TIDMAAA
RNS Number : 6058Y
All Asia Asset Capital Limited
06 March 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").
6 March 2017
All Asia Asset Capital Limited
("All Asia Asset Capital", "AAA" or the "Company")
Proposed disposal of Energy Central Limited
And
Notice of Extraordinary General Meeting
Further to the announcements of 15 December 2016 and 2 February
2017, the Board of AAA (AIM: AAA) announces that, on 3 March 2017,
the Company entered into a conditional sale and purchase agreement
(the "Sale & Purchase Agreement") with Chakris Kajkumjohndej
(the "Purchaser") regarding the proposed disposal by the Company
(the "Disposal") of AAA's entire interest in 100% of the issued
share capital of Energy Central Limited ("Energy Central"), for a
cash consideration equivalent to Thai Baht 34,889,000 (equivalent
to approximately GBP810,000 based on current exchange rates).
Energy Central's sole asset is the Company's interest in Andaman
Power & Utilities Co., Ltd. ("APU"). Further information
regarding Energy Central and recent events relevant to Energy
Central can be found further below.
Completion of the Disposal is subject, inter alia, to the
approval of AAA's shareholders ("Shareholders") at an extraordinary
general meeting of the Company (the "EGM") which will be held at
the offices of Buisson & Associes, 18 rue de Marignan 75008
Paris, France at 11:00 am on 24 March 2017.
A circular setting out the details of and the background to the
proposed Disposal (the "Circular") and a notice to convene the EGM
will shortly be posted on the Company's website
(http://www.aaacap.com/).The Circular will be sent to Shareholders
in the coming days.
The above summary should be read in conjunction with the full
text of this announcement below and the Circular. Extracts from the
Circular are set out below.
For further information:
All Asia Asset Capital Limited
Paniti Junhasavasdikul, General
Counsel
Robert Berkeley, Executive Chairman
and Finance Director
Tel: +44 (0) 207 621 8910
Tel: +852 3756 0124
www.aaacap.com
Allenby Capital Limited (Nomad
& Broker)
Nick Athanas / Nick Naylor /
Alex Brearley
Tel: +44 (0) 203 328 5656
www.allenbycapital.com
About AAA
AAA is an investment company that has been established as a
platform for investors looking to access growing markets in the
Asia-Pacific region. The Company invests in a portfolio of
companies with at least a majority of operations (or early-stage
companies that intend to have at least a majority of their
operations) in the Asia-Pacific region in industries with high
growth potential including, but not limited to: agriculture,
forestry and plantations, mining, natural resources, property,
and/or technology. AAA is publicly quoted and its shares are traded
on the AIM market, which is operated by the London Stock
Exchange.
Extracts from the Circular
(references to pages or paragraphs below refer to the relevant
pages or paragraphs of the Circular)
ALL ASIA ASSET CAPITAL LIMITED (THE "COMPANY" OR "AAA")
DISPOSAL OF 100% OF THE ISSUED SHARE CAPITAL OF ENERGY CENTRAL
LIMITED
AND
NOTICE OF EXTRAORDINARY GENERAL MEETING
INTRODUCTION
On 6 February 2017, the board of directors of the Company (the
"Board" or the "Directors") received an initial approach regarding
the purchase of 100% of the issued share capital of Energy Central
Limited ("Energy Central") owned by the Company. Further
information regarding Energy Central and recent events that are
relevant to Energy Central can be found in the section titled
'Assets to be disposed of' further below. Energy Central's sole
asset is the Company's interest in Andaman Power & Utilities
Co., Ltd. ("APU").
The purpose of the Circular is to provide you with, among other
things, (i) details of the proposed conditional disposal by the
Company (the "Disposal") of 100% of the issued share capital of
Energy Central for a cash consideration of Thai Baht 34,889,000
(equivalent to approximately GBP810,000 based on current exchange
rates); and (ii) notice of an extraordinary general meeting of the
Company to be convened to consider and, if thought fit, approve the
Disposal (the "EGM").
