliant on the nancial support of
Mercuria.
13. General Meeting actions to be taken
Cancellation, Re-registration and the adoption of the New
Articles requires the passing of the Cancellation Resolution and
the Re-registration Resolution at the General Meeting. Accordingly,
a Notice of the General Meeting convening a meeting to be held at
the of ces of the Company on 1 September 2022 at 11.00 a.m. is set
out at Part V of the Circular.
Whether or not you propose to attend the General Meeting, you
are requested to complete the Form of Proxy in accordance with the
instructions printed thereon and return it, duly signed, together
with any power of attorney under which it is executed, as soon as
possible but in any event so as to arrive not later than 11.00 a.m.
on 30 August 2022. Completion and return of a Form of Proxy will
not preclude a member from attending and voting at the General
Meeting should they wish. Shareholders who return a completed Exit
Opportunity Form shall still be permitted to vote their shares at
the General Meeting and so should also return a Form of Proxy.
14. Irrevocable undertakings
The Board has received an irrevocable undertaking from Mercuria
(representing approximately 83.72 per cent. of the Ordinary
Shares), to vote in favour of the Resolutions which remains binding
subject to a long stop date of 15 September 2022 on which it
terminates. The irrevocable undertaking from Mercuria also requires
Mercuria to provide the Exit Opportunity on the terms and
conditions set out in this announcement.
Accordingly, the Resolutions are expected to be passed at the
General Meeting.
15. Director intentions
John Bentley, Nicolas Mallo Huergo and I intend to sell all of
our holdings of Ordinary Shares, equivalent to approximately 0.06
per cent. of the Company's issued share capital, through the Exit
Opportunity. None of the other Directors hold any Ordinary Shares
in the Company.
16. Recommendation
The Board considers the Cancellation, the Re-registration and
the adoption of the New Articles to be in the best interests of
Shareholders as a whole. Accordingly, the Board recommends that
Shareholders vote in favour of the Resolutions.
The Independent Directors and Nicolas Mallo Huergo consider it
appropriate that those Minority Shareholders who are unable or
unwilling to hold shares in the Company following the Cancellation
should be given an opportunity to realise their investment under
the Exit Opportunity. However, the Independent Directors and
Nicolas Mallo Huergo make no recommendation to Minority
Shareholders in relation to their participation in the Exit
Opportunity; Minority Shareholders should consult their duly
authorised independent advisers before they make a decision as to
whether to sell some, all, or none of their Ordinary Shares, in
order to obtain advice relevant to their particular
circumstances.
Nevertheless, Shareholders should, when making their decision
whether or not to avail themselves of the Exit Opportunity, bear in
mind, inter alia, the following:
1. The loss of the listing, and resultant loss of liquidity,
should the Cancellation take effect;
2. The fact that Mercuria has not undertaken to provide any dealing facility going forwards post Cancellation;
3. The loss of the protections of the AIM Rules and CNV
regulations, particularly with regard to approvals and disclosure
obligations, should the Cancellation take effect;
4. The expected loss of the protections of the Takeover Code,
should the AIM Cancellation take effect;
5. The loss of the protections afforded by the Relationship
Agreement in respect of the Company's independence from Mercuria
following its termination upon the AIM Cancellation;
6. The Exit Opportunity purchase price represents, (i) a 25 per
cent. premium to the closing mid-market price per Ordinary Share on
AIM on 21 June 2022, being the last practicable date prior to the
date of the Announcement of discussions with Mercuria; and (ii) an
approximate 67 per cent. premium to the 30 day VWAP per Ordinary
Share on AIM on 21 June 2022, being the last practicable date prior
to the date of the Announcement of discussions with Mercuria;
and
7. The Exit Opportunity is being made available now and there is
no assurance that any exit opportunity may be made available in
future, including at this price.
