TIDMNLG
RNS Number : 1717S
Arria NLG PLC
19 December 2016
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
19 December 2016
Arria NLG plc
("Arria NLG", "Arria" or the "Company")
Proposed cancellation of trading on AIM, trading update and
notice of general meeting and warrantholder meeting
Arria NLG (AIM: NLG), a technology leader in Natural Language
Generation ("NLG"), will today post to holders of Arria UK Shares
and holders of Quoted Warrants a circular (the "Circular") with
notices convening the following meetings:
(a) a general meeting of holders of Arria UK Shares, to be held
at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL
at 10.00 a.m. on 6 January 2017 (the "General Meeting"); and
(b) a meeting of holders of Quoted Warrants, to be held at the
offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at
10.15 a.m. on 6 January 2017 (the "Quoted Warrantholder
Meeting").
At the meetings, the Company will, inter alia, seek approval for
the cancellation of trading on AIM of the Arria UK Shares and
Quoted Warrants ("Cancellation"). The purpose of the Circular is to
provide holders of Arria UK Shares and Quoted Warrants with an
update on the Company's current funding position and its progress
towards the listing in New Zealand and the rationale to the
proposed Cancellation.
If the Cancellation is approved at the General Meeting and
Warrantholder Meeting, the last day of trading on AIM of the Arria
UK Shares and Quoted Warrants is expected to be 19 January 2017 and
Cancellation is expected to take effect at 7.00 a.m. on 20 January
2017. Cancellation will be conditional on the passing of the
resolutions to approve cancellation of both the Arria UK Shares and
the Quoted Warrants. Should one of the Cancellation resolutions not
be passed at the General Meeting or Quoted Warrantholder Meeting,
then both the Arria UK Shares and Quoted Warrants will remain
admitted to trading on AIM.
A copy of the Circular is available from the Company's website,
www.arria.com. A copy of the letter from the Chair and Interim
Chief Executive of Arria UK as contained in the Circular is set out
below, which includes an update on the Company's trading and
financial position and fundraising activities.
Defined terms used in this announcement shall have the meaning
as set out at the end of this announcement unless otherwise defined
above.
For further information, please visit www.arria.com or
contact:
Arria NLG plc - Chairman Tel +44 (0)20 7100 4540
and Interim Chief Executive
Sharon Daniels
---------------------------- ---------------------------------------
Allenby Capital (Nominated Tel: +44 (0)20 3328
Adviser & Joint Broker) 5656
Nick Naylor
Jeremy Porter
James Reeve
---------------------------- ---------------------------------------
MSL Capital Markets (Lead Tel: +64 (0)4 472 2716
Manager)
Andrew McDouall
Justine Dunnett
Peter Lynds
---------------------------- ---------------------------------------
Stockdale Securities Tel: +44 (0)20 7601
(Joint Broker) 6100
Antonio Bossi
Robert Finlay
---------------------------- ---------------------------------------
IFC Advisory (Financial Tel: +44 (0)20 7652
PR and IR) 9788
Tim Metcalfe tim.metcalfe@investor-focus.co.uk
Graham Herring graham.herring@investor-focus.co.uk
Heather Armstrong heather.armstrong@investor-focus.co.uk
---------------------------- ---------------------------------------
Ruder Finn (PR - USA) Tel: +1 541-326-5847
Scott Beaver (West Coast) Tel: +1 203-246-1304
Brianna Mulligan (East
Coast)
---------------------------- ---------------------------------------
The following information has been extracted from and should be
read in conjunction with the Circular.
EXPECTED TIMETABLE
Publication of this document 19 December 2016
Latest time for receipt 10.00 a.m. on 4 January
of Forms of Proxy for the 2017
General Meeting
Latest time for receipt 10.15 a.m. on 4 January
of Forms of Proxy for the 2017
Quoted Warrantholder Meeting
General Meeting 10.00 a.m. on 6 January
2017
Quoted Warrantholder Meeting 10.15 a.m. on 6 January
2017
Last day of dealings in, 19 January 2017
and for registrations of
transfers of, Arria UK
Shares and Quoted Warrants
Cancellation of admission 7.00 a.m. on 20 January
to trading on AIM of Arria 2017
UK Shares and Quoted Warrants
1. Introduction
On 1 December 2016 Arria UK announced that the Arria Group
expects its listings on NZX and ASX to be completed in March
2017.
The purpose of the circular is to provide Arria UK Shareholders
and Quoted Warrantholders with an update on the Company's current
funding position, its progress towards the Listings and to seek
Arria UK Shareholder approval in relation to the IPO
Pre-Subscription Offer and the proposed cancellation of admission
to trading on AIM of the Arria UK Shares and Quoted Warrantholder
approval in relation to the cancellation of admission to trading on
AIM of the Quoted Warrants.
In addition, this circular sets out information in relation
to:
(a) the General Meeting to be held at the offices of Travers
Smith LLP, 10 Snow Hill, London EC1A 2AL at 10.00 a.m. on 6 January
2017; and
(b) the Quoted Warrantholder Meeting to be held at the offices
of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at 10.15 a.m.
on 6 January 2017.
2. Funding update
Current trading position
As previously announced, Arria UK continues to seek additional
funding to support its operations, and the IPO Pre-Subscription
Offer (details of which were announced on 1 December 2016 and are
set out below) comprises part of this additional funding. If the
IPO Pre-Subscription Offer fails to raise sufficient amounts or the
IPO Pre-Subscription Resolutions are not approved at the General
Meeting then Arria UK would need to seek an increased amount of
additional funding from alternative sources in order to support its
operations. There is no guarantee, however, that such increased
amount of additional funding could be obtained in the requisite
time frame, or at all. Further, the Arria UK Directors believe that
any such funding, if obtained, would likely be on less favourable
terms than the IPO Pre-Subscription Offer.
