TIDMNAQ
RNS Number : 8090R
NBA Quantum PLC
06 May 2009
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NBA Quantum plc
("NBA Quantum" or "the Company")
Proposed Cancellation of trading on AIM
and Notice of General Meeting
As announced in the Company's interim results released on 30 March 2009 the
Board confirms it is seeking a delisting from AIM of the Company's Ordinary
Shares together with certain related proposals.
A General Meeting is being convened to be held on 28 May 2009 at 11.00 a.m. at
3000 Cathedral Hill, Guildford, Surrey GU2 7UB at which a resolution to seek,
inter alia, Shareholder approval for the cancellation will be proposed.
A circular convening the General Meeting will today be posted to Shareholders
and will shortly be available for download at the Company's website:
www.nbagroup.com
The expected timetable of principal events is as follows:
+-----------------------------------------+--------------------------------+
| | 2009 |
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| | |
+-----------------------------------------+--------------------------------+
| Despatch of the circular | Wednesday 6 May |
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| | |
+-----------------------------------------+--------------------------------+
| Last time and date for receipt of Forms | 11.00 a.m. on Tuesday 26 May |
| of Proxy | |
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| | |
+-----------------------------------------+--------------------------------+
| General Meeting | 11.00 a.m. on Thursday 28 May |
+-----------------------------------------+--------------------------------+
| | |
+-----------------------------------------+--------------------------------+
| Record date | Close of business on Thursday |
| | 28 May |
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| | |
+-----------------------------------------+--------------------------------+
| Expected date for CREST accounts to be | Friday 29 May |
| credited | |
+-----------------------------------------+--------------------------------+
| | |
+-----------------------------------------+--------------------------------+
| Last day for dealings of Ordinary | Thursday 4 June |
| Shares on AIM | |
+-----------------------------------------+--------------------------------+
| | |
+-----------------------------------------+--------------------------------+
| Expected date of cancellation of | with effect from 7.00 a.m. on |
| Ordinary Shares from trading on AIM | Friday 5 June |
+-----------------------------------------+--------------------------------+
| | |
+-----------------------------------------+--------------------------------+
| Expected date by which definitive new | Friday 5 June |
| share certificates are to be despatched | |
+-----------------------------------------+--------------------------------+
| | |
+-----------------------------------------+--------------------------------+
| Expected date by which cheques for | Friday 5 June |
| Fractional Entitlements (where | |
| applicable) are to be despatched | |
+-----------------------------------------+--------------------------------+
| | |
+-----------------------------------------+--------------------------------+
| Expected date on which CREST accounts | Monday 8 June |
| are to be cancelled | |
+-----------------------------------------+--------------------------------+
The full text of the Chairman's letter contained within the circular is set out
below. Definitions in this announcement shall bear the same meaning as those in
the circular to Shareholders.
Dear Shareholder,
Proposed Cancellation, Capital Reorganisation, Re-registration and Capital
Reduction
Introduction
The Group's interim results announced on 30 March 2009 included certain details
concerning the Board's intention to seek a delisting from AIM of the Ordinary
Shares and related proposals. The Board believes that it would be in the
interests of the Company and its Shareholders as a whole to cancel from the
admission to trading on AIM the Ordinary Shares ("the Cancellation"), effect a
share consolidation of the share capital of the Company ("the Capital
Reorganisation"), re-register as a private company ("the Re-registration") and
effect a share capital reduction ("Capital Reduction"), together "the
Transaction". The reasons for and details of the proposed Transaction are set
out below. I am therefore writing to you today to seek the necessary approval to
allow the proposed Transaction to proceed. Notice of a General Meeting of the
Company (at which the Resolutions to give effect to the Transaction will be put
to the Shareholders) is set out on pages 15 and 16 of this document.
Background to and reasons for the proposed Transaction
1. Reasons for proposed Cancellation
Following careful consideration the Board has concluded that it is no longer in
the best interests of the Company or its Shareholders to maintain the Company's
trading facility on AIM and consider that the costs of remaining quoted on AIM
far outweigh the benefits.
