13
November 2024
The
information contained in this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU
Exit) Regulations 2019. The person responsible for making this
announcement on behalf of the Company is Rory
Mepham.
For
immediate release
Sancus Lending Group
Limited
("Sancus" or the
"Company")
Intended Cancellation of
Listing of ZDP Shares and ZDP Share Buyback
The Company today announces that it
has applied to the Financial Conduct Authority ("FCA") and London Stock Exchange plc
(the "LSE") to effect a
cancellation of its listing of zero dividend preference shares of
no par value (the "ZDP
Shares") in the non-equity shares and non-voting equity
shares category of the Official List and to trading on the main
market for listed securities of the LSE ("Main Market") (the "Cancellation"), which is expected to
become effective at 7.00 a.m. on 11 December 2024. The Company is
also announcing a ZDP Share Buyback for those holders of ZDP Shares
(the "ZDP Shareholders")
who wish to realise some or all of their holding of ZDP Shares,
prior to Cancellation.
After careful consideration, the
board of directors of the Company (the "Directors") have concluded that the
Cancellation will be in the best interests of the Company, its
business and its shareholders as a whole. Further rationale for the
Cancellation is provided in the letter from the Chairman to ZDP
Shareholders, which is set out in full in the Appendix to this
announcement.
ZDP Shareholders should note that
they are able to continue to trade in the ZDP Shares on the Main
Market prior to the effective date of Cancellation. However, all
ZDP Shareholders should note that following Cancellation the
ability for ZDP Shareholders to dispose of their ZDP Shares will be
significantly diminished and will be dependent on there being a
willing buyer for those ZDP Shares at such time.
For those ZDP Shareholders who wish
to realise some or all of their holding of ZDP Shares, the Company
is offering a liquidity mechanism in the form of:
(a) first, pursuant to the Company's
existing share buyback authority granted at the annual general
meeting of the Company held on 16 August 2024, the Company will
purchase ZDP Shares by way of a reverse bookbuild process, as set
out below. The Company intends to acquire ZDP Shares for cash at a
price which amounts to a maximum aggregate consideration of £2.3
million (the "ZDP Share
Consideration"), and at a price per ZDP Share of 108 pence
(being the closing mid-market price of the ZDP Shares prior to the
date of this announcement) (or such lower price as is required
pursuant to Company's existing share buyback authority) (the
"ZDP Offer Price") until
10.00 a.m. on 9 December 2024 (being two days prior to the
Cancellation) (the "ZDP Share
Buyback"); and
(b) second, Somerston Fintech
Limited ("Somerston"), the
majority holder of the Company's ordinary shares and ZDP Shares,
has committed to buy, to the extent that there is excess demand
following the ZDP Share Buyback, ZDP Shares for cash at a price
which amounts to a maximum aggregate consideration of £1.1 million,
and at a price per ZDP Share of the ZDP Offer Price (108p), until
10.00 a.m. on 9 December 2024 (being two days prior to the
Cancellation) (the "Somerston
Purchases").
The ZDP Share Buyback will be funded
by the issue by the Company to Somerston of 8 per cent. unsecured
bonds with a maturity date of 31 October 2027 (the "Bonds"). Further details about the
issue of these Bonds are set out in the Appendix to this
Announcement.
Any ZDP Shareholder who is
interested in exchanging some or all of their holding of ZDP Shares
for Bonds should contact the Company using the below contact
details. Any such exchange is subject to eligibility and is at the
absolute discretion of the Company. No Bonds are being offered to
any person pursuant to this announcement.
Somerston holds 50.40 per cent. of
the ZDP Shares and has confirmed to the Company that it will not
sell its ZDP Shares pursuant to the ZDP Share Buyback. All other
ZDP Shareholders will have the opportunity to realise their
investment in the ZDP Share Buyback. Further details about the ZDP
Share Buyback are set out in the Appendix to this
announcement.
As a company listed in the
non-equity shares and non-voting equity shares category of the
Official List, the Company is not required to obtain the approval
of shareholders for the Cancellation. Pursuant to UK Listing Rule
21.2.17 R though, the Company is required to give at least 20
business days' notice of the intended cancellation of this listing.