If the IPO Pre-Subscription Offer fails to raise sufficient
amounts or the IPO Pre-Subscription Resolutions are not approved at
the General Meeting, and no alternative funding can be raised,
Arria UK's ability to operate as a going concern may be put at risk
during the first quarter of 2017.
Trading update
Over the last four years Arria UK has invested approximately
GBP35 million to establish its global natural language generation
capabilities, including: paths to market; trial marketing;
strategic partnering; and beta-testing of Arria UK's natural
language generation technologies. During this period Arria UK has
gained invaluable market intelligence and applied it to product
development. Arria UK has also had 9 patents awarded (with a 10(th)
patent expected to be issued soon following a notice of allowance),
with more progressing from its natural language generation
intellectual property programme.
Over the past 18 months in particular, projects and partnerships
have been undertaken across the USA, Europe and Asia Pacific with
companies including: IBM; Genpact; Charles Schwab; Cognizant;
Comcast; Consolidated Edison; Deloitte; Deutsche Bank; Farmlink;
HSBC; Macquarie; McKinsey & Company; MeteoGroup; P&G;
Pepsi; Results.com; Royal Bank of Canada; Rolls Royce; Sabre;
Sanofi and Samsung.
Arria's core asset from this development and sales work is its
natural language generation platform (the "NLG Platform"). The NLG
Platform is used to both analyse data, and to generate rich,
narrative and written insights. Arria UK now licenses the NLG
Platform via three distinct offerings, all of which support the
recurring revenue model central to the Arria UK's commercial
strategy:
1. Professional Services - the development and licencing of
large custom applications that use the NLG Platform for
enterprise-level clients;
2. Recount - a subscription-based Software-as-a-Service
accounting product built on top of the NLG Platform, that acts as a
virtual financial advisor to small and medium sized business, which
launches to the public in December 2016; and
3. The NLG Developer Cloud - the provision of tools and services
that enable the 18-million-strong global third-party developer
community to build natural language generation applications that
interact directly with the NLG platform. These tools include
Arria's Articulator and Articulator-Lite natural language
generation products.
Arria UK is currently finalising its report and accounts for the
year ended 30 September 2016 and expects that these will now be
announced by 31 March 2017.
The IPO Pre-Subscription Offer
As announced on 1 December 2016 and in advance of the Listings,
Arria UK is undertaking an IPO Pre-Subscription Offer. Arria UK has
appointed Rainmaker, a Chicago-based registered broker-dealer that
specialises in sourcing capital for growth issuers, particularly in
the technology sector, to assist in a US private offering to
accredited investors. Further announcements on the progress of the
IPO Pre-Subscription Offer will be made in due course.
The IPO Pre-Subscription Offer consists of the issue of the
Notes in return for a minimum investment per investor of the NZ$
equivalent of US$500,000.
On completion of the Scheme and the Listings (further details of
which are set out below), the Notes and accrued interest will be
acquired by Arria NZ in exchange for Arria NZ Offer Bundles.
In the event that the Scheme is completed, but the Listings have
not happened by 30 June 2017, the Notes and accrued interest will
be acquired by Arria NZ in exchange for four Arria NZ Shares for
each NZ$1.00 of Note held (including accrued interest).
Additionally, if at any time up until maturity of the Notes on
30 June 2017, the Board of Arria UK should form the view (as a
result of changes in global markets or for any other reason) that
the capital appreciation prospects for Arria UK Shareholders are
better served by retaining the current structure of Arria UK or if
for any other reason the Scheme is not completed by 30 June 2017,
the Notes will convert, in accordance with the terms of the Note
Instrument, into four Arria UK Shares per NZ$1.00 of the balance of
principal and interest of the Note.
Arria UK Shareholders should note that the proportion of shares
that they own in Arria UK or Arria NZ (following the Scheme
becoming effective in accordance with its terms) will be diluted,
as the case may be, by:
(1) if the Scheme and the Listings occur:
(i) the issue of the Arria NZ Offer Bundles in consideration for
the acquisition of each Note (plus accrued interest);
(ii) the proposed fundraising of NZ$25 million in connection with the Listings;
(iii) the exercise of the Arria UK Warrants issued pursuant to the Warrant Instruments;
(iv) the conversion of the Arria UK Loan Notes pursuant to the Arria UK Loan Note Instruments;
(v) the exercise of any warrants or loan notes which may be
issued by Arria NZ and which can result in the issue of Arria NZ
Shares; and
(vi) the exercise of outstanding options or vesting of
outstanding awards to subscribe for Arria UK Shares pursuant to the
Arria UK Share Schemes;
(2) if the Scheme is completed, but the Listings have not happened by 30 June 2017:
(i) the issue of four Arria NZ Shares for each NZ$1.00 of Note
(plus accrued interest) held; and
(ii) any of those scenarios in 1(iii) - (vi) above; or
(3) if the Scheme and Listings do not happen by the maturity of
the Notes on 30 June 2017 or the Board of Arria UK determines not
to proceed with the Scheme by 30 June 2017:
(i) the issue of the Arria UK Shares on conversion of the Notes
in accordance with the terms of the Note Instrument; and
(ii) any of those scenarios in 1(iii)-(vi) above.
