TIDMMES
RNS Number : 2714G
Messaging International Plc
04 August 2016
4 August 2016
Messaging International Plc
("MI" or the "Company")
Proposed disposal of TeleMessage Ltd.
and
Notice of General Meeting
The Company today announces that it has entered into a
conditional sale and purchase agreement whereby certain holders of
ordinary shares in MI, including Directors of MI, (the
"Consortium") have agreed to acquire the wholly owned subsidiary of
the Company, TeleMessage Ltd. and to assume the Liabilities, on a
Company value of GBP459,317. The Consideration will be satisfied
via cash payment and the redesignation of New Ordinary Shares held
by members of the Consortium into Deferred Shares with no rights
attached.
The Disposal constitutes a fundamental change of business of the
Company pursuant to Rule 15 of the AIM Rules. Accordingly,
Completion is conditional, inter alia, on the approval of
Shareholders at a general meeting of the Company (the "General
Meeting"). On Completion, the Company will be deemed to be an "AIM
Rule 15 cash shell" for the purpose of the AIM Rules and will have
six months to make an acquisition or acquisitions which constitute
a reverse takeover under Rule 14 of the AIM Rules or otherwise seek
readmission as an "investing company" with the attendant
requirement to raise at least GBP6 million on or immediately before
such readmission.
The Company has also conditionally raised GBP500,000 at 0.24
pence per Subscription Share, through the subscription of
208,333,333 New Ordinary Shares. Subject to Shareholder approval
admission of the New Ordinary Shares is expected on or around 23
August 2016. In addition, subject to Shareholder approval, the
Company will undertake a subdivision of the Existing Ordinary
Shares (further details of which are set out below) and will be
renamed SigmaRoc Plc. The TIDM will be SRC.
Conditional upon the passing of the Resolutions and on
Completion, it is proposed the Existing Directors will step down
and that Max Vermorken will join the Board as Chief Executive
Officer and David Barrett and Dominic Traynor will join the Board
as Non-Executive Directors.
The proposed strategy of SigmaRoc plc is to invest in and/or
acquire companies and/or projects within the construction materials
sector, which are either cash flow generative or show significant
potential for growth and a profitable exit. The proposed new board
has significant experience in the sector and with this business
model, which presently shows significant potential in frontier and
niche markets.
Further details of the above transactions are set out below and
a further announcement will be made, as appropriate, in due
course.
The Company is today therefore posting a circular to
Shareholders convening the General Meeting (the "Circular"). The
General Meeting will be held at the offices of Peterhouse Corporate
Finance Limited, New Liverpool House, 15 Eldon Street, London, EC2M
7LD, at 12:00 p.m. on 22 August 2016.
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"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
For further information, please contact:
For further Messaging International
information Plc
visit www.telemessage.com Tel: + 972 3
or contact: 9225252
Guy Levit
Eran Zucker Peterhouse Corporate Tel: +44 (0)
Finance 20 7469 0932
David Foreman Cantor Fitzgerald Tel: +44 (0)
Europe 20 7894 7000
Catherine Leftley Cantor Fitzgerald Tel: +44 (0)
Europe 20 7894 7000
The following text has been extracted from the Circular.
Capitalised terms in the extracted text in this announcement
shall have the same definition as in the Circular unless the
context requires otherwise.
Introduction
This Circular sets out a series of proposals, namely, the
proposed Disposal of TeleMessage, the Subscription and associated
capital reorganisation of the Company, the resignation of the
Existing Directors on Completion of the Disposal and appointment of
the Proposed Directors following Completion, the Company becoming
an AIM Rule 15 cash shell and certain other related matters to be
proposed at the General Meeting. The purpose of this Circular is to
provide you with the background to and to explain why the
Independent Director considers these proposals to be in the best
interests of the Company and Shareholders as a whole and why he
recommends that Shareholders should vote in favour of the
Resolutions to be proposed at the General Meeting.
A notice convening a General Meeting for 12:00 p.m. on 22
August, 2016, at the offices of Peterhouse Corporate Finance
Limited, New Liverpool House, 15 Eldon Street, London, EC2M 7LD, to
consider the Resolutions, is set out at the end of this
Circular.
Background to the Proposals
The Company was incorporated on 12 August 2004 as RTI Eighteen
PLC. On 24 May 2005, it changed its name to TeleMessage
International Plc and on 12 July 2005 changed its name to Messaging
International Plc. On 20 July 2005, the Company acquired the entire
issued share capital of TeleMessage through the issuance of
65,380,000 Existing Ordinary Shares in the Company at a price of 5
pence per share, together with 25,000,000 warrants to purchase
ordinary shares in the Company at 5 pence per share.
The Company's shares were admitted to trading on AIM at 5 pence
per share and has since witnessed the share price fall to 0.7 pence
as of 3 August, 2016 (being less than fifteen per cent. of the
original share price). This drop in the share price of the Company
occurred notwithstanding the financial results which showed a
gradual increase in revenues and fall in losses until 2010, when
the Company showed a profit. Since 2010 the share price has
continued its decline.