DEFINITIONS
The following de nitions and technical terms apply throughout
this announcement, unless the context otherwise requires:
"AIM" the market of that name operated by London
Stock Exchange;
"AIM Cancellation" the proposed cancellation of admission
of the Ordinary Shares to trading on
AIM;
"AIM Rules" the AIM Rules for Companies of London
Stock Exchange;
"Announcement of discussions the announcement made by the Company
with Mercuria" on 22 June 2022 that it was in discussions
with Mercuria regarding the Cancellation
and Exit Opportunity;
"BASE" the Buenos Aires Stock Exchange;
"BASE Cancellation" the proposed cancellation of admission
of the Ordinary Shares to trading on
BASE;
"BASE Receiving Agent" Caja de Valores S.A;
"Bridging Facility" means the non-convertible bridging facility
agreement entered into between the Company
and Mercuria on 29 April 2020, as subsequently
amended, with a principal amount of US$
133.5 million;
"Business Day" a day (other than a Saturday or Sunday
or public holiday) on which commercial
banks are open for general business in
London and Argentina;
"Caja de Valores" the Central Depository Agent for Negotiable
Securities registered under Ndeg19 of
the CNV;
"Cancellation" the AIM Cancellation and/or the BASE
Cancellation (as applicable);
"Cancellation Resolution" resolution 1 of the Resolutions;
"Circular" the circular being sent to Shareholders
later today;
"CNV" the Argentine National Securities Commission;
"Company" or "Phoenix" Phoenix Global Resources plc;
"Convertible Facility" means the convertible facility agreement
entered into between the Company and
Mercuria on 24 July 2017, as subsequently
amended, with a total principal amount
of US$ 291 million;
"CREST" the electronic systems for the holding
and transfer of shares in uncertificated
form operated by Euroclear UK & International
Limited;
"Directors" or "Board" the directors of the Company whose names
are set out on page 5 of the Circular;
"Euroclear" Euroclear UK & International;
"Exit Opportunity" the proposal by Mercuria to offer to
purchase the Minority Shareholders' Ordinary
Shares: (i) at a price of 7.5 pence per
Ordinary Share in respect of Ordinary
Shares listed on AIM (the "AIM Exit Opportunity"),
and (ii) at a price of US$ 0.0916 per
Ordinary Share (using the US$/GBP exchange
rate at London market close on 2 August
2022) in respect of Ordinary Shares listed
on BASE, further details of which are
set out in the Circular (the "BASE Exit
Opportunity");
"Exit Opportunity the form provided by the Receiving Agent
Form" and which accompanies the Circular, in
relation to participation in the AIM
Exit Opportunity by those Shareholders
who have Ordinary Shares listed on AIM
and who hold shares in certificated form;
"Form of Proxy" the form of proxy for use in relation
to the General Meeting which accompanies
the Circular;
"GBP" pounds sterling or pence, the lawful
currency of Great Britain;
"General Meeting" the general meeting of the Company to
be held at 1st Floor, 62 Buckingham Gate,
London, SW1E 6AJ, at 11.00 a.m. on 1
September 2022;
"Group" the Company, together with its subsidiaries;
"Independent Directors" means those Directors who are deemed
independent for the purposes of the Relationship
Agreement, being Sir Michael Rake, John
Bentley, Martin Bachmann and Tim Harrington;
the resignation of the Independent Directors,
other than Sir Michael Rake and Martin
Bachmann, with effect from the date on
the AIM Cancellation is effective;
"Independent Director the resignation of the Independent Directors,
Resignations" other than Sir Michael Rake and Martin
Bachmann, with effect from the date on
the AIM Cancellation is effective;
"London Stock Exchange" London Stock Exchange plc;
"Mercuria" Mercuria Energy Group Limited;
"Mercuria Facilities" means (i) the Mercuria Bridging Facility;
and (ii) the Mercuria Convertible Facility;
"Minority Shareholders" the holders of the Ordinary Shares not
currently owned by Mercuria;
"New Articles" the new articles of association of Phoenix
to be adopted following the passing of
the Re-registration Resolution;
"Ordinary Shares" ordinary shares of 10 pence each in the
capital of the Company;
"Panel" the UK Panel on Takeovers and Mergers;
"Panmure Gordon" Panmure Gordon (UK) Limited
"Receiving Agent" Share Registrars Limited; has the meaning
given to it in the AIM Rules;
"Regulatory Information has the meaning given to it in the AIM
Service" Rules;
"Registrar" Share Registrars Limited;
"Relationship Agreement" the relationship agreement entered into
between, among others, the Company and
Mercuria dated 24 July 2017, as subsequently
amended;
"Re-registration" the re-registration of Phoenix as a private
limited company and the consequential
adoption of the New Articles;
"Re-registration Resolution" resolution 2 of the Resolutions;
"Resolutions" the resolutions proposed to be passed
at the General Meeting, being the Cancellation
Resolution and the Re-registration Resolution;
"Shareholder" a holder of Ordinary Shares;
"Share Schemes" the Phoenix Global Resources Long Term
Incentive Plan and the Phoenix Global
Resources Deferred Bonus Plan;
"Shore Capital" Shore Capital and Corporate Limited and
Shore Capital Stockbrokers Limited;
"Shore Capital and Shore Capital and Corporate Limited,
Corporate" registered in England and Wales under
company registration number 02083043,
whose registered office is at Cassini
House, 57 St James's Street, London SW1A
1LD;
"Shore Capital Stockbrokers" Shore Capital Stockbrokers Limited, registered
in England and Wales under company registration
number 1850105, whose registered office
is at Cassini House, 57 St James's Street,
London SW1A 1LD;
"Takeover Code" the City Code on Takeovers and Mergers;
"UK" the United Kingdom of Great Britain and
Northern Ireland;
"UK Broker(s)" together Shore Capital Stockbrokers Limited
and Panmure Gordon;
"US$" US dollars, the lawful currency of the
United States of America; and
"VWAP" volume weighted average price.
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