THE SALE & PURCHASE AGREEMENT
The Company has entered into a conditional sale and purchase
agreement ("Sale & Purchase Agreement") with Chakris
Kajkumjohndej (the "Purchaser"), pursuant to which the Company will
sell, and the Purchaser will purchase, all of the shares of Energy
Central (the "Sale Shares") owned by the Company on the terms and
subject to the conditions set out in the Sale & Purchase
Agreement. Completion of the Sale & Purchase Agreement is
conditional on, inter alia, approval of Shareholders at the EGM.
The principal terms of the Sale & Purchase Agreement are
summarised below:
Parties
(i) the Purchaser; and
(ii) the Company (as vendor).
Assets to be disposed of
The Company has conditionally agreed to sell, and the Purchaser
conditionally agreed to acquire, all of the shares of Energy
Central (the "Sale Shares") owned by the Company, on the terms and
subject to the conditions set out in the Sale & Purchase
Agreement.
Energy Central is an investment holding company which is
incorporated in the British Virgin Islands and is wholly owned by
the Company. Energy Central's sole asset is a 7 per cent stake in
APU, a company that was originally intended to construct and
operate a gas powered 200 megawatt electricity generation plant in
southern Myanmar (the "Proposed Power Plant Project").
Between October 2013 and July 2014 the Company invested a total
of US$1,800,000 in cash to acquire the Company's stake in APU
(equivalent to approximately US$1,470,000 at current exchange
rates). In addition in July 2014 the Company issued 11,000,000 new
shares in AAA to the Purchaser as part consideration for the
acquisition of shares in APU.
In September 2016, AAA announced that APU had become majority
owned by United Power of Asia Public Company Limited ("UPA"), a
public listed company in Thailand, and that APU was moving forward
to further developments of 200 Megawatt plants in the region and
was seeking financing for the project development.
On 15 December 2016, the Company announced that it had become
apparent that, due to the actions of third parties, APU's effective
economic interest in the project company which intends to construct
and operate the Proposed Power Plant Project was likely to be
substantially diluted and consequently be lower than originally
anticipated by the Board. At that point in time, the Board
estimated that it was likely that AAA's effective interest in the
Proposed Power Plant Project would be reduced to a level in the
region of 0.07% (assuming that no other events occur that could
lead to further dilution of AAA's effective interest and assuming
that a power purchase agreement between third parties became
unconditional).
The Company's announcement of 15 December 2016 highlighted that
the events (as described in summary above) would likely to lead to
a very substantial decrease in the value of the Company's seven per
cent. interest in APU. The value attributed to AAA's investment in
APU in the Company's interim results for the period ended 30 June
2016, announced by the Company on 16 September 2016, was
GBP4,338,000, which was based on an independent valuation report
that was commissioned by the Company.
Despite making a number of enquiries, the Company has not been
provided with any material or reliable update regarding the
position with APU, as described above. The Board is doubtful as to
whether any reliable update, information or explanation regarding
the apparent difficulties concerning the Company's investment in
APU will be forthcoming. As described in more detail in the the
section titled 'The merits of the Disposal' further below, under
the circumstances the Board believes that pursing the Disposal
represents the most realistic available option for preserving value
for Shareholders.
For the six months to 30 June 2016, as a non-trading holding
company, Energy Central did not record any profits or revenues (on
an unaudited basis). The aggregate unaudited current and
non-current assets of Energy Central as at 30 June 2016 were
GBP4,337,955. However, given that Energy Central's sole asset is
the Company's interest in APU, these results should be considered
in light of the apparent difficulties concerning the Company's
investment in APU has experienced during 2016 (as described above
and in the Company's announcement of 15 December 2016). In
particular, Shareholders should be aware that the Company's
announcement of 15 December 2016 highlighted that the difficulties
concerning the Company's investment in APU would likely to lead to
a very substantial decrease in the value of the Company's interest
in APU.