The Directors believe that TeleMessage requires additional funds
to invest in its current and future products, including its secure
enterprise mobile messaging platform developed to cater to the
requirements of businesses and organisation. In an attempt to
address the Group's working capital requirements and prior to
considering the Proposals as set out in this Document, the Company
took informal soundings from the market, which indicated negligible
appetite for an equity fundraising by the Company if it remains
listed on AIM. The Directors believe that this is mainly due to a
lack of revenue visibility, historical and ongoing losses, working
capital concerns, its small market capitalisation and the
volatility of the Company's share price. Conversely, however, there
appears to be interest from investors if the Company were to be
unquoted.
The Board is therefore faced with a situation where, if the
Company is to remain as an AIM listed company, it will unlikely be
able to raise the requisite funds, without offering a prohibitively
large discount to the current share price, to enable it to continue
to trade, let alone invest in the development of its trading
business. Alternatively, the Board could propose to delist, but
then there would effectively be no market in the Existing Ordinary
Shares. Finally, and as proposed in this Document, the Board could
dispose of the Business, introduce new funds, appoint new
directors, and look to adopt a new Investing Strategy.
Having considered these alternatives at length with a number of
its advisers, the Board has concluded that the best available
option is to dispose of the Business, including the Subsidiary (and
all of its Liabilities), to members of the Consortium (who are all
directors or shareholders in the Company).
Pursuant to the SPA, the Consortium has agreed to acquire the
Business and to assume the Liabilities, on a Company value of
GBP459,317, for a total consideration adjusted for the value of the
cash shell calculated on the basis of an independent third-party
valuation of the Subsidiary (the "Consideration"). The
Consideration will be satisfied via a cash payment on closing of
GBP38,400 and the redesignation of 84,760,943 Existing Ordinary
Shares (169,521,886 New Ordinary Shares following the Share Capital
Reorganisation) held by the members of the Consortium (whether held
directly by the Consortium members or indirectly for their benefit)
into Deferred Shares. The 169,521,886 New Ordinary Shares following
the Share Capital Reorganisation held by members of the Consortium
are worth GBP406,853 at the Subscription Price.
In addition, and to the extent not fully undertaken by the
Subsidiary, the Consortium has agreed to assume responsibility for
all obligations in relation to the Mizrahi Tefahot Loan. All
outstanding loans by the Company to the Subsidiary and by the
Subsidiary to the Company will be eliminated prior to the Disposal,
including the Capital Note. Following the Disposal, the Company
will be debt free, other than for liabilities incurred in
connection with the Disposal and certain obligations to ongoing
service providers.
In order to recapitalise the Company, Peterhouse has
conditionally raised GBP500,000 at 0.24 pence per Subscription
Share, through the subscription of 208,333,333 New Ordinary Shares
representing 77 per cent of the Enlarged Share Capital following
approval of the Share Capital Reorganisation and Completion. The
Subscription Shares will be issued following and conditional upon
the passing of the Resolutions. Additionally, conditional upon all
Resolutions being passed and the Disposal being completed the
84,760,943 Existing Ordinary Shares (169,521,886 New Ordinary
Shares following the Share Capital Reorganisation) of the Company
currently held by the Consortium (whether held directly by the
Consortium members or indirectly for their benefit) will be
re-designated as 84,760,943 Deferred Shares (169,521,886 Deferred
Shares following the Share Capital Reorganisation) with no rights
at all, save for the repayment of nominal capital after (and only
after) the weighted rights to repayment to all other Shareholders
of their capital have been satisfied in full.
The net effect of the redesignation of the 169,521,886 New
Ordinary Shares held by the members of the Consortium, is that
shareholders currently holding the remaining 31,111,205 Existing
Ordinary Shares (62,222,410 New Ordinary Shares following the Share
Capital Reorganisation) which currently represent 26.85 per cent of
the issued share capital in the Company, will hold 23 per cent of
the issued share capital following the Subscription. The dilutive
effect of the Proposals on these shareholders is therefore 3.85 per
cent.
Following completion of the Proposals, the Company will be an
AIM Rule 15 cash shell with cash of approximately GBP450,000.
In view of the Company's requirement for working capital, should
the Resolutions not be approved at the General Meeting, the Board
would have to consider delisting from AIM.
Conditional on the passing of the Resolutions and on Completion,
the Existing Directors will resign as directors and it is proposed
that Dominic Traynor, David Barrett and Max Vermorken will be
appointed as directors of the Company. The Existing Directors
confirm that they will remain on the board for a limited period
following the General Meeting, subject to the Company's proposed
replacement nominated advisor (as noted below) confirming the
appropriateness of the proposed directors for providing continuous
management of the Company and it is expected that this will occur
shortly after the General Meeting.
