TIDMTNCI
RNS Number : 3880A
Tinci Holdings Ltd
22 December 2014
TINCI HOLDINGS LIMITED
Proposed Cancellation of Admission of Ordinary Shares to trading
on AIM
Tinci Holdings Limited (the "Company") (AIM: TINC) announces
that it intends to seek shareholder approval for the cancellation
of admission (the "Cancellation") of the Company's ordinary shares
(the "Ordinary Shares") to trading on the AIM Market of the London
Stock Exchange plc ("AIM"). This proposal is conditional on
shareholder approval, which will be sought at a general meeting of
the Company's shareholders (the "Shareholders") to be held at 4:00
p.m. (Hong Kong time) on 15 January 2015 ("General Meeting").
Full details of the proposed Cancellation, including what action
Shareholders should take and details of a proposed re-registration
of the Company as a private company after the Cancellation, are set
out in a circular that will be posted to Shareholders shortly (the
"Circular"). A copy of the Circular will be made available on the
Company's website and a summary is given below.
Rationale for Cancellation
Since the Company's admission to AIM in 2006, the quoted price
for the Ordinary Shares has fallen from 70p to 4.38p, the closing
price for the Ordinary Shares on 15 December 2014. The Ordinary
Shares have traded at these low levels for the last two years now,
with corresponding low trading volumes.
In light of this, the Directors have carefully considered the
merits or otherwise of the Ordinary Shares continuing to trade on
AIM. Among others, the following factors have been taken into
consideration:
-- The low liquidity in the trading of the Ordinary Shares and
the lack of interest in small cap companies has resulted in a share
price that the Directors believe does not reflect the true value of
the Company;
-- The Company has not been able to raise capital from
institutional investors as there appears to be little interest in
small cap AIM companies, in particular those operating in the PRC.
This situation is unlikely to change in the foreseeable future;
-- Due to the small size of the Company, many of the business
opportunities that the Company is considering would constitute a
reverse takeover under the AIM Rules, which would entail
significant additional cost, time and uncertainty to execute;
and
-- The administrative costs and management time spent on
maintaining the Company's AIM listing could be better spent on
developing the Company's business.
Given the above, the Directors have concluded that the
commercial disadvantages and costs of maintaining admission to
trading on AIM outweigh the potential benefits and that it is
therefore no longer in the Company's or its Shareholders' best
interests to remain traded on AIM.
In addition, the Company would benefit from substantial
administrative cost savings as a result of the Cancellation. Such
cost savings include professional fees associated with the
admission of the Ordinary Shares to trading on AIM (including
legal, accounting, broking, London Stock Exchange and nominated
adviser costs). Similarly, the Cancellation would result in reduced
internal administrative costs by removing the Company's ongoing
compliance obligations as a publicly quoted company and free up
further management time.
The Company has received irrevocable undertakings from a
majority of the directors of the Company and certain Shareholders
(whose holdings amount in aggregate to approximately 80 per cent.
of the issued share capital of the Company) that they will vote in
favour of the Cancellation. Therefore, it is expected that the
resolution to delist from AIM will be passed at the General
Meeting.
Principal effects of the Cancellation and Conditional Share
Purchase Facility from Major Shareholder
The principal effects that the Cancellation will have on the
Company are as follows:
-- The Company will cease to retain a nominated adviser and broker;
-- There would 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. It may also be more difficult for Shareholders to
determine the market value of their shareholdings in the Company at
any given time, which could adversely affect their value; and
-- The Company will no longer be subject to the AIM Rules.
Shareholders will therefore no longer be afforded the protections
given by the AIM Rules nor have the same access to information as
the Company would not be bound to:
a) make any public announcements of material events, substantial
transactions and related party transactions, nor to announce
interim or final results;
b) comply with any of the corporate governance practices
applicable to AIM companies;
c) disclose major shareholders in the Company;
d) comply with the requirement to obtain shareholder approval
for reverse takeovers and fundamental changes in the Company's
business; or
e) maintain a website with information required under AIM Rule 26.