By way of example, assuming that the Scheme and Listings occur
and that the total IPO Pre-Subscription Offer of NZ$25 million is
taken up in full and the resulting Arria NZ Offer Bundles are all
exercised, a total of NZ$75 million would have been raised and a
total of 76,875,000 Arria NZ Shares will be issued. Therefore,
if:
(i) no further Arria NZ Shares are issued in any fundraising
undertaken at the time of the Listings or by any other instruments
convertible into Arria NZ Shares;
(ii) no further Arria UK Shares are issued prior to the Scheme
pursuant to the Arria UK Warrant Instruments, the Arria UK Loan
Note Instruments or Arria UK Share Schemes; and
(iii) the existing Arria UK Shareholders hold Arria NZ Shares on
a one for one basis pursuant to the Scheme,
then Arria UK Shareholders will own 123,680,610 Arria NZ Shares
out of a total enlarged issued share capital of 200,555,610,
representing 61.66 per cent. of the issued share capital of Arria
NZ.
However, if the Scheme is completed, but the Listings have not
happened by 30 June 2017, and assuming that:
(i) the total IPO Pre-Subscription Offer of NZ$25 million is taken up in full;
(ii) no further Arria UK Shares are issued prior to the Scheme
pursuant to the Arria UK Warrant Instruments, the Arria UK Loan
Note Instruments or Arria UK Share Schemes; and
(iii) the existing Arria UK Shareholders hold Arria NZ Shares on
a none for one basis pursuant to the Scheme,
a total of 102,500,000 Arria NZ Shares will be issued and the
Arria UK Shareholders will own 123,680,610 Arria NZ Shares out of a
total enlarged issued share capital of 226,180,610, representing
54.68 per cent. of the issued share capital of Arria NZ.
The existing Arria UK Shareholders would also end up owning
54.68 per cent. of the issued share capital of Arria UK assuming
that:
(i) the Scheme does not become effective;
(ii) that the total IPO Pre-Subscription Offer of NZ$25 million
is taken up in full and the resulting Arria UK Shares are issued,
resulting in the issue of a further 102,500,000 Arria UK Shares;
and
(iii) that no further Arria UK Shares are issued pursuant to the
Arria UK Warrant Instruments, the Arria UK Loan Note Instruments or
Arria UK Share Schemes.
It is Arria UK's intention to use the proceeds from the IPO
Pre-Subscription Offer in Arria UK's continuing operations
including for general working capital requirements and to fund
costs associated with the Scheme and the Listings.
The Arria UK Directors believe that, given Arria UK's
requirements for additional financing, the IPO Pre-Subscription
Offer, along with the RCF described in further detail below, is
currently the most appropriate way to raise additional funds for
the Arria Group prior to the Scheme and the Listings
completing.
The IPO Pre-Subscription Resolutions will grant the Arria UK
Directors authority to issue the Notes which are convertible into,
in aggregate a maximum of 102,500,000 Arria UK Shares, and to
disapply statutory pre-emption rights in relation to such
allotments.
Arria UK Loan Note update
Between January 2015 and July 2016, Arria UK received funds from
subscriptions for Arria UK Loan Notes totalling approximately
GBP6.9m. On 3 October 2016, Arria UK announced it had reached
agreement with investors subject to the completion of the relevant
documentation, for the subscription of approximately GBP2.7 million
of Arria UK Loan Notes with C Warrants attached and at the date of
this document Arria UK has received approximately GBP1.1 million of
funds relating to these subscriptions. The subscribers have
included existing and new investors in Arria UK. Arria UK has today
reached agreement with the subscribers of the Arria UK Loan Notes
to extend the due date of receipt of the balance of outstanding
funds of approximately GBP1.6 million to 31 January 2017.
Revolving credit facility with Global Vision Consulting
Group
On or around the date of this document Arria UK will enter into
an unsecured revolving credit facility with Global Vision, a New
Zealand consulting group. Global Vision is a strategic adviser that
collaborates with the board and management of emerging companies
and registered funds to raise their potential. It is a New Zealand
incorporated limited liability company which was set up in March
2016.
The RCF makes available to Arria UK a US$3.015 million line of
credit upon which Arria UK can draw at its discretion. Interest is
charged at Bank of England base rate plus 5 per cent. on amounts
drawn under that RCF compounding annually, and payment of all
balances of principal and interest are due at the termination date,
being 30 June 2019. Arria UK will conclude a first drawdown of
approximately GBP300,000 on the RCF shortly.
Under the terms of the RCF, Global Vision is permitted to
syndicate the loan to third parties. As part of their syndication,
Sharon Daniels, Chair and Interim Chief Executive has indicated
that she may participate in subscribing for up to US$500,000.
As Sharon Daniels is a director of Arria UK, her participation
as a subscriber for up to US$500,000 of the RCF is deemed to be a
transaction with a related party under rule 13 of the AIM Rules.
Accordingly, the Arria UK Directors (other than Sharon Daniels)
consider, having consulted with Arria UK's nominated adviser,
Allenby Capital Limited, that the terms of Sharon Daniels'
participation in the RCF are fair and reasonable insofar as Arria
UK Shareholders are concerned.
Subscription and sharing agreement with Lanstead
On 15 October 2015 Arria UK announced that it had entered into
two subscription agreements with Lanstead, together with related
sharing agreements. A total of 18,750,000 Arria UK Shares were
subscribed for by Lanstead at an issue price of 32 pence per Arria
UK Share. 15 per cent. of the GBP6,000,000 gross proceeds of the
Lanstead subscription, being GBP900,000, was retained by Arria UK
and the balance of GBP5,100,000 was pledged by Arria UK pursuant to
two sharing agreements with Lanstead. These sharing agreements
entitled Arria UK to receive back those proceeds on a pro rata
monthly basis over a period of 18 months, subject to adjustment
upwards or downwards each month depending on price of the Arria UK
Shares at the time, as explained in the announcement of 15 October
2015. The monthly payments under the sharing agreements commenced
during February 2016 and to date Arria UK has received GBP1.62
million from Lanstead under the sharing agreements.