Change of Nominated Adviser
Cantor has indicated its desire to step down as nominated
adviser and joint broker to the Company as soon as practicable
following the General Meeting. The Company and the Independent
Director are in advanced discussion with a replacement nominated
adviser and a further announcement will be made in due course.
Information on Messaging International plc
MI is the holding company of TeleMessage and TeleMessage Inc. (a
wholly owned subsidiary of Telemessage). The Company is conducting
its business through Telemessage and Telemessage Inc. MI via its
trading name 'TeleMessage' offers a secure enterprise mobile
messaging platform developed to cater to the requirements of
businesses and organisations.
As mobile and text messaging becomes more popular in the
workplace, companies are seeking a way for fast, secure and
reliable communication-'TeleMessage' solves that problem. It is the
alternative to common consumer messaging apps, providing a
user-friendly experience, while protecting company data and
ensuring reliable communication in real-time.
The 'TeleMessage' secure messaging solution is:
-- Secure - messages are encrypted end-to-end, allow
time-limited messages, forward-locking, remote lock & wipe.
-- Managed - company administrator can control and enforce
information transfer policies, archive messages, create companywide
address book and generate reports.
-- Reliable - get delivery and read notifications, convert IP
Push Notifications that are not received into a standard SMS
message 99.9 per cent uptime guarantee.
-- IT-Ready - APIs to connect with any IT system and a Web
portal and Outlook Plug to deliver Push Notifications, SMS, voice,
fax and email messages.
Recent Developments - Operations
TeleMessage is transitioning from its legacy focus on mobile
operators providing value added services such as text-to-landline,
into its new focus on direct enterprise offerings including secure
mobile messaging for enterprise solutions.
Revenues in the text-to-landline product have declined. Some
customers have been lost due to market consolidation and one major
customer changed its remuneration model so the revenue generated
from this customer is now substantially lower, albeit with a higher
gross margin percentage.
Since the end of 2013, TeleMessage has been focused on
developing its new product line - secure mobile messaging for
enterprise and believes this to be the future of the company.
As described in the Company's annual report, the business has
been transitioning from its legacy Text-to-Landline product, to a
new offering focused on the Secure Mobile Messaging for Enterprises
and also the "Mass Messaging" solution for Enterprises.
Revenues in the Text-to-Landline product continued to decline in
2015. Some customers were lost due to market consolidation and, as
announced on 27 March 2015, TeleMessage reached an agreement on a
change of the Text-to-Landline business model with one of its key
mobile carrier customers in North America (with which the company
has contracts on a number of products not affected by this change).
The change transitions the Text-to-Landline service from a standard
SMS fee to a premium SMS fee resulting in a lower amount of
transmitted messages with a corresponding decline in the revenue
generated from the customer, albeit with a higher gross margin
percentage.
More recently TeleMessage has been focused on developing its new
product line - Secure Mobile Messaging for Enterprises. The huge
success of mobile messaging services like iMessage, Facebook
Messenger and WhatsApp for consumers in the USA and around the
globe has identified unmet needs for enterprises. Similar
capabilities can now be offered by enterprises to their employees,
to enhance business communications, while ensuring company
governance and controls required to meet more stringent standards,
regulations and security needs. The TeleMessage solution provides
tools that are managed, secure, reliable and IT Ready.
The Disposal and Related Party Transaction
The Disposal will take place in the form of the sale of the
entire issued share capital of the Subsidiary (and its Liabilities)
from the Company to the Consortium for a total consideration equal
to the Consideration. The Consideration will be satisfied via a
cash payment on closing of GBP38,400 and the redesignation of
84,760,943 Existing Ordinary Shares (169,521,886 New Ordinary
Shares following the Share Capital Reorganisation) held by the
members of the Consortium (whether held directly by the Consortium
members or indirectly for their benefit) into Deferred Shares.
The SPA contains basic warranties as to capacity and authority
and title from the Company and no other warranties.
In addition, the SPA requires the entry into a termination and
release agreement between the Company and Mizrahi Bank for the
termination and release of certain guarantees and agreements
provided by the Company to Mizrahi Bank in connection with the
Mizrahi Tefahot Loan. Further details of the Mizrahi Tefahot Loan
are set out below.
In accordance with AIM Rule 15, the Disposal constitutes a
fundamental change of business of the Company. On Completion, the
Company would cease to own, control or conduct all or substantially
all, of its existing trading business, activities or assets and
would therefore become an AIM Rule 15 cash shell. In addition the
Disposal constitutes a substantial property transaction for the
purposes of section 190 of the Companies Act, requiring the consent
of Shareholders.
The Disposal is also a related party transaction in accordance
with AIM Rule 13 as each of Guy Levit, Horacio Furman and David
Rubner form part of the Consortium, they are all Directors and, in
the case of Horacio Furman, also a significant shareholder as he is
currently interested in 59.38 per cent. of the existing issued
share capital of MI.
