TIDMECAP
RNS Number : 3508Q
Elephant Capital PLC
26 February 2016
For Immediate Release 26 February 2016
Elephant Capital PLC
Further Details Regarding Delisting Proposal
Introduction
On 26 February 2016, the Board announced its intention to seek
Shareholder approval for the cancellation of the admission of the
Ordinary Shares to trading on AIM. The Board believes that it is
helpful for Shareholders to be able to consider the proposed
Delisting in conjunction with the report and audited accounts of
the Company for the year ended 31 August 2015. Accordingly, the
Board is proposing the resolution to approve the proposed Delisting
as part of the business at this year's annual general meeting of
the Company, which has been convened for 10.00 a.m. on 1 April
2016. The Directors unanimously consider the proposed Delisting to
be in the best interests of the Company and its Shareholders as a
whole and are recommending that Shareholders should vote in favour
of the proposed Delisting at the AGM.
Copies of the report and audited accounts of the Company for the
year ended 31 August 2015 and a separate circular containing
further details of the proposed Delisting and the notice convening
the AGM will be posted to Shareholders on 29 February 2016 and
copies will also be available for download from the Company's
website at www.elephantcapital.com shortly.
Background to, and Reasons for, the Delisting
At an extraordinary general meeting of the Company held in June
2011, Shareholders approved proposals for a managed wind down of
the Company, focussing on realising the Company's then existing
investment portfolio over time and (subject to the Company's
working capital requirements and to the extent permitted by law)
returning relevant realisation proceeds to Shareholders. Since
then, the Company has realised several of its investments and
returned, through a combination of tender offers and buy-backs of
Ordinary Shares through the market, GBP11.8 million in cash to
Shareholders.
The Board, in conjunction with the Investment Manager, is
continuing to seek suitable solutions for the disposal of the
Company's remaining illiquid investments (valued, in aggregate, at
GBP4.4 million as at 31 August 2015). However, the Investment
Manager does not expect the realisation of the Company's remaining
investments to be completed in the near future. As it sells down
its remaining investments, the Company intends to make further
phased returns of cash to Shareholders as part of its managed wind
down process.
The Board is conscious of the depletion of the Company's net
assets resulting from the ongoing costs of the Company. Cancelling
the admission of the Ordinary Shares to trading on AIM would remove
certain costs and the administrative and regulatory burden
associated with the Company's AIM quotation and will enable the
Company to make further cost savings. The Board estimates that cost
savings of approximately GBP100,000 per annum (including the
Chairman's retirement), which equates to approximately 20 per cent.
of the Company's annualised net operating costs in the year ended
31 August 2015, could be achieved if the Company ceases to be an
AIM company.
The Board also recognises that there has been an absence of
meaningful market liquidity in the Ordinary Shares for some time
(during the 12 months ended 24 February 2016, the Ordinary Shares
traded on only 31 days) and, accordingly, that the AIM quotation of
the Ordinary Shares no longer offers investors the opportunity to
trade in meaningful volumes or with frequency within an active
market.
Accordingly, the Board has concluded that the costs of
maintaining the admission of the Ordinary Shares to trading on AIM
at a time when the Company is completing its realisation strategy
outweigh the potential benefits and, therefore, that it is no
longer in the interests of the Company or its Shareholders as a
whole for the Ordinary Shares to remain traded on AIM.
Principal Effects of Delisting
The principal effects that the Delisting will have on
Shareholders include the following:
-- there will no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares on AIM (or any other
recognised market or trading exchange);
-- while the Ordinary Shares will remain freely transferable,
they may be more difficult to sell compared to shares of companies
traded on AIM (or any other recognised market or trading
exchange);
-- it may be more difficult for Shareholders to determine the
market value of their investment in the Company at any given
time;
-- the Company will no longer be subject to the AIM Rules and,
accordingly, Shareholders will no longer be afforded the
protections given by the AIM Rules - in particular, the Company
will not be bound to:
- make any public announcements of material events, or to announce interim or final results;
- comply with any of the corporate governance practices applicable to AIM companies;
- announce substantial transactions and related party transactions; or
- comply with the requirement to obtain shareholder approval for
reverse takeovers, changes to the Company's investing policy and
fundamental changes in the Company's business;
-- the Company will cease to retain a nominated adviser and broker; and
-- the Delisting might have either positive or negative taxation
consequences for Shareholders (Shareholders who are in any doubt
about their tax position should consult their own professional
independent adviser immediately).
The Company will remain subject to the Companies Act. The
Company will also continue to be subject to the City Code for the
period of 10 years from the date of the Delisting and, therefore,
Shareholders will continue to receive the minority and other
protections afforded by the City Code.
