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Company Announcements

Proposed cancellation of trading on AIM

By LSE RNS

RNS Number : 3740Q
Specialist Investment PropertiesPLC
11 September 2017
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

 

11 September 2017

 

Specialist Investment Properties plc

 (the "Company" or "SIPP")

 

Proposed cancellation of admission to trading on AIM and notice of Extraordinary General Meeting

 

 

Introduction

 

The Company has today announced that it intends to seek shareholder approval for the cancellation of admission of its Ordinary Shares to trading on AIM.

Background to the Cancellation

 

The Company announced its final results for the year ended 31 December 2016 on 26 May 2017 and has published its results for the six months ended 30 June 2017 today. In the results for the year ended 31 December 2016 the Company disclosed that SIPP had some months ago sought to raise additional equity capital as it had used the majority of its available capital in making acquisitions in its three identified target asset classes of children's homes, supported living accommodation and short term accommodation for local authorities. The equity fundraising did not proceed because the current size of the Company and the extent of its investment pipeline limited the market capitalisation of the Company post fund-raising, which diminished the attractiveness for institutional investors (who were generally positive about the investment strategy but were looking for a larger market capitalisation).

 

Accordingly, the Company announced in the same results that it was considering the best option to realise value in the Group which might include seeking shareholder approval for the cancellation of the Company's Ordinary Shares from trading on AIM in order to preserve shareholder value and/or a sale of the Group's assets. Following careful consideration, the Board has now concluded that it is in the best interests of the Company and its shareholders to seek the Cancellation and once effected seek to dispose of the Company's assets and subsequently pursue an orderly winding up of the Company.

 

Reason for the Cancellation

 

The Board has concluded that, given the difficulties in raising equity funds described above, the Company will not be able to reach critical mass to fully execute its strategy and that, while its assets are performing well and the Group is generating a small operating profit, its current size means that the fixed costs of running the Company, including the costs of being admitted to trading on AIM, are disproportionate to the amount of income the Company generates from its assets.  The Company's current administration costs are running in excess of £150,000 and following delisting would be expected to be reduced by at least 50%.

 

Following careful consideration, the Directors have therefore concluded that it is no longer in the best interests of the Company or its Shareholders to maintain the Company's admission to trading on AIM. Consequently, the Board has decided to propose the Cancellation. The Directors' intention is to reduce the Company's costs through the Cancellation and following which they will seek to dispose of the Company's assets to realise as much value as possible for Shareholders. As well as reducing the Company's costs, the Board believes that not being a Company admitted to trading on AIM will provide it with greater flexibility to realise the best value for its assets. Any sale of assets after the Cancellation comes into effect which is to an entity/person which is in any way a related party (as defined in the AIM Rules and/or under IOM Law) will be made only after obtaining an independent valuation and the approval of the independent directors.

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 Ordinary Shares on AIM or any other recognised market or trading exchange;

(b)        the Company would not be obliged to announce material events, administrative changes 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;

(d)        the Company would no longer be subject to the AIM Rules and Shareholders would no longer be required to vote on certain matters as provided in the AIM Rules; and

(e)        The Company will cease to have a nominated adviser. The Company is currently required under the AIM Rules to consult with its nominated adviser on, for example, transactions constituting "related party transactions" under those rules, and to inform the nominated adviser of key decisions such as any proposed changes to the Board. Following Cancellation, the Shareholders will also no longer benefit from the protection afforded by the nominated adviser.

Following the Cancellation, the Company intends to dispose of its assets and subsequently to pursue an orderly winding up of the Group with the resultant net cash being distributed to shareholders.  Based on the Directors' estimation of value of the Company's assets and the expected costs which are likely to be incurred up to and including the winding-up of the Company, the Directors expect that shareholders will receive in excess of 18p per share on the winding-up of the Company on the assumption it is completed by 31 December 2017.

