TIDMRES
RNS Number : 9367E
Rugby Estates PLC
16 May 2013
16 May 2013
Rugby Estates Plc
("Rugby" or the "Company" or the "Group")
Proposed disposal of the Company's remaining property
portfolio
Proposed cancellation of admission of the Ordinary Shares to
trading on AIM
Proposed re-registration of the Company as a private limited
company
Proposed adoption of new articles of association
and
Notice of General Meeting
Summary:
-- Process of realising Rugby's property portfolio and returning
proceeds to Shareholders, as originally announced in December 2008,
now almost complete:
- only two assets remaining to be sold; and
- aggregate of GBP51.8 million in cash returned to Shareholders to date.
-- The Board continues to believe that the solvent liquidation
of the Company will, in due course, be the most effective way of
returning the final value in the Company to its Shareholders. This
will follow the ultimate realisation of the Group's residential
development site at Chilton Trinity, Bridgwater, Somerset for which
discussions are in progress with a leading UK housebuilder on a
joint venture and/or deferred consideration basis.
-- Taking into account anticipated further costs, the Board
currently expects to announce a further return of cash to
Shareholders in August 2013 of 160 pence per Ordinary Share.
Following this, holders of shares worth GBP213 in January 2009 will
have received GBP310 in cash and have six Ordinary Shares remaining
which the Directors believe will have a value of between GBP5 and
GBP12 when finally realised following the solvent liquidation of
the Company.
-- In light of the Group's relatively small market
capitalisation of less than GBP4 million, the fact that, since 31
March 2013, it has had no permanent staff other than the Directors,
its office is being closed down and taking into account other key
factors relating to costs and liquidity, the Directors consider
that it is no longer viable for the Company to remain as a quoted
company and as a result are seeking the approval of its
Shareholders to:
- dispose of its remaining property portfolio;
- cancel admission of the Ordinary Shares to trading on AIM;
- re-register the Company as a private limited company; and
- adopt the New Articles.
-- The Board is aware that following the proposed AIM
Cancellation, Shareholders may still wish to acquire or dispose of
their Ordinary Shares and, accordingly, intends to take steps to
create and maintain a matched bargain settlement facility.
-- The Company has received irrevocable undertakings from
Shareholders and Directors to vote in favour of the Resolutions in
respect of, in aggregate, 244,233 Ordinary Shares, representing
approximately 22.36 per cent of Rugby's current issued share
capital and letters of intention from Shareholders to vote in
favour of the Resolutions in respect of, in aggregate, 67,771
Ordinary Shares, representing approximately 6.20 per cent. of
Rugby's current issued share capital.
-- Accordingly, the Board has notified the London Stock Exchange
pursuant to Rule 41 of the AIM Rules of its intention to cancel
admission of the Ordinary Shares to trading on AIM. Each of the
Proposals is subject to Shareholders' approval at the General
Meeting, which will be held at 11.00 a.m. on 3 June 2013.
-- The anticipated last day of trading of the Group's Ordinary
Shares is 17 June 2013, with the cancellation of trading of the
Ordinary Shares on AIM expected to take place from 7.00 a.m. on 18
June 2013.
-- The circular which convenes the General Meeting is being
posted to Shareholders today and will be available tomorrow on the
Company's website, www.rugbyestates.plc.uk.
David Tye, Chairman, commented:
"The process of realising Rugby's property portfolio and
returning proceeds to Shareholders has now been largely completed.
As outlined previously, we are taking the necessary steps towards
the cancellation of the admission of the Company's shares to
trading on AIM. The Directors will, however, continue to work hard
to deliver the optimal outcome and value for shareholders in the
coming months, including another proposed return of 160 pence per
Ordinary Share which we expect to announce in August."
For further information:-
David Tye, Chairman Rugby Estates 020 7016 0050
Andrew Wilson, Chief Executive www.rugbyestates.plc.uk
Stephanie Highett
Dido Laurimore
Will Henderson FTI Consulting 020 7831 3113
Sanlam Securities
Lindsay Mair / Scott Mathieson UK Limited - Nominated
(Nomad) / Simon Bennett (Broker) Adviser and Broker 020 7628 2200
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Posting of this circular and 16 May 2013
Form of Proxy to Shareholders
--------------------------------- ------------------------------
Latest time and date for receipt 11.00 a.m. on 1 June 2013
of Forms of Proxy
--------------------------------- ------------------------------
General Meeting 11.00 a.m. on 3 June 2013
--------------------------------- ------------------------------
Last day for trading Ordinary 17 June 2013
Shares on AIM
--------------------------------- ------------------------------
Expected cancellation of trading with effect from 7.00 a.m. on
of Ordinary Shares on AIM 18 June 2013
--------------------------------- ------------------------------
All references to time in this statement are to London time,
unless otherwise stated.
LETTER FROM THE CHAIRMAN
Rugby Estates plc
(Incorporated and registered in England and Wales with
registered number 02548935)
Registered Office:
4 Farm Street
London
W1J 5RD
16 May 2013
David Tweeddale-Tye (Executive Chairman)
Andrew Wilson (Chief Executive Officer)
Stephen Jones (Finance Director)
John Jackson (Non-executive director)
David Lindop (Non-executive director)
Dear Shareholder
Proposed disposal of the Company's remaining property portfolio,
proposed cancellation of admission of Ordinary Shares to trading on
AIM, proposed re--registration of the Company as a private limited
company, proposed adoption of new articles of association and
notice of General Meeting
Introduction
In December 2008, following a strategic review, the Board
announced its intention to realise Rugby's property portfolio and
return the cash generated to its Shareholders. This process is now
almost complete with only two properties remaining to be sold and
an aggregate of GBP51.8 million having been returned to
Shareholders to date compared to a market capitalisation of GBP36.4
million at 31 January 2009.
