Cancellation of admission to trading on AIM
March 02 2009 - 3:49AM
UK Regulatory
TIDMOCZ
RNS Number : 1016O
OCZ Technology Group, Inc.
02 March 2009
2 March 2009
OCZ Technology Group, Inc.
Proposed cancellation of admission to trading on AIM
OCZ Technology Group, Inc. ("OCZ" or "the Company", AIM: OCZ), a worldwide
leader in innovative, ultra-high performance and high-reliability computer
components, announces that it has today published a circular to shareholders of
the Company ("Shareholders") to seek their approval for the cancellation of
admission to trading on AIM ("Delisting") of the Company's common shares
("Common Shares") and depositary interests ("Depositary Interests").
The Company gives notice of an extraordinary general meeting ("EGM") to be held
on 25 March 2009 at 8.30 a.m. (California time) at the offices of DLA Piper US
LLP at 2000 University Avenue, East Palo Alto, California 94303, United States
and concurrently at 4.30 p.m. (GMT) at the offices of DLA Piper UK LLP at 3
Noble Street, London EC2V 7EE at which, amongst others, a resolution proposing
the Delisting will be put to Shareholders.
The directors of the Company ("Directors" or "Board") unanimously consider the
Delisting to be in the best interests of the Company and its Shareholders as a
whole. Further to the announcement of 10 November 2008, the Company now intends
to pursue a sole listing of its Common Shares in the U.S.
Background
The Company was admitted to trading on AIM on 21 June 2006 at an initial
flotation price of 65 pence per share, representing a market capitalisation of
GBP27.2 million. Since that date its share price has fluctuated in a range
between approximately 3 pence and 176 pence per share and its market
capitalisation has fluctuated between GBP1.6 million and approximately GBP90
million. The closing middle market price per share was 8.25 pence on 27 February
2009, being the last business day prior to the release of this announcement,
giving the Company a market capitalisation of approximately GBP4.3 million.
When the Company was admitted to trading on AIM, it had annual revenues of
US$35.7 million. In the six month period ended 31 August 2008, the Company
generated revenues of US$79.6 million. Monthly revenues, using the prevailing
GBP/USD exchange rate, typically exceed GBP10 million. Whilst the Board is aware
of perceived concerns resulting from the current state of the DRAM market, other
industry specific issues and the lack of liquidity in global credit markets, it
believes that the Company's financial position, the continued growth in its core
business and its successful diversification into new, higher margin product
areas justifies optimism for the future and a market capitalisation in excess of
its net asset value. The current market capitalisation is significantly below
the Company's net asset value as at 31 August 2008 of $28.4 million (GBP19.8
million using the prevailing GBP/USD exchange rate), based upon the unaudited
interim results for the six month period ended 31 August 2008. For these
reasons, the Board believes that the current market capitalisation significantly
undervalues the Company.
Given the poor share price performance of the Company and relative lack of
trading liquidity, the Directors have undertaken a review of the benefits and
disadvantages of the Company continuing to be admitted to trading on AIM,
recognising, inter alia, the following key factors:
* The Company is unable to raise capital through institutional or other investors
or use its shares as currency for making acquisitions without causing
significant and unacceptable dilution to Shareholders and the Directors do not
expect this situation to change in the foreseeable future;
* The Directors consider that the U.S. capital markets offer a better opportunity
for both the valuation of the Company and the liquidity of its Common Shares;
and
* The Directors are advised that retaining the AIM quotation would adversely
affect the prospect of achieving an appropriate valuation on U.S. capital
markets.
The Board now believes that for the reasons referred to above, among others, it
should seek the cancellation of the admission of the Common Shares and
Depositary Interests to trading on AIM. Following the cancellation of admission
and prior to seeking a listing in the United States, as set out below, the
Company will seek to arrange an off-market trading facility, allowing
shareholders an opportunity to continue to be able to buy or sell the Company's
shares. Further information is set out below.