The Consideration and the basis of its determination
The consideration for the Disposal is Thai Baht 34,889,000
payable in cash in US$ (equivalent to approximately GBP810,000
based on current exchange rates) (the "Consideration") upon
Completion (as defined further below). The Consideration was
determined after arm's length negotiations between the Company and
the Purchaser.
Other terms of the Sale & Purchase Agreement
Upon the payment of Consideration by the Purchaser at
Completion, the Company shall release the Purchaser and Mr. Upakit
Pachariyangkun (the "Released Persons") from any and all claims,
demands, obligations, liabilities, or causes of action which the
Company has or shall have in relation to the purchase of APU's
shares and potential damage to the Company due to the action(s) of
the Released Persons or the majority shareholder(s) of APU. Mr.
Upakit Pachariyangkun is the Chairman and founder of APU.
The merits of the Disposal
When evaluating the Consideration and the merits of the
Disposal, the Directors have been mindful of the apparent
difficulties concerning the Company's investment in APU, as
outlined above and as announced by the Company on 15 December 2016.
As such, in the context of these difficulties, the Directors
consider that the Consideration is fair and reasonable and that
pursing the Disposal is in the best interests of the Company and
its Shareholders as a whole. The Directors believe that this is
especially the case when compared with alternative courses of
action, such as pursuing formal legal claims against the original
sellers of the shares in APU, given the likely timeframe for the
pursuit of any such legal claims and the uncertainly regarding the
likelihood of a superior outcome from any such litigation.
Conditions for the coming into effect of the Sale & Purchase
Agreement
Completion of the Disposal shall come into effect upon
satisfaction of the following conditions (the "Conditions") (i)
approval of the Disposal by Shareholders at the EGM; and (ii) the
payment of Consideration in full by the Purchaser. Subject to the
satisfaction (or waiver, if applicable) of any conditions in the
Sale & Purchase Agreement, including shareholder approval, it
is expected that completion of the Disposal under the Sale &
Purchase Agreement ("Completion") shall take place on 15 April 2017
(the "Completion Date"). On the Completion Date, the Sale Shares
shall be transferred to and registered under the name of the
Purchaser and the Consideration shall be paid in full, without
deduction or set off, to the Company.
INFORMATION ON THE PURCHASER
The Purchaser is one of the original vendors of APU, from whom
the Company acquired 4.5 per cent. of APU in 2014 for a
consideration of 11,000,000 ordinary shares in the Company and a
payment of US$550,000 in cash.
To the best knowledge, information and belief of the Directors,
after making all reasonable enquiries, the Purchaser is a
shareholder of the Company, who is beneficially interested in 11
million Ordinary Shares in the capital of the Company, representing
5.17 per cent. of the voting rights in the Company.
THE EFFECT OF THE DISPOSAL AND USE OF PROCEEDS
From an accounting treatment perspective, the final loss
attributable to the Company's investment in APU will be comprised
of two components, being: (i) the fair value loss on the
investment; and (ii) the loss on the disposal of investment. The
Board believes that time is of the essence when it comes to the
progression of the Disposal and given the difficulties concerning
the Company's investment in APU and the background to the Disposal,
the Board does not believe that it is feasible to provide a
reliable estimate of the fair value loss on the investment ahead of
Completion.
For illustrative purposes, it is currently expected that the
loss on the disposal of the investment component will be
approximately GBP3,923,000 as a result of the Disposal, which has
been calculated on the basis of the difference between the
Consideration to be received from the Disposal of approximately
GBP810,000 and the value attributed to AAA's investment in APU in
the Company's interim report period 30 June 2016 of approximately
GBP4,733,000. This is approximately 81% of the investment cost
without taking into account the tax and charges incurred in
connection with the disposal. This figure has been calculated using
the information currently available to the Company, which includes
a number of assumptions and does not include any provision for any
fair value loss on the investment, and is therefore provided solely
for illustrative purposes. The final total actual loss attributable
to the Company's investment in APU will be assessed after
Completion and is subject to audit. The Company will make an
announcement on this topic, as appropriate.