As reported in the Company's results for the six months ended 31
July 2012, which were announced on 31 October 2012, the Board
continues to believe that the solvent liquidation of the Company
will, in due course, be the most effective way of returning the
final value in the Company to its Shareholders. In the interim, the
Directors consider that it would be neither practical nor cost
effective to hand over any outstanding matters to a liquidator
until all the remaining properties in the Company's portfolio have
been sold.
As a result of recent sales, the Group held available cash
balances of GBP3.0 million as at 14 May 2013. Taking into account
currently contracted and expected transactions, the Board currently
estimates that after reserving monies to settle the Group's current
and expected liabilities and for the estimated further costs of
managing the Group and its assets and liabilities through to the
ultimate winding up of the Group, the Company will be in a position
to announce a further return of cash to Shareholders of 160 pence
per Ordinary Share in August 2013.
The Company proposes the disposal of its remaining property
portfolio, the cancellation of admission of the Ordinary Shares to
trading on AIM, the re-registration of the Company as a private
limited company and the adoption of the New Articles in connection
with such matters. The purpose of this letter is to explain the
rationale behind these Proposals, why the Directors unanimously
consider the Proposals to be in the best interests of the Company
and its Shareholders as a whole, and to seek your approval for the
steps necessary to facilitate the Proposals. The notice of General
Meeting, which is being convened in connection with the Proposals
and will be held at the offices of Nabarro LLP, Lacon House, 84
Theobald's Road, London WC1X 8RW at 11.00 a.m. on 3 June 2013, is
set out at the end of this statement.
The Board has received irrevocable undertakings to vote in
favour of the Resolutions from certain Shareholders amounting to
97,299 Ordinary Shares, representing, in aggregate, approximately
8.90 per cent. of Rugby's current issued share capital.
In addition, the Directors who hold Ordinary Shares have
irrevocably undertaken to vote in favour of the Resolutions in
respect of their aggregate holding of 146,934 Ordinary Shares,
representing, in aggregate, approximately 13.45 per cent. of
Rugby's current issued share capital.
The Company has therefore received irrevocable undertakings from
Shareholders to vote in favour of the Resolutions in respect of, in
aggregate, 244,233 Ordinary Shares, representing approximately
22.36 per cent. of Rugby's current issued share capital.
The Board has also received a letter of intention from certain
Shareholders confirming that it is their intention to vote in
favour of the Resolutions in respect of their aggregate holding of
67,771 Ordinary Shares, representing approximately 6.20 per cent.
of Rugby's current issued share capital.
In addition, the Directors have been advised that Rugby Estates
plc Retirement Benefit Scheme will vote in favour of the
Resolution, in respect of 34,055 Ordinary Shares, representing
approximately 3.12 per cent. of Rugby's current issued share
capital.
Draft unaudited financial information for the year ended 31
January 2013
The financial information set out in more detail in Appendix I
to this statement is unaudited, in draft form and does not
constitute statutory accounts. The final audited financial
statements for the year ended 31 January 2013 will be completed and
sent to Shareholders within the statutory period. The final audited
results may differ from the information in this statement due to
revision of accounting estimates, accounting treatment or the audit
process.
Trading update
The Group's draft unaudited results for the year ended 31
January 2013 are set out in Appendix I of this statement. In
accordance with current accounting regulations the Group's
unaudited financial statements for the year ended 31 January 2013,
as with those of the previous year, have not been prepared on a
going concern basis as the planned liquidation of Rugby's portfolio
and the significant reduction in the Company's operations are, as
more fully described above, now nearing finalisation. The key
performance indicator remains the estimate of the value that
Shareholders will receive on a solvent liquidation. Taking into
account the expected return of cash to Shareholders of 160 pence
per Ordinary Share, which is expected to be announced to
Shareholders in August 2013, on the basis of current expectations,
final payments to Shareholders will amount to between 90 and 200
pence per Ordinary Share. This compares to the Closing Price of 335
pence per Ordinary Share on 15 May 2013, the last practical date
before the publication of this statement.
The draft unaudited result for the year ended 31 January 2013
was a loss before taxation of GBP3.5 million (2012: loss of GBP3.2
million). The principal items included within the loss before
taxation for the year were a reduction in the net realisable value
of the Group's remaining property portfolio of GBP1.5 million
(2012: GBP3.1 million) and restructuring costs incurred in winding
down the Company's operations of GBP1.7 million (2012: GBPnil).
Total comprehensive expense for the year, which includes taxation
and changes in the fair value of investments, was GBP3.5 million
(2012: GBP3.4 million).
In the second half of the year, the Group continued with its
programme of property disposals and, notwithstanding the poor
market conditions, GBP0.4 million was realised from the sale of the
office building known as the Cloisters in Edgbaston, Birmingham.