Settlements under the sharing agreements will be paused during
the period in which Arria UK's Shares are not quoted on a
recognised exchange. The Arria UK Directors anticipate that the
sharing agreements with Lanstead will continue following the
Listings. Lanstead has indicated its support to the Arria UK
Directors and its intention to support the GM Resolutions in the
General Meeting.
3. Progress on the Listings and the Scheme
The Arria Group expects to be able to complete the Scheme, the
Cancellation and effect the Listings, on or before 30 June 2017.
The target date is March 2017 to complete all these steps. Arria NZ
expects to use a network of retail broking firms in New Zealand to
complete the Listings, and legal, accounting and tax advisers are
in place.
To implement the Listings, Arria UK has organised a New Zealand
company, Arria NZ, to become the successor holding company and
wholly owning parent of the Arria Group. This transition will be
achieved through the Scheme, which will be subject to Arria UK
Shareholder approval, such approval to be sought early in 2017. On
Completion of the Scheme, Arria UK Shareholders will hold a like
number of Arria NZ Shares (which following the Listings will be
traded on NZX and ASX) rather than their Arria UK Shares, which are
currently traded on AIM.
As the Scheme requires approval of both the High Court of
Justice in England and Wales and the Arria UK Shareholders, Arria
UK will send a scheme document containing full details of the
Scheme, including the resolutions to be passed and relevant voting
materials and the recommendation of the Board of Arria UK to the
Arria UK Shareholders for their approval in early 2017.
4. Proposed cancellation of the admission to trading on AIM of
the Arria UK Shares and Quoted Warrants
Ahead of the Scheme and the Listings, Arria UK intends to apply
to AIM to cancel trading on AIM of the Arria UK Shares and Quoted
Warrants.
Rule 41 of the AIM Rules requires, inter alia, that the
cancellation of the admission of securities to trading on AIM must
be conditional upon the consent of not less than 75 per cent. of
votes cast by the holders of each security, given in a general
meeting. In this case, the cancellation of the admission to trading
on AIM of Arria UK Shares is conditional not only on the
Cancellation Resolution being passed by the requisite majority of
Arria UK Shareholders at the General Meeting, but also the
Warrantholder Cancellation Resolution being passed by the requisite
majority of Quoted Warrantholders at the Quoted Warrantholder
Meeting. Similarly, the cancellation of the admission to trading on
AIM of the Quoted Warrants is conditional not only on the
Warrantholder Cancellation Resolution being passed by the requisite
majority at the Quoted Warrantholder Meeting, but also the
Cancellation Resolution being passed by the requisite majority of
Arria UK Shareholders at the General Meeting. Accordingly, the
cancellation of admission to trading on AIM of the Arria UK Shares
will only take effect if the Quoted Warrants can also be
simultaneously cancelled from trading on AIM, and vice-versa.
The Arria UK Shares have been admitted to trading on AIM since
December 2013. The primary objectives of seeking such admission
were: (a) to meet a requirement of the agreement whereby Arria UK
acquired all the capital stock of Data2Text Limited, the Scottish
company that developed the group's NLG technologies; (b) to
increase the global profile of Arria UK as a result of being a
quoted company; and (c) to provide Arria UK with access to further
equity capital in the UK to fund business opportunities and provide
working capital, should it be required. Over the past two years,
approximately GBP9.7 million of funding has been raised to develop
the Arria UK business. The vast majority of that funding has been
raised outside of the UK from existing and new sources in New
Zealand, North America and other jurisdictions with the support of
Arria UK Directors, management and key shareholders, as price and
terms of funds raised outside of the UK was more acceptable to the
Arria UK Directors.
Accordingly, in June 2015, the Arria UK Directors considered the
options as to which capital market, jurisdiction, and cultural
environment would best support Arria UK's growth plans while best
protecting Arria UK, its culture, its shareholders and its
technologies.
The Arria UK Directors concluded that the New Zealand capital
markets would best support the Arria Group's plans. Some of the
indicators that supported this conclusion are noted below:
-- The S&P/NZX 50 Index was the world's best-performing
developed stock gauge this year with overseas buying of equities
jumping 21 percent in 2015;
-- The growing prominence of New Zealand as an investment
opportunity and in particular the technology sector is supported by
two recent publications;
i. "The Investor's Guide to the New Zealand Technology Sector" a
report prepared by Technology Investment Network on behalf of the
New Zealand Ministry of Business, Innovation and Employment that
"makes a strong case for investment in New Zealand's technology
sector"; and
ii. "Determining our Future: Artificial Intelligence (AI)" a
report prepared by the Institute of Directors of New Zealand and
New Zealand law firm Chapman Tripp, that indicates the profile that
artificial Intelligence will have in New Zealand stating "Already,
AI has a growing effect on our daily lives. Its potential impacts
are profound. In the near future, it is likely to drive - at an
unprecedented pace - highly disruptive change to our economy,
society, and institutions. As such, AI presents huge opportunities
and risks to all New Zealanders" The conclusion to the report's
call to action states "The potential economic and social
opportunities from AI technologies are immense. The public and
private sectors must move promptly and together to ensure we are
prepared to reap the benefits, and address the risks of AI."
