Proposed Cancellation of trading on AIM
May 26 2009 - 8:17AM
UK Regulatory
TIDMCLV
RNS Number : 8139S
Clipper Ventures PLC
26 May 2009
26 May 2009
Clipper Ventures plc
("Clipper Ventures" or the "Company")
Proposed cancellation of trading of securities on AIM (the "Cancellation")
The Company today announces that its Board of Directors (the "Board") has
resolved to seek shareholder approval for the cancellation of admission to
trading on AIM of the Ordinary Shares in the Company (the "Cancellation").
Having carefully considered the matter, the Directors have concluded it is no
longer in the best interests of the Company or its shareholders for the
Company's shares to continue to be admitted to trading on AIM. The Cancellation
is conditional upon the consent of not less than 75 per cent of votes cast by
shareholders at the proposed EGM.
Current trading and prospects
In January of this year, the Company announced that, since the publication of
its half-year results on 27 November 2008, economic uncertainty had continued,
leading to price reductions in the corporate entertainment market. As a
consequence, the Company took the decision to reduce its expected level of sales
and margins in its corporate sailing division. Similarly, the market for sail
training was proving difficult and as such, the Company reduced its expected
level of income in this division. As announced on 30 March 2009, the Company
subsequently entered into an agreement for the sale of the assets, business and
brand of its loss-making Zapcat Racing business which faced a very difficult
event sponsorship environment.
As a result, and as previously announced in January 2009, the Group anticipates
that its operating profit for the year ended 30 April 2009 will be significantly
lower than management's previous expectations announced in November 2008.
Turnover for the year was materially down compared to the previous year and
operating profits are expected to be approximately GBP0.75m compared to an
operating profit of GBP1.2m in the prior year. As at 30 April 2009, the Group
had net cash balances of approximately GBP2.5m. It is the Board's view that,
while the Clipper 09 race due to start in September 2009 will utilise a
considerable proportion of this cash, the balance nevertheless provides
sufficient working capital for the business over the coming year as well as a
small reserve against the anticipated fleet replacement (a project which has now
been started and is estimated to involve capital expenditure of approximately
US$10m over the next 4 years). Despite current economic difficulties, the
Directors believe the Group's prospects remain sound but do not expect to see
significant growth in profitability while the global economic environment
remains challenging.
Background to the Cancellation
In light of the above, the Directors have undertaken a review of the benefits of
the Ordinary Shares continuing to be traded on AIM, recognising the following
key factors:
* the negative impact that the current world recession and falls in the value of
global stock markets have had both on the sponsorship market and on small cap,
low liquidity stocks generally;
* admission to trading on AIM may no longer serve a useful function for the
Company in terms of its ability to access capital;
* the Board's view that the Company's current market capitalisation does not
accurately reflect its inherent value (the Company's share price having declined
by approximately 54 per cent. between 22 May 2008 and 22 May 2009, being the
latest practicable date prior to the date of this announcement) and that its
ability to conclude any potential future corporate transaction could be impeded
by the value placed on the Company by the market;
* the relative concentration of the Company's shareholder base, with four
shareholders (two of them Directors) holding approximately 65 per cent. of the
Company's issued ordinary share capital, resulting in limited trading liquidity
in the Ordinary Shares; and
* the disproportionate amounts of senior management time and regulatory burdens
associated with maintaining the Company's admission to AIM and meeting related
regulatory, reporting and corporate governance obligations.
Consequently, the Directors do not consider that the Company can justify any
longer the costs associated with being publicly listed and, following careful
consideration, have concluded that it is no longer in the best interests of the
Company and its shareholders to maintain admission of the Ordinary Shares to
AIM.
Strategy following the Cancellation
Following the Cancellation, the Directors intend to continue to focus on
enhancing shareholder value by continuing the Company's business in
substantially the same manner as at present.