As with many other smaller AIM quoted companies, the Group's Shareholder
register is tightly held. Over 80 per cent. of the Shareholders by number listed
on the Group's register own less than 0.6% of NBA Quantum's issued share
capital. The Group suffers from a lack of liquidity in its shares. In the twelve
months to 29 March 2009 (being the latest date before the Company announced its
intention to delist) there were 226 trading days when no Ordinary Shares were
traded on the London Stock Exchange (87 per cent of trading days) and 244
trading days when less than 5,000 Ordinary Shares were traded (94 per cent of
trading days in that period). The average daily volume over the twelve months to
29 March 2009 is less than 4,000 shares, equating to 0.04 per cent of the
Group's current issued share capital. As it is unlikely that the Group will be
issuing new shares as part of a fundraising or as consideration for an
acquisition, the lack of liquidity in its shares and low trading volumes are
likely to continue.
The Group's quotation on AIM involves considerable direct costs which the
Directors estimate amount to approximately GBP60,000 per annum and deem are not
appropriate for a Company of the size of NBA Quantum. Additionally, the
Directors consider that the Company's listing on AIM results in a
disproportionate amount of senior management time being spent in meeting the AIM
Rules and related requirements, including reporting, disclosure and corporate
governance requirements. The Directors believe that the interest of the Company
and the Shareholders would best be served by removing these costs and allowing
the Company's business to develop outside the constraints to which it is
currently subject.
The Company is aware that there is limited institutional investor appetite for a
Company of the size of NBA Quantum. The Directors do not therefore consider that
the Company will be able to attract and maintain an institutional investor base,
especially in light of the current economic environment.
In light of the factors detailed above, the Directors have concluded that the
Cancellation be in the interests of the Company and its Shareholders as a whole.
Rule 41 of the AIM Rules for Companies requires an AIM company which wishes the
London Stock Exchange to cancel admission of its shares to trading on AIM to
notify such intended cancellation and separately inform the London Stock
Exchange of its preferred cancellation date at least 20 business days prior to
such date. The Cancellation is conditional upon the consent of not less than 75
per cent of votes cast by Shareholders given at the General Meeting.
The Company has notified the London Stock Exchange of its preferred cancellation
date and if the relevant resolution is approved at the General Meeting it is
anticipated that Cancellation will occur with effect from 7.00 a.m. on Friday 5
June 2009.
2. 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 shares on AIM or any other market or tracking exchange;
(b) the Company would not be bound to announce material events,
administrative charges 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; and
(d) the Company will no longer be subject to the AIM Rules and Shareholders
will no longer be required to vote on certain matters as provided in the AIM
Rules.
The Board will, however, continue to:
(a) continue to hold general meetings in accordance with the applicable
statutory requirements and the Company's articles of association; and
(b) continue to send Shareholders copies of the Company's audited accounts in
accordance with the applicable statutory requirements.
Shareholders should note that following the Cancellation the Company will remain
subject to the provisions of The Takeover Code on the basis set out in those
provisions.
3. Following the Cancellation
The Directors are aware that Shareholders may still wish to acquire or dispose
of Shares. The Directors are considering making available a matched bargain
settlement. Under this facility Shareholders or persons acquiring Shares will be
able to leave an indication with the matched bargain settlement facility
provider that they are prepared to buy or sell at an agreed price. In the event
that the matched bargain settlement facility provider is able to match that
order with an opposite sell or buy instruction, the matched bargain settlement
facility provider will contact both parties and then effect the order. The
contact details of any matched bargain settlement facility provider, if
arranged, will be made available to Shareholders on the Company's website at
www.nbagroup.com.
4. Reasons for proposed Capital Reorganisation, Re-registration and Capital
Reduction
The Company's authorised share capital currently is GBP10,000,000 comprising of
100,000,000 Ordinary Shares of 10p of which 7,329,372 Existing Ordinary Shares
are in issue.
