TIDMECV
RNS Number : 4558H
Eco City Vehicles PLC
01 December 2015
1 December 2015
Eco City Vehicles PLC
("ECV" or the "Company")
Notice of General Meeting and Issue of Equity
The board of directors of ECV announces that a notice of a
General Meeting of the Company to be held at the offices of Allenby
Capital at 3 St Helen's Place, London, EC3A 6AB on Wednesday 23
December, 2015 at 10.30 am was posted to shareholders yesterday.
The purpose of the General Meeting is to approve a subscription for
new Ordinary Shares.
A copy of the circular accompanying the notice of the General
Meeting can be found on the Company's website at
www.ecocityvehicles.co.uk and the material information contained in
that circular is set out below.
The website www.ecocityvehicles.co.uk is the Company's website
for the purposes of Rule 26 of the AIM Rules for Companies.
Enquiries:
Eco City Vehicles plc
John Swingewood, Director +44 1444 440 359
Allenby Capital (Nomad and Broker)
Nick Harriss/John Depasquale +44 20 3328 5656
Letter from the Directors
Dear Shareholder,
1. BACKGROUND TO THE SUBSCRIPTION
As you are aware, last year Eco City Vehicles plc (the
"Company") effected a capital reorganization, including a company
voluntary arrangement ("CVA"), that achieved the solvent
restructuring of the Company and the re-admission of the Company's
ordinary shares of 1p each (the "Ordinary Shares") to the AIM
market operated by the London Stock Exchange ("AIM"), following
suspension from trading on AIM on 19(th) September 2014. The
purpose and effect of the CVA was to bind all the historical
unsecured creditors of the Company and clear its historical debts,
including preferential debts. The CVA was fully implemented as of
12(th) November 2015.
A further material subscription of GBP5,000,000 (before
expenses) for 409,836,066 new Ordinary Shares (the "Subscription
Shares") at a price of 1.22p per share (the "Subscription Price")
has been arranged from two significant shareholders, a new
institutional investor and advisor, MXC Capital Limited ("MXC"),
and certain other new investors (together the "Subscribers") to
enable the Company better to pursue its investing policy approved
by shareholders earlier this year. That policy is to invest in
and/or acquire companies and/or assets in the telecommunications,
media and technology sectors where the board of directors of the
Company (the "Board") believes there are opportunities for growth
which, if achieved, will be earnings enhancing for shareholders.
MXC is being retained, through its regulated subsidiary MXC Capital
Markets LLP ("MXCCM"), under an engagement letter pursuant to the
terms of which MXCCM agrees, among other things, to assist the
Company to identify suitable acquisitions.
The Company has also agreed to issue to MXC (or to such other
company within the MXC group of companies as MXC may direct)
warrants ("Warrants") to subscribe for 5% of the issued ordinary
share capital of the Company from time to time; a summary of the
terms of the Warrants is set out in paragraph 3 below.
As an investing company, the Company will be required to make an
acquisition which constitutes a reverse takeover under the rules
for AIM companies as published by the London Stock Exchange from
time to time (the "AIM Rules") or otherwise implement its proposed
investing policy on or before the date falling 12 months from
20(th) January 2015, the date of the adoption of the investing
policy, failing which the Ordinary Shares would then be suspended
from trading on AIM. In the event that the Ordinary Shares (which
would include the Subscription Shares) are so suspended and the
Company fails to undertake a transaction that constitutes a reverse
takeover under the AIM Rules, the admission to trading on AIM would
be cancelled six months from the date of suspension.
2. THE SUBSCRIPTION
A total of 409,836,066 Subscription Shares will be issued to the
Subscribers, who have indicated that they will subscribe
conditional on the resolutions contained in the Notice of General
Meeting which appears on page 5 being passed. The Subscription is
not underwritten.
On the assumption that all the Subscription Shares will be
subscribed for, it is expected that immediately following
completion of the Subscription ("Completion"), the persons who will
hold 3% or more of the issued share capital of the Company will be
as set out in paragraph 4.
