TIDMSIPP
RNS Number : 3740Q
Specialist Investment PropertiesPLC
11 September 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
11 September 2017
Specialist Investment Properties plc
(the "Company" or "SIPP")
Proposed cancellation of admission to trading on AIM and notice
of Extraordinary General Meeting
Introduction
The Company has today announced that it intends to seek
shareholder approval for the cancellation of admission of its
Ordinary Shares to trading on AIM.
Background to the Cancellation
The Company announced its final results for the year ended 31
December 2016 on 26 May 2017 and has published its results for the
six months ended 30 June 2017 today. In the results for the year
ended 31 December 2016 the Company disclosed that SIPP had some
months ago sought to raise additional equity capital as it had used
the majority of its available capital in making acquisitions in its
three identified target asset classes of children's homes,
supported living accommodation and short term accommodation for
local authorities. The equity fundraising did not proceed because
the current size of the Company and the extent of its investment
pipeline limited the market capitalisation of the Company post
fund-raising, which diminished the attractiveness for institutional
investors (who were generally positive about the investment
strategy but were looking for a larger market capitalisation).
Accordingly, the Company announced in the same results that it
was considering the best option to realise value in the Group which
might include seeking shareholder approval for the cancellation of
the Company's Ordinary Shares from trading on AIM in order to
preserve shareholder value and/or a sale of the Group's assets.
Following careful consideration, the Board has now concluded that
it is in the best interests of the Company and its shareholders to
seek the Cancellation and once effected seek to dispose of the
Company's assets and subsequently pursue an orderly winding up of
the Company.
Reason for the Cancellation
The Board has concluded that, given the difficulties in raising
equity funds described above, the Company will not be able to reach
critical mass to fully execute its strategy and that, while its
assets are performing well and the Group is generating a small
operating profit, its current size means that the fixed costs of
running the Company, including the costs of being admitted to
trading on AIM, are disproportionate to the amount of income the
Company generates from its assets. The Company's current
administration costs are running in excess of GBP150,000 and
following delisting would be expected to be reduced by at least
50%.
Following careful consideration, the Directors have therefore
concluded that it is no longer in the best interests of the Company
or its Shareholders to maintain the Company's admission to trading
on AIM. Consequently, the Board has decided to propose the
Cancellation. The Directors' intention is to reduce the Company's
costs through the Cancellation and following which they will seek
to dispose of the Company's assets to realise as much value as
possible for Shareholders. As well as reducing the Company's costs,
the Board believes that not being a Company admitted to trading on
AIM will provide it with greater flexibility to realise the best
value for its assets. Any sale of assets after the Cancellation
comes into effect which is to an entity/person which is in any way
a related party (as defined in the AIM Rules and/or under IOM Law)
will be made only after obtaining an independent valuation and the
approval of the independent directors.
Effect of the Cancellation on Shareholders
The principal effects of the Cancellation would be that:
(a) there would no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares on AIM or any other
recognised market or trading exchange;
(b) the Company would not be obliged to announce material
events, administrative changes or material transactions nor to
announce interim or final results;
(c) 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;
(d) the Company would no longer be subject to the AIM Rules and
Shareholders would no longer be required to vote on certain matters
as provided in the AIM Rules; and
(e) The Company will cease to have a nominated adviser. The
Company is currently required under the AIM Rules to consult with
its nominated adviser on, for example, transactions constituting
"related party transactions" under those rules, and to inform the
nominated adviser of key decisions such as any proposed changes to
the Board. Following Cancellation, the Shareholders will also no
longer benefit from the protection afforded by the nominated
adviser.
Following the Cancellation, the Company intends to dispose of
its assets and subsequently to pursue an orderly winding up of the
Group with the resultant net cash being distributed to
shareholders. Based on the Directors' estimation of value of the
Company's assets and the expected costs which are likely to be
incurred up to and including the winding-up of the Company, the
Directors expect that shareholders will receive in excess of 18p
per share on the winding-up of the Company on the assumption it is
completed by 31 December 2017.
Unaudited Interim Results for the six months ended 30 June
2017
The Unaudited Interim Results of the Company show a profit
before and after taxation of GBP12,000 for the six months to 30
June 2017. The Company's balance sheet at 30 June 2017 comprised
net assets of GBP2.2m, of which GBP0.2m was held in cash at the
balance sheet date. Investment properties were carried at an
aggregate value of GBP6.6m, with GBP4.5m of associated borrowings
in place.