The Company has approximately 180 Shareholders. Some 130 of these Shareholders
hold approximately 6,000 of the Existing Ordinary Shares and represent less than
1% of the current issued share capital of the Company. The Directors consider
that a more appropriate capital structure is therefore now required. The Capital
Reorganisation will also offer an exit route for some of the minority
Shareholders. Further, the proposed Capital Reorganisation and Re-registration
will reduce the administrative burden of the Company and the Re-registration
will make the Company easier to manage under the lighter regulatory regime for
private companies introduced by the Act.
The Directors are, therefore, proposing to effect the Capital Reorganisation and
Re-registration, details of which are set out below.
Summary of the Proposals
The Board will be putting resolutions to effect the proposals as detailed below
before the Shareholders at the General Meeting, to be held on Thursday 28 May
2009. The Resolutions provide for:-
i) the authority to allot 628 Existing Ordinary Shares free of statutory
pre-emption provisions;
ii) the consolidation of the Company's Existing Ordinary Shares into New
Ordinary Shares;
iii) consequential amendments to the Memorandum of Association and
Articles of Association and approval of
the Transfer Placing
Agreement;
iv) cancellation of the Shares from admission to trading on AIM;
v) re-registration as a private limited company;
vi) authorisation of actual or potential conflicts; and
vii) the approval of the use by the Company of electronic communications
as permitted by the Act.
The Resolutions are set out in full in the Notice of General Meeting.
The Shareholders should note that, if the Re-registration Resolution becomes
effective, they will continue to receive the protections afforded by the City
Code on Takeovers and Mergers for so long as the Company falls within section
3(a)(ii) A-D of the City Code on Takeovers and Mergers. The City Code will
continue to apply to the Company for a period of 10 years commencing from the
day on which the admission of its shares on AIM is cancelled.
Details of Proposed Capital Reorganisation
The Directors are proposing to consolidate the Existing Ordinary Shares on the
basis of 1 New Ordinary Share for every 1,000 Existing Ordinary Shares held,
creating New Ordinary Shares of GBP100 each.
To effect the consolidation, it will be necessary to issue and allot 628
additional Ordinary Shares so that the Company's issued share capital is exactly
divisible by 1,000. Conditional upon and subject to the passing of the
Resolutions specified above, the Company will issue the 628 Ordinary Shares for
cash at an issue price of 10p per Existing Ordinary Share to Peter
Elliott-Hughes (who will receive 297 Ordinary Shares), Robert Jervis (who will
receive 275 Ordinary Shares) and Alan Rumford (who will receive 56 Ordinary
Shares), being the 3 members of the concert party ("Concert Party"). The issue
price of 10p per Existing share is 2.87p higher than the last traded price of
7.13p on 13 January 2009.
Accordingly, immediately prior to the consolidation the Company's issued
ordinary share capital will comprise 7,330,000 Ordinary Shares. The Directors
estimate that the number of Shareholders following the Capital Reorganisation
becoming effective would reduce by approximately 72 per cent to approximately 56
Shareholders.
Other than the change in the nominal value, the New Ordinary Shares arising on
completion of the Capital Reorganisation will have the same rights as the
Existing Ordinary Shares including, without limitation, the same voting,
dividend and other rights.
The consolidation of the Company's shares would be effected by Resolution 3 on
the Notice of the General Meeting. Resolution 3 is conditional on Resolutions 1
and 2 also being passed as they are necessary to ensure that the Company's
issued share capital is exactly divisible by 1000. Resolution 4 is part of the
Directors' proposal for dealing with the fractional entitlements arising from
the consolidation.
A consequence of the terms of the Capital Reorganisation is that holders of
fewer than 1,000 Existing Ordinary Shares will not be entitled to receive a New
Ordinary Share and holders of more than 1,000 Existing Ordinary Shares will only
be entitled to one New Ordinary Share for every 1,000 Existing Ordinary Shares
they hold at the Record Date. They will not be entitled to receive New Ordinary
Shares in respect of their Fractional Entitlements. Further information about
the treatment of Fractional Entitlements is set out below.