Resolution 2 to be proposed at the General Meeting seeks
Shareholders' approval for the Disposal.
The Independent Director considers, having consulted with Cantor
(the Company's nominated adviser), that the terms of the Disposal
are fair and reasonable insofar as the Company's Shareholders are
concerned. The Independent Director has taken into account the
following:
1. the Existing Directors having obtained the support of the
Consortium representing 73.1 per cent of the issued share capital
for the Proposals;
2. the lack of alternative options for the provision of future
working capital for the Company's Business given the poor liquidity
and lack of investor interest in the Company's shares;
3. the very real prospect given the support of the Consortium to
the Proposals and the lack of alternatives, that the Existing
Directors (other than the Independent Director) decide to procure
the cancellation of the admission of the Company's shares to
trading on AIM;
4. the steady decline in the Company's sales and risks
associated with the need of the Company to invest heavily in
R&D in order to update its technology offering; and
5. the independent third-party valuation.
Following completion of the Disposal, the Company will become an
AIM Rule 15 cash shell and as such will be required to make an
acquisition or acquisitions which constitutes a reverse takeover
under AIM Rule 14 (including seeking re-admission as an investing
company (as defined under the AIM Rules)) on or before the date
falling six months from completion of the Disposal or be
re-admitted to trading on AIM as an investing company under the AIM
Rules (which requires the raising of at least GBP6 million) failing
which, the Company's New Ordinary Shares would then be suspended
from trading on AIM pursuant to AIM Rule 40. Admission to trading
on AIM would be cancelled six months from the date of suspension
should the reason for the suspension not have been rectified.
The Capital Note and Intercompany Debts
In June 2014, the Company issued to TeleMessage, a five year US
dollar denominated capital note for $2,251,713 which was then
equivalent to GBP1,332,845, to be repaid at the end of the five
year term at the option of TeleMessage. The loan was provided
interest free and can only be assigned with the approval of both
the Company and TeleMessage. As of 31 December 2015 the carrying
value of the capital note was GBP1,518,780 giving rise to a foreign
exchange translation gain of GBP185,935 reflected in the Company's
reserves.
In addition, the Company and Subsidiary entered into a loan
agreement and promissory note dated 14 August 2007, pursuant to
which as at the date of the General Meeting the Subsidiary will owe
the Company an amount of GBP330,560 in principal and interest
("Loan and Promissory Note") and a further inter-company balance is
due from the Company to the Subsidiary which will amount to
GBP84,334 as at the date of the General Meeting ("Inter-Company
Balance").
The Subsidiary has agreed, conditional upon approval of the
Resolutions at the General Meeting, to release and discharge the
Company from any and all of its outstanding obligations under the
Inter-Company Balance; and the Company has also agreed, conditional
upon approval of the Resolutions at the General Meeting, to release
and discharge the Subsidiary from any and all of its outstanding
obligations under the Capital Note and Loan and Promissory Note, as
well as to terminate the Capital Note and Loan and Promissory Note
so that they shall have no further effect. In consideration for the
release and discharge of the amounts due from TeleMessage to the
Company under the Capital Note and Loan and Promissory Note, the
Subsidiary will issue 19,301,575 ordinary shares of NIS 0.01 par
value each to the Company.
Mizrahi Tefahot Loan and Warrant
In January 2015, TeleMessage signed an agreement for a venture
loan of US$1,000,000 from Mizrahi Bank. Under the terms of the
agreement, repayments are over 36 equal monthly instalments with an
interest rate based on the London Interbank Offered Rate plus 6 per
cent (the "Mizrahi Tefahot Loan").
In June 2012, as part of a previous agreement (which was
subsequently replaced by the Mizrahi Tefahot Loan), the Company
granted to Mizrahi Bank 3,896,804 warrants exercisable at any time
from grant until June 2017. The warrants are exercisable at a price
of 0.61 pence per share, although in certain circumstances the
exercise price might be subject to adjustment. In January 2015, the
Company granted an additional 4,500,000 warrants to Mizrahi Bank
exercisable at any time from grant to 24 January 2020 and
exercisable at a price of 0.91 pence per share representing the
average closing price of an ordinary share in the capital of the
Company (as derived from the AIM appendix to the daily official
list of the London Stock Exchange) during the 30 days immediately
prior to the signing of such warrant (but not including). The
exercise of the previously issued warrants was extended to January
2020 as part of the agreement of the Mizrahi Tefahot Loan.
The Mizrahi Tefahot Loan will remain with TeleMessage subsequent
to the completion of the Disposal pursuant to the terms of the SPA
and, conditional upon the completion of the Disposal, the
abovementioned warrants will be cancelled and re-issued to Mizrahi
Bank by TeleMessage.