The total value of properties realised during the year amounted to
GBP5.1 million (2012: GBP4.8 million). These sales meant that there
was a reduction in rental income received during the year to GBP0.6
million (2012: GBP1.4 million). The Group's fee income totalled
GBP1.0 million (2012: GBP1.3 million). The appointment of Rugby
Asset Management Limited ("RAM") as property adviser to O Twelve
Estates Limited was terminated with effect from 12 March 2013. RAM
has no further clients and has accordingly now ceased
operations.
The Group's draft unaudited net assets at 31 January 2013 were
GBP5.4 million. The Directors are of the opinion that the total net
amount which will be realised up to the final liquidation of the
Company, and will thus be available to return to Shareholders will
be between GBP2.7 million and GBP3.9 million, equivalent to
approximately 250 pence to 360 pence per Ordinary Share. Of this,
the Directors currently intend to announce a return of cash to
Shareholders of 160 pence per Ordinary Share in August 2013, with
the balance to be paid after the sale of the Chilton Trinity site.
This range is less than that shown in the unaudited draft financial
statements which do not provide for the costs of running the Group
until its liquidation or the costs of the liquidation process
itself. The wide range reflects, in particular, the considerable
uncertainty of both the timing and the amount that may be realised
from the Chilton Trinity site, which may be materially higher or
lower than the estimated figure in the unaudited draft financial
statements. The Group's running costs and liquidation costs cannot
be predicted with any certainty. The Group has been an active
property trader, investor and manager for over 20 years and has
various residual assets and liabilities which may realise or be
settled at amounts other than those currently estimated in the
unaudited draft financial statements. The Group has a number of
subsidiaries, each of which will need to be wound up before the
Company can make final cash payments to Shareholders.
Property portfolio
As at 31 January 2013, the carrying value of the five remaining
properties within the Group was GBP4.4 million (2012: GBP11.4
million). The market for secondary properties outside London has
remained weak and this has hampered the Company's efforts to
realise the portfolio. However, since 31 January 2013 the Company
has exchanged contracts to sell the retail property at Surbiton and
the offices at Highfield Road and Apex House, Edgbaston,
Birmingham. The proceeds of these sales amount, in aggregate, to
GBP2.2 million. The sales of the Birmingham properties have been
completed and the Surbiton sale is due to complete by 31 May
2013.
A new lease of the remaining industrial unit at Printers Way,
Harlow has recently been completed. The property will be
re-marketed for sale in in the next few months when certain
maintenance works to the estate have been completed.
The Group's principal remaining asset is the former industrial
site at Chilton Trinity, Bridgwater, Somerset for which a
resolution to grant planning consent for 67 dwellings and 14 small
business units was achieved in December 2011. Planning consent is
subject to entering into a Section 106 Agreement with the local
authority. This complex process is expected to be completed very
shortly. The Company is in discussions with a leading UK
housebuilder on a joint venture and/or deferred consideration basis
so as to maximise Shareholder value. This site suffers from
contamination and remediation works are currently in progress.
The Directors estimate that the net realisable value of the
remaining two properties in the Company's portfolio is
approximately GBP2.2 million, after deducting selling expenses and
the other costs expected to be incurred prior to sale. Shareholders
should be aware that this is the Directors' best estimate based on
current discussions but the final net realisation of the Chilton
Trinity site will be dependent, inter alia, on future demand for
housing in the Bridgwater area and the final cost of
decontamination. This estimate is therefore subject to considerable
uncertainty as regards both amount and timing.
Shareholders should be aware that dependent on the timing of the
disposals of the remaining properties in the Company's portfolio,
the Company may be subject to the requirements of AIM Rule 15.
Under AIM Rule 15, if the disposals amount to a fundamental change
of business, the disposals must be conditional on Shareholders'
approval. Accordingly, an ordinary resolution (requiring a simple
majority of the votes cast) will be proposed at the General Meeting
to approve the disposal of the remaining properties in line with
the Company's strategy.
If the proposed Resolution for the cancellation of the Company's
Ordinary Shares to trading on AIM is not approved then the Company
will be subject to the requirements of AIM Rule 15 and will be
treated as an investing company once all of its assets have been
disposed of. Under the requirements of AIM Rule 15, the Company
would have to, at that time, seek Shareholder approval of the
Company's investment policy to be followed going forward and the
Company would then have to implement the investment policy to the
satisfaction of the London Stock Exchange within 12 months of
becoming an investing company.
Financing
At 31 January 2013, the Group had cash balances of GBP3.3
million (2012: GBP4.6 million) and no borrowings. Of this amount,
GBP1.5 million was being held as security deposits which are not
readily available to the Group. At 14 May 2013, cash balances,
excluding security deposits, were GBP3.0 million. After taking into
account contracted property sale proceeds of GBP1.1 million due to
be received by 31 May 2013 and the proposed return to Shareholders
of 160 pence per Ordinary Share expected to be announced to
Shareholders in August 2013, which in aggregate amounts to GBP1.7
million, there remains GBP2.4 million available to the Group to
settle the Group's liabilities, including the termination payments
to certain Directors set out below, and for ongoing administration,
restructuring and property costs, including costs relating to the
Chilton Trinity site, pending receipt of further property sale
proceeds.