It is expected that the Company will receive net cash proceeds
of approximately Thai Baht 34,889,000 from the Disposal (equivalent
to approximately GBP810,000 based on current exchange rates), which
shall be paid in US$. The Company will bear its own costs and
expenses in relation to the legal fees and audit fee in respect of
the Disposal.
The net proceeds from the Disposal will be used for the general
working capital purposes of the Company, as it continues to
evaluate new investment and fund raising opportunities.
The Board believes that the Disposal is in line with the
Company's investing policy, which has been reproduced below.
Following Completion, the Company will continue to pursue its
investing policy. However, as announced on 2 November 2016, a
number of investment opportunities that the Board has reviewed in
more recent times have fallen outside of the scope of the Company's
investing policy and, consequently, the Board may, in due course,
propose to change the Company's investing policy. Any change in
investing policy will be subject to the approval of shareholders at
that point in time.
The Company's Investing Policy
The Company intends to invest in companies with at least the
majority of their operations (or early stage companies that intend
to have at least the majority of their operations) in the Asia
Pacific region. The Company intends to invest in a portfolio of
companies with an initial focus on companies that operate (or early
stage companies that intend to operate) in industries with likely
high growth potential including, but not limited to: agriculture,
forestry and plantation, mining, natural resources, property and/or
technology.
The Directors intend to source and identify potential
investments in line with the Investing Policy through their own
research and network of contacts and possibly strategic
partnerships with other companies or persons who can assist the
Company in sourcing and identifying potential investments.
Investments are expected to be mainly in the form of equity
although investments may be by way of debt, convertible securities
or investments in specific projects. In the case of equity
investments, the Directors intend typically to take minority
positions (with suitable minority protection rights), primarily in
unquoted companies. Investments will therefore typically be of a
passive nature. However, whilst the Directors intend that typical
investments will constitute minority positions in investee
companies, should the Company make majority investments, the
Company may seek participation in the management or board of
directors of such an entity with a view to seeking to improve the
performance and growth of the business.
There is no limit on the size of an investment in a project. The
Directors expect that each investment will typically yield a
targeted internal rate of return of at least 20 to 30 per cent. per
annum. It is likely that a substantial portion of the Company's
financial resources will be invested in a small number of
companies, however the Company has not excluded the possibility of
making just one investment. Depending on the size of investments,
they may be deemed to be reverse takeovers for the purposes of the
AIM Rules, which would require Shareholder approval and
re-admission of the Company, as enlarged by the acquisition, to
trading on AIM.
In addition to paying the costs of the Company's ongoing
expenses, the Company's cash resources will primarily be used to
identify, evaluate and select suitable investment opportunities and
to make investments, either in part or in full, as applicable. The
Directors consider that as investments are made, or promising new
investment opportunities arise, further funding of the Company will
be required and they anticipate further equity fundraisings by the
Company. Subject to prevailing authorities to issue new Ordinary
Shares or, if required, with Shareholder approval, new Ordinary
Shares may be used as consideration, in whole or in part, for
investments. The Company will not be subject to any borrowing or
leverage limits. In order to mitigate investment risk, the
Directors intend to carry out a thorough due diligence process in
evaluating each potential investment including: site visits,
analysis of financial, legal and operational aspects of each
investment opportunity, meetings with management, risk analysis,
review of corporate governance and anti-corruption procedures and
the seeking of third party expert opinions and valuation reports
where the Directors see fit.
The Directors will apply investment criteria including: the
potential for capital growth and/or the potential for profit
generation with a view to receiving dividend income over time, high
attractiveness to potential buyers of the company in question in
order to facilitate exits and a strong and experienced management
team.
Given the time frame to fully maximise the value of an
investment, the Board expects that investments will be held for the
medium to long term, although short-term disposals of assets cannot
be ruled out in exceptional or opportunistic circumstances. The
Directors intend to re-invest the proceeds of disposals in
accordance with the Company's Investing Policy unless, at the
relevant time, the Directors believe that there are no suitable
investment opportunities in which case the Directors will consider
returning the proceeds to Shareholders in a tax efficient
manner.
