TIDMTRIC
RNS Number : 8486I
Tricor PLC
02 September 2016
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
Tricor plc
("Tricor" or the "Company")
Proposed sale of the plant and equipment of Tricor Minerals Pte
Ltd to KGGD Pte Ltd and the new operating arrangements between
Tricor Environmental Pte Ltd and KGGD Pte Ltd
and
Notice of General Meeting
Tricor (AIM: TRIC) announces that it has entered into a
conditional sale and purchase agreement with KGGD Pte Ltd ("KGGD")
and Dunamis Mining Pte Ltd ("Dunamis") whereby KGGD will acquire
the iron sand processing plant and equipment of Tricor Minerals Pte
Ltd ("Tricor Minerals"), a 72 per cent. subsidiary of the Company.
In addition, Tricor Environmental Pte Ltd ("Tricor Environmental"),
a wholly-owned subsidiary of the Company, has entered into a new
operating arrangement with KGGD. The disposal and the new operating
agreement together form the Transaction.
The Transaction is conditional, inter alia, on the approval of
shareholders at a general meeting of the Company to be held on at
11.00 a.m. on 30 September 2016 at 11 Collyer Quay, #14-06 The
Arcade, Singapore 049317 (the "GM"), further details of which are
set out below.
A circular (the "Circular"), containing information in relation
to the Transaction and convening the GM, is expected to be sent to
shareholders on 5 September 2016. The Circular will be available on
the Company's website at www.tricor-plc.co.uk in due course.
Enquiries:
Tricor plc
Chan Fook Meng
CEO +65 6236 2985
Allenby Capital Ltd (Nominated
Adviser & Broker) +44 (0) 20 3328
John Depasquale / Richard Short 5656
Proposed sale of the plant and equipment of Tricor Minerals to
KGGD and the new operating arrangements between Tricor
Environmental and KGGD and Notice of General Meeting
1. Introduction
The purpose of this letter is to provide you with the background
to and the reasons for the Transaction. In addition, it explains
why the Directors consider the Transaction to be in the best
interest of the Company and Shareholders as a whole and why they
recommend that Shareholders should vote in favour of the Resolution
to be proposed at the General Meeting.
The Company announced today that it has reached an agreement in
principle with KGGD and Dunamis with regard to Settlement Agreement
1 and Settlement Agreement 2:
Settlement Agreement 1
In exchange for a full and final settlement amongst the Company,
TEPL, KGGD and Dunamis, the parties have agreed in principle on the
Settlement Agreement 1. Based on the Settlement Agreement 1, upon
securing the Mineral Processing Permit ("MPP"), TEPL will work
exclusively with KGGD in relation to the iron sand operations for
one year on a 50/50 profit sharing basis, the extension of which
will be dependent on the performance of KGGD during the year.
Settlement Agreement 2
In conjunction with Settlement Agreement 1, TMPL and KGGD have
also agreed to a conditional sale and purchase agreement to
transfer the ownership of TMPL's iron sand processing plant and
related equipment to KGGD in exchange for KGGD and Dunamis'
agreement to write off the entire amount owed by TMPL to both these
parties as of the signing date of Settlement Agreement 2.
The Disposal constitutes a fundamental change of business of the
Company pursuant to Rule 15 of the AIM Rules. Accordingly, the
execution of the settlement agreement is subject to, inter alia, on
the approval of Shareholders at the General Meeting, notice of
which is being sent to shareholders on 5 September 2016.
Following the Disposal, the Company will be classified pursuant
to Rule 15 of the AIM Rules as an AIM Rule 15 cash shell. The
Company will be required to make an acquisition or acquisitions
which constitute a reverse takeover transaction under the AIM Rules
within six months of becoming an AIM Rule 15 cash shell (which will
be deemed to be the date of completion of the Transaction) or be
re-admitted to trading on AIM as an investing company under the AIM
Rules (which requires the raising of at least GBP6 million),
failing which, the Ordinary Shares would then be suspended from
trading on AIM. After six months of suspension, the Ordinary Shares
would then be cancelled from trading on AIM.
The Company is currently in ongoing discussions with a number of
potential reverse takeover targets. The Board believe that there is
a reasonable chance that the Company will undertake a reverse
takeover within the permitted six-month timeframe. Consequently, at
this time, the Board do not have plans to re-admit the Company to
trading on AIM as an investing company, requiring a GBP6 million
fundraise.