Returns of cash to Shareholders
In July 2012 the Company returned a further GBP6.4 million to
Shareholders. As a result, since the Board's decision to return
cash to Shareholders in December 2008, a holder of 100 Ordinary
Shares as at 31 January 2009, when their market value was GBP213,
will have received GBP310 in cash following the proposed return to
Shareholders of 160 pence per Ordinary Share expected to be
announced in August 2013 and will have six Ordinary Shares
remaining which the Directors believe will have a value of between
GBP5 and GBP12 when finally realised following the solvent
liquidation of the Company.
Principal risks and uncertainties
Shareholders should be aware that:
-- The amounts which may be realised on disposal of the
remaining properties may differ from current expectations and
recent valuations. In the current economic environment the
Directors believe the risks are weighted to the downside.
-- The final net realisation of the Chilton Trinity site, in
particular, is subject to considerable uncertainty as regards both
amount and timing.
-- The timing and extent of actions to reduce administration
expenses will depend, inter alia, on the timing of property sales,
Shareholder approval of the Proposals and exploration of any
alternatives to liquidation. Thus the extent of trading losses
before any formal appointment of a liquidator cannot be predicted
with accuracy.
-- The liquidator's fees and costs incurred during the
liquidation of the Group, together with legal and other
professional fees before and during the liquidation and the time
scale for finally resolving the affairs of the Group cannot be
predicted with accuracy.
-- There may be latent liabilities or claims against the Group
of which the Directors are not aware. The winding down process
itself may bring any such liabilities to light.
-- Resolving all the assets and liabilities of the Group,
including latent and contingent liabilities of the Group to the
degree of certainty required for the directors of each company in
the Group to be able to recommend that shareholders vote in favour
of the members' voluntary liquidation of each company may take
longer than currently expected.
Background to and reasons for the Proposals
Currently, Rugby has a relatively small market capitalisation of
less than GBP4 million, and since 31 March 2013, it has had no
permanent staff other than the Directors and its office is being
closed down. The Ordinary Shares have been admitted to trading on
AIM since 14 June 2005 and, in light of the foregoing, the
Directors no longer consider that a listing on AIM makes practical
sense. In reaching their decision the Directors have also taken
into account the following factors:
-- the level of administrative burden and costs, which the Board
estimates to be in the region of GBP150,000 per annum, associated
with maintaining an admission to AIM, at a time when Rugby is not
anticipating any further management fees and negligible rental
income from the remaining properties;
-- the legal and regulatory burden associated with maintaining
Rugby's admission to AIM is now disproportionate to the benefits;
and
-- like many other companies traded on AIM, there is a lack of
liquidity in the Ordinary Shares and the Company's small free float
and market capitalisation restrict trading demand for the Ordinary
Shares.
In the light of the foregoing, and following careful
consideration, the Directors consider that it is no longer viable
for the Company to remain as a quoted company and, as a result, are
seeking approval of its Shareholders to dispose of its remaining
property portfolio, to cancel admission of the Ordinary Shares to
trading on AIM, to re-register the Company as a private limited
company and to adopt the New Articles.
Accordingly, the Board has notified the London Stock Exchange
pursuant to Rule 41 of the AIM Rules of its intention to cancel
admission of the Ordinary Shares to trading on AIM. Each of the
Proposals is subject to Shareholders' approval at the General
Meeting. Each Resolution will be subject to 75 per cent. of the
votes cast being in favour of the Resolution, save for the
Resolution to approve the disposal of the remaining property
portfolio which will be subject to a simple majority of the votes
cast in favour of the Resolution.
Governance and the structure of the Board following the AIM
Cancellation
At present the Board comprises three executive directors: Andrew
Wilson (Chief Executive Officer), Stephen Jones (Finance Director)
and myself (collectively the "Rugby Management Team"), together
with two non--executive directors, John Jackson and David Lindop
(collectively the "Non-Executive Directors"). The Board considers
that:
-- Shareholders will be aware that, as previously announced, the
overhead costs of the Company have been substantially reduced in
the past 12 months as the continuing fee income and net rental
income from the remaining properties in the portfolio has reduced.
The Rugby Management Team took temporary salary cuts of 67 per
cent. from 1 June 2012 and, as set out more fully above, have been
working on a part time basis to wind the business down in an
orderly manner in the best interests of Shareholders. Despite the
considerable efforts that have been made, it has not proved
possible to sell the Company's largest asset by value, namely its
development at Chilton Trinity, on terms that the Board considered
to be acceptable. While the Board will consider any reasonable
offer for an early unconditional sale, it is the Board's current
intention to retain this asset and realise value over the medium
term, which the Board currently believes to be three to five
years.
-- As a consequence of this, the Directors do not currently
intend to amend the Board's existing structure should the AIM
Cancellation come into effect, save that in recognition of the
reduced amount of time that will be required to complete the
outstanding affairs of the Company, all the executive Directors
will be part time. As a result, the Rugby Management Team will have
their existing service agreements terminated and will enter into
new agreements with the Company to reflect this. The total amount
payable to the Rugby Management Team to terminate their existing
contracts will be GBP852,000. The combined cost of all the Board
going forward, excluding management incentives, will be GBP210,000
for the 12 months to 31 May 2014 and not more than GBP150,000 per
annum thereafter.
-- The Non-Executive Directors have reached agreement with the
Rugby Management Team for the continued management of Chilton
Trinity and the winding down of the Group's affairs in preparation
for the ultimate liquidation of the Company, further details of
which are set out below.
