TIDMBKWD
RNS Number : 9071I
Brookwell Limited
09 July 2013
BROOKWELL LIMITED
RECOMMENDED PROPOSAL FOR VOLUNTARY WINDING UP AND CANCELLATION
OF ADMISSION AND TRADING ON AIM
On 10 June 2013 the Company announced that the Board would be
putting forward proposals for the Company to be put into a
voluntary winding up. The Company is today posting a circular
convening an Extraordinary General Meeting of the Company, to be
held at 9.00 a.m. on 30 July 2013, at which D Shareholders will be
asked to approve a resolution to wind up the Company and to appoint
James Robert Toynton and Alan John Roberts of Grant Thornton
Limited as the Joint Liquidators to wind up the Company and settle
the Company's liabilities. If the Resolution is passed, the
Company's admission to trading on AIM will be cancelled with effect
from 7 August 2013. The Joint Liquidators will be appointed with
effect from Cancellation.
Under the AIM Rules the Company is required to obtain the
approval of at least 75 per cent. of D Shareholders voting at a
general meeting for the cancellation of trading on AIM.
BACKGROUND
The Company was launched in June 2008 with the objective of
providing value and liquidity for shareholders from a portfolio of
investments which were acquired in exchange for A Shares issued at
GBP1 per share. The A Share portfolio was realised and the proceeds
returned to the holders of A Shares over the period to December
2010.
In February 2009 the Company launched the B Share class as a
separate class from the A Shares. The B Share portfolio was
realised and the proceeds returned to the holders of B Shares over
the period to March 2011.
In February 2011 the Company launched the D Share class and
16,424,372 D shares were issued in exchange for 76 investments with
a market value at bid price at acquisition of GBP16.4 million.
At 5 July 2013 (the latest practicable date prior to this
announcement) the Company had net assets of GBP2.8 million,
comprising five remaining investments with a book value of GBP2.7
million and net current assets of GBP0.1 million, after setting
aside an amount to cover the remaining expenses of the Company and
liquidation costs. The net assets are equivalent to 51.56p per
Share. The aggregate of the amount returned to D Shareholders
(including the 28 June 2013 redemption) and the latest net asset
value is GBP10.7 million. This is equivalent to 65 per cent. of the
initial gross assets of the D Class Fund.
At the time of the launch of the D Shares the Directors stated
that, at an extraordinary general meeting to be held in the third
quarter of 2014, D Shareholders would be invited to consider the
future of the Company. The Directors and the Investment Manager
expect that the realisation of the remaining investments may take
up to June 2014. Given the level of the on-going costs in
comparison to the net asset value, the Directors and the Investment
Manager consider that the best outcome for D Shareholders will be
achieved through a managed realisation as part of a solvent
liquidation. Accordingly, as set out below, the Directors recommend
that D Shareholders vote in favour of the Proposal to put the
Company into voluntary liquidation. As part of this process the
Investment Manager will be engaged to assist in the realisation of
the remaining investments.
D CLASS FUND
As noted above the D Class Fund has five investments at 5 July
2013 (the latest practicable date prior to this announcement).
These comprise three holdings which are carried at valuation (see
below) and two which are carried at nil value.
Company Trading status Percentage of Carrying value
relevant capital at 5 July
owned 2013
% GBPm
Northern Investors Company
plc Listed 6.5% 2.3
Private & Commercial
Finance Group plc AIM traded 8.9% 0.3
Squarestone Brasil Limited Delisted 1.7% 0.1
The investments in Northern Investors Company plc and Private
& Commercial Finance Group plc are carried at bid price.
Squarestone Brasil Limited is carried at the Directors' estimate of
fair value based on net asset value with a liquidity discount
applied.
The Company also hold two unlisted investments, Orchid
Developments Group Limited, which is in liquidation, and Trans
Balkan Investments Limited. Both investments are valued at nil.
REVISED INVESTMENT MANAGEMENT AGREEMENT
The Directors consider that the Investment Manager with its
knowledge of the remaining investments should assist the Joint
Liquidators in the realisation of those investments, with its
remuneration based on such realisation. The Investment Management
Agreement would automatically terminate on the liquidation of the
Company. The Company has therefore entered into the Revised
Investment Management Agreement which will become effective from
Cancellation.
The Investment Manager is entitled under the existing Investment
Management Agreement to receive a monthly management fee equal to
one twelfth of one per cent. of the net asset value at 30 June
2013. Under the terms of the Revised Investment Management
Agreement the Investment Manager will be entitled to a fee equal to
one per cent. of the proceeds of any realisations of the
investments in the period from 1 July 2013 to 30 June 2014. Any
fees in respect of realisations of the investments will be payable
in the month following the realisation. If Cancellation is
effective, this fee arrangement will apply from 1 July 2013 and no
amount will be payable in respect of that period under the existing
Investment Management Agreement.