As an ancillary but integral part of the Subscription, MXCCM has
been appointed, conditional on Completion, as financial advisor to
assist in identifying, evaluating and, together with the Company's
other professional advisers, executing potential acquisition
opportunities. MXCCM will be paid an annual retainer fee of
GBP30,000 increasing to GBP50,000 on the earlier of the Company
completing its second acquisition and it achieving a market
capitalization of more than GBP30,000,000 for 10 consecutive
business days. In addition MXCCM will receive a corporate finance
fee equal to 2.5% of the enterprise value of any corporate
transactions concluded by the Company. MXCCM has also been granted
the right, conditional on Completion, to appoint a director to the
Board.
In addition to the Subscription, the directors of the Company
(the "Directors") between them are subscribing for 3,278,688 new
Ordinary Shares at the Subscription Price in lieu of receiving
unpaid Directors' fees of GBP40,000.
3. MATERIAL TERMS OF THE WARRANTS
The Company will, at Completion, grant to MXC (or to such other
company within the MXC group of companies as MXC may direct)
Warrants to subscribe on an ongoing basis for Ordinary Shares in
the capital of the Company equating to 5% of the fully diluted
issued ordinary share capital of the Company from time to time.
Additional Warrants will be deemed to have been granted at the
then current placing price by the Company to MXC on the allotment
and issue of new shares in the Company to any person, such that the
number of Warrants held by MXC is at all times equal to 5% of the
Company's fully diluted issued share capital.
This "evergreen" element shall be suspended should MXC no longer
hold 5% or more of the issued share capital of the Company provided
that, if MXC acquires further shares to bring its holding to 5% or
more, the "evergreen" Warrant subscription rights shall be
reinstated. The exercise of the Warrants is linked to the growth in
share price of the Company. If not otherwise exercised, the
Warrants shall lapse after seven years.
4. EFFECT OF THE SUBSCRIPTION
The following table sets out the names of the Subscribers who
will have an interest in 3 per cent or more of the issued share
capital of the Company immediately following Completion of the
Subscription (ignoring the Warrants).
Name Of Subscriber Amount Subscribed Number Of % of
Subscription Enlarged
Shares Share
Capital
MXC GBP1,333,334 109,289,672 24.7
Euroblue Investments
Ltd. GBP1,333,333 109,289,590 26.0
Henderson Global
Investors Ltd. GBP1,333,333 109,289,590 26.0
Hargreave Hale
Ltd. GBP500,000 40,983,607 9.3
Livingbridge
VC LLP GBP250,000 20,491,803 4.6
Harwood Capital
LLP GBP250,000 20,491,803 4.6
Total GBP5,000,000 409,836,066 95.2
Save as disclosed above, no other shareholder will have an
interest in 3 per cent or more of the issued share capital of the
Company immediately following Completion of the Subscription.
John Swingewood currently has an interest in 5,099,493 Ordinary
Shares representing 17.7% of the existing share capital of the
Company. Following the Subscription and his subscribing for
1,639,344 new Ordinary Shares. John Swingewood will have an
interest in 6,738,837 Ordinary Shares representing 1.5% of the
enlarged issued share capital of the Company.
5. RESOLUTIONS AND NOTICE OF GENERAL MEETING
A Meeting of the holders of the Ordinary Shares (the "General
Meeting") is being convened to be held at the offices of Allenby
Capital at 3 St Helen's Place, London, EC3A 6AB on Wednesday 23(rd)
(t) December, 2015 at 10.30 am to consider, and if thought fit, to
approve the following resolutions (the "Resolutions"):
Resolution 1, which is an ordinary resolution, to authorise the
Company to allot and issue up to GBP5,032,800 of new Ordinary
Shares pursuant to Section 551 Companies Act 2006 ("2006 Act");
and
Resolution 2, which is a special resolution, to permit the
allotment and issue of up to GBP5,032,800 of new Ordinary Shares on
a non-pre-emptive basis as if section 561(1) of the 2006 Act did
not apply to such allotment.
6. FORM OF PROXY
Please follow the directions in the form of proxy supplied.
Whether or not you propose to attend the General Meeting, please
complete and submit a form of proxy in accordance with the
instructions printed on the enclosed form. The form of proxy must
be received by no later than 48 hours before the time of the
holding of the General Meeting. A proxy need not be a member.
7. RELATED PARTY TRANSACTION
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