2. Background and reasons for the Disposal
TMPL was set up to process and produce iron sand in the
Philippines. Tricor invested SGD720 in this project for a 72 per
cent. stake on 28 May 2013. TMPL currently owns an iron sand
processing plant which commenced construction in 2013. The trial
run of the plant was stopped after a short period as it did not
reach the anticipated processing capacity and experienced various
operational and technical problems (the "Problems"). The plant has
therefore been idle since early 2014 so that it could be redesigned
and also be moved to another site with a better resource of iron
sand. At the same time, TMPL was applying for the necessary permits
to process and sell iron sand (both at the original site and the
new site), which have not been forthcoming.
The remaining 28 per cent. of TMPL shares are held by KGGD (18
per cent.), Dunamis (7 per cent.) and Mr. Tan Hong Pheng (3 per
cent.). KGGD is fully owned by Mr. Chong Seow Meng and Dunamis is
fully owned by Mr. Chong Koon Ann. It was agreed from the outset
that KGGD would be responsible for managing and funding TMPL. To
date, KGGD and Dunamis have an accumulated amount owing to them
from TMPL, in the form of loans and payables, of approximately
USD$1.3 million. The amount due results from the costs incurred in
building the plant and funding the personnel costs, general
operations and the permit applications. The MPP was not received by
31 December 2013, as KGGD expected, and on 25 June 2015, KGGD
consequently issued a statutory demand to TMPL for the repayment of
the loan received by TMPL. The Company, TEPL, TMPL, KGGD and
Dunamis have since been in discussions to reach an amicable
resolution.
Due to the uncertainty of whether the MPP would eventually be
secured, which is central to TMPL's ability to generate cash flow
and to pay the amount owed to KGGD and Dunamis in relation to the
costs in building the iron sand processing plant and acquiring the
relevant equipment, the Directors believe that a reasonable
solution is to transfer the iron sand processing plant to KGGD in
exchange for KGGD and Dunamis' agreement to write off all amounts
owed to them as of the signing date of Settlement Agreement 2. The
Directors believe that this transaction is in the best interest of
the Shareholders. A full impairment of the iron sand processing
plant was performed in FY2015 and it has since carried a zero book
value on the balance sheet of TMPL.
In the event TEPL manage to secure the MPP with TMPL, as per
Settlement Agreement 1, TEPL and KGGD will continue to work on the
iron sand operation on a 50/50 profit sharing basis.
3. Summary of the Settlement Agreements
A summary of the Settlement Agreement 1 and Settlement Agreement
2 is set out below:
Settlement Agreement 1 - New operating arrangements between TEPL
and KGGD
Subject to the passing of the Resolution, TEPL has agreed to
grant KGGD a one-year, royalty free, sole and exclusive right and
licence to own and operate an iron sand processing plant on the
Bangan Sub-Concession to extract iron sand therefrom and to
process, export and sell any product from the date that TEPL
obtains an MPP. KGGD will operate the Bangan Sub-Concession
strictly in accordance with the conditions imposed by the MPP, and,
subject to the conditions of the MPP, KGGD will have the right to
increase its production as it chooses.
KGGD and TEPL will jointly obtain any financing necessary to
commence and continue the iron sand operation for the duration of
the license at market rate and KGGD is entitled to charge US$2.00
per metric tonne for the cost of marketing and arranging all
banking facilities for the sale of the iron sand. In addition,
subject to the deduction of all costs associated with the setting
up and operation of iron sand processing plant at the Bangan
Sub-Concession, and all costs, taxes and other outgoings associated
with the export and sale of iron sand, TEPL will be entitled to 50
per cent. of the net profit of the iron sand business annually.
Settlement Agreement 2 - Proposed sale of the Plant and
Equipment by TMPL to KGGD
Subject to the passing of the Resolution, TMPL agrees to
transfer the ownership of the Plant and Equipment to KGGD, in
exchange for KGGD and Dunamis's agreement to write off the full
amount owed to them by TMPL as of the date of the Settlement
Agreement 2, being approximately USD$1.3 million. KGGD shall take
delivery of the Plant and Equipment at whichever location and will
pay all charges and expenses of removing the Plant and
Equipment.