Employee and Other Option Holders Share Options
Subject to the Disposal, it is expected that all current
employees and other option holders of the Subsidiary and
Telemessage Inc. will waive all of the existing 32,452,564 options
in the Company held by them, in consideration for the receipt of
new options in the Subsidiary on substantially the same terms, such
that no options to acquire shares in the Company will remain in
effect immediately following the Disposal.
Amendments to Articles of Association and Memorandum of
Association
Subject to passing resolution 3 at the General Meeting, the
Company will amend its articles of association and memorandum of
association by including the terms of the new class of Deferred
Shares with such rights and restrictions as further detailed in
resolution 3 of the notice of General Meeting at the end of this
Document and removing references to a limited authorised share
capital.
Share Capital Reorganisation
The Existing Ordinary Shares have a current nominal value of
GBP0.005 per share. The Company will not be able to raise funds via
an issue of shares at the current trading price. The AIM Rules
provide that a company cannot have more than one class of shares
admitted to trading. The Company is therefore proposing to
undertake the Share Capital Reorganisation so that it can raise
further equity capital at a price of GBP0.0024 per share.
Under the Share Capital Reorganisation, it is proposed that each
Existing Ordinary Share of GBP0.005 is sub-divided into two New
Ordinary Shares of GBP0.001 each and three Deferred Shares of
GBP0.001 each. This would result in the Company having 231,744,296
New Ordinary Shares, and 347,616,444 Deferred Shares being in issue
immediately following the Share Capital Reorganisation. As such,
following the Share Capital Reorganisation, each shareholder with a
holding of an Existing Ordinary Share will have twice as many New
Ordinary Shares as Existing Ordinary Shares held before the Share
Capital Reorganisation.
The rights attaching to the New Ordinary Shares will be
identical in all respects to those of the Existing Ordinary Shares.
The Deferred Shares will have no voting rights, no entitlement to
attend general meetings of the Company and will carry only the
right to participate in any return of capital to the extent of the
amount paid up or credited as paid up on each Deferred Share after
the holders of New Ordinary Shares have received repayment of their
capital paid up on each New Ordinary Share together with the
payment of GBP10,000,000 on each such New Ordinary Share.
Accordingly, the Deferred Shares will, for all practical purposes,
be valueless and the Proposed Directors', will consider bringing a
resolution before the Shareholders' at the next Shareholder
meeting, requesting approval for the Company to repurchase such
shares following which they will be cancelled.
Further to the above and conditional upon all Resolutions being
passed, and the Disposal and Share Capital Reorganisation being
completed, the 169,521,886 New Ordinary Shares (84,760,943 Existing
Ordinary Shares) of the Company held by the Consortium will be
re-designated as 169,521,886 Deferred Shares. This would result in
the Company having 62,222,410 New Ordinary Shares, and 517,138,330
Deferred Shares being in issue. The net effect of the redesignation
of the 169,521,886 New Ordinary Shares held by the members of the
Consortium, is that shareholders currently holding the remaining
31,111,205 Existing Ordinary Shares (62,222,410 New Ordinary Shares
following the Share Capital Reorganisation) which currently
represent 26.85 per cent of the issued share capital in the
Company, will hold 23 per cent of the issued share capital
following the Subscription. The dilutive effect of the Proposals on
these shareholders is therefore 3.85 per cent.
If the Proposals are approved, the New Ordinary Shares will
trade under the new name of the Company, and under the new TIDM.
New share certificates will be issued to Shareholders holding share
certificates as a result of the Company's name change and Share
Capital Reorganisation. Share certificates will be sent by first
class post at the risk of the Shareholder.
The Subscription
Conditional upon the approval of the Proposals at the General
Meeting, Peterhouse has placed 208,333,333 New Ordinary Shares at a
price of GBP0.0024 raising GBP500,000 before expenses of
approximately GBP50,000. It is expected that the New Ordinary
Shares will be admitted to trading on AIM on or around 23 August
2016. It is intended that a total of GBP0.01 of the proceeds raised
from the Subscription will be applied to redeeming all or part of
the Deferred Shares of the Company including all of the Deferred
Shares held by the members of the Consortium.
Additionally, conditional on the Proposals being approved by
Shareholders at the General Meeting, the Company has agreed to
issue Peterhouse warrants to subscribe for New Ordinary Shares at
the placing price equal to 3 per cent of the Enlarged Share Capital
of the Company, exercisable at the Subscription Price for up to 5
years.
Use of Proceeds
The proceeds of the Subscription will be used to cover the costs
of the Disposal and to provide the Company with sufficient working
capital for at least 12 months from the date the Company becomes an
AIM Rule 15 cash shell.
Sale of Existing Ordinary Shares to Peterhouse
Should Shareholders wish to divest their investment in the
Company, such Shareholders may, conditional on the Proposals being
approved by Shareholders at the General Meeting, do so by notifying
Peterhouse within seven calendar days of the date of this Circular.