It is anticipated that the Cancellation will become effective at
7.00 a.m. on 11 December 2024. Following the Cancellation, in
respect of the ZDP Shares, the Company will no longer be subject to
the regulatory and statutory regime which applies to companies
admitted to listing in the non-equity shares and non-voting equity
shares category of the Official List and traded on the Main
Market.
The Cancellation will not apply to
the ordinary shares of no par value in the capital of the Company
(the "Ordinary Shares"),
which will continue to be admitted to trading on the AIM market of
the LSE.
For further information, please
contact:
Sancus Lending Group Limited
Rory Mepham
Keith Lawrence
+44 (0)1481 708 280
Panmure Liberum Limited (Nominated Adviser and Corporate
Broker)
Chris Clarke
William King
+44 (0) 20 3100 2000
Instinctif Partners (PR Advisor)
Hannah Scott
Augustine Chipungu
+44 (0)20 7457 2020
Apex
Group Ltd
Matt Falla
Nicola Momberg
+44 (0)1481 755530
Panmure Liberum Limited ("Panmure Liberum") is authorised and
regulated by the Financial Conduct Authority ("FCA") in the United Kingdom and is
acting exclusively for the Company and no one else in connection
with the Cancellation and shall not be responsible to anyone other
than the Company for providing the protections afforded to its
clients, nor for providing advice in connection with the
Cancellation or any matter referred to herein. None of Panmure
Liberum nor any of its affiliates (nor any of them or their
respective directors, officers, employees, representatives or
agents) owe or accept any duty, liability or responsibility
whatsoever (whether direct, indirect, consequential, whether in
contract, in tort, under statute or otherwise) to any person who is
not a client of Panmure Liberum in connection with the
Cancellation, this announcement, any statement contained herein or
otherwise.
Appendix
Letter from the
Chairman
THIS
DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION.
If
you are in any doubt about the contents of this letter, its likely
impact on you and/or the action you should take, you should
immediately consult your stockbroker, bank, solicitor, accountant,
fund manager or other appropriate independent financial adviser
authorised under the Financial Services and Markets Act 2000 (as
amended) if you are resident in the United Kingdom or, if not,
another appropriate authorised independent financial adviser in
your own jurisdiction.
If
you have sold or otherwise transferred all of your ZDP Shares in
Sancus Lending Group Limited (or will have sold or transferred all
such shares prior to implementation of the proposals described
below), please pass this document to the purchaser or transferee,
or to the person who arranged the sale or transfer, for onward
transmission to the purchaser or transferee.
13 November 2024
Dear ZDP Shareholders,
Intended cancellation of ZDP Shares Listing
1.
Introduction
The Company has two classes of
shares in issue: (i) zero dividend preference shares of no par
value ("ZDP Shares") and
(ii) ordinary shares of no par value (the "Ordinary Shares").
The ZDP Shares are listed in the
non-equity shares and non-voting equity shares category of the
Official List and traded on the main market for listed securities
of London Stock Exchange (the "LSE") ("Main Market"). The ZDP Shares have been
listed and traded on the Main Market since 5 October 2015 and have
a maturity date of 5 December 2027. On that date, the ZDP Shares
are expected to be redeemed for a final capital entitlement of
253.32 pence per ZDP Share (representing a 9 per cent. per annum
yield in the period from 6 December 2022, when the terms of the ZDP
Shares were most recently amended, to 5 December 2027).
As at the date of this letter, there
are 35 holders of ZDP Shares ("ZDP
Shareholders") recorded on the Company's ZDP Shareholders'
register and 6,274,833 ZDP Shares in issue (excluding 11,894,628
ZDP Shares held by the Company in treasury). Somerston Fintech
Limited ("Somerston") holds
50.40 per cent. of the ZDP Shares.
The Company is now writing to ZDP
Shareholders to advise of its intention to cancel the listing of
its ZDP Shares in the non-equity shares and non-voting equity
shares category of the Official List and to trading on the main
market of the LSE (the "Cancellation").
The Ordinary Shares were admitted to
trading on the AIM market of the LSE ("AIM") on 5 August 2005 and they will
continue to be admitted to AIM; the Cancellation does not apply to
the Ordinary Shares.