-- The ability of New Zealand technology leaders such as
Xero.com to raise approximately $500 million from US investors;
and
-- The ongoing expansion of the New Zealand technology sector
and, the New Zealand Government's Ultra-Fast Broadband (UFB)
initiative that connected New Zealand to the world at the "speed of
light" via its fibre optic network.
These indicators, along with others (including that a number of
Arria UK's founders also co-founded Diligent, an NZX listed SaaS
technology company that was recently sold for NZ$943 million in
cash), all supported the Arria UK Directors' conclusion that the
New Zealand capital market would better support the Arria Group's
growth plans.
As part of the plan to raise the capital the Arria UK Directors
believe Arria UK requires for its future development, Arria UK has
for some time now been pursuing the Listings, and the associated
reorganisation (including the Scheme). The regulatory process to
achieve the Listings has proven time consuming and complex and, the
Arria UK Directors believe, further complicated by maintaining the
AIM quotation. The Cancellation would therefore be the first step
in achieving the Listings and completing this now would remove a
level of complication and distraction for management and potential
investors.
The Arria UK Directors believe the removal of a public quote for
the Arria UK Shares and the Quoted Warrants will assist in
achieving the best outcome from the Listings. The Arria UK
Directors believe that it would be better for Arria UK to operate
as an unquoted company from the date of Cancellation until the
Listings as they expect further capital can be more easily raised
at an acceptable valuation within the US, New Zealand, Australia or
other markets outside the UK as an unquoted company.
After careful consideration, the Arria UK Directors have
therefore concluded that the commercial disadvantages and costs of
maintaining an AIM quote at this time in Arria UK's development
outweigh the potential benefits and that it is therefore no longer
in Arria UK's or the Arria UK Shareholders' best interests to
maintain its quotation on AIM.
Particular consideration has been given by the Arria UK
Directors to the relatively low trading liquidity in the Arria UK
Shares and their valuation. As at 16 December 2016, the last
business day prior to the publication of this document, the closing
mid-market price of the Arria UK Shares was 13.25 pence providing a
market capitalisation of approximately GBP16.4 million, which the
Arria UK Directors consider to be materially below the true value
of Arria UK.
Cancellation is conditional upon the passing of both the
Cancellation Resolution and the Warrantholder Cancellation
Resolution at the General Meeting and Quoted Warrantholder Meeting,
respectively.
Proposed cancellation of the admission to trading on AIM of the
Arria UK Shares
As at the date of this document, Arria UK has received
irrevocable undertakings and letters of intent to vote in favour of
the GM Resolutions in respect of a total of no less than 64,554,410
Arria UK Shares representing, in aggregate, approximately 51 per
cent. of Arria UK's ordinary share capital in issue on 16 December
2016 (being the latest practicable date prior to the publication of
this document).
Subject to the Cancellation Resolution being passed by the
requisite majority of Arria UK Shareholders at the General Meeting
and the Warrantholder Cancellation Resolution being passed by the
requisite majority of Quoted Warrantholders at the Quoted
Warrantholder Meeting, it is anticipated that trading in the Arria
UK Shares on AIM will cease at close of business on 19 January
2017, with cancellation of the admission to trading on AIM of the
Arria UK Shares taking effect at 7.00 a.m. on 20 January 2017.
Proposed cancellation of the admission to trading on AIM of the
Quoted Warrants
It is intended that along with the Arria UK Shares, the
admission to trading on AIM of the Arria UK Quoted Warrants will
also be cancelled. Accordingly, in the Notice of Quoted
Warrantholder Meeting set out in the Circular, the Warrantholder
Cancellation Resolution proposes to cancel the admission to trading
on AIM of the Quoted Warrants.
As at the date of this document, Arria UK has received
irrevocable undertakings and letters of intent to vote in favour of
the Quoted Warrantholder Resolutions in respect of a total of no
less than 7,276,250 Quoted Warrants representing, in aggregate,
approximately 72 per cent. of the Quoted Warrants in issue on 16
December 2016 (being the latest practicable date prior to the
publication of this document).
Subject to the Warrantholder Cancellation Resolution being
passed by the requisite majority at the Quoted Warrantholder
Meeting and to the Cancellation Resolution being passed by the
requisite majority of Arria UK Shareholders at the General Meeting,
it is anticipated that trading in the Quoted Warrants on AIM will
cease at close of business on 19 January 2017, with cancellation of
the admission to trading on AIM of the Quoted Warrants taking
effect at 7.00 a.m. on 20 January 2017.
Effect of cancellation of the admission to trading on AIM of the
Arria UK Shares and Quoted Warrants
Upon the cancellation of the admission to trading on AIM of the
Arria UK Shares and Arria UK Quoted Warrants, Allenby Capital
Limited will cease to be nominated adviser and broker to the
Company and the Company will no longer be required to comply with
the AIM Rules. Following such time, the Company will maintain the
current arrangements in CREST so that Arria UK Shares and Quoted
Warrants will still be capable of being held and transferred in
uncertificated form.
Following Cancellation, the Arria UK Directors intend to put in
place a matched bargaining trading facility with an independent
third party, to allow Arria UK Shareholders to effect transactions
in the Arria UK Shares between Cancellation and the Listings.
Further details of such a facility will be announced in due
course.