Peterhouse has agreed to arrange, on a best endeavours basis, the
execution of a sale of any Existing Ordinary Shares held by
Shareholders wishing to sell the same to its clients for GBP0.0024
per Existing Ordinary Share. This sale facility effectively values
the whole of the issued Existing Ordinary Shares, prior to the
Subscription but following the Share Capital Reorganisation and
redesignation of the 169,521,886 New Ordinary Shares held by the
members of the Consortium into Deferred Shares, at approximately
GBP149,334.
Alternatively, Shareholders are free to retain their Existing
Ordinary Shares or sell them in the market as they see fit.
Shareholders wishing to take advantage of the above sale facility
should contact Peterhouse directly on 020 7469 0934 or 020 7469
0936.
Dis-application of pre-emption rights and authority to allot
shares
In order to facilitate the Subscription, as described above and
to enable the Company to raise further funds to implement its
intended Investing Strategy with minimal limitations, it is
necessary for the Directors to seek authority from Shareholders at
the General Meeting pursuant to the Companies Act to, inter alia,
issue the Subscription Shares and to issue further shares for cash.
The Directors may seek further funding for the Company following
the General Meeting, subject to any necessary resolutions being
approved by Shareholders.
Full details of the authorities the Directors are seeking at the
General Meeting are set out in the attached notice of General
Meeting.
Change of Name
Subject to Shareholders' approval of the Proposals, it is
proposed that the name of the Company be changed to SigmaRoc Plc.
The TIDM will be SRC.
Proposed Directors Upon Completion of the Disposal
Subject to the Resolutions being passed, it is proposed that Max
Vermorken will join the Board as Chief Executive Officer and David
Barrett and Dominic Traynor will join the Board as Non-Executive
Directors. All of the Existing Directors will resign from office
upon completion of the Proposals with no compensation for loss of
office, and will waive all claims against the Company under their
appointment letters.
Dominic Traynor - Non Executive Director
Dominic is a corporate lawyer specialising in listings and
takeovers, M&A and corporate finance. Dominic has acted on more
than 20 AIM-admissions as well as numerous reverse takeovers, other
acquisitions, joint ventures and secondary fundraisings with a
particular focus on the mining and oil and gas sectors. Dominic
graduated from Durham University in 1997 with a degree in Law and,
after completing the LPC at the College of Law in York, joined
Ronaldsons as a trainee in 1998 qualifying in 2000.
David Barrett - Non Executive Director
David co-founded London Concrete in 1997, subsequently building
the business from one concrete plant in London to over a dozen
plants around the capital. London Concrete was sold to Aggregate
Industries and is currently the number one concrete supplier in
London, with flagship projects such as the London Olympics, the
Shard, the US embassy and the new Bloomberg building. Having
previously worked with Pioneer, David retired from London Concrete
in 2015 and is widely considered an expert in the industry.
Max Vermorken - CEO
Max was most recently a strategic advisor with the world's
biggest construction materials group LafargeHolcim. His last job
for the company was to manage the hive-down and integration of two
large asset portfolios - a mix which included two cement plants and
a multitude of down-stream aggregates and construction materials
assets - in the context of the global LafargeHolcim merger. Prior
to working for LafargeHolcim Max worked with
Luxembourg-headquartered Private Equity group Genii were he
reported directly to its founding principals. Max holds a PhD in
Financial Economics and Bachelor and Master degrees in both Civil
Engineering and Economics.
Proposed Directors Remuneration Package
In addition, as set out below, subject to completion of the
Proposals and the adoption of a share option plan, it is proposed
that each of the Proposed Directors enter into a letter of
appointment with the Company pursuant to which they will each be
appointed as non-executive directors of the Company for an initial
term of one year and that they will each be paid GBP12,000 per
annum, monthly in arrears; other than Max Vermorken who will be
appointed as an executive director for an initial term of one year
and will be paid GBP129,996 per annum, monthly in arrears. In
addition, it is intended that, subject to Completion of the
Proposals and any approvals required for the adoption thereof being
obtained, the Company will adopt a share option plan over, in
aggregate, 15 per cent of the issued share capital of the Company
at the time of the issue, exercisable at the Subscription Price at
any time following the completion of a reverse take-over under the
AIM Rules, for a period of five years, subject to the approval of
the Company's nominated adviser from time to time. The share option
plan will be put in place in order to incentivise the directors of
the company and certain key staff and individuals.
Investing Strategy
The Company's proposed strategy, following the Disposal, will be
to invest in and/or acquire companies and/or projects within the
construction materials sector, including but not limited to
exploration, production, treatment and trading activities, which
are either cash flow generative or show significant potential for
growth and a profitable exit. It is anticipated that the
geographical focus will primarily be frontier and niche markets,
where the Company's smaller size and added nimbleness will present
a competitive advantage in a sector dominated by major industry
players. These markets are therefore primarily situated in Africa
and the Middle East as well as certain European regions. The
Company may also pursue targets which leverage its entrepreneurial
nature, in regions and subsectors where established majors are
facing a difficult time.