As a company listed in the
non-equity shares and non-voting equity shares category of the
Official List, the Company is not required to obtain the approval
of shareholders for the Cancellation and is instead required only
to provide the Financial Conduct Authority ("FCA") with 20 business days' prior
notice. The Cancellation will take effect at 7.00 a.m. on
December 2024.
The purpose of this letter is to
explain why the directors of the Company (the "Directors", or the "Board") unanimously consider the
Cancellation to be in the best interests of the Company, its
business and existing shareholders as a whole.
2. Background to,
and reasons for, the Cancellation
At an extraordinary general meeting
held on 12 December 2014, a special resolution was passed to
approve the adoption of new articles of incorporation in connection
with the creation of a new class of redeemable zero dividend
preference shares in the capital of the Company in connection with
the Company's acquisition of Sancus Limited and Sancus (Guernsey)
Limited from Sancus Holdings Limited. The Board believed that the
ZDP Shares would diversify the funding of the Company's capital
structure and better align the structure with the Board's
expectation of the future returns from the Company's business. The
issue of ZDP Shares was also expected to reduce the Company's
overall cost of capital.
However, since then, the Directors
have identified an increased management burden, cost and a
distraction from the core business of the Company by being subject
to the additional obligations associated with the listing of the
ZDP Shares.
The Directors unanimously believe
that the listing of the ZDP Shares offers no material benefits to
the Company or shareholders and creates additional obligations for
the Company, including required compliance with an accelerated
financial reporting timetable, additional regulatory disclosure
obligations and additional filing obligations. Further, the ZDP
Shares have consistently traded at a material discount to their
book value and, as at the date of this letter, were trading at
approximately 554 per cent. of book value. Given the very limited
market liquidity in respect of the ZDP Shares, it also appears that
the listed status of the ZDP Shares is of little benefit to the ZDP
Shareholders and is of no benefit to the holders of Ordinary
Shares.
The Company has no formal obligation
to retain the listed status of the ZDP Shares, therefore the
Directors believe that the on-going costs and
regulatory requirements associated with maintaining the listed
status of the ZDP Shares are disproportionate to any perceived
benefits to the Company.
Prior to progressing with the
Cancellation, the Directors consulted the Company's larger ZDP
Shareholders and the proposals received support. The outcome of
those consultations has been taken into account by the Directors
when considering whether to proceed with the
Cancellation.
3. Process for,
and principal effects of, the Cancellation
The Directors are aware that certain
ZDP Shareholders may be unable or unwilling to hold ZDP Shares once
the Cancellation becomes effective. Such ZDP Shareholders should
consider selling their ZDP Shares in the market prior to the
Cancellation becoming effective (either pursuant to the ZDP Share
Buyback referred to in paragraph 4(a) of this letter or
otherwise).
The principal effects of the
Cancellation will be that:
· there
will be no formal market mechanism enabling ZDP Shareholders to
trade their ZDP Shares. No other recognised market or trading
facility is intended to be put in place to facilitate the trading
of the ZDP Shares following the Cancellation;
· while
the ZDP Shares will remain freely transferable, it is likely that
the liquidity and marketability of the ZDP Shares will, following
Cancellation, be even more constrained than at present and the
value of such ZDP Shares may be adversely affected as a
consequence;
· in the
absence of a formal market and quote, it may be more difficult for
ZDP Shareholders to determine the market value of their ZDP Shares
at any given time;
· the
regulatory and financial reporting and disclosure obligations
applicable to shares that are listed and traded on the Main Market
will no longer apply to the ZDP Shares;
· ZDP
Shareholders will no longer be afforded the protections given by
the UK Listing Rules, such as the requirement to be notified of
certain events and the separate requirement to seek shareholder
approval for certain other corporate events such as reverse
takeovers or fundamental changes in the Company's business;
and
· the
Cancellation may have taxation or other commercial consequences for
ZDP Shareholders. ZDP Shareholders who are in any doubt about their
tax position should consult their own professional independent tax
advisers.
The above considerations are not
exhaustive and ZDP Shareholders should seek their own independent
advice when assessing the likely impact of the Cancellation on
them.