Nevertheless, once the cancellation of the admission to trading
on AIM of the Arria UK Shares and Quoted Warrants has taken place,
there will no longer be a formal market mechanism to trade in the
Arria UK Shares or Quoted Warrants and no price will be publicly
quoted for either security. Whilst from the date of Cancellation
until the date of the Listings, Arria UK Shares and Quoted
Warrantholders will continue to be able to trade "off-market", it
may be more difficult for Arria UK Shareholders and Quoted
Warrantholders to realise their Arria UK Shares and Quoted Warrants
respectively than when the Arria UK Shares and Quoted Warrants were
traded on AIM.
Nonetheless, for those reasons outlined above, the Directors
consider that the cancellation of the admission to trading on AIM
of the Arria UK Shares and Quoted Warrants is in the best interests
of Arria UK and its stakeholders.
5. Description of proposed amendments to Quoted Warrant Instrument
It is proposed that in order to allow a longer period for
exercise of the Quoted Warrants the definition of "Long Stop Date"
in the Quoted Warrant Instrument (being the last day for exercise
of any Quoted Warrants under the Loan Note Instrument) be extended
by around 18 months (the "Extension Amendment"). The long stop date
of the Quoted Warrants is currently 30 September 2017. If the
Extension Amendment is approved, the amended Long Stop Date of the
Quoted Warrants will be 15 March 2019.
Pursuant to the terms of the Quoted Warrant Instrument, any
amendment to the terms of the Quoted Warrant Instrument requires a
special resolution consenting to the amendment to be passed by
Quoted Warrantholders holding not less than 75 per cent. of the
outstanding Quoted Warrants.
At the Quoted Warrantholder Meeting, Resolution 1 proposes to
amend the terms of the Quoted Warrant Instrument in accordance with
a deed of variation to be entered into by Arria UK or around the
date of the Quoted Warrantholder Meeting.
The Deed of Variation enclosed with this circular will, if the
Quoted Warrantholder Resolutions are passed, be entered into by
Arria UK and will effect the Extension Amendment.
6. Notice of General Meeting
There is set out in the Circular a notice convening the General
Meeting to be held at 10.00 a.m. on 6 January 2017 at the offices
of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL.
The business to be conducted at the General Meeting is set out
in the General Meeting notice and will consist of the GM
Resolutions as follows:
IPO Pre-Subscription Resolutions
Resolution 1: authority to allot (ordinary resolution)
The resolution asks Arria UK Shareholders to grant the Directors
authority under section 551 of the Companies Act 2006 to allot
shares or grant such subscription or conversion rights as are
contemplated by sections 551(1)(a) and (b) respectively of the
Companies Act 2006 up to a maximum aggregate nominal value of
GBP102,500, being 102,500,000 Arria UK Shares. This authority is in
addition to the authorities granted to the Arria UK Directors at
the Annual General Meeting held on 28 January 2016 and will expire
on 6 January 2017.
Resolution 2: disapplication of pre-emption rights (special
resolution)
If the Directors wish to allot new shares or other equity
securities for cash, the Companies Act 2006 requires that such
shares or other equity securities are offered first to existing
shareholders in proportion to their existing holdings. The
allotment of equity securities as referred to in this resolution
includes the sale of any Arria UK Shares which Arria UK holds in
treasury following a purchase of its own shares. Resolution 2 asks
Arria UK Shareholders to grant the Directors authority to allot
equity securities for cash up to an aggregate nominal value of
GBP102,500, being 102,500,000 Arria UK Shares, without first
offering the securities to existing Arria UK Shareholders. This
authority is in addition to the authorities granted to the Arria UK
Directors at the Annual General Meeting held on 28 January 2016 and
will expire on 6 January 2017.
Cancellation Resolution
Resolution 3: cancellation of admission to trading on AIM of the
Company's shares (special resolution)
In accordance with the AIM Rules, the resolution asks the Arria
UK Shareholders to approve the cancellation of admission to trading
on AIM of the Arria UK Shares.
7. Notice of Quoted Warrantholder Meeting
There is set out in the Circular a notice convening the Quoted
Warrantholder Meeting to be held at 10.15 a.m. on 6 January 2017 at
the offices of Travers Smith LLP, 10 Snow Hill, London EC1A
2AL.
The business to be conducted at the Quoted Warrantholder Meeting
is set out in the Quoted Warrantholder Meeting notice and will
consist of the Quoted Warrantholder Resolutions.
8. Action to be taken
The General Meeting and the Quoted Warrantholder Meeting will be
held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A
2AL on 6 January 2017. The General Meeting will start at 10.00 a.m.
and the Quoted Warrantholder Meeting will start at 10.15 a.m. (or,
if later, as soon as the General Meeting has been concluded or
adjourned).
You will find enclosed with this document a blue Form of Proxy
for use in respect of the General Meeting by the Arria UK
Shareholders and a white Form of Proxy for use in respect of the
Quoted Warrantholder Meeting by the Quoted Warrantholders.
Whether or not you intend to attend the General Meeting or the
Quoted Warrantholder Meeting in person, please complete and sign
the enclosed Forms of Proxy and return it in accordance with the
instructions printed thereon as soon as possible, but in any event
so as to be received electronically at www.eproxyappointment.com by
10.00 a.m. on 4 January 2017 in the case of the General Meeting and
by 10.15 a.m. on 4 January 2017 in the case of the Quoted
Warrantholder Meeting (or, in the case of an adjourned Meeting, not
less than 48 hours prior to the time and date set for the adjourned
Meeting (excluding any day that is not a working day)).