The City Code
The City Code provides an orderly framework within which
takeovers and mergers are conducted and operates principally to
ensure that shareholders are treated fairly and not denied an
opportunity to decide on the merits of a takeover and that
shareholders of the same class are afforded equivalent treatment.
Shareholders should note that following the Cancellation the
Company will remain subject to the provisions of the City Code on
the basis set out in those provisions.
Share dealing following Cancellation
Following Cancellation, the Company intends to use reasonable
endeavours to facilitate introductions and communication among
Shareholders who wish to sell their Ordinary Shares and those
persons who wish to purchase Ordinary Shares. To do this,
Shareholders or persons wishing to acquire or sell Ordinary Shares
will be able to leave an indication with the Company that they are
prepared to buy / sell Ordinary Shares at a specified price. In
carrying out such introductions, the Company will not arrange
transactions and will take no responsibility to match up
Shareholders wishing to sell and purchase Ordinary Shares, and no
responsibility in respect of the time frame and manner in which
introductions or communications (if any) are made or as to the
price at which any trades might take place. Shareholders wishing to
make such an indication to the Company should do so by writing to
the offices of the Company at Burleigh House, Peel Road, Douglas,
Isle of Man, IM1 5EP.
Approving the Cancellation and General Meeting
Under the AIM Rules, it is a requirement that the Cancellation
must be approved by not less than 75 per cent. of the Shareholders
voting in the Extraordinary General Meeting. Accordingly, an
Extraordinary General Meeting ("EGM") has been convened to be held
at 10.00 a.m. on 4 October 2017 at Martello Court, Admiral Park, St
Peter Port, Guernsey, GY1 3HB at which a special resolution to
approve the application to the London Stock Exchange for the
Cancellation will be put to Shareholders. The Company will today
post to its shareholders a Circular to convene the EGM and a copy
of the Circular will shortly be available on the Company's website,
https://www.specialistinvestmentproperties.com/.
If the Resolution is approved, it is expected that the
Cancellation will take effect at 7.00 a.m. on 12 October 2017,
being at least 20 business days following the date of this letter,
and 5 clear business days following the date of the General
Meeting.
For further information:
Specialist Investment Properties plc
John Le Poidevin / Lynn Bruce / Simon Clements
+44 (0) 1481 724222
Allenby Capital Limited (Nomad and Broker to the Company)
David Worlidge / James Thomas / Liz Kirchner
+44 (0) 20 7167 6433
The definitions used within this announcement are as
follows:
"Admission" the admission of the Ordinary
Shares to trading on AIM
"AIM" the AIM securities market
operated by the London Stock
Exchange plc
"AIM Rules" the AIM Rules for Companies
published by the London Stock
Exchange plc from time to
time (including, without limitation,
any guidance notes or statements
of practice) which govern
the rules and responsibilities
of companies whose shares
are admitted to trading on
AIM
"Cancellation" the proposed cancellation
of the Company's Ordinary
Shares from admission to trading
on AIM, subject to the passing
of the Resolution
"Circular" the circular which will be
sent to Shareholders in connection
with the Cancellation
"City Code" the City Code on Takeovers
and Mergers
"Company" or "SIPP" Specialist Investment Properties
plc
"CREST" the electronic settlement
system established under the
Uncertificated Securities
Regulations 2001 (SI 2001
No. 3755) which enables title
to units of relevant securities
to be evidenced and transferred
without a written instrument
and in respect of which Euroclear
UK and Ireland Limited is
the operator
"Directors" or "Board" the directors of the Company
"Extraordinary General the Extraordinary General
Meeting" or "EGM" Meeting of the Company convened
for 10.00 a.m. on 4 October
2017 and any adjournment thereof
"Group" the Company and its subsidiaries
"Ordinary Shares" ordinary shares of 1p each
in the capital of the Company
"Resolution" the special resolution to
be proposed at the EGM, details
of which are set out in the
notice of EGM set out in the
Circular
"RIS" Regulatory Information Service
"Shareholders" the holders of Ordinary Shares
and "Shareholder" means any
one of them
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGUCPBUPMGUG
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