Arrangements with the Rugby Management Team
As announced on 17 May 2012, the Rugby Management Team agreed to
reduce their salaries for 12 months from 1 June 2012 to one third
of their previous levels.
The Board has agreed that, conditional upon the AIM Cancellation
becoming effective, each member of the Rugby Management Team will
enter into a new service agreement with effect from 1 June 2013
which will provide for him to work such hours as are reasonably
required for the proper performance of his duties at a salary of
GBP50,000 per annum. The Company's existing private medical
insurance arrangements for the benefit of the Rugby Management Team
will continue but there will be no other benefits. Each member of
the Rugby Management Team will have their salary reviewed annually
and, with effect from 1 June 2014, their aggregate salaries will
not exceed GBP100,000 per annum. The agreements will be terminable
on one month's notice by either party.
Each member of the Rugby Management Team will also be entitled
to a cash bonus calculated by reference to future cash returns to
Shareholders. Each member of the Rugby Management Team will receive
0.833 per cent. of the first GBP2,184,624 paid to Shareholders
(equivalent to 200 pence per Ordinary Share based on the current
number of Ordinary Shares in issue) and five per cent. of the cash
paid to Shareholders over this amount.
If a member of the Rugby Management Team ceases to be employed
by the Company as a result of termination by the Company other than
for cause (for example, in the case of gross mis-conduct), or in
the event of an offer of voluntary redundancy by the Company, he
shall be entitled to receive a cash bonus in respect of cash
payments to Shareholders occurring at any time, including after the
termination date. If his employment ceases in other circumstances,
he will not be entitled to a cash bonus on cash payments to
Shareholders after his employment ceases.
By way of example, if total future returns to Shareholders
amount to 250 pence per Ordinary Share, each member of the Rugby
Management Team would receive a bonus of GBP46,000, rising to
GBP108,000 if total future returns to Shareholders amount to 360
pence per Ordinary Share.
Irrevocable undertakings to vote in favour at the General
Meeting
Prior to sending this statement to Shareholders, the Board has
had discussions with a number of its principal Shareholders (other
than its Directors who hold Ordinary Shares). As a result of those
consultations the Board has received irrevocable undertakings to
vote in favour of the Resolutions from such Shareholders amounting
to 97,299 Ordinary Shares, representing, in aggregate,
approximately 8.90 per cent. of Rugby's current issued share
capital.
In addition, the Directors who hold Ordinary Shares have
irrevocably undertaken to vote in favour of the Resolutions in
respect of their aggregate holding of 146,934 Ordinary Shares,
representing, in aggregate, approximately 13.45 per cent. of
Rugby's current issued share capital.
The Company has therefore received irrevocable undertakings from
Shareholders to vote in favour of the Resolutions in respect of, in
aggregate, 244,233 Ordinary Shares, representing approximately
22.36 per cent. of Rugby's current issued share capital.
The Board has also received a letter of intention from certain
Shareholders confirming that it is their intention to vote in
favour of the Resolutions in respect of their aggregate holding of
67,771 Ordinary Shares, representing, in aggregate, approximately
6.20 per cent. of Rugby's current issued share capital.
In addition, the Directors have been advised that Rugby Estates
plc Retirement Benefit Scheme will vote in favour of the Resolution
in respect of 34,055 Ordinary Shares, representing approximately
3.12 per cent. of Rugby's current issued share capital.
Effect of the AIM Cancellation on Shareholders
The principal effects of the AIM Cancellation would be:
-- Shareholders will no longer be able to buy and sell shares in
the Company through AIM or any other public stock market and
therefore liquidity and marketability of the Ordinary Shares will
be reduced. However, in order to provide a measure of liquidity in
the Ordinary Shares after the AIM Cancellation, the Company intends
to set up, and maintain, a matched bargain trading facility,
further details of which are set out below;
-- the Company will no longer be subject to the AIM Rules and,
accordingly, it will not be required to retain a nominated adviser
or to comply with the requirements of AIM in relation to annual
accounts, half-yearly reports or the disclosure of price sensitive
information; and
-- the Company would no longer be required to comply with any of
the corporate governance requirements for quoted companies.
The above considerations are not exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the AIM Cancellation on them.
Share trading facility following AIM Cancellation
Your Board is aware that, following the proposed AIM
Cancellation, Shareholders may still wish to acquire or dispose of
their Ordinary Shares and, accordingly, intends to take steps to
create and maintain a matched bargain settlement facility. The
Company has held initial discussions with Capita Registrars to
provide such a facility. Under such a facility Shareholders or
persons wishing to acquire Ordinary 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.
Shareholders who do not have their own broker may need to
register with a broker as a new client. This can take some time to
process and, therefore, Shareholders who consider they are likely
to avail themselves of this facility are encouraged to commence
engagement proceedings with a broker at the earliest opportunity.
The contact details of the matched bargain settlement facility
provider, once arranged, will be made available to Shareholders on
the Company's website.
It is entirely up to you whether you take advantage of the
matched bargain settlement facility and the Company is not making
any recommendation to you as to the course of action you should
take. There can be no guarantee that Ordinary Shares offered for
sale or purchase under the matched bargain settlement facility will
be sold or purchased.
If you are in any doubt, you may want to take independent advice
from an appropriate independent financial adviser.