Alternatively you can return the Forms of Proxy via email to
#UKCSBRS.ExternalProxyQueries@computershare.co.uk or
investor.relations@arria.com by 10.00 a.m. on 4 January 2017 in the
case of the General Meeting and by 10.15 a.m. on 4 January 2017 in
the case of the Quoted Warrantholder Meeting (or, in the case of an
adjourned Meeting, not less than 48 hours prior to the time and
date set for the adjourned Meeting (excluding any day that is not a
working day)).
Alternatively, you can return the Forms of Proxy by post to
Computershare Investor Services PLC at Pavilions, Bridgewater Road,
Bristol, BS99 6ZY, to arrive by 10.00 a.m. on 4 January 2017 in the
case of the General Meeting and by 10.15 a.m. on 4 January 2017 in
the case of the Quoted Warrantholder Meeting (or, in the case of an
adjourned Meeting, not less than 48 hours prior to the time and
date set for the adjourned Meeting (excluding any day that is not a
working day)). If you wish to return your Form of Proxy by post,
there is a pre-paid address for your convenience for use in the UK
only. Unless the Form of Proxy is returned by the time noted above,
it will be invalid.
If you hold your Arria UK Shares or Quoted Warrants in
uncertificated form (that is, in CREST) you may vote using the
CREST Proxy Voting service in accordance with the procedures set
out in the CREST Manual (please also refer to the accompanying
notes to the Notice of the General Meeting set out at the end of
this document). Proxies submitted via CREST (under CREST
participant 3RA50) must be received by the Registrars not later
than 10.00 a.m. on 4 January 2017 in the case of the General
Meeting and by 10.15 a.m. on 4 January 2017 in the case of the
Quoted Warrantholder Meeting (or, in the case of an adjourned
Meeting, not less than 48 hours prior to the time and date set for
the adjourned Meeting (excluding any day that is not a working
day)).
The completion and return of the Form of Proxy by post or by
email or the appointment of a proxy or proxies electronically will
not prevent you from attending and voting in person at the General
Meeting or the Quoted Warrantholder Meeting as applicable, or any
adjournment thereof, should you wish to do so.
If you have any questions relating to completion and return of
the Forms of Proxy, please contact the Registrars, Computershare
Investor Services PLC, on +44 370 702 0000 between 8.30 a.m. and
5.30 p.m. Monday to Friday (except public holidays). Please note
that calls to this number may be monitored or recorded.
In order for the IPO Pre-Subscription Offer of the Notes to
proceed, Arria UK Shareholders will need to approve the GM
Resolutions set out in the Notice of General Meeting. If the GM
Resolutions are not passed, Arria UK will only be able to issue
Notes in return for a maximum of GBP15,260.34 being the remainder
of the current authority given to the Arria UK Directors at the
Annual General Meeting held on 28 January 2016, and will be unable
to complete the full IPO Pre-Subscription Offer target of up to
NZ$25 million and no authority will be available to the Arria UK
Directors to issue further Notes for cash. Accordingly, it is
important that Arria UK Shareholders vote in favour of the GM
Resolutions, in order that these matters can proceed.
The notice convening the General Meeting is set out in the
Circular and the notice convening the Quoted Warrantholder Meeting
is set out in the Circular.
9. Recommendation
The Arria UK Directors consider that approval of the GM
Resolutions and the Quoted Warrantholder Resolutions are in the
best interests of Arria UK and its members as a whole. The Arria UK
Directors therefore unanimously recommend that you vote in favour
of all the GM Resolutions and the Quoted Warrantholder Resolutions
as, where relevant, they intend to do in respect of their own
holdings.
Sincerely,
Sharon Daniels
Chairman and Interim Chief Executive Officer
DEFINITIONS
The following definitions apply throughout this document and the
accompanying Forms of Proxy unless the context requires
otherwise:
AIM the AIM market operated by
the London Stock Exchange
plc
AIM Rules the AIM Rules for Companies
published by the London Stock
Exchange plc
Acquisition Options the options to be issued
by Arria NZ to Arria UK Shareholders
in connection with the Scheme
Arria Group Arria UK and each of its
subsidiaries
Arria NZ Arria NZ Limited (incorporated
in New Zealand with company
number 5947227 with its registered
office at Unit 16, 144 Beaumont
Street, Westhaven, Auckland,
1010, New Zealand)
Arria NZ Offer Bundles Arria NZ securities, having
a purchase price of NZ$1.00
(which will be satisfied
by the acquisition of the
Notes by Arria NZ) and consisting
of one Arria NZ Share and
two options to purchase one
Arria NZ Share, exercisable
until 15 June 2021 (the terms
of which can be adjusted
so that subscribers of the
Notes receive the same terms
as any investors in Arria
NZ at the time of the Listings)
Arria NZ Shareholder a holder of an Arria NZ Share
Arria NZ Shares ordinary shares in the capital
of Arria NZ
Arria UK or Company Arria NLG plc (registered
in England and Wales with
company number 7812686 with
its registered office at
Space One, 1 Beadon Road,
Hammersmith, London W6 0EA)
Arria UK Directors the directors of Arria UK
as at the date of this document
Arria UK Loan Notes the loan notes issued by
Arria UK pursuant to the
Arria UK Loan Note Instruments
Arria UK Loan Note the Unsecured Convertible
Instruments Loan Note Instrument 2019,
Unsecured Convertible Loan
Note Instrument 2019 Tranche
2, Unsecured Convertible
Loan Note Instrument 2019
Tranche 3 and Unsecured Convertible
Loan Note Instrument 2019
Tranche 4, each with a longstop
date of 31 October 2019
Arria UK Shareholder a holder of an Arria UK Share
