TIDMSCAP
RNS Number : 3268J
Shariah Capital, Inc
06 August 2012
6 August 2012
Shariah Capital, Inc.
("Shariah Capital" or the "Company")
Proposed Cancellation of Admission to trading on AIM
and
Notice of Special Meeting
Shariah Capital today announces that it is proposing to cancel
the admission to trading on AIM of its common shares (the "Common
Shares") (the "Cancellation").The Company will today publish a
circular setting out further details of the Cancellation and the
implications for shareholders of the Company (the "Circular"). The
Circular will also contain a notice convening a special meeting
which is to be held at 125 Elm Street, New Canaan, Connecticut,
United States of America at 11:30 a.m. New York Time (4:30 p.m. UK
time) on 23 August 2012 (the "Special Meeting") at which the
approval of Shareholders for the Cancellation will be sought. In
the event that Shareholders approve the Cancellation it is
anticipated that trading in the Common Shares on AIM will cease at
close of business on 4 September 2012 and Cancellation will become
effective at 7:00 a.m. UK time on 5 September 2012.
Attached below are extracts from the Chairman and CEO's letter
contained in the Circular. Defined terms used in the announcement
below shall have the same meaning as those terms defined and used
in the Circular.
For further information, please contact:
Shariah Capital, Inc. Tel: +1 (203) 972-0331
Eric Meyer, Chairman and CEO Fax: +1 (203) 972-0229
Steve Adelkoff, Finance Director Email: emeyer@shariahcap.com
Website: www.shariahcap.com
Allenby Capital Limited Tel: +44(0)203 328 5656
(Nominated Adviser and Broker)
Nick Athanas/Nick Harriss/James
Reeve
Extracts from the Circular
1. Introduction
The Company announces today that the Board has resolved to seek
Shareholder approval for the cancellation of admission to trading
on AIM of the Common Shares.
The purpose of this letter is to explain: (i) the background to,
and the reasons for, the Cancellation; (ii) why the Directors
unanimously consider the Cancellation to be in the best interests
of the Company and its shareholders; and (iii) why Eric Meyer
(Chairman and Chief Executive Officer of the Company) has
irrevocably undertaken to vote in favour of the Cancellation in
respect of his direct and beneficial interests in the Common Shares
representing 76.95% of all the Common Shares in issue at the date
of this document. The notice of the Special Meeting is set out at
the end of this document and seeks your approval to the
Resolution.
Your attention is drawn to paragraph 9 below which contains a
unanimous recommendation from the Directors that you vote in favour
of the Cancellation.
2. Background to the Cancellation
The principal reasons for Admission have been (amongst others)
to provide Shareholders and potential Shareholders of the Company
with a liquid market to buy and sell the Company's Common Shares,
to provide the Company with the ability to access the capital
markets to fund business opportunities, and to use its Common
Shares as consideration for acquisitions. The Company has been
reviewing both the advantages and disadvantages of maintaining
Admission and the Directors believe that it no longer sufficiently
provides the Company with its principal reasons for Admission. The
Directors have therefore, following careful consideration,
concluded that it is no longer in the best interests of the Company
or its Shareholders for the Company to maintain Admission. In
reaching this conclusion the Directors have taken the following key
factors into account:
(a) in the Directors' opinion, the AIM quotation has not
provided the Company's shareholders with a liquid, or even
semi-liquid, market for its Common Shares;
(b) given the overall market conditions for small quoted
companies, the Directors are of the opinion that it is (and will
continue to be) difficult and uneconomic for the Company to attract
meaningful equity investment, or other form of investments, through
Admission;
(c) Admission has not, in itself, offered investors the
opportunity to trade in meaningful volumes or with frequency within
an active market. With almost no trading volume, the Company's
share price is very inactive and can move up or down significantly
following trades of small numbers of Common Shares;
(d) the Directors estimate that the annual direct, and indirect,
costs of Admission are at least US$300,000 per annum. This estimate
includes listing expenses and advisory, legal, insurance,
compliance, and audit fees. The Board considers these costs to be
too high in relation to the current benefits of Admission and the
Directors believe that these expenses could be better re-directed
in running the business in a private capacity; and
(e) the increasing, and now dramatic, amount of senior executive
time which is spent in relation to the regulatory and compliance
requirement (and restrictions) associated with maintaining a public
quotation is disproportionate to the benefit to the Company of
maintaining Admission.
Pursuant to Rule 41 of the AIM Rules, cancellation of the
admission of the Common Shares to trading on AIM requires the
consent of not less than 75% of votes cast by Shareholders (in
person or by proxy) given at a general meeting. In addition, a
period of at least five Business Days following the Shareholder
approval of the Cancellation is required before the Cancellation
may be put into effect.
The Company's nominated adviser and broker, Allenby Capital
Limited, has notified the London Stock Exchange of the proposed
Cancellation. In the event that Shareholders approve the
Cancellation it is anticipated that the last day of dealings in the
Common Shares on AIM will be 4 September 2012 and that the
effective date of Cancellation will be 5 September 2012.
3. Current trading and prospects
On 28 June 2012 the Company announced its year end results and
noted the challenging and difficult market for alternative funds in
the Gulf region. It also gave an indication to Shareholders that a
possible Cancellation was an option being considered by the Board.
Since this announcement the business environment has materially
worsened for the Gulf region, stock markets globally, commodities,
and the DSAM Kauthar Funds, which the Company manages through its
joint venture with the Dubai Multi Commodities Centre
Authority.