In selecting investment and/or acquisition opportunities, the
Proposed Directors will focus on three types of business:
-- businesses, assets and/or projects in markets where
anticipated structural change can lead to growth or consolidation
within the construction materials sector;
-- businesses which present a steady cash flow opportunity
allowing the Company to build a baseline income to sustain its
further expansion projects; and
-- businesses or projects which present a clear opportunity for
the Company to take advantage of cyclical weakness within
established production majors.
Key to the identification of the right assets is not just
obtaining attractive valuations, but also the competitive advantage
that can be secured in the local market as construction materials
are a local product. In identifying the right assets the Proposed
Directors will leverage the skills represented on the board and at
management level as well as its significant industry relationships.
The investments will therefore be actively managed utilising the
local knowledge present within the management and their
networks.
There is no limit on the number of projects into which the
Company may invest, and the Company's financial resources may be
invested in a number of propositions or in just one investment,
which may be deemed to be a reverse takeover under the AIM Rules.
The Proposed Directors intend to mitigate risk by appropriate due
diligence and transaction analysis. Any transaction constituting a
reverse takeover under the AIM Rules will also require Shareholder
approval. The Proposed Directors consider that as investments are
made, and new promising investment opportunities arise, further
funding of the Company may also be required.
The Company will always seek to optimise the funding of any
investment through a combination of debt and equity, systematically
aiming to maximise shareholder value. Investments in early stage
assets are expected to be mainly in the form of equity, with debt
potentially being raised later to fund the development of such
assets. Investments in later stage assets are more likely to
include an element of debt to equity gearing. The Proposed
Directors may also offer additional New Ordinary Shares by way of
consideration as well as cash, thereby helping to preserve the
Company's cash for working capital and as a reserve against
unforeseen contingencies including, for example, delays in
collecting accounts receivable, unexpected changes in the economic
environment and operational problems.
General Meeting
The Notice convening the General Meeting to be held at the
offices of Peterhouse Corporate Finance Limited, New Liverpool
House, 15 Eldon Street, London, EC2M 7LD, at 12:00 p.m. on 22
August, 2016 at which the Resolutions will be proposed is set out
at the back of the Circular.
Action to be taken
Shareholders will find a Form of Proxy enclosed for use at the
General Meeting. Whether or not you intend to be present at the
General Meeting, you are requested to complete and return the Form
of Proxy in accordance with the instructions printed thereon as
soon as possible. To be valid, completed Forms of Proxy must be
received by Share Registrars Limited, The Courtyard, 17 West
Street, Farnham, Surrey, GU9 7DR, not later than 12:00 p.m. on 20
August, 2016, being 2 days before the time appointed for holding
the General Meeting. You are entitled to appoint a proxy to attend
and to exercise all or any of your rights to vote and to speak at
the General Meeting instead of you. Completion of the Form of Proxy
will not preclude you from attending and voting at the General
Meeting in person if you so wish. Your attention is drawn to the
notes to the Form of Proxy.
Recommendation
The Independent Director, after consultation with Cantor
Fitzgerald Europe, the Company's Nominated Adviser, considers the
terms of the Disposal to be fair and reasonable insofar as the
Shareholders are concerned and recommends Shareholders to vote in
favour of the Resolutions.
The Board, and certain other Shareholders, intend to vote in
favour of the Resolutions in respect of their shareholdings which
in aggregate amount to 84,760,943 Existing Ordinary Shares
representing 73.2 per cent. of the existing issued ordinary share
capital.