The Company will continue to retain the services of its
Investment Manager on the current terms (including the fixed fee of
GBP160,000 per annum, which will remain payable until 25 February
2017). It is anticipated that the Company's investment portfolio
may not have been realised in full by 25 February 2017 and the
Investment Manager has agreed that, in that event, it will continue
to provide its management services for no fee.
Notwithstanding the Delisting, the Company will continue to
prepare and send to Shareholders audited annual reports and
accounts and to hold annual general meetings and other general
meetings in accordance with the applicable statutory requirements
and the Company's articles of association.
The Board intends to continue to maintain the Company's website
(www.elephantcapital.com) and to post portfolio updates on that
website from time to time, although Shareholders should be aware
that there will be no obligation on the Company to include all of
the information required under AIM Rule 26 or to update the website
as required by the AIM Rules.
Process for Delisting
The Delisting is conditional on the approval of not less than 75
per cent. of votes cast by Shareholders on the resolution regarding
the Delisting to be proposed at the AGM.
Furthermore, Rule 41 of the AIM Rules requires an AIM company
that wishes the London Stock Exchange to cancel the admission of
its shares to trading on AIM to notify such intended cancellation
and separately inform the London Stock Exchange of its preferred
cancellation date at least 20 business days prior to such date. In
accordance with AIM Rule 41, the Directors have notified AIM of the
Company's intention, subject to resolution 3 being passed at the
AGM, to cancel the Company's admission of the Ordinary Shares to
trading on AIM on 11 April 2016. Accordingly, if resolution 3 is
passed at the AGM, the Delisting will be effective at 7.00 a.m. on
11 April 2016.
The Shares will remain eligible for settlement in CREST.
Accordingly, Shareholders will continue to be able to hold their
shares in CREST after Delisting.
Transactions in Ordinary Shares following the Delisting
Shareholders should note that, if effected, the Delisting will
significantly reduce the liquidity and marketability of the
Ordinary Shares. The Directors intend to make arrangements for a
matched bargain facility through Capita Asset Services following
the Delisting becoming effective. Details of this facility will be
included on the Company's website in due course in the event that
the Delisting is completed.
Enquiries
Vikram Lall, Chairman +1 473 533 2513
Gaurav Burman +44 (0) 20
Elephant Capital plc 7389 1770
Sue Inglis
Cantor Fitzgerald Europe (Nominated +44 (0) 20 7894
Adviser & Broker) 8016
Expected Timetable(1)
2016
Circular containing details of the proposed Delisting and
the notice convening the AGM posted to shareholders 29
February
Latest time and date for receipt of Forms of Proxy for the AGM
10.00 a.m. on 30 March
AGM 10.00 a.m. on 1 April
Last day of dealing in the Ordinary Shares on AIM(2) 8 April
Cancellation of the admission to trading on AIM of the
Ordinary Shares becomes effective(2) 7.00 a.m. on 11 April
Notes:
(1) All times referred to in this announcement are, unless
otherwise stated, references to London time.
(2) Conditional on resolution 3 to be proposed at the AGM being
passed.
Definitions
February 26, 2016 09:57 ET (14:57 GMT)
The following definitions apply throughout this announcement
unless the context otherwise requires:
"AGM" the annual general meeting of the Company convened for 10.00 a.m. on 1 April 2016, or any
adjournment of that meeting
"AIM" the market of that name, operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies (including the AIM Note for Investing Companies) published by
the London Stock Exchange from time to time
"Board" the Board of Directors, including any duly constituted committee thereof
"City Code" The City Code on Takeovers and Mergers
"Company" Elephant Capital PLC
"Companies Act" Isle of Man Companies Acts 1931 - 2004
"CREST" the system for the paperless settlement of trades in securities and the holding of
uncertificated
securities generated by Euroclear UK and Ireland Limited in accordance with the
Uncertificated
Securities Regulations 2005 of the Isle of Man
"Delisting" cancellation of admission of the Ordinary Shares to trading on AIM in accordance with Rule
41 of the AIM Rules
"Directors" the Directors of the Company
"Form of Proxy" the form of proxy for use by Shareholders in connection with the AGM
"Investment Manager" Elephant Capital LLP
"London Stock Exchange" London Stock Exchange plc
"Ordinary Shares" ordinary shares of GBP0.01 each in the capital of the Company
"Shareholders" holders of Ordinary Shares
This information is provided by RNS
The company news service from the London Stock Exchange
END
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February 26, 2016 09:57 ET (14:57 GMT)
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