Fractional Entitlements
Where, as a result of the consolidation of the Existing Ordinary Shares
described above, any Shareholder is entitled to a fraction only of a New
Ordinary Share (a "Fractional Shareholder" and "Fractional Entitlement"
respectively), all such fractions shall be aggregated by the Company so as to
form New Ordinary Shares.
The Company has entered into a Transfer Placing Agreement (further details of
which are set out below) to sell these New Ordinary Shares on behalf of the
Fractional Shareholders, to each of Peter Elliott-Hughes, Robert Jervis and Alan
Rumford (being the three members of the Concert Party), pursuant to the Transfer
Placing Agreement, subject to and conditional upon the Resolutions (other than
the Re-registration Resolution) being passed at the General Meeting.
The proceeds of the sale will then be distributed to the Fractional Shareholders
in proportion to the fractions of New Ordinary Shares held by each of them,
except where the payment due to any Fractional Shareholder would be less than
GBP5 in which case, for purely economic reasons, the Directors have decided, in
the exercise of their discretion under Article 6 of the Company's Articles of
Association to retain the proceeds of sale and donate these to the National
Society for the Prevention of Cruelty to Children (NSPCC).
As stated above, on completion of the Capital Reorganisation any Shareholder
holding fewer than 1,000 Existing Ordinary Shares on the Record Date will no
longer be a Shareholder in the Company. This is because such Shareholders will
not have any New Ordinary Shares. Instead, such Shareholders would receive a
cash sum equal to the number of Existing Ordinary Shares held by them at the
Record Date multiplied by 10p, being the price to be paid for the Fractional
Entitlements by Peter Elliott-Hughes, Robert Jervis and Alan Rumford (the three
members of the Concert Party) pursuant to the Transfer Placing Agreement,
provided, as explained above, the payment due is GBP5 or more.
Any Shareholder holding more than 1,000 Existing Ordinary Shares, on the Record
Date, but a holding which is not exactly divisible by 1,000, will be entitled to
one New Ordinary Share for each 1,000 Existing Ordinary Shares, held together
with the proceeds of sale of his or her Fractional Entitlement to a New Ordinary
Share (which will be aggregated and sold as described above) subject to the
minimum payment of GBP5. The Appendix to this document sets out worked examples
of the effect the Capital Reorganisation will have on Shareholders at different
levels of shareholding.
The Record Date for the proposed Capital Reorganisation (being the date on which
the Fractional Entitlements will be calculated) will be the close of business on
Thursday 28 May 2009 and, if approved by Shareholders, it is expected that the
proposed Capital Reorganisation will become effective on Thursday 28 May 2009.
Placing of the Fractional Entitlements
The Company has entered into a Transfer Placing Agreement with Peter
Elliott-Hughes, Robert Jervis and Alan Rumford (the three members of the Concert
Party), whereby they have undertaken to acquire the Fractional Entitlements at a
price of 10p per share for each Existing Ordinary Share. The price for the
Fractional Entitlements has been calculated at 10p per share which is 2.87p
higher than the last traded price of 7.13p on 13 January 2009. The Transfer
Placing Agreement is conditional on the approval by Shareholders of the
Resolutions (other than the Re-registration Resolution) to be proposed at the
General Meeting of the Company to be held on Thursday 28 May 2009 including
approving the entering into of the Transfer Placing Agreement. In anticipation
of the Capital Reorganisation, Peter Elliott-Hughes, Robert Jervis and Alan
Rumford (the three members of the Concert Party) have deposited the sum of
GBP2,100 with IBB Solicitors as security for their obligations under the
Transfer Placing Agreement. Following the Capital Reorganisation becoming
effective, Peter Elliott-Hughes will have a beneficial interest of approximately
23.98 per cent of the issued share capital of the Company, Robert Jervis will
have approximately 22.22 per cent and Alan Rumford will have approximately 4.49
per cent. These percentages are within 0.3 per cent of their existing
shareholdings.