Arria UK Shares ordinary shares of 0.1 penny
each in the capital of Arria
UK
Arria UK Share Schemes the long-term incentive programme
pursuant to which options
are granted over Arria UK
Shares which was adopted
by Arria UK on 13 November
2013 and, in addition, the
options granted pursuant
to share option agreements
entered into between Arria
and certain employees
Arria UK Warrants the B Warrants, C Warrants
and the Quoted Warrants
ASX ASX Limited
B Warrants the B warrants issued by
Arria UK pursuant to the
terms of the warrant instrument
dated 11 June 2015
Board the board of directors of
Arria UK
Business Day any day on which the London
Stock Exchange plc is open
for the transaction of business
Cancellation the cancellation of admission
to trading on AIM of the
Arria UK Shares and the Quoted
Warrants
Cancellation Resolution Resolution 3 set out in the
notice of General Meeting
certificated or in a share or other security
certificated form which is not in uncertificated
form
Companies Act 2006 the Companies Act 2006, as
amended, modified, consolidated,
re-enacted or replaced from
time to time
CREST the relevant system (as defined
in the CREST Regulations)
for paperless settlement
of share transfers and the
holding of shares in uncertificated
form in respect of which
Euroclear UK & Ireland is
the operator (as defined
in the CREST Regulations)
CREST Manual the rules governing the operation
of CREST consisting of the
CREST Reference Manual, the
CREST International Manual,
the CREST Central Counterpart
Service Manual, the CREST
Rules, the CREST Operations
Manual and the CREST Glossary
of Terms, each as amended
from time to time
CREST Regulations the Uncertificated Securities
Regulations 2001 (S.I. 2001
No. 3755), as amended from
time to time
C Warrants the C warrants issued by
Arria UK pursuant to the
terms of the warrant instrument
dated 21 June 2016
Forms of Proxy the blue form of proxy for
use by Arria UK Shareholders
at the General Meeting, and
the white form of proxy for
use by the Quoted Warrantholders
at the Quoted Warrantholder
Meeting, both of which accompany
this document
General Meeting the General Meeting of the
Company convened for 10.00
a.m. on 6 January 2017
Global Vision Global Vision Consulting
Group
GM Resolutions the Cancellation Resolution
and the IPO Pre-Subscription
Resolutions
IPO Pre-Subscription the private placement by
Offer Arria UK of up to NZ$25 million
of subscriptions from qualified
investors outside the UK
IPO Pre-Subscription Resolutions 1 and 2 set out
Resolutions in the notice of General
Meeting
Lanstead Lanstead Capital LP
Listings the proposed primary listing
of the Arria NZ Shares, Acquisition
Options and the constituent
parts of the Arria NZ Offer
Bundles on the NZX Main Board
and secondary listing on
ASX and associated fundraising
of approximately NZ$25 million
plus over-allotments
Notes NZ$ denominated unsecured
convertible loan notes of
Arria UK, bearing interest
at five percent (5%) per
annum and with a maturity
date of 30 June 2017
Note Instrument the Arria UK instrument pursuant
to which the Notes are created
NZ$ New Zealand dollars
NZX NZX Limited
NZX Main Board the main board equity securities
market operated by NZX
participant ID the identification code or
membership number used in
CREST to identify a particular
CREST member or other CREST
participant
Quoted Warrantholder a holder of a Quoted Warrant
Quoted Warrantholder the General Meeting of the
Meeting Quoted Warrantholders convened
for 10.15 a.m. on 6 January
2017
Quoted Warrantholder the resolutions set out in
Resolutions the notice of the Quoted
Warrantholder Meeting
Quoted Warrants the quoted warrants of Arria
UK issued pursuant to the
terms of the warrant instrument
dated 27 November 2013
Rainmaker Rainmaker Securities, LLC
RCF the US$3.015 million revolving
credit facility to be entered
into between Arria UK and
Global Vision on or around
the date of this document
Registrar Computershare Investor Services
PLC
Scheme the scheme of arrangement
proposed to be made in due
course under Sections 895
to 899 of the Companies Act
2006 between Arria UK, Arria
NZ and the holders of Arria
UK Shares at the relevant
time
uncertificated or recorded on the relevant
in uncertificated register as being held in
form uncertificated form
Unsecured Convertible the unsecured convertible
Loan Note Instrument loan note instrument dated
2019 30 September 2014 constituting
GBP7,500,000 of unsecured
convertible notes 2019
Unsecured Convertible the unsecured convertible
Loan Note Instrument loan note instrument dated
2019 Tranche 2 26 October 2015 constituting
GBP3,000,000 unsecured tranche
2 convertible loan notes
2019
Unsecured Convertible the unsecured convertible
Loan Note Instrument loan note instrument dated
2019 Tranche 3 8 June 2016 constituting
GBP1,000,000 unsecured tranche
3 convertible loan notes
2019
Unsecured Convertible the unsecured convertible
Loan Note Instrument loan note instrument dated
2019 Tranche 4 21 June 2016 constituting
GBP4,000,000 unsecured tranche
4 convertible loan notes
2019
US$ United States dollars
US or United States the United States of America,
its territories and possessions,
any state of the United States
of America, any other areas
subject to its jurisdiction
and the District of Columbia
US Person a US person as defined in
Regulation S under the US
Securities Act
US Securities Act the United States Securities
Act of 1933 (as amended)
US Shareholders Arria UK Shareholders who
are based in the US
Warrantholder Cancellation Resolution 1 set out in the
Resolution notice of Quoted Warrantholder
Meeting
This information is provided by RNS
The company news service from the London Stock Exchange
END
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