The City Code on Takeovers and Mergers
The Code currently applies to the Company. Shareholders should
note that, if the Resolution to re--register the Company as a
private limited company becomes effective, the Company will remain
subject to the Code for a period of 10 years from the effective
date of the cancellation of the admission of the Ordinary Shares to
trading on AIM. Accordingly, Shareholders will continue to receive
the protections afforded by the Code in the event that an offer is
made to acquire a controlling interest in the Company.
Brief details of the Panel, the Code and the protections given
by the Code are described below. Before giving your consent to the
re-registration of the Company as a private limited company, you
may want to take independent professional advice from an
appropriate independent financial adviser.
The Code
The Code is issued and administered by the Panel. Rugby is a
company to which the Code applies and its Shareholders are
accordingly entitled to the protections afforded by the Code.
The Code and the Panel operate principally to ensure that
shareholders are treated fairly and are not denied an opportunity
to decide on the merits of a takeover and that shareholders of the
same class are afforded equivalent treatment by an offeror. The
Code also provides an orderly framework within which takeovers are
conducted. In addition, it is designed to promote, in conjunction
with other regulatory regimes, the integrity of the financial
markets.
The General Principles and Rules of the Code
The Code is based upon a number of General Principles which are
essentially statements of standards of commercial behaviour. For
your information, these General Principles are set out in Part 1 of
Appendix II of this statement. The General Principles apply to all
transactions with which the Code is concerned. They are expressed
in broad general terms and the Code does not define the precise
extent of, or the limitations on, their application. They are
applied by the Panel in accordance with their spirit to achieve
their underlying purpose.
In addition to the General Principles, the Code contains a
series of Rules, of which some are effectively expansions of the
General Principles and examples of their application and others are
provisions governing specific aspects of takeover procedure.
Although most of the Rules are expressed in more detailed language
than the General Principles, they are not framed in technical
language and, like the General Principles, are to be interpreted to
achieve their underlying purpose. Therefore, their spirit must be
observed as well as their letter. The Panel may derogate or grant a
waiver to a person from the application of a Rule in certain
circumstances.
Effect of re-registering the Company as a private company
If the AIM Cancellation is approved, the Ordinary Shares will no
longer be admitted to trading on AIM. In this event, the Board
proposes that the Company be re-registered as a private limited
company as this will reduce both the costs and complexities of
operating the Company and, in particular, will facilitate future
returns of capital to Shareholders, without the need to apply to
the Court.
The principal effects that the Re-registration will have on the
Company are as follows:
-- as a private company, the Company will be prohibited from
offering its securities to the public;
-- following Re-registration, the Company will be able to use
the solvency statement procedure for a reduction of capital (and
will not be required to obtain Court approval, as has been the case
for previous returns of cash to Shareholders);
-- the Company has a single class of shares. Private companies
with a single class of shares may authorise their directors to
allot shares, with no restriction on the number of shares which may
be issued. This authority is currently given to the Board (subject
to certain caps) through the resolutions proposed at the annual
general meeting of the Company each year. Under the terms of the
New Articles, following the Re-registration, the Company will no
longer be required to seek authority from Shareholders to allot or
grant rights to subscribe for or convert Ordinary Shares. However
the Directors have no current intention to allot any new Ordinary
Shares;
-- as a private company, the Company will be able to use the
statutory written resolution procedure and will not be required to
hold an annual general meeting; and
-- the provisions of the Code will cease to apply to the Company
following the tenth anniversary of the AIM Cancellation (please see
further details above).
Notwithstanding the Re-registration and the changes that will be
made by the adoption of the New Articles, the Company will remain
subject to the requirements of United Kingdom company law, which
contains various provisions for the protection of minority
shareholders, and the Company will, as stated above, continue to
communicate information about the Company to the Shareholders in
accordance with the requirements of the Companies Act.
Proposed adoption of New Articles
A copy of the proposed New Articles will be available for
inspection at the Company's registered office, 4 Farm Street,
London W1J 5RD, during usual business hours on the business days
until the close of the General Meeting
By way of brief summary, the principal changes proposed to be
made to the Existing Articles are as follows:
Authority to allot shares
Pursuant to section 550 of the Companies Act, where a private
company has only one class of shares the directors may exercise any
power of the company to allot shares of that class or grant rights
to subscribe for or to convert any security into such shares,
except to the extent that they are prohibited from doing so by the
Company's articles of association. The New Articles do not contain
any such prohibition. However, pursuant to paragraph 43, Schedule
2, The Companies Act 2006 (Commencement No. 8, Transitional
Provisions and Savings) Order 2008 (SI 2008/2860), in order to take
advantage of this provision it is necessary for the Company to pass
an ordinary resolution giving the Directors authority to use the
power under section 550 and such resolution is being proposed at
the General Meeting.
Provisions relating to general meetings of the Company and
written resolutions
Private companies are not required to hold annual general
meetings and may pass shareholder resolutions as written
resolutions in accordance with the terms of the Companies Act. The
New Articles will remove the requirement to hold annual general
meetings and the references to the standard business required to be
conducted at the Company's annual general meetings, including the
routine retirement of directors by rotation and the laying of
accounts before Shareholders. Following adoption of the New
Articles, the Company will be able to continue to hold annual
general meetings, but will no longer be obliged to do so. The
notice period to call a general meeting pursuant to the New
Articles will be the minimum required by law (currently 14 clear
days).
