TIDMGBR
RNS Number : 1840T
Global Brands S.A.
01 December 2011
01 December 2011
Global Brands S.A. ("Global Brands" or "the Company")
Notice of EGM and Trading Update
Global Brands S.A. (AIM: GBR), an international business
developing branded food operations in Europe, including being the
master franchise owner of Domino's Pizza in Switzerland, Luxembourg
and Liechtenstein, provides an update on key developments.
Current trading and prospects:
The Company's performance has been slower than anticipated,
especially following the difficult trading conditions experienced
during Q3. As a result, reaching profitability will take longer.
The management team has battled to deliver strong same store sales
growth over the significant gains achieved last year and
sub-franchising is taking longer than originally anticipated.
The Austrian market opportunity would have provided the
opportunity to deliver growth whilst leveraging the Company's
central overhead and reducing the net cost to the operation in
Switzerland. Without this short-term opportunity, the costs
associated with being on AIM, will materially impact the Company's
ability to deliver a profit in the near term.
EGM:
After careful consideration by the Board of Directors, the
Company announces that it will seek approval for the cancellation
of admission of its ordinary shares of CHF 0.02 each ("Ordinary
Shares") to trading on AIM ("the Delisting").
A general meeting of shareholders will be convened for 14:00 on
21 December 2011 to seek approval for the Delisting (the "General
Meeting") with the Delisting becoming effective, subject to that
approval, on 30 December 2011.
Background:
The Company was admitted to trading on AIM in September 2005
raising GBP2.8m of capital to be used to grow the company to 23
stores in three years. In addition, it was contemplated that the
Company would utilise its listing on AIM to raise further capital
to diversify both its brand portfolio and its operations
geographically.
The performance of the Company since admission has been mixed
and well documented. The significant reduction in losses and the
move toward breakeven has been a difficult and slow process.
Whilst the Directors appreciate the support of all shareholders,
they believe that the historic performance of the Company and the
recent lack of interest to fund the Austrian opportunity is a clear
indication of current investor sentiment.
The Directors remain confident that the business will continue
to improve and ultimately grow through diversification, however
they believe that investor sentiment will not significantly improve
until the Company has reported a number of years of profitable
performance. Without the opportunity to grow quickly by opening a
new market such as Austria, growth will be organic and take time.
During this time, the business would continue to incur the costs
associated with its listing but without the principal benefits that
it should bring. Therefore the Directors are recommending to
Shareholders to Delist the Company.
Consideration:
In preparing their recommendation in favour of Delisting, the
Directors have taken into account the following:
-- The primary purpose of the admission to trading on AIM was
the ability to raise capital. This has now been severely
compromised meaning that either capital will not be available or
only available at a price that is not in the best interests of
Shareholders.
-- Capital could be available to the Company from sources other
than those seeking publicly traded investments and these would be
more easily accessible if the Company was not a publicly traded
company.
-- The admission to trading on AIM does not, in itself, offer
investors meaningful liquidity or marketability of the Ordinary
Shares or the opportunity to trade in meaningful volumes or with
frequency.
-- In those circumstances, the on-going costs and regulatory
requirements, together with the management time of maintaining the
admission to trading on AIM, are not a justifiable expense.
Given the above, the Directors believe that greater shareholder
value will ultimately be derived by operating the Company's
business off-market and consider it to be in the best interests of
the Company and its Shareholders as a whole to seek a Delisting at
this time.
Effect of the Delisting on Shareholders:
The principal effects of the Delisting would be that:
-- There would no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares on AIM;
-- The Company would not be bound to announce material events,
administrative changes or material transactions, nor to announce
interim or final results;
-- 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;
-- The Company would no longer be subject to the AIM Rules for
Companies and Shareholders would therefore no longer be afforded
the protections given by the AIM Rules for Companies. Such
protections include the requirement to be notified of certain
events including, amongst other things, substantial transactions
(the size of which results in a 10 per cent. threshold being
reached under any one of the class tests) and related party
transactions and the requirement to obtain shareholder approval for
reverse takeovers (the size of which results in a 100 per cent.
threshold being reached under any one of the class tests) and
fundamental changes in the Company's business including disposals
exceeding 75 per cent. under any of the class tests;
-- The Company would no longer be subject to the Disclosure
Rules and Transparency Rules of the Financial Services Authority
and would therefore no longer be required specifically to disclose
major shareholdings in the Company; and
-- Upon the Delisting becoming effective, the Company's CREST
facility will be cancelled and Shareholders who hold Ordinary
Shares in un-certificated form prior to Delisting will receive
share certificates.