The Company's operations following the Disposal
Following the completion of the Transaction, TEPL will continue
to work with its operating partner, Chahaya, to attempt to secure
reclamation sand contracts. In addition, TEPL will continue to work
with TMPL to try to secure the MPP. Once the MPP application is
approved, TEPL and KGGD will work on the iron sand operation on a
50/50 profit sharing basis as per Settlement Agreement 1. TRT will
remain dormant until the iron sand operation commences.
On completion of the Transaction, the Board anticipates that the
Company will further explore corporate opportunities with the aim
of identifying a reverse takeover transaction opportunity within
the next six months, and to provide working capital for the
day-to-day business of the Company. The Board has been pursuing a
number of corporate opportunities in the resources and medical
sectors and believe that it will be able to complete a reverse
takeover transaction within the six months following completion of
the Transaction and maintain the admission of the Ordinary Shares
to trading on the AIM Market.
Any reverse takeover transaction will require the publication of
an AIM-compliant admission document and will be subject to
Shareholder approval at a further general meeting of the Company to
be convened at the appropriate time.
4. General Meeting
Purpose of the General Meeting
The General Meeting is being convened for the purpose of
approving the Transaction.
A notice convening the General Meeting to be held at 11.00 a.m.
at the offices of 11 Collyer Quay, #14-06 The Arcade, Singapore
049317 on 30 September 2016 at which the Resolution will be put to
Shareholders is being sent to shareholders on 5 September 2016.
The result of the voting on the Resolution will be announced via
a Regulatory Information Service and posted on the Company's
website after the meeting.
For ease of reference the Resolution is set out below:
1. The approval of the signing of Settlement Agreement 1 and
Settlement Agreement 2 amongst the Company, its subsidiaries, KGGD
and Dunamis
5. Related Party Transaction
The disposal of iron sand processing plant and related equipment
by TMPL to KGGD and the new operating arrangements between TEPL and
KGGD represent a related party transaction under AIM Rule 13 as
KGGD and Dunamis Mining are substantial shareholders in TMPL,
holding 25 per cent. of the issued share capital of TMPL. The
Directors consider, having consulted with the Company's nominated
adviser, Allenby Capital, that the terms of the transaction are
fair and reasonable insofar as the Shareholders are concerned.
6. Irrevocable Undertakings
The Company intends to seek irrevocable undertakings from its
major shareholders over the coming weeks in advance of the General
Meeting to vote in favour of the Resolution. Further announcements
will be made and as when appropriate in this regard.
7. Recommendation
For the reasons set out above, the Board is of the view that
approval of the signing of Settlement Agreement 1 and Settlement
Agreement 2 by the Shareholders is in the best interests of
Shareholders as a whole.
The Board unanimously consider the Resolution to be in the best
interest of the Company and the Shareholders as a whole. The
Directors recommend that the Shareholders vote in favour of the
Resolution to be proposed at the General Meeting as they intend to
do in respect of their aggregate beneficial holdings amounting to
56,655,635 Ordinary Shares, representing 30.5 per cent. of the
Ordinary Shares.
In the event that the Resolution is not passed, the Company will
need to raise additional funds to meet current liabilities and to
fulfil its settlement obligations to KGGD under the terms of the
loan agreement. There is no guarantee that the Board will be able
to raise these necessary funds on terms acceptable to Shareholders,
or at all.