As a result the Company wishes to be even more prudent to cut
costs and reduce ongoing operating expenses and the Directors
believe the Cancellation is an immediate way of implementing this
strategy. The Company intends to protect its cash position (which
as at 31 July 2012 stood at approximately US$4.1 million) as it
attempts to wait out the current financial uncertainties, preserves
its Shariah franchise, and looks for new business opportunities.
This may include opportunities outside of its Shariah operations
which the Board believes will become increasingly prevalent should,
as the Board expects, market conditions continue to stay the same
or worsen.
Following Cancellation the Company intends to follow a course of
action contemplated in the outlook of the 28 June 2012 year end
results announcement. While the Company will look to maintain and
protect its Shariah business through the ongoing tumultuous
challenges of the Gulf it is unlikely it will continue to do so if
its Shariah business cannot achieve profitability. The Company will
therefore seek to, concurrent with its Shariah initiatives, expand
its business interests beyond Shariah and its Gulf relationships.
Benefiting from a strong and liquid balance sheet the Company
intends to utilize this asset to expand into areas of historical
expertise of the Company's management team. This may include
forming an investment fund in which the Company would invest in
publicly trade securities or in early stage angel/venture investing
and/or making direct investments into either publicly traded
securities or private companies.
4. Process for Cancellation
In accordance with Rule 41 of the AIM Rules, the Company has
notified the London Stock Exchange of the intention of
Cancellation, (subject to Shareholder approval), giving twenty
business days notice. Under the AIM Rules, it is a requirement that
the Cancellation is approved by not less than 75% of votes cast by
Shareholders at the Special Meeting) Accordingly, the Resolution
sent out in the notice of Special Meeting on page 10 of this
document seeks Shareholder approval for Cancellation. Subject to
the Resolution approving the Cancellation being passed at the
Special Meeting, it is anticipated that trading in the Common
Shares on AIM will cease at the close of business on 4 September
2012 with Cancellation taking effect at 7:00 a.m. UK time on 5
September 2012.
Upon the Cancellation becoming effective, Allenby Capital
Limited will cease to be nominated adviser to the Company and the
Company will no longer be required to comply with the rules and
corporate governance requirements to which companies admitted to
trading on AIM are subject, including the AIM Rules.
5. Irrevocable undertakings
Eric Meyer (the Company's Chairman and Chief Executive Officer)
and certain of his family trusts have each irrevocably undertaken
to exercise the voting rights in favour of the Resolution to be
proposed at the Special Meeting in respect to their respective
interests which total 46,153,635 Common Shares out of the
59,975,832 Common Shares held by Shareholders (which represents
approximately 76.95% of the total voting rights in the
Company).
6. Principle effects of Cancellation
Following Cancellation, the Common Shares will not be traded on
any public market. There can be no guarantee that a Shareholder
will be able to purchase or sell any Common Shares following
Cancellation.
Although the Common Shares will remain transferable (subject to
applicable securities and other laws) they will cease to be
transferable through AIM or through any stock exchange. No price
will be publicly quoted for the Common Shares.
There can be no assurance that a shareholder would be able to
purchase or sell any Common Shares following the proposed
Cancellation.
The Company will not be subject to the AIM Rules and,
accordingly, it will not (amongst other things) be required to
retain a nominated adviser to comply with the requirements of AIM
in relation to, inter alia, annual accounts and half-yearly
reports, the disclosure of price sensitive information or the
disclosure of information on corporate transactions. The Company
would no longer be required to comply with any of the additional
specific corporate governance requirements for companies admitted
to trading on AIM. Shareholders will no longer be able to vote on
certain matters as provided in the AIM Rules.
It is the current intention of the Board to maintain an
appropriate level of corporate governance following Cancellation.
The Company intends to continue to maintain a website at
www.shariahcap.com for the foreseeable future.
7. Dealing and settlement arrangements
The Company is not intending to put in place a matched
bargaining facility for Shareholders following Cancellation,
however, the Directors are aware that Shareholders may wish to
dispose of their Common Shares in the Company following
Cancellation. Accordingly, the Company is presently considering
offering to Shareholders, other than Eric Meyer and his family
trusts, a buyout of their Common Shares following Cancellation at a
time to be determined. The terms of such buyout have not yet been
set by the Company, and there can be no assurance that any such
buyout offer will be made by the Company to its Shareholders.
If Shareholders wish to buy or sell Common Shares on AIM they
must do so prior to Cancellation becoming effective. As noted
above, on the Shareholders approval of Cancellation, it is
anticipated that the last day of dealing in the Common Shares on
AIM will be 4 September 2012 and that the effective date of
Cancellation will be 5 September 2012.
8. Special Meeting and action to be taken
Set out at the end of this document is a notice of Special
Meeting which is to be held at 125 Elm Street, New Canaan CT at
11:30 a.m. on 23 August 2012. The Form of Proxy should be completed
and returned in accordance with the instructions printed thereon so
as to arrive at the Company's headquarters at 125 Elm Street, New
Canaan, Connecticut 06840 as soon as possible and no later than
11:30 a.m. New York Time on 21 August 2012. Completion and return
of the Form of Proxy will not prevent Shareholders from attending
and voting at the Special Meeting should they so wish.
9. Recommendation
For the reasons set out above, the Directors believe that the
Cancellation is in the best interests of the Company and of
Shareholders as a whole. Accordingly, the Directors unanimously
recommend Shareholders to vote in favour of the Resolution
approving the Cancellation.
Yours faithfully,
Eric Meyer
Chairman and Chief Executive Officer
This information is provided by RNS
The company news service from the London Stock Exchange
END
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