TIDMASTO
RNS Number : 4584P
AssetCo PLC
10 June 2020
10 June 2020
AssetCo plc
("AssetCo" or the "Company")
Proposed Capital Reduction and Notice of General Meeting
AssetCo announces that the Company will today be posting a
circular to shareholders (the "Circular") incorporating a notice of
a general meeting, to seek the approval of Shareholders for the
proposals to reduce the Company's capital.
The Capital Reduction is conditional, inter alia, on the
approval of Shareholders. A notice of General Meeting is set out at
the end of the Circular, which convenes the General Meeting for
11am. on 10 July 2020, at Singleton Court Business Park, Wonastow
Road, Monmouth, NP25 5JA.
Given social distancing rules and guidance that are currently in
force, you are strongly recommended to appoint a proxy rather than
attend the meeting in person. If, however, you wish to attend in
person, we request that you give at least 48 hours' advance notice
to Computershare Investor Services, the Registrar, in order that we
can make arrangements for the meeting to be conducted safely and in
accordance with such rules and guidance.
The Board of Directors considers that the Resolution is in the
best interests of the Company and its Shareholders as a whole and
unanimously recommends that Shareholders vote in favour of the
Resolution to be proposed at the General Meeting.
Unless the context requires otherwise, defined terms used in
this announcement shall have the meanings given to them in the
Circular dated 10 June 2020.
A copy of the Circular will shortly be available on the
Company's website at www.assetco.com .
Enquiries:
Tudor Davies, Chairman
AssetCo plc
Tel: +44 (0) 7785 703523
Or +44 (0) 20 7614 5900
Ticker AIM: ASTO.L
www.assetco.com
John Llewellyn-Lloyd / Ciaran
Walsh
Arden Partners plc
Tel: +44 (0) 20 7614 5900
Fiona Tooley
Tooley Street Communications
Mobile: +44 (0) 7785 703
523
Email: fiona@tooleystreet.com
Timetable of principal events
Time and Date
Publication of the Circular 10 June 2020
Latest time for receipt of 11 a.m. on 8 July 2020
individual Forms of Proxy for
General Meeting
General Meeting 11 a.m. on 10 July 2020
Court hearing to confirm the On or around 4 August 2020
Capital Reduction
Registration of Court order expected to be the business day after
and Effective Date of the Capital the Court order confirming the Capital
Reduction Reduction
If any of the above times and/or dates change, the revised times
and/or dates will be notified to Shareholders by an announcement
through the Regulatory Information Service of the London Stock
Exchange. All references in this announcement and the Circular are
to London time unless otherwise stated.
Introduction
As announced in the Company's interim results for the six months
ended 31 March 2020 (the Interim Statement), the Company's focus
has continued to be on regaining and developing new business in the
Middle East and realising the cash in receivables and bonds from
the previous contract and completing the action for negligence
against Grant Thornton. The results for the six months to 31 March
2020 are a loss of GBP0.7m, reflecting the costs of operating in
Abu Dhabi dealing with business development, and the costs
associated with the Court of Appeal hearing during January
2020.
The Circular sets out details of a proposed Capital Reduction as
described below.
The Capital Reduction is conditional, inter alia, on the
approval of Shareholders at the General Meeting and to confirmation
by the court. You will find set out at the end of this document a
Notice of General Meeting which has been convened for 11 a.m. on 10
July 2020, at Singleton Court Business Park, Wonastow Road,
Monmouth, NP25 5JA.
Given social distancing rules and guidance that are currently in
force, you are strongly recommended to appoint a proxy rather than
attend the meeting in person. If, however, you wish to attend in
person, we request that you give at least 48 hours' advance notice
to Computershare Investor Services, the Registrar, in order that we
can make arrangements for the meeting to be conducted safely and in
accordance with such rules and guidance.
The purpose of the Circular is to provide you with details of,
and the reasons for, the Capital Reduction and the Resolution to be
proposed at the General Meeting. The Board considers that the
Resolution is in the best interests of the Company and its
Shareholders as a whole and unanimously recommends that you vote in
favour of the Resolution to be proposed at the General Meeting.
You are advised to read the whole of the Circular, including the
Notice, and not to rely solely on the information contained in this
letter.
Background to the Capital Reduction
As announced on 10 June 2020 in our Interim Results to 31 March
2020, AssetCo has GBP28.4 m of net assets represented by GBP26.1 m
of unrestricted cash balances, and is continuing to pursue new
business in the Middle East as well as awaiting the Court of
Appeal's decision in respect of its legal action against Grant
Thornton. The Company had a deficit of GBP62,045,076 on its profit
and loss account. The existence of that deficit currently prevents
the Company from making distributions to shareholders.
The Board considers that a large proportion of the cash balances
are surplus to current requirement, and although future investment
opportunities may arise, it may also be appropriate to return
surplus cash to shareholders. Whilst there has been no formal
decision made, the Board would like to have the flexibility to make
distributions to shareholders in future.
It is against this background that the Board proposes the
Capital Reduction as a means of eliminating the deficit on the
Company's profit and loss account and achieving a surplus on that
account. That will enable the Company lawfully to make
distributions if the Board considers them appropriate. The Board
estimates that the effect of the Capital Reduction will be to
generate a surplus of GBP27,149,361.35 on the Company's profit and
loss account.
If approved by Shareholders at the General Meeting and
subsequently confirmed by the Court, upon the Court's confirmation
order being registered with the Registrar of Companies, the effect
of the Capital Reduction will be to (i) cancel the entire amount
standing to the credit of the Share Premium Account (being
approximately GBP64,941,326 in total as at the date of this
announcement), and (ii) cancel the Company's Deferred Shares.