Cash held by the Company pending investment, reinvestment or
distribution will be managed by the Company and placed in bank
deposits or in capital guaranteed schemes offered by major global
financial institutions, in order to protect the capital value of
the Company's cash assets. The Company may, where appropriate, also
enter into agreements or contracts in order to hedge against
interest rate or currency risks. Investments are expected to be
held by the Company or a subsidiary to be incorporated for the
purpose of holding an investment.
Any material change to the Company's Investing Policy will only
be made following the approval by ordinary resolution of
Shareholders in general meeting. In addition, if the Company has
not substantially implemented its Investing Policy within 18 months
of Admission, the Company will seek the approval of Shareholders at
its next annual general meeting for its Investing Policy and on
annual bases thereafter until such time that its Investing Policy
has been substantially implemented. If it appears unlikely that the
Company's Investing Policy can be implemented at any time, the
Directors will consider returning remaining funds to
Shareholders.
The Directors will review the Investing Policy on an annual
basis and will implement any non-material changes or variations as
they consider fit. Details of any such non-material changes or
variations will be announced as appropriate. Any material change or
variation of the Investing Policy will be subject to the prior
approval of Shareholders.
Other investments
Following Completion, the Company will have one investment in
Myanmar Allure Group Co., Ltd. ("MAG"), which owns and operates the
Allure Resort, a combined hotel, resort and gaming facility located
in Tachileik province, Myanmar, in the vicinity of the
Thailand-Myanmar Mae Sai border. On 16 September 2016, the Company
announced that MAG intended to expand its business including the
development of a new building and partnerships with other gaming
operators in order to fulfill increasing demand in this sector.
Despite requests for updates, the Board has not been provided with
any material updates regarding MAG since that provided in the
Company's announcement of 16 September 2016. The Board remains of
the belief that steps should be taken to seek to realise the
Company's investment in MAG.
EGM
The EGM is being convened for Shareholders to consider and, if
thought fit, approve the Disposal.
A notice convening the EGM to be held at the offices of Buisson
& Associes, 18 rue de Marignan 75008 Paris, France at 11:00 am
on 24 March 2017 is set out on page 1 of the Circular. A form of
proxy for the EGM is enclosed with the Circular.
Whether or not you intend to attend the EGM, you are requested
to complete the form of proxy in accordance with the instructions
printed thereon and return the same as per the instruction in the
form of proxy as soon as possible and in any event not less than 48
hours before the time appointed for the EGM or any adjournment
thereof. Completion and return of the form of proxy will not
preclude you from attending and voting in person at the EGM if you
so wish.
The voting on the ordinary resolutions to approve the Disposal,
the Sale & Purchase Agreement and the transactions contemplated
thereunder at the EGM will be taken by poll and an announcement on
the results of the EGM will be made by the Company after the
EGM.
As at the Latest Practicable Date, no Shareholders, save for the
Purchaser whom the Board believe is beneficially interested in 11
million Ordinary Shares in the capital of the Company, representing
5.17 per cent. of the voting rights in the Company, had any
material interest in the Disposal such as to be required to abstain
from voting on the resolution(s) to approve the Disposal, the Sale
& Purchase Agreement and the transactions contemplated
thereunder at the EGM.
RECOMMENDATION
The Directors consider that the Disposal and its terms are fair
and reasonable and in the best interests of the Company and its
Shareholders as a whole. Accordingly, the Directors recommend the
Shareholders to vote in favour of the ordinary resolution(s) to
approve the Disposal at the EGM, as they intend to do in respect of
their entire beneficial holdings of Ordinary Shares totalling in
aggregate 14,914,575 Ordinary Shares and representing approximately
7.01 per cent. of the issued ordinary share capital of the
Company.
--ENDS--
This information is provided by RNS
The company news service from the London Stock Exchange
END
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