Pursuant to the UK Listing Rules,
the Company is not required to obtain the approval of shareholders
for the Cancellation and is instead required only to provide the
FCA with 20 business days' prior notice. It is proposed that the
Cancellation will take effect at 7.00 a.m. on 11 December
2024.
Following Cancellation, the Company
will remain registered with the Guernsey Registry and the Guernsey
Financial Services Commission as a Non-Regulated Financial Services
Business and its Ordinary Shares will remain admitted to trading on
AIM, notwithstanding the Cancellation. ZDP Shareholders should also
note that the City Code on Takeovers and Mergers (the "Takeover Code") will continue to apply
to the Company following the Cancellation.
The Company will also continue to be
bound by the Company's articles of incorporation (the "Articles") (which set out the rights
attaching to the ZDP Shares) following the Cancellation. The
Company has no present intention to amend the Articles, but the
Company may seek approval from the holders of the Ordinary Shares
to amend the Articles in the future. Any amendments to the terms of
the ZDP Shares would require the approval of ZDP Shareholders in
accordance with the Articles.
The Ordinary Shares will remain
admitted to trading on AIM following the Cancellation.
4. Transactions
in the ZDP Shares prior to and post the intended
Cancellation
ZDP Shareholders should note that
they are able to continue to trade in the ZDP Shares on the Main
Market prior to the effective date of Cancellation.
Whether or not ZDP Shareholders seek
to sell their ZDP Shares in light of the proposed Cancellation is a
matter for individual ZDP Shareholders and will depend on their
personal circumstances. The Directors make no recommendation in
this regard and any ZDP Shareholders that are in any doubt as to
what they should do are advised to seek their own independent
advice from a professional adviser, duly authorised and regulated
by the FCA, if they are resident in the United Kingdom, or if not,
another appropriate authorised independent financial adviser in
their own jurisdiction.
All ZDP Shareholders should note,
however, that following Cancellation the ability for ZDP
Shareholders to dispose of their ZDP Shares will be significantly
diminished and will be dependent on there being a willing buyer for
those ZDP Shares for the time being.
a.
Transactions in the ZDP Shares prior to the intended
Cancellation
For those ZDP Shareholders who wish
to realise some or all of their holding of ZDP Shares prior to the
intended Cancellation, the Company is offering a liquidity
mechanism in the form of:
(i) first, pursuant to the
Company's existing share buyback authority granted at the annual
general meeting of the Company held on 16 August 2024 (the
"Authority"), the Company
will purchase ZDP Shares by way of a reverse bookbuild process, as
set out below. The Company intends to acquire ZDP Shares for cash
at a price which amounts to a maximum aggregate consideration of
£2.3 million (the "ZDP Share
Consideration"), and at a price per ZDP Share of 108 pence
(being the closing mid-market price of the ZDP Shares prior to the
date of this announcement) (or such lower price as is required
pursuant to Company's existing share buyback authority) (the
"ZDP Offer Price") until
10.00 a.m. on 9 December 2024 (being two days prior to the
Cancellation) (the "ZDP Share
Buyback"). This commitment is subject to the continuing
availability of that Authority and the Company's ability to
undertake the ZDP Share Buyback in accordance with the terms of the
Authority; and
(ii)
second, Somerston, the majority holder of the Company's ordinary
shares and ZDP Shares, has committed to buy, to the extent that
there is excess demand following the ZDP Share Buyback, ZDP Shares
for cash at a price which amounts to a maximum aggregate
consideration of £1.1 million, and at a price per ZDP Share of the
ZDP Offer Price, until 10.00 a.m. on 9 December 2024 (being two
days prior to the Cancellation) (the "Somerston Purchases").
Under the procedures of the ZDP
Share Buyback and the Somerston Purchases, holders of ZDP Shares
may offer to sell some or all of their ZDP Shares at the ZDP Offer
Price.
ZDP Shareholders who do wish to sell
some or all of their ZDP Shares to Sancus or to Somerston should
contact Panmure Liberum Limited ("Panmure Liberum") to make their offers
in the ZDP Share Buyback and the Somerston Purchases prior to 10.00
a.m. on 9 December 2024 (being the day prior to the Cancellation)
(the "Closing Time") (the
period from this announcement to the Closing Time being the
"ZDP Offer
Period").