The implementation of the Capital Reduction is subject to a
number of criteria and legal processes which are explained further
below.
Procedure to effect the Capital Reduction
Share premium forms part of the capital of the Company and
arises on the issue by the Company of Ordinary Shares at a premium
to their nominal value. The premium element is credited to the
Share Premium Account. Under the 2006 Act, the Company is precluded
from paying any dividends or making other distributions in the
absence of sufficient distributable reserves, and the Share Premium
Account, being a non-distributable reserve, can be applied by the
Company only for limited purposes. However, provided the Company
obtains the approval of Shareholders by way of a special resolution
and subsequent confirmation by the Court, it may cancel all or part
of the balance standing to the credit of its Share Premium Account
with the result that (subject to any order made by the Court to the
contrary), such balance will be credited to the Company's profit
and loss account.
The Deferred Shares were created by the Company as part of a
previous scheme of arrangement and have no economic value. The
Board does not consider there to be any commercial purpose in the
Deferred Shares and is therefore taking the opportunity to cancel
the Deferred Shares as part of the Capital Reduction. Pursuant to
articles 3.2.4 and 3.3.6 of the Articles, the cancellation of the
Deferred Shares pursuant to a reduction of capital for no
consideration will not constitute a variation of the rights
attaching to the Deferred Shares. Consequently, the Capital
Reduction can be approved without the approval of the holders of
the Deferred Shares.
In order to effect the Capital Reduction, the Company first
requires Shareholders to approve it by special resolution.
Secondly, the Capital Reduction must be confirmed by the Court.
If the special resolution is approved by Shareholders in general
meeting, the Company will then apply to Court for a confirmation
order.
The Capital Reduction will take effect when the order of the
Court confirming it and a statement of capital approved by the
Court have been registered with the Registrar of Companies. The
Effective Date of the Capital Reduction is currently expected to be
the next working day following the hearing at which the Capital
Reduction is to be confirmed by the Court, which is currently
expected to be on or around 4 August 2020.
In order to approve the Capital Reduction, the Court will need
to be satisfied that the interests of the Company's creditors will
not be prejudiced by the Capital Reduction. It is possible
(although the Board considers it unlikely) that the Court will
require the Company to give a suitable undertaking for the purpose
of protecting creditors, such as to create a special reserve in the
Company's books of account for so long as any creditors of the
Company, who do not consent to the Capital Reduction, remain
unpaid.
The Board reserves the right (where necessary by application to
the Court) to abandon, discontinue or adjourn any application to
the Court for confirmation of the Capital Reduction, and hence the
Capital Reduction itself, if the Board believes that the terms
required to obtain confirmation are unsatisfactory to the Company
or if the Board considers that to continue with the Capital
Reduction is inappropriate or not advisable and would not be in the
best interests of the Company and its Shareholders.
The Capital Reduction does not affect the voting or dividend
rights of any Shareholder, or the rights of any Shareholder on a
return of capital.
Procedure to effect the Capital Reduction
You will find a notice convening the General Meeting at the end
of the Circular. The General Meeting will be held at 11 a.m. on 10
July 2020 at Singleton Court Business Park, Wonastow Road,
Monmouth, NP25 5JA to consider and, if thought appropriate, pass
the Resolution which is summarised below.
Resolution: Capital Reduction
The Resolution will be proposed as a special resolution of the
Company. The Directors will be seeking approval of Shareholders to
(i) cancel the balance standing to the credit of the Company's
share premium account, and (ii) cancel all issued Deferred
Shares.
Action to be taken
A Form of Proxy for use in connection with the General Meeting
is enclosed with the Circular. Whether or not you intend to be
present at the General Meeting, you are requested to complete, sign
and return a Form of Proxy in accordance with the instructions
printed thereon so as to be received by the Registrar,
Computershare Investor Services PLC of The Pavilions, Bridgwater
Road, Bristol, BS99 6ZY not later than 11 a.m. on 8 July 2020.
Completion and return of a Form of Proxy will not preclude you from
attending and voting in person at the General Meeting, if you wish
to do so.
Recommendation
The Board considers the Capital Reduction to be in the best
interests of the Company and its Shareholders as a whole.
Accordingly, the Board unanimously recommends that Shareholders
vote in favour of the Resolution, as all of the Directors intend to
do in respect of their beneficial holdings amounting, in aggregate,
to 5,893,582 Ordinary Shares representing approximately 48.3 per
cent. of the existing issued share capital of the Company.
Forward-looking statements
Certain statements contained in this announcement are or may
constitute "forward-looking statements". These statements may be
identified by words such as "expects", "looks forward to",
"anticipates", "targets", "aims", "may", "would", "could",
"intends", "plans", "believes", "seeks", "estimates", "will",
"project" or words of similar meaning. They include all matters
that are not historical facts. Such statements are based on the
current expectations and certain assumptions of the Directors and
are, therefore, subject to certain risks and uncertainties.
Forward-looking statements are not guarantees of future performance
and a number of factors could cause actual results and developments
to differ materially from those expressed or implied by the
forward-looking statements. The forward-looking statements in this
announcement speak only as of the date of this announcement. Except
as required by law, the Company disclaims any obligation to update
any such forward-looking statements to reflect future events or
developments.
Notice to overseas persons
The distribution of this announcement, the Circular and/or the
accompanying Form of Proxy outside the UK may be restricted by law.
Persons outside the UK who come into possession of these documents
should inform themselves about and observe any such restrictions.
Any failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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