As members of the Concert Party have a shareholding in excess of 50 per cent in
the Company, the purchase of the New Ordinary Shares arising from Fractional
Entitlements will not incur any obligation under Rule 9 to make a general offer
to Shareholders.
Details of the Proposed Capital Reduction
In the Group's interim results announced on 30 March 2009, it was stated that
the Board was considering effecting a share capital reduction to improve the
Company's balance sheet. The Board considers that such an exercise would improve
its headroom for paying future dividends and would be in the interests of the
Company and its Shareholders.
The Board is considering using the simplified procedure set out in the Act to
effect the share capital reduction in order to avoid the need to seek court
approval, which is a time consuming and expensive exercise. This alternative
procedure is only available to private limited companies and will not be
available to the Company until the re-registration process has been completed
and the Registrar of Companies has issued a certificate of re-registration as a
private limited company to the Company.
Accordingly the Board confirms it remains its intention to seek Shareholders
approval, at an appropriate opportunity following completion of the
re-registration process, to a reduction of the Company's share capital under the
simplified process.
Settlement
If you hold a share certificate in respect of your Existing Ordinary Shares,
your certificate will no longer be valid from the time the proposed Capital
Reorganisation becomes effective. If you hold more than 1,000 Existing Ordinary
Shares on the Record Date you will be sent a new certificate evidencing the New
Ordinary Shares to which you are entitled under the Capital Reorganisation. Such
certificates will be despatched on Friday 5 June 2009. Upon receipt of a new
certificate, you should destroy any old certificates. Pending the despatch of
the new certificates, transfers of New Ordinary Shares will be certified against
the Company's share register.
If you hold your Existing Ordinary Shares in uncertificated form, you should
expect to have your CREST account cancelled and you will be issued in paper form
with the New Ordinary Shares to which you are entitled on implementation of the
Capital Reorganisation on Thursday 28 May 2009 or as soon as practicable after
the Capital Reorganisation becomes effective.
Monies payable to Shareholders in respect of the sale (on behalf of Fractional
Shareholders) of their fractional entitlement to the New Ordinary Shares will be
paid by cheque to the Shareholders entitled to such payment (at such
Shareholder's risk) and such cheques are expected to be despatched no later than
Friday 5 June 2009 subject to a minimum threshold of GBP5 being payable. All
cash payments will be made in pounds sterling by cheque drawn on a branch of a
UK clearing bank and despatched by first class post.
Effect of the proposed Capital Reorganisation on the Share Option Scheme and
Convertible Securities
As part of the Capital Reorganisation and conditional upon the Resolutions
(other than the Re-registration Resolution), Peter Elliott-Hughes has agreed to
surrender to the Company the benefit of the Share Options issued to him pursuant
to the Share Option Scheme.
Following such surrender, there will no longer be any outstanding share options
in issue under the Share Option Scheme or otherwise.
The Company does not have outstanding any securities convertible into Shares.
Electronic Communications
A resolution will be proposed at the General Meeting to enable the Company to
take advantage of the provisions of the Act which allows website communication
to Shareholders. The main advantages of website communications are the faster
access to important information about the Company it affords to Shareholders and
the environmental and cost saving benefits of reducing the number of printed
documents required to be distributed to Shareholders. A separate letter is
enclosed with this document which sets out the options you will have as to how
you receive formal shareholder information from the Company in the future
subject to the passing of this resolution. Please read the document carefully.