The Company will not be bound to announce material events, interim or final
results, nor to comply with any of the corporate governance requirements for
quoted companies. However, the Directors wish to assure shareholders that they
remain committed to a high level of transparency and do not intend the
Cancellation to significantly impact on the level of disclosure of material
events currently made to them. As such, the Board will post relevant information
on the Company's website along the lines required by AIM Rule 26. They will also
hold annual and general meetings in accordance with statutory requirements and
the Company's articles of association, and will continue to send shareholders
copies of the Company's audited accounts. In addition, the Directors intend that
the composition of the Board will continue to include at least one independent
non-executive Director for so long as this is beneficial and practical.
Treasury shares
On 19 September 2007, pursuant to a general authority given by shareholders to
make market purchases of its own shares, the Company acquired 200,000 Ordinary
Shares currently held by it in treasury (the "Treasury Shares"). Immediately
upon Cancellation becoming effective, the Treasury Shares will cease to be
qualifying shares within the meaning of the Companies Act 1985 (the "Act"). In
accordance with section 162E of the Act, if shares held as treasury shares cease
to be qualifying shares, they must be cancelled and the Company's issued share
capital reduced by their nominal value. Although relatively immaterial in this
case, as a consequence of such cancellation and reduction in the issued share
capital of the Company, conditional upon Cancellation becoming effective on 26
June 2009, the Company will no longer hold any shares in treasury and the total
number of Ordinary Shares in issue will be 38,992,942.
Transactions in the Ordinary Shares following Cancellation
Liquidity on AIM is provided by market makers who are member firms of the London
Stock Exchange obliged to quote a share price between 8.00 a.m. and 4.30 p.m. on
business days. Following the Cancellation, there will no longer be a market
facility for dealing in the Ordinary Shares and no price will be publicly
quoted. As such, holdings of Ordinary Shares are unlikely to readily be capable
of sale and will be difficult to value.
The Directors are aware that shareholders are likely to wish to continue to
acquire or dispose of Ordinary Shares and, accordingly, the Company intends to
use reasonable endeavours to put in place and maintain a matched bargain
settlement facility.
Under this facility, it is intended that shareholders or persons wishing to
acquire Ordinary Shares will be able to leave an indication with the matched
bargain settlement facility provider (which may be the Company Secretary) 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, it 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. This can
take some time to process and, therefore, shareholders who consider they are
likely to use this facility are encouraged to register at the earliest
opportunity. Once the facility has been arranged, the contact details of the
matched bargain settlement facility provider and the process for the buying and
selling of Ordinary Shares will be made available to shareholders on the
Company's website at www.clipper-ventures.com.
Shareholders should note that, following the Cancellation, the Company will
remain subject to the provisions of the City Code on Takeovers and Mergers.
Extraordinary General Meeting
The EGM has been convened to approve the Cancellation and will be held at the
Company's registered office at 1A Granary & Bakery Building, Royal Clarence
Yard, Weevil Lane, Gosport, Hampshire PO12 1FX, on 18 June 2009 at 9:00 a.m.
In accordance with the AIM Rules, it is a requirement that any proposed
de-listing from AIM must be approved by not less than 75 per cent of
shareholders voting in general meeting. Those Directors who are also
shareholders have undertaken to vote in favour of the resolution in respect of
their beneficial shareholdings of 21,569,757 Ordinary Shares which represent, in
aggregate, approximately 55.3 per cent. of the current issued ordinary share
capital of the Company.
Subject to the requisite shareholder approval, the last day of trading in the
Ordinary Shares is expected to be 25 June 2009 and the Cancellation is expected
to be effective from 7.00 a.m. on 26 June 2009.
A copy of the shareholder circular convening the EGM is available on the
Company's website www.clipper-ventures.com.
For further information:
+--------------------------------------+--------------------------------------+
| Clipper Ventures plc | |
+--------------------------------------+--------------------------------------+
| William Ward | Tel: +44 (0)239 252 6000 |
| Jeremy Knight | |
+--------------------------------------+--------------------------------------+
| | |
+--------------------------------------+--------------------------------------+
| HB Corporate Limited | |
+--------------------------------------+--------------------------------------+
| Luke Cairns/Edward Cozens | Tel: +44 (0)207 510 8600 |
+--------------------------------------+--------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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