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.
The Board intends, however, to continue to hold general meetings
in accordance with the applicable statutory requirements and the
Company's articles of association and to provide copies of the
Company's annual report and audited accounts to Shareholders in
accordance with the applicable statutory requirements.
Immediately following the Delisting, there will be no market
facility for dealing in the Ordinary Shares and no price will be
publicly quoted. As a result, the Board recognises that the
Delisting will make it more difficult for Shareholders to buy and
sell Ordinary Shares should they want to do so. In view of this,
and in order to assist Shareholders, the Board intends, at an
appropriate time following the Delisting, to facilitate a matched
bargain dealing arrangement to enable Shareholders to trade the
Ordinary Shares. Once the facility has been arranged, details will
be made available to Shareholders.
Following the Delisting:
The Company will continue to work at maximising value for its
Shareholders which the Directors believe will be easier to achieve
if the Delisting is approved as management time can be focused on
driving the business forward.
Process for Delisting:
In accordance with Rule 41 of the AIM Rules for Companies, the
Company has notified the London Stock Exchange of the intention to
cancel the admission of the Ordinary Shares to trading on AIM,
subject to Shareholder approval. Under the AIM Rules for Companies,
it is a requirement that the Delisting is approved by the requisite
majority of Shareholders voting at the General Meeting (being not
less than 75 per cent. of the votes cast).
The Company will send a notice of general meeting to
Shareholders shortly convening the General Meeting. The Notice of
General Meeting will set out a resolution seeking Shareholders'
approval of the Delisting (the "Resolution"). Subject to the
Resolution approving the Delisting being passed at the General
Meeting, it is anticipated that trading in the Ordinary Shares on
AIM will cease at the close of business on 29 December 2011 with
Delisting taking effect at 7.00 a.m. on 30 December 2011.
Irrevocable Undertakings:
The Company has received irrevocable undertakings to vote in
favour of the Resolution to be proposed at the General Meeting from
[two] of the Directors of the Company who together are interested
in [5,434,335] Ordinary Shares, representing [2.66] per cent of the
current issued ordinary share capital of the Company.
In addition, the Company has received irrevocable undertakings
to vote in favour of the Resolution to be proposed at the General
Meeting from shareholders of the Company who together are
interested in [84,727,291] Ordinary Shares, representing [41.50]
per cent of the current issued ordinary share capital of the
Company.
General Meeting:
The General Meeting of the Company will be held at the Company's
registered office, 19 rue Eugene Ruppert, Luxembourg, L-2453 at
14:00 on the 21 December 2011. At the General Meeting, the
Resolution will be proposed.
Recommendation:
The Directors consider the Delisting to be in the best interests
of the Company and its Shareholders as a whole, and most likely to
promote the success of the Company for the benefit of its
Shareholders as a whole, and accordingly unanimously recommend that
Shareholders vote in favour of the Resolution to be proposed at the
General Meeting as they have irrevocably undertaken to do in
respect of their own beneficial holdings of Ordinary Shares,
amounting, in aggregate, to [5,434,335] Ordinary Shares,
representing [2.66] per cent of the current issued ordinary share
capital of the Company.
-Ends-
For further information:
Global Brands S.A.
Simon Bentley, Chairman Tel: (0) 20 7317 8022
Bruce Vandenberg, CEO www.globalbrands.ch
Libertas Capital
Thilo Hoffmann Tel: (0) 20 7569 9650
Sandy Jamieson www.libertaspartnersllp.com
Alexander David Securities Ltd
Bill Sharp Tel: (0) 20 7448 9820
Fiona Kinghorn Tel: (0) 20 7448 9832
www.ad-securities.com
FTI Consulting
Jonathon Brill Tel: (0)20 7831 3113
Caroline Stewart www.fticonsulting.com
Notes to Editors:
Global Brands is a public company incorporated under the laws of
Luxembourg and established in 1999. The company has been admitted
to trading on the AIM of the London Stock Exchange since 2005.
The Company is the owner and operator of the exclusive master
franchise of Domino's Pizza in Switzerland, Luxembourg and
Liechtenstein. Domino's Pizza is the world's leading pizza delivery
brand, with over 9000 stores in 63 markets.
Global Brands SA's stated strategy is to add additional
international brands to its portfolio.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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