Notice of General Meeting regarding Cancellation
February 20 2009 - 2:00AM
UK Regulatory
TIDMTLU
RNS Number : 6242N
Teleunit S.p.A
20 February 2009
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| | 20 February 2009 |
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Teleunit SpA
("Teleunit" or "the Group"; stock code: TLU)
Notice of General Meeting
The Company has today sent a circular to Shareholders to seek their approval
for cancellation of admission to trading on AIM of the Company's Ordinary
Shares. A copy of the notice is available on the Company's website,
http://ir.teleunit.it.
Background to the proposed Delisting
The Ordinary Shares in the Company were admitted to trading on AIM on 26 May
2004 with the Company having raised money at a Share Price of 20p, giving the
Company a market capitalisation of GBP37.3 million. Since that time the market
valuation of the Company has decreased substantially with the mid-market Share
Price being 1.125p at the close of business on 19 February 2009, giving the
Company a market capitalisation of GBP1.99 million.
As reported in trading updates, interim and year-end results, the Group has
suffered a series of setbacks which have meant that it has not achieved the
targets it set at the time of the IPO: In June 2006 the Group reported its first
loss since its incorporation in 1997; In 2007, a corporate and organisational
restructuring delayed management's growth targets for the Group's core
businesses; the Group incurred significant net losses and asset write-downs
following a marked reduction in revenues as a result of a regulation-driven
downturn in the VAS market; and protracted litigation with Telecom Italia SpA
has over the years been a significant drain on management's time and the Group's
financial resources.
Despite these factors, the Group has enjoyed some success, not least by means of
the successful start-up and proven growth of its subsidiary Neomobile, which to
date continues to trade beyond expectations. In October 2008 a 15.87% stake of
Neomobile was successfully sold to a VCC for a cash consideration of EUR10.0
million, giving Neomobile an implied enterprise value of EUR63.0 million. Assuming
a residual valuation unadjusted for subsequent growth, the Company's total AIM
capitalisation today stands at a significant discount to the intrinsic value of
its subsidiary. Notwithstanding this and the Group's greatly
strengthened balance sheet and cash position following the sale, the Company's
Share Price hardly responded.
In light of these factors the Directors have formed the view that the market has
lost confidence in the Company and that, looking forward, any recovery which may
occur in the Company's financial performance is unlikely to be properly
reflected in its Share Price. Furthermore, there is very little interest in the
Company, and an associated absence of demand for the Company's shares. This,
together with the Company's very small free float, (82% of the Ordinary Shares,
excluding those held in treasury, are held by three investors) makes the
Ordinary Shares a highly illiquid stock and the Directors believe that average
daily volumes (average of 33,236 shares traded per business day in 2008) are not
sufficient to uplift the Share Price.
The Directors consider it unlikely that the Company will wish or have any need
to raise money via a new share issue in the foreseeable future and, even if such
were feasible, the Directors consider that such a capital raising is unlikely to
be achieved without unacceptably high dilution to existing shareholders. As such
the Board does not expect the number of shares in free float to increase
significantly.
In light of this, the Directors consider that the costs associated with
maintaining an AIM listing, which are in excess of GBP60,000 per year, and the
related regulatory requirements and management time cost, are no longer
justified. Consequently, the Directors have concluded that it is no longer in
the best interests of the Company to maintain the admission to AIM of the
Ordinary Shares.
Strategy following the De-Listing
The Board and Management will continue to pursue their strategy of selective
international expansion and support for the Group's most profitable initiatives.
This could also include the disposal of certain operating divisions that
currently represent a cash drain and have limited future prospects. The Company
undertakes to keep shareholders informed of its operations and finances by
publishing the notices and results of General Meetings and the Group's
consolidated year-end accounts on the Group's website.
Transactions in Ordinary Shares following delisting
Following the De-Listing there will be no market facility for dealing in
Ordinary Shares and no price will be publicly quoted for Ordinary Shares. It is
likely that there will be less liquidity in the Ordinary Shares and they will
become more difficult to value.
The Board recognises that not all Shareholders will be able and/or willing to
continue to own shares in the Company following the De-Listing. Accordingly, the
Board has appointed Daniel Stewart, its current Nominated Adviser and broker to
provide a broking facility following the De-Listing. Under this facility
shareholders or persons wishing to trade shares will be able to leave an
indication with Daniel Stewart of their desire to buy or sell shares at a
specific price. Further details of the facility will be set out on the
Company's website following the De-Listing.
General Meeting
The General Meeting to approve the De-Listing will be held on 23 March 2009, at
10.00 a.m. (local time), at the Company's Head Office on Via Monteneri,
Sant'Andrea delle Fratte, Perugia, Italy. Set out below is a summary of the
resolution that will be put to Shareholders:
1. Cancellation of admission to trading on AIM of the Company's Ordinary Shares:
In accordance with Rule 41 of the AIM Rules, it is a requirement that any
De-Listing from AIM be approved by not less than 75 per cent. of Shareholders
voting in person or by proxy at a general meeting. The De-Listing, if approved,
is expected to take effect on 31 March 2009.
Directors' recommendation
The Directors believe that, for the reasons outlined above, the De-Listing is in
the best interests of the Company. The Directors therefore recommend that
Shareholders vote in favour of the resolution at the General Meeting, as they
themselves intend on doing in respect of their direct and indirect holdings of
127,658,134 shares representing 72.3% of the voting issued Ordinary Share
capital.
Please note that all defined terms in this announcement are as set out in the
circular.
For further information, please contact:
+-----------------------------------------------------+------------------------+
| Gianfranco Cimica, Chief Executive Officer, | 00 39 075 528 3939 |
| Teleunit SpA | |
+-----------------------------------------------------+------------------------+
| Oliver Rigby, Daniel Stewart & Company Plc | 020 7776 6550 |
+-----------------------------------------------------+------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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