Unaudited Interim Results for the six months ended 30 June 2017

The Unaudited Interim Results of the Company show a profit before and after taxation of £12,000 for the six months to 30 June 2017.  The Company's balance sheet at 30 June 2017 comprised net assets of £2.2m, of which £0.2m was held in cash at the balance sheet date. Investment properties were carried at an aggregate value of £6.6m, with £4.5m of associated borrowings in place.

The City Code

The City Code provides an orderly framework within which takeovers and mergers are conducted and operates principally to ensure that shareholders are treated fairly and not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment. Shareholders should note that following the Cancellation the Company will remain subject to the provisions of the City Code on the basis set out in those provisions.

Share dealing following Cancellation

Following Cancellation, the Company intends to use reasonable endeavours to facilitate introductions and communication among Shareholders who wish to sell their Ordinary Shares and those persons who wish to purchase Ordinary Shares. To do this, Shareholders or persons wishing to acquire or sell Ordinary Shares will be able to leave an indication with the Company that they are prepared to buy / sell Ordinary Shares at a specified price. In carrying out such introductions, the Company will not arrange transactions and will take no responsibility to match up Shareholders wishing to sell and purchase Ordinary Shares, and no responsibility in respect of the time frame and manner in which introductions or communications (if any) are made or as to the price at which any trades might take place.  Shareholders wishing to make such an indication to the Company should do so by writing to the offices of the Company at Burleigh House, Peel Road, Douglas, Isle of Man, IM1 5EP.

Approving the Cancellation and General Meeting

Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75 per cent. of the Shareholders voting in the Extraordinary General Meeting. Accordingly, an Extraordinary General Meeting ("EGM") has been convened to be held at 10.00 a.m. on 4 October 2017 at Martello Court, Admiral Park, St Peter Port, Guernsey, GY1 3HB at which a special resolution to approve the application to the London Stock Exchange for the Cancellation will be put to Shareholders. The Company will today post to its shareholders a Circular to convene the EGM and a copy of the Circular will shortly be available on the Company's website, https://www.specialistinvestmentproperties.com/.

If the Resolution is approved, it is expected that the Cancellation will take effect at 7.00 a.m. on 12 October 2017, being at least 20 business days following the date of this letter, and 5 clear business days following the date of the General Meeting. 

 

 

For further information:

Specialist Investment Properties plc

John Le Poidevin / Lynn Bruce / Simon Clements

+44 (0) 1481 724222

Allenby Capital Limited (Nomad and Broker to the Company)

David Worlidge / James Thomas / Liz Kirchner

+44 (0) 20 7167 6433

The definitions used within this announcement are as follows:

"Admission"

the admission of the Ordinary Shares to trading on AIM

 

"AIM"

the AIM securities market operated by the London Stock Exchange plc

 

"AIM Rules"

the AIM Rules for Companies published by the London Stock Exchange plc from time to time (including, without limitation, any guidance notes or statements of practice) which govern the rules and responsibilities of companies whose shares are admitted to trading on AIM

 

"Cancellation"

the proposed cancellation of the Company's Ordinary Shares from admission to trading on AIM, subject to the passing of the Resolution

 

"Circular"

the circular which will be sent to Shareholders in connection with the Cancellation

 

"City Code"

the City Code on Takeovers and Mergers

 

"Company" or "SIPP"

Specialist Investment Properties plc

 

"CREST"

the electronic settlement system established under the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) which enables title to units of relevant securities to be evidenced and transferred without a written instrument and in respect of which Euroclear UK and Ireland Limited is the operator

 

"Directors" or "Board"

the directors of the Company

 

"Extraordinary General Meeting" or "EGM"

the Extraordinary General Meeting of the Company convened for 10.00 a.m. on 4 October 2017 and any adjournment thereof

 

"Group"

the Company and its subsidiaries

 

"Ordinary Shares"

 

ordinary shares of 1p each in the capital of the Company

"Resolution"

the special resolution to be proposed at the EGM, details of which are set out in the notice of EGM set out in the Circular

 

"RIS"

Regulatory Information Service

 

"Shareholders"

the holders of Ordinary Shares and "Shareholder" means any one of them

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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