Yours sincerely,
Chan Fook Meng
CEO
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Date of this document 2 September 2016
Latest time and date for receipt 10.00 a.m. on 27
of Forms of Proxy September 2016
General Meeting 11.00 a.m. on 30
September 2016
Expected date of the completion 5 October 2016
of Transaction
DEFINITIONS
"AIM" the market of that name operated
and regulated by the London
Stock Exchange;
"AIM Rules" together the AIM Rules for Companies,
the AIM Rules for Nominated
Advisers and the AIM Disciplinary
Procedures and Appeals Handbook
as published by the London Stock
Exchange from time to time;
"Allenby Capital" Allenby Capital Limited (incorporated
and registered in England and
Wales with registered number
06706681), the Company's nominated
adviser and broker;
"Articles" the articles of association
of the Company, as adopted by
a special resolution of the
Company passed on 2 February
2011;
"Bangan Sub-Concession" the sub-concession of the Bucao
Concession which Tricor Environmental
Pte Ltd and Tricor Minerals
Pte Ltd applied for a Mineral
Processing Permit;
"Board" or "Directors" the directors of the Company
as at the date of this Document,
whose names are set out on page
3 of this document
"Bucao Concession" a sand concession located along
the Bucao River in the Philippines;
"Company" or "Tricor" Tricor plc, a company incorporated
in England and Wales under the
Companies Act 2006 with registered
number 02709891 whose registered
office is at Finsgate, 5-7 Cranwood
Street, London, EC1V 9EE, United
Kingdom;
"Companies Act" the Companies Act 2006, as amended
or "Act" from time to time;
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001 (SI 2001 No
3755)) for the paperless settlement
of trades and the holding of
uncertificated securities, operated
by
Euroclear, in accordance with
the same regulations;
"Disposal" the proposed sale of the plant
and equipment of Tricor Minerals
Pte Ltd to KGGD Pte Ltd and
the new operating arrangements
between Tricor Environmental
Pte Ltd and KGGD Pte Ltd;
"Document" this document dated 2 September
2016;
"Dunamis" Dunamis Mining Pte Ltd, a company
incorporated in Singapore with
registered office at 3 Shenton
Way #24-06, Shenton House, Singapore
068805;
"Euroclear" Euroclear UK & Ireland Limited,
the operator of CREST;
"Form of Proxy" the form of proxy enclosed with
this document for use by Shareholders
in connection with the General
Meeting;
"General Meeting" the general meeting of the Company
to be held at 11.00 a.m. on
30 September 2016 at 11 Collyer
Quay, #14-06 The Arcade, Singapore
049317, to consider and if through
fit, pass the Resolution, notice
of which is set out at the end
of this Document;
"KGGD" KGGD Pte Ltd, a company incorporated
in Singapore with registered
office at 3 Shenton Way #24-06,
Shenton House, Singapore 068805;
"London Stock Exchange" the London Stock Exchange Group
plc;
"Notice of Meeting" the Notice of General Meeting
or "Notice" set out at the end of this document;
"Ordinary Shares" ordinary shares of 0.001 pence
each in the capital of the Company;
"Options" the outstanding options to purchase
Ordinary Shares;
"Plant and Equipment" the plant and equipment that
is to be transferred to KGGD
Pte Ltd under the Settlement
Agreement 2 includes the iron
sands separating plant equipment,
the processing equipment, the
steel sheet and screen, 8 units
of container, steel parts, power
house, water piping system, conveyer
system, silo and control room
and MS plate 10,000 litre fuel
tank;
"Regulatory Information a regulatory information service
Service" operated by the London Stock
Exchange as defined by the AIM
Rules;
"Resolution" the resolution set out in the
Notice of General Meeting;
"Settlement Agreement the Agreement to be entered into
1" between the Company, Tricor Environmental
Pte Ltd, KGGD Pte Ltd and Dunamis
Mining Pte Ltd, further details
of which are set out at paragraph
3 of this Circular;
"Settlement Agreement the Agreement to be entered into
2" between Tricor Minerals Pte Ltd
and KGGD Pte Ltd, further details
of which are set out at paragraph
3 of this Circular;
"Shareholder(s)" holder(s) of Ordinary Shares
in the Company from time to time;
"Subsidiaries" The subsidiaries of the Company
at the date of this Document,
being Tricor Environmental (100%
owned) and Tricor Minerals (72%
owned);
"Transaction" Settlement Agreement 1 and Settlement
Agreement 2, together the Transaction;
"Tricor Environmental" Tricor Environmental Pte Ltd,
or "TEPL" the Company's wholly-owned subsidiary,
a company incorporated in Singapore
with registered office at 150
Cecil Street, #03-00, Singapore
069543;
"Tricor Minerals" Tricor Minerals Pte Ltd, the
or "TMPL" Company's 72% subsidiary, a company
incorporated in Singapore with
registered office at 120 Robinson
Road #13-02 Singapore 068913;
"UK" the United Kingdom of Great Britain
and Northern Ireland;
"uncertificated" recorded on the relevant register
or "in uncertificated of the share security concerned
form" as being held in uncertificated
form in CREST and title to which,
by virtue of the Crest Regulations,
may be transferred by means of
CREST;
"GBP" the legal currency of the UK.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLTMTTMBBMBIF
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