The following definitions apply throughout this Circular unless
the context requires otherwise:
"AIM Rules" the AIM Rules for Companies;
"AIM" the market of that name operated by the London Stock Exchange;
"Articles of Association" or "Articles" the articles of association of the Company;
"Board" or "Directors" the directors of the Company at the date of this Document whose names are
set out on page
8 of this Document;
"Corporate Finance Warrants" the warrants to be granted to Peterhouse to subscribe for 3 per cent of the
Enlarged Share
Capital of the Company, at the time of issue, exercisable at the
Subscription Price for up
to 5 years;
"Business" the business operated by the Subsidiary, as further described in Part I of
this Document;
"Cantor Fitzgerald Europe" or Cantor Fitzgerald Europe, Company's nominated adviser and joint broker,
"Cantor" incorporated in England
and Wales with company number 02505767 (authorised by the FCA with firm
reference number 149380);
"Capital Note" the capital note issued in June 2014 by Messaging International Plc to the
Subsidiary for
$2,251,713 which was equivalent to GBP1,332,845 to be repaid at the end of
the five year term
or, after such time, in instalments at the option of the Subsidiary;
"Circular" or "Document" this document dated 4 August 2016;
"Companies Act" the Companies Act 2006, as amended from time to time;
"Company" or "MI" Messaging International plc, a company registered in England and Wales with
registered number
5204176;
"Completion" completion of the Disposal expected to occur on or about 22 August, 2016;
"Consortium" certain holders of shares in MI including Directors of MI, details of whom
can be found in
Part I of this Document;
"Deferred Shares" the deferred shares of GBP0.001 each in the capital of the Company to be
created upon adoption
of resolution 3 at the General Meeting;
"Disposal" the proposed sale of TeleMessage, to the Consortium, pursuant to the terms
of the SPA;
"EBITDA" earnings before interest, tax, depreciation and amortisation;
"Enlarged Share Capital" the New Ordinary Shares and the Subscription Shares in issue immediately
following the Subscription
and Share Capital Reorganisation;
"Existing Directors" Irvin Fishman, Horacio Furman, Guy Levit, and David Rubner;
"Existing Ordinary Shares" ordinary shares of GBP0.005 each in the share capital of the Company
outstanding prior to
the proposed Share Capital Reorganisation;
"FCA" the Financial Conduct Authority;
"Form of Proxy" the form of proxy accompanying the Circular for use at the General Meeting;
"General Meeting" the General Meeting of Shareholders to be held at 12:00 p.m. on 22 August,
2016 at the offices
of Peterhouse Corporate Finance Limited, New Liverpool House, 15 Eldon
Street, London, EC2M
7LD;
"Group" the Company and the Subsidiary;
"Independent Director" Irvin Fishman;
"Investors" the subscribers for the Subscription Shares under the Subscription;
"Liabilities" all outstanding liabilities in relation to the Business;
"London Stock Exchange" the London Stock Exchange PLC;
"Memorandum of Association" the memorandum of association of the Company;
"Mizrahi Bank " Mizrahi Tefahot Bank Ltd., incorporated and registered in Israel with
company number 520000522;
"Mizrahi Tefahot Loan" as defined on page 13;
"New Ordinary Shares" new ordinary shares of GBP0.001 each in the capital of the Company
following the Share Capital
Reorganisation;
"Peterhouse" Peterhouse Corporate Finance Limited, the Company's joint broker,
incorporated in England
and Wales with company number 02075091 (authorised by the FCA with firm
reference number 184761);
"Proposals" the proposals set out in this Circular, whereby Shareholders are being
asked to consider and,
if thought fit, approve (i) the terms of the Disposal, (ii) the change of
name of the Company
to SigmaRoc Plc, (iii) the authority to allot New Ordinary Shares, (iv) the
dis-application
of pre-emption rights, and (v) amendment of the Articles and of the
Memorandum of Association;
"Proposed Directors" Dominic Traynor, David Barrett and Max Vermorken;
"Resolutions" the resolutions set out in the notice of General Meeting contained within
the Circular;
"Shareholders" holders of Existing Ordinary Shares in the Company from time to time;
"Share Capital Reorganisation" the proposed reorganisation of the share capital of the Company pursuant to
the Share Split;
"Share Spilt" the subdivision of each Existing Ordinary Share into two New Ordinary
Shares of GBP0.001 each
and three Deferred Shares of GBP0.001 each;
"SPA" the conditional share sale and purchase agreement dated 4 August, 2016
between the Consortium
and the Company in respect of the Disposal;
"Subscribers" the subscribers subscribing for the Subscription Shares;
"Subscription" the conditional subscription of the Subscription Shares at the Subscription
Price;
"Subscription Price" GBP0.0024 or 0.24 pence;
"Subscription Shares" the 208,333,333 New Ordinary Shares to be issued by the Company pursuant to
the Subscription;
"Subsidiary" the wholly-owned subsidiary of the Company, being, TeleMessage;
"TeleMessage" TeleMessage Ltd., a company registered in Israel with registered number
512791120;
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland; and
"US" or "United States" the United States of America, its territories and possessions, any states
of the United States
of America and the District of Columbia and all other areas subject to its
jurisdiction.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this Document 4 August, 2016
Latest time and date for 12:00 p.m. on 20 August,
receipt of Forms of Proxy 2016
in respect of the General
Meeting
General Meeting 12:00 p.m. on 22 August,
2016
Expected date of Completion 22 August, 2016
of the Disposal
Record date for the Share 22 August, 2016
Capital Reorganisation
Admission of the New Ordinary 23 August, 2016
Shares to AIM
Expected issue of the Subscription 23 August, 2016
Shares and admission of
these shares to trading
on AIM
CREST stock accounts credited 23 August, 2016
with New Ordinary Shares
and Subscription Shares
in uncertificated form
Dispatch of share certificates 31 August, 2016
for New Ordinary Shares
and Subscription Shares
in certificated form by
no later than
Notes
1. References to times in this Document are to London time unless otherwise stated.
2. If any of the above times or dates should change, the revised
times and/or dates will be notified to Shareholders by an
announcement on an RNS (and posted on the Company's website).
3. All events in the above timetable following the General
Meeting are conditional upon approval by the Shareholders of the
Resolutions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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