In view of the above, and in order to provide Shareholders with
a definitive option for exit, Mr. Xu Jinfu, Tinci's Chief Executive
Officer and who has an interest in 63.3 per cent. of the Company's
Ordinary Shares, has agreed with the Board to purchase the Ordinary
Shares that he does not already own at the price of 20p per
Ordinary Share (which is at a significant premium to the current
trading price of 4.38p) , conditional on the Company delisting from
AIM and re-registering as a private company. To facilitate this Mr.
Xu has agreed to deposit LIR600,000 into an escrow account managed
by Computershare Investor Services PLC to fund the purchase ofthe
Ordinary Shares held outside Hong Kong and China (the "Facility").
The Facility will be made available to Shareholders on the
Company's share register with addresses outside of Hong Kong or
China, currently totalling 2,950,041 Ordinary Shares. It is
anticipated that the full amount of the funds will be deposited
into the account prior to the date of the General Meeting, but,
should this be delayed for any reason, the General Meeting will be
adjourned in accordance with the articles of association of the
Company until such time as the full amount is deposited. After the
Cancellation is approved at the General Meeting or any adjournment
thereof, the Company intends to retain the services of its
registrars to administer this purchase of Ordinary Shares after the
Cancellation. Once this service has been arranged, details will be
made available to Shareholders on the Company's website
www.tinciholdings.com.
The Cancellation process and the General Meeting
Under the AIM Rules, the Cancellation can be effected following
the expiry of 20 business days from the date on which notice of the
Cancellation is given to the London Stock Exchange provided that
the Cancellation has been approved by not less than 75 per cent. of
votes cast by Shareholders and can only become effective once five
business days have passed since the date on which the requisite
Shareholder approval is given.
The Company will hold the General Meeting on 15 January 2015 at
4:00 p.m. (Hong Kong time) at the office of the Company at 18(th)
floor, Wuyangxincheng Plaza, No. 111 - 115 Siyouxin Road,
Guangzhou, P.R.C. where the Cancellation resolution will be
considered and if deemed fit, approved as a special resolution.
Subject to approval of the Cancellation by the requisite majority,
it is anticipated that trading of the Ordinary Shares on AIM will
cease at the close of business on 22 January 2015 and the effective
date of the Cancellation will be 23 January 2015.
Rationale for re-registering as a private limited company
In addition, following the proposed Cancellation, the Directors
consider that there is little benefit to maintaining the Company's
status as a Hong Kong public limited company together with the
extra costs and administrative burdens associated with such status.
This re-registration would require the approval of not less than 75
per cent. of the votes cast by Shareholders at a general meeting.
The principal effects of the re-registration are detailed in the
Circular. Under Hong Kong laws, as part of the re-registration, the
Company would also be required to adopt new articles of
association. It is anticipated that the Board will propose, at a
separate Shareholder meeting to be held after the Cancellation,
that Tinci be re-registered as a Hong Kong private company. Details
of such Shareholder meeting will be made available on the Company's
website www.tinciholdings.com in due course
Recommendation
The Directors unanimously consider that the Cancellation is in
the best interests of the Company and its Shareholders as a whole.
Accordingly, the Directors recommend that Shareholders vote in
favour of the Resolution to be proposed at the General Meeting as a
majority of the Directors intend to do in respect of their own
beneficial shareholdings amounting, in aggregate, to 34,525,565
Ordinary Shares, representing approximately 65.2 per cent. of the
issued share capital of the Company at the date of this
announcement.
For further information, please visit www.tinciholdings.comor
contact:
Tinci Holdings Ltd
David Steeds Tel: +44 (0)7836 578222
Joshua Cheng Tel: +1 512 577 4613
Westhouse Securities Limited, Nominated Adviser
Martin Davison Tel: +44 (0) 20 7601 6100
Grant Thornton UK LLP, Financial Adviser
Maureen Tai Tel: +852 6108 1910
This information is provided by RNS
The company news service from the London Stock Exchange
END
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