Delisting
The Company has notified the London Stock Exchange of the proposed Delisting
and, subject to the appropriate resolution being passed at the EGM, the London
Stock Exchange has confirmed that the cancellation of trading in the Common
Shares on AIM will be effective from 7.00 a.m. (GMT) on 2 April 2009.
The Notice of EGM contains a special resolution (Resolution 1), which proposes
that the Company's admission to trading on AIM is cancelled. The Delisting is
conditional upon Resolution 1 being passed by not less than 75 per cent. of
votes cast by Shareholders at the EGM.
Following the Delisting
Following the Delisting, the Company will seek to arrange a matched bargain
settlement facility. Under this facility, Shareholders or persons wishing to
acquire or dispose of (as appropriate) Common Shares would 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. Shareholders who
do not have their own broker may need to register with the matched bargain
settlement facility provider as a new client. If and when the facility is
arranged, the contact details of the matched bargain settlement facility
provider will be made available to Shareholders on the Company's website
(www.ocztechnology.com).
U.S. Capital Markets
The Board recognises the significant contribution to the Company's growth, which
has been made by investors who have supported it since its admission to trading
on AIM, and it is their hope that a new listing on a U.S. capital market should
benefit Shareholders by providing increased liquidity and enhanced market
capitalisation. Therefore, the Company intends to file a registration statement
with respect to the Common Shares with the United States Securities and Exchange
Commission and seek a listing in the U.S. Once such registration is effective,
the Company would be obligated to issue public reports in the U.S.
The Directors believe that the U.S. capital markets are a better fit for the
Company given the large number of U.S. technology companies listed in the U.S.
capital markets, better financial analyst coverage of the memory industry in the
U.S. and the higher liquidity of certain markets in the U. S.
Recommendation
The Directors unanimously consider the Delisting and other matters referred to
in this announcement to be in the best interests of the Company and its
Shareholders as a whole and the Directors recommend that Shareholders vote in
favour of the resolutions to be proposed at the EGM as they intend to in respect
of their beneficial holdings of Common Shares amounting to, in aggregate,
14,226,939 Common Shares, representing approximately 27.25 per cent of the
current issued share capital of the Company.
Ryan Petersen, Chief Executive of OCZ commented:
"Although we are disappointed to leave AIM, we believe it is the best course of
action for OCZ and its shareholders to apply for a single listing in the US,
where we feel there is a greater appetite among investors for innovative and
rapidly growing technology companies such as ours. We thank all our UK investors
for their continuing support and believe this move will align OCZ's market value
with what we consider to be its true worth."
A circular setting out full details of the Delisting and certain related issues
has been posted to Shareholders today and will be available from the Company's
website (www.ocztechnology.com).
Enquiries:
+--+-------+-----------------------------------------+------------------------------+
| OCZ Technology Group, Inc | |
+----------------------------------------------------+------------------------------+
| | Ryan Petersen, Chief Executive Officer | +1 408 733 8400 |
+----------+-----------------------------------------+------------------------------+
| John East and Partners Limited | |
+----------------------------------------------------+------------------------------+
| | Bidhi Bhoma/Simon Clements | +44 20 7628 2200 |
+--+-------------------------------------------------+------------------------------+
| College Hill | |
+----------------------------------------------------+------------------------------+
| | Adrian Duffield/Carl Franklin | +44 20 7457 2020 |
+--+-------+-----------------------------------------+------------------------------+
Note to editors
OCZ develops, produces, and distributes high-performance computer components
including flash memory storage, memory modules, thermal management solutions and
computer power supplies, designed to make computers run faster, more reliably
and more efficiently.
With a reputation for innovation and excellence in a demanding and discerning
market, OCZ extended its market leadership when it acquired PC Power & Cooling
in May 2007, to become a global force in high-performance power supply and
cooling products. In October 2007, it acquired high performance laptop and
desktop computer systems maker Hypersonic PC to further diversify its product
offerings.
Based in the heart of Silicon Valley, OCZ employs approximately 300 staff across
offices in the USA (Sunnyvale and San Diego), Canada, Holland and its
manufacturing and logistics centre in Taiwan.
www.ocztechnology.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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