Other miscellaneous amendments
The New Articles contain a number of other consequential
miscellaneous amendments as a result of the AIM Cancellation and
the Re-registration.
Conditional upon the AIM Cancellation taking effect, Resolution
2 in the notice of General Meeting seeks Shareholder approval for
the Re-registration, adoption of the New Articles and the granting
of general authority to the Company's directors to allot Ordinary
Shares. It is anticipated that the effective date of
Re-registration will be on or before 1 July 2013.
Taxation
If you are in any doubt about your tax position, and/or are
subject to tax in a jurisdiction other than the UK, you should
consult an appropriate independent professional adviser. You should
note that following the AIM Cancellation, the Company's shares will
no longer be quoted on AIM or any other public market.
General Meeting
Notice convening the General Meeting, to be held at the offices
of Nabarro LLP, Lacon House, 84 Theobald's Road, London WC1X 8RW at
11.00a.m. on 3 June 2013, is set out below.
The Resolutions propose the disposal of the remaining property
portfolio, the AIM Cancellation, the Re-registration and the
adoption of the New Articles. Under the AIM Rules, it is a
requirement that any cancellation of Ordinary Shares to trading on
AIM must be approved by not less than 75 per cent. of votes cast by
Shareholders at the General Meeting. Accordingly, Resolution 2 is
proposed as a special resolution of the Company and, as such, it
requires the approval of not less than 75 per cent. of the votes
cast by Shareholders at the General Meeting.
Assuming Resolution 2 is approved, it is expected that the AIM
Cancellation will be effective from 7.00 a.m. on 18 June 2013.
Action to be taken by Shareholders
Shareholders will find enclosed within the Circular, which will
be available on the Company's website tomorrow and is being posted
to Shareholders, a Form of Proxy for use at the General Meeting.
The Form of Proxy should be completed in accordance with the
instructions set out on it and returned so as to be received at the
Company's registrars, Equiniti of Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA not later than 11.00 a.m. on 1 June
2013.
Completion and return of a Form of Proxy will not prevent
Shareholders from attending and voting at the General Meeting in
person, should they so wish.
Recommendation
The Board believes that the disposal of the remaining property
portfolio, the AIM Cancellation, the Re-registration and the
adoption of the New Articles are in the best interests of the
Company and its Shareholders as a whole and are most likely to
promote the success of the Company for the benefit of the
Shareholders. Accordingly, the Directors unanimously recommend that
Shareholders vote in favour of the Resolutions as the Directors who
hold Ordinary Shares have irrevocably undertaken to do in respect
of their own beneficial shareholdings which amount to 146,934
Ordinary Shares, equivalent to, in aggregate, 13.45 per cent. of
Rugby's current issued share capital.
Yours faithfully
David Tweeddale-Tye
Chairman
RUGBY ESTATES PLC
(the "Company")
(Incorporated and registered in England and Wales with
registered number 02548935)
NOTICE OF GENERAL MEETING
NOTICE IS HEREBY GIVEN that a General Meeting of the Company
will be held at the offices of Nabarro LLP, Lacon House, 84
Theobald's Road, London WC1X 8RW at 11.00 a.m. on 3 June 2013 for
the purpose of considering and, if thought fit, passing the
following resolutions, of which Resolution 1 will be proposed as an
ordinary resolution and Resolutions 2 and 3 will be proposed as
special resolutions:
1. THAT the disposal by the Company of its remaining property
portfolio (the "Disposal") on such terms and conditions as the
directors may achieve be and is hereby approved and the directors
be and are hereby authorised to take all steps necessary or
desirable to complete the Disposal.
2. THAT the admission of the Company's ordinary shares of 14
pence each in the capital of the Company to trading on AIM, a
market operated by London Stock Exchange plc be cancelled (the "AIM
Cancellation") and the Company's officers or persons authorised by
the directors be authorised and directed to execute all documents
and take all necessary actions in connection with the AIM
Cancellation.
3. THAT, subject to and conditional upon the AIM Cancellation taking effect:
(a) the Company be re-registered as a private limited company
under the Companies Act 2006 with the name Rugby Estates
Limited;
(b) with effect from the Company's re-registration as a private
limited company, the articles of association produced to the
meeting and signed for the purpose of identification by the
Chairman of the meeting, be adopted as the articles of association
of the Company in substitution for the existing articles of
association of the Company; and
(c) with effect from the Company's re-registration as a private
limited company and in accordance with paragraph 43(1) of Schedule
2 to the Companies Act 2006 (Commencement No. 8, Transitional
Provisions and Savings) Order 2008 (SI 2008/2860), the Directors be
given the powers to allot shares in the Company or to grant rights
to subscribe for or to convert any security into such shares in the
Company under section 550 of the Companies Act 2006. This authority
is in substitution for all previous authorities conferred on the
Directors in accordance with section 80 of the Companies Act 1985
or section 551 of the Companies Act 2006.