ZDP Shareholders may offer to sell
some or all of their ZDP Shares in the ZDP Share Buyback or the
Somerston Purchases, or may choose not to tender to sell any. All
ZDP Shares accepted in the ZDP Share Buyback and the Somerston
Purchases will be purchased at the ZDP Offer Price.
Panmure Liberum has been appointed to manage the reverse
bookbuild process and the Somerston Purchases, and ZDP Shareholders
wishing to make offers to have their ZDP Shares bought in the ZDP
Share Buyback or the Somerston Purchases should contact Marc
Wilkinson on 0203 100 2206.
The ZDP Share Buyback will be funded
by the issue by the Company to Somerston of 8 per cent. unsecured
bonds with a maturity date of 31 October 2027 (the "Bonds"). On 12 November 2024, Somerston
entered into a subscription agreement with the Company (the
"Bond Subscription
Agreement") pursuant to the terms of which Somerston will
subscribe for up to £2.3 million of Bonds, subject to completion of
the ZDP Share Buyback.
i. Other
terms of the ZDP Share Buyback
Governing law and conditions
The ZDP Share Buyback is governed by
English law and is subject to the jurisdiction of the courts of
England.
ii. Related
Party Transaction
The Company's entry into the Bond
Subscription Agreement with Somerston is a related party
transaction for the purpose of the AIM Rules due to the fact that
Somerston is a 'substantial shareholder', as defined in the AIM
Rules, and holds 51.50 per cent. of the Ordinary Shares and 50.40
per cent. of the ZDP Shares. The independent directors (being the
Company's directors with the exception of Tracy Clarke) (the
"Independent Directors"),
who have been so advised by Panmure Liberum, acting in its capacity
as Nominated Adviser to the Company, consider that the terms of the
Bond Subscription Agreement are fair and reasonable so far as the
Company's shareholders are concerned. In giving its advice, Panmure
Liberum has taken account of the Independent Directors' commercial
assessment of the Bond Subscription Agreement and ZDP Share
Buyback. The Independent Directors consider the ZDP Share Buyback
and the Bond Subscription Agreement to be in the best interests of
the Company's shareholders as a whole.
iii. ZDP Share
exchange
Any ZDP Shareholder who is
interested in exchanging some or all of their holding of ZDP Shares
for Bonds should contact the Company using the above contact
details. Any such exchange is subject to eligibility and is at the
absolute discretion of the Company. No Bonds are being offered to
any person pursuant to this announcement.
b.
Transactions in the ZDP
Shares post the intended Cancellation
If a ZDP Shareholder retains their
ZDP Shares following the Cancellation, although the ZDP Shares will
remain freely tradeable, they will no longer be tradeable on the
Main Market and no other formal facility (such as CREST) will be
available to facilitate the trading of the ZDP Shares.
Those ZDP Shareholders who hold
their ZDP Shares in CREST will be sent share certificates for their
holding by 31 December 2024.
5. Trading
update
Since the date of the interim
results to 30 June 2024, the Company has continued to trade in line
with management's expectations. In the ten months to 31 October
2024 the Company achieved revenues of £13.4 million versus £10.0
million in the ten months to 31 October 2023.
As at 31 October 2024, the Company
had written £79.5 million of new loan facilities versus £51 million
as at 30 June 2024. As at 31 October 2024 loans under management
were £211 million and the Company continues to experience stable
credit quality. Management is confident of continued growth in its
loan volumes for the remainder of 2024 as it continues to work
towards achieving long term profitability.
6.
Conclusion
ZDP Shareholders should consult
their own professional advisers as to whether continuing to hold
ZDP Shares in the Company following the Cancellation is suitable or
whether the Cancellation has any tax consequences for them. Tax
rules can change and the precise tax implications for ZDP
Shareholders will depend on their particular
circumstances.
Any ZDP Shareholder who would like
to discuss the contents of this letter should please contact the
Company using the contact details are set out above.
Yours faithfully,
Steve Smith
Chairman