The Investment Manager will arrange for the NAV of the D Shares
to be published quarterly on the Company's website
www.brookwelllimited.com until all or substantially all of the
investments are realised.
VOLUNTARY WINDING UP
The liquidation of the Company, which will be a solvent
liquidation in which all creditors will be paid in full, will
involve the passing of the Resolution to approve the Voluntary
Winding Up of the Company and to appoint the Joint Liquidators. The
appointment of the Joint Liquidators will become effective
immediately upon Cancellation. At this point, the powers of the
Directors would cease and the Joint Liquidators would assume
responsibility for the winding up of the Company, including the
payment of fees, costs and expenses, the discharging of the
liabilities of the Company and the realisation and distribution of
the remaining assets.
The net asset value of GBP2.8 million as at 5 July 2013 (the
latest practicable date prior to this announcement) is stated after
setting aside an amount to cover the remaining expenses of the
Company and liquidation costs (including the fees due to the
Investment Manager).
Under the terms of appointment the Joint Liquidators will be
paid at their normal rates until all surplus funds have been
realised and distributed to D Shareholders. The Joint Liquidators'
fees are expected to be approximately GBP23,000 based on the
assumption that the realisation of the investments and return of
funds to D Shareholders is completed within a year from the date of
appointment.
The Directors propose that James Robert Toynton and Alan John
Roberts be appointed as Joint Liquidators. They have agreed to
accept the appointment in the event that the Resolution is
passed.
The Joint Liquidators will begin the process of settling the
Company's liabilities as soon as practicable after Cancellation.
The Joint Liquidators will make distributions to D Shareholders as
the investments are realised over the period of the
liquidation.
DEALINGS AND SETTLEMENT
In the event that D Shareholders approve the Resolution, it is
expected that the last day for dealing in the D Shares will be 6
August 2013 and that the Cancellation will become effective on 7
August 2013.
If any of the proposed times or dates outlined above should
above change an announcement will be made through a Regulatory
Information Service (as defined in the AIM Rules).
PROCESS OF CANCELLATION AND ITS EFFECTS
In accordance with Rule 41 of the AIM Rules, the Company has
notified the London Stock Exchange of the intention to cancel the
admission to AIM. Under the AIM Rules it is a requirement that the
Cancellation is approved by not less than 75 per cent. of the votes
cast by D Shareholders (in person or by proxy) at the Extraordinary
General Meeting. Accordingly the Resolution seeks approval of the D
Shareholders for the Cancellation. Subject to the Resolution being
passed at the Extraordinary General Meeting, it is anticipated that
trading in the D Shares on AIM will cease at the close of business
on 6 August 2013 with Cancellation taking effect at 7.00 a.m. on 7
August 2013.
Following the cancellation of trading in the D Shares on AIM the
D Shares will not be traded on any public market and the CREST
facility, through which Uncertificated transactions are settled,
will be cancelled from the close of business on 6 August 2013.
Following the Cancellation Deloitte will cease to be the
nominated adviser and Marshall Securities Limited will cease to be
broker to the Company. The Company will no longer be required to
comply with the rules and corporate governance requirements to
which companies admitted to trading on AIM are subject, including
the AIM Rules.
The services of the Northern Trust Company as custodians to
Brookwell will be retained until all of the assets are realised
and/or deemed to be of negligible value and abandoned. The services
of Capita Registrars will be maintained to manage the shareholder
register.
RECOMMENDATION
The Board believes that the Proposal is in the best interests of
D Shareholders as a whole and recommends that all D Shareholders
vote in favour of the Resolution.
EXPECTED TIMETABLE
2013
Circular and Form of Proxy posted to 9 July
D Shareholders
Last time and date for receipt of Forms 9.00 a.m.
of Proxy on 28 July
Extraordinary General Meeting of the 9.00 a.m.
Company on 30 July
Proposed cancellation of admission 7.00 a.m. 7 August
to trading on AIM on
If any of the details contained in the timetable above should
change, the revised times and dates will be notified to
Shareholders by means of an announcement through a Regulatory
Information Service (as defined in the AIM Rules). All events
listed in the above timetable following the General Meeting are
conditional on the passing of the Resolution at the General Meeting
and assume that the General Meeting is not adjourned.
All of the times referred to in this announcement refer to
London time.
Except where the context otherwise requires, capitalised terms
in this announcement have the meaning set out in the definitions
contained in the circular, a copy of which will be available on the
Company's website www.brookwelllimited.com.
For further information please contact:
Brookwell Limited
Tom Lancaster-King Tel: 01481 726 034
Progressive AIM Realisation Limited (Investment manager)
Robert Legget Tel: 020 7566 5550
Deloitte Corporate Finance (Nominated adviser)
James Lewis / Paul Zimmerman Tel: 020 7936 3000
Marshall Securities Limited (Broker)
John Webb Tel: 020 7490 3788
9 July 2013
Website: www.brookwelllimited.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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