Dated: 16 May 2013
By Order of the Board
Stephen Jones
Company Secretary
Registered Office:
4 Farm Street
London
W1J 5RD
APPENDIX I
UNAUDITED GROUP STATEMENT OF COMPREHENSIVE INCOME
Year to 31 Year to 31
January 2013 January 2012
Unaudited Audited
GBP'000 GBP'000
Sales of properties 5,140 4,767
Rental income 618 1,406
Fees receivable 983 1,309
Revenue 6,741 7,482
Direct costs of:
Sales of properties (5,845) (3,967)
Net realisable value adjustment
to inventory (1,522) (3,114)
Rental income (396) (551)
Fees receivable (11) (10)
Direct costs (7,774) (7,642)
Administrative expenses - general (1,957) (3,231)
Administrative expenses - PRIP 871 -
adjustment
Administrative expenses - restructuring (1,660) -
costs
Administrative expenses - total (2,746) (3,231)
Other operating income - 240
Gains and losses on financial assets:
- distributions received - 2,084
- unrealised impairment losses (2) (2,130)
- gains previously recognised in 246 -
other comprehensive income
Finance revenue 17 28
Loss before taxation (3,518) (3,169)
Income tax credit - 35
Loss for the period attributable
to equity holders of the parent (3,518) (3,134)
Other comprehensive income
Fair value gains and (losses) on
financial assets 246 (259)
Gains realised on disposal (246) -
Other comprehensive expense for
the period (net of tax) - (259)
Total comprehensive expense for
the period attributable to equity
holders of the parent (3,518) (3,393)
Basic and diluted (loss) per share
(January 2012: restated) (324p) (291p)
UNAUDITED GROUP STATEMENT OF FINANCIAL
POSITION
as at 31 January 2013
31 January 31 January
2013 2012
Unaudited Audited
GBP'000 GBP'000
Non-current assets
Financial assets 18 328
Total co-investments 18 328
Property, plant and equipment - 36
Total non-current assets 18 364
Current assets
Property inventories 4,366 11,436
Trade and other receivables 393 1,610
Current tax assets - 11
Cash and short term deposits 3,335 4,580
Total current assets 8,094 17,637
Total assets 8,112 18,001
Current liabilities
Trade and other payables 1,225 2,666
Provisions 1,476 68
Total current liabilities 2,701 2,734
Non-current liabilities
Deferred taxation - -
Total non-current liabilities - -
Total liabilities 2,701 2,734
Net assets 5,411 15,267
Equity
Called up share capital 153 331
Own shares - held for AESOP (108) (140)
Share premium account 2,033 6,094
Capital redemption reserve 2,550 4,402
Unrealised gains and losses - -
Retained earnings 783 4,580
Total equity 5,411 15,267
APPENDIX II
Definitions
The following definitions apply throughout this statement unless
the context otherwise requires:
AIM the AIM market operated by the
London Stock Exchange
------------------------ ---------------------------------------
AIM Rules the AIM Rules for Companies published
by the London Stock Exchange
------------------------ ---------------------------------------
AIM Cancellation the cancellation of admission
of the Rugby Shares to trading
on AIM becoming effective in
accordance with Rule 41 of the
AIM Rules
------------------------ ---------------------------------------
Closing Price the closing middle market quotations
as derived from the AIM Appendix
of the Daily Official List on
a particular day
------------------------ ---------------------------------------
Code the City Code on Takeovers and
Mergers
------------------------ ---------------------------------------
Companies Act the Companies Act 2006 (as amended)
------------------------ ---------------------------------------
Court High Court of Justice in England
and Wales
------------------------ ---------------------------------------
CREST the system of paperless settlement
of trades and the holding of
uncertified shares of which Euroclear
UK & Ireland Limited is the operator
------------------------ ---------------------------------------
Company or Rugby Rugby Estates plc
------------------------ ---------------------------------------
Directors or Board the directors of the Company
whose names appear at the head
of the Letter from the Chairman
above
------------------------ ---------------------------------------
Existing Articles the articles of association of
the Company as at the date of
this statement
------------------------ ---------------------------------------
Form of Proxy the form of proxy enclosed within
the Circular for use by Shareholders
in connection with the General
Meeting
------------------------ ---------------------------------------
Group the Company and its subsidiaries
from time to time
------------------------ ---------------------------------------
London Stock Exchange London Stock Exchange plc
------------------------ ---------------------------------------
Meeting the General Meeting of the Company
to be held at the offices of
Nabarro LLP, Lacon House, 84
Theobald's Road, London WC1X
8RW at 11.00 a.m. on 3 June 2013,
or any adjournment thereof, notice
of which is set out in this statement
------------------------ ---------------------------------------
New Articles the articles of association proposed
to be adopted at the General
Meeting pursuant to Resolution
2
------------------------ ---------------------------------------
Non-Executive Directors John Jackson and David Lindop
------------------------ ---------------------------------------
Ordinary Shares ordinary shares of 14 pence each
in the capital of the Company
------------------------ ---------------------------------------
Panel the Panel on Takeovers and Mergers
------------------------ ---------------------------------------
Proposals the proposed disposal of the
Company's remaining property
portfolio, the AIM Cancellation,
the Re--registration and the
adoption of the New Articles
------------------------ ---------------------------------------
Re--registration the proposed re--registration
of the Company as a private limited
company
------------------------ ---------------------------------------
Resolutions the resolutions set out in the
notice of General Meeting and
"Resolution" shall mean any of
them
------------------------ ---------------------------------------
Rugby Management Team David Tweeddale-Tye, Andrew Wilson
and Stephen Jones
------------------------ ---------------------------------------
Section 106 Agreement an agreement or unilateral undertaking
under section 106 of the Town
and Country Planning Act 1990
------------------------ ---------------------------------------
Shareholders the holders of Ordinary Shares
------------------------ ---------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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