Taxation
The following statements are intended only as a general guide to the current tax
position under UK taxation law and practice. They relate only to certain limited
aspects of the UK tax position of Shareholders who are the beneficial owners of
Existing Ordinary Shares and who are resident or (in the case of individuals)
ordinarily resident in the UK for tax purposes and who hold their shares in the
Company beneficially as an investment (and not as security to be realised in the
course of a trade). The following is not, and is not intended to be, an
exhaustive summary of the tax consequences of acquiring, holding and disposing
of Existing Ordinary Shares or New Ordinary Shares. A Shareholder who is any
doubt as to his or her tax position or is subject to tax in any jurisdiction
other than the UK should consult his or her duly authorised professional adviser
without delay.
The proposed Capital Reorganisation should constitute a reorganisation of the
Company's share capital for the purposes of section 126 of the Taxation of
Chargeable Gains Act 1992. For the purposes of UK taxation of chargeable gains,
to the extent that you receive New Ordinary Shares under the proposed Capital
Reorganisation, you should not be treated as making a disposal of any of your
Existing Ordinary Shares or an acquisition of New Ordinary Shares. The New
Ordinary Shares will be treated as the same asset as, and as having been
acquired at the same time and for the same aggregate cost as, the holding of
Existing Ordinary Shares from which they derive.
Any entitlements to fractions of New Ordinary Shares arising as a result of the
Capital Reorganisation will be consolidated and sold (as noted above) on behalf
of the Shareholders entitled to the same.
If you hold more than 1,000 Existing Ordinary Shares and under the proposed
Capital Reorganisation you receive cash as a result of the sale of the
Fractional Entitlements, you may be entitled, under the current practice of HM
Revenue & Customs, to treat the cash received from the part disposal as a
deduction from any base cost you may have in your Existing Ordinary Shares (and
accordingly, the New Ordinary Shares held after the proposed Capital
Reorganisation) rather than as consideration for a disposal of the Existing
Ordinary Shares held representing such Fractional Entitlement. This treatment is
only available where the receipt is regarded by HMRC as "small" i.e. the amount
you receive does not exceed GBP3,000, or does not exceed 5 per cent. of the
value of the asset in respect of which it is paid, and the amount you receive is
less than the allowable base cost of the asset.
If the cash received is not regarded by HMRC as "small" then a part disposal
calculation will be required to set the cash against the part of the base cost
relating to the Fractional Entitlements in the Existing Ordinary Shares giving
rise to a taxable gain or loss on the disposal.
If you hold fewer than 1,000 Existing Ordinary Shares and, under the proposed
Capital Reorganisation you receive cash as a result of the sale of the
Fractional Entitlements, the cash received will be set against the whole of the
base cost of your Existing Ordinary Shares giving rise to a taxable gain or loss
on the disposal.
No liability to stamp duty or stamp duty reserve tax will be incurred by a
holder of Existing Ordinary Shares as a result of the proposed Capital
Reorganisation.
General Meeting
You will find set out at the end of this document a notice convening the General
Meeting to be held at 3000 Cathedral Hill, Guildford, Surrey GU2 7YB at 11.00
a.m. on Thursday 28 May 2009 .
Action to be taken
You are requested to complete and sign the enclosed Form of Proxy for use at the
General Meeting and to return it to the Company's registrars by post or by hand
to Capita Registrars, Proxy Department, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU, so as to arrive as soon as possible and, in any event,
not later than 11.00 a.m. on Tuesday 26 May 2009. Completion and return of a
Form of Proxy will not prevent you from attending and voting at the meeting in
person should you wish to do so.
Recommendation
The Board consider that the proposals are most likely to promote the success of
the Company for the benefit of its Shareholders. Accordingly, the Board
recommend that Shareholders vote in favour of the Resolutions to be proposed at
the General Meeting, as they intend to do in respect of their own beneficial
holdings which in aggregate amount to 3,370,874 Existing Ordinary Shares,
representing approximately 45.9913 per cent of the Company's issued share
capital carrying voting rights.
Yours sincerely,
Robert Jervis
Chairman
Contact
NBA Quantum PLC
Bob Jervis, Chairman Tel: 01483 243531
Brewin Dolphin Investment Banking (NOMAD) Tel: 0845 213 4730
Mark Brady / Alison Barrow
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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