RE: US Listing
25 Février 2005 - 8:00AM
UK Regulatory
RNS Number:0242J
Provalis PLC
25 February 2005
For Immediate Release 25th February 2005
Provalis plc
Notice of intent to terminate ADR program, to de-list from NASDAQ
and to suspend SEC registration and reporting obligations
Provalis plc (LSE: PRO; NASDAQ: PVLS), the International Medical Diagnostics and
Pharmaceuticals Group, announces that it intends to:
* Terminate its American Depositary Receipt (ADR)
programme and its NASDAQ listing; and
* As soon as possible thereafter, suspend its registration
and reporting obligations to the United States Securities and Exchange
Commission (SEC)
Provalis has taken this decision following a careful review of the merits of the
Company's secondary listing on NASDAQ. This review concluded that the
significant costs and management time necessary to comply with additional
requirements introduced by recent changes in United States securities laws,
including the Sarbanes-Oxley Act of 2002, far outweighed the benefits of the
listing. This action, which is expected to save the Group approximately
$700,000 between now and 30th June 2006 and at least $400,000 in each year
thereafter, should not cost more than $50,000.
The Company has been informed that there are presently 19 US residents
registered as holding ordinary shares on the London Stock Exchange and
approximately 930 US residents holding ADRs on NASDAQ. As at the end of January,
the total ADR holding of these US residents represented just under 5.5m ordinary
shares, or approximately 1.5% of Provalis' entire issued share capital. The
average trading volume in Provalis' ADRs during 2004 was less than 12,000 per
week.
Provalis may suspend its SEC registration and reporting obligations if the
number of US residents who hold Provalis securities (either ADRs on NASDAQ or
ordinary shares on the London Stock Exchange), directly or through nominees,
falls below 300.
In order to reduce the number of US residents holding Provalis securities to
less than 300, Provalis intends to implement the following as soon as possible:
* Give written notice of termination of Provalis' ADR
programme, effective in 90 days;
* Upon the termination of the programme at the end of this 90-day
notice period, no further transfers of ADRs will be permitted and
trading of ADRs on NASDAQ will cease; as a consequence, there will be no
liquid trading market for the sale or purchase of Provalis ADRs;
* Holders of any ADRs which remained outstanding would then have
2 months in which to surrender their ADRs in return for Provalis ordinary
shares, subject to payment by the holder of a cancellation fee;
* Any ADR holders that surrender their ADRs in return for
Provalis ordinary shares would subsequently hold and trade the ordinary shares
on the London Stock Exchange; and
* On the expiry of this 2 month period, the ordinary shares underlying any
remaining outstanding ADRs would be sold by the Bank of New York
(the provider of Provalis' ADR programme) on the open market, with the sale
proceeds distributed to the ADR holders in cash.
Provalis intends to give holders of its ADRs formal written notice of the
termination of the ADR programme by no later than 31st March 2005. That notice
will explain in detail the process for termination of the ADR programme and the
steps to be taken by holders of ADRs.
Provalis believes that few ADR holders are likely to surrender their ADRs for
ordinary shares. Consequently, the probable result of the process described
above is that most holders of its ADRs will receive cash for their ADRs shortly
after the sale of the underlying ordinary shares by the Bank of New York and
will therefore cease to hold Provalis securities.
Provalis expects, therefore, that this will result in the number of US residents
holding Provalis securities falling below 300. Should this be the result,
Provalis will as soon as is practicable terminate the US registration of its
securities under Section 12 of the Securities Exchange Act of 1934 (the Exchange
Act) and suspend its reporting obligations under Section 15 of the Exchange Act.
As a result of these actions, Provalis would no longer be required to file
periodic or current reports with the SEC, or to comply with the requirements of
the Sarbanes-Oxley Act of 2002. Provalis believes that such deregistration and
suspension should take effect before 31st August 2005.
Provalis also intends to propose resolutions at its Annual General Meeting to be
held later this year to introduce changes to Provalis' Articles of Association
that will, in effect:
* Limit the number of US residents permitted as holders of Provalis
ordinary shares to less than 300 (or such other number as would ensure
that Provalis' SEC registration and reporting requirements are not
reinstated); and
* Give Provalis the power to compel the involuntary sale by
US residents of their holdings of ordinary shares to the extent necessary to
accomplish this result.
The text of the proposed amendments to Provalis' Articles of Association and
detailed information concerning the amendments will be provided in the Notice of
the Annual General Meeting which will be given to holders of ordinary shares
prior to the 2005 Annual General Meeting.
If these changes are approved at the Annual General Meeting, and if the number
of US residents holding Provalis' securities had not already been reduced to
less than 300, Provalis would exercise the powers granted by its amended
Articles of Association to so reduce them. As soon as is practicable thereafter,
Provalis would terminate its Exchange Act registration and suspend its SEC
reporting requirements as described above. Provalis believes that, under this
scenario, deregistration and suspension would take effect before the end of
December 2005.
Once deregistration and suspension has taken effect (howsoever achieved),
Provalis would exercise the powers resulting from the passing of resolutions
referred to above to the extent necessary to ensure that the number of US
residents holding its securities remains below 300, in order to avoid any future
reinstatement of its SEC registration and reporting obligations.
Provalis' ordinary shares will remain listed on the London Stock Exchange and
Provalis will continue to fulfil its registration and reporting obligations to
the UK Listing Authority and the London Stock Exchange.
Commenting on this announcement, Frank Harding, Chairman of Provalis plc, said:
"As a UK listed company, Provalis complies fully with UK listing rules and
applicable regulations. Complying with the additional US obligations is a
significant and on-going burden on our finances and our management time and
outweighs the benefit of our US listing. We believe that this deregistration and
suspension of SEC reporting requirements will save the Group approximately
$700,000 between now and 30th June 2006 and at least $400,000 in each year
thereafter. As such, there is a real commercial benefit in implementing this
proposal as soon as possible."
END
Visit Provalis' Revised Website at http://www.provalis.com
"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of
1995: Statements in this announcement that relate to future plans, expectations,
events, performances and the like are forward-looking statements as defined in
the US Private Securities Litigation Reform Act of 1995. Actual results of
events could differ materially from those described in the forward-looking
statements due to a variety of factors. Such factors include, among others, the
possibilities that a greater than expected number of holders of Provalis' ADRs
may elect to surrender them for ordinary shares, such that SEC deregistration
may not be feasible; that the holders of ordinary shares may not approve the
proposed amendments to the company's Articles of Association at its 2005 Annual
General Meeting; and that the cost savings realized from the withdrawal of the
company from the US regulatory scheme may be less than anticipated. Other
factors that could affect the Company's future results are more fully described
in its filings with the US Securities and Exchange Commission, in particular the
latest 20-F filing, copies of which are available from the Company Secretary at
the Company's registered address.
For further information:-
Dr Phil Gould, Chief Executive Officer, Provalis plc Tel: 01244 833463
Mr Peter Bream, Finance Director, Provalis plc Tel: 01244 833552
Mr Lee Greenbury, Company Secretary, Provalis plc Tel: 01244 833402
Lisa Baderoon, Buchanan Communications Tel: 020 7466 5000
Notes to Editors
Provalis plc (LSE: PRO; NASDAQ: PVLS) is an international healthcare group with
two operating businesses:-
* Medical Diagnostics - develops medical diagnostic products
for chronic disease management for sale to world markets. The business'
principal products are in2it(TM)A1c and Glycosal(R), both diabetes diagnostic
tests, and Osteosal(R), a diagnostic test for osteoporosis.
* Pharmaceuticals - sells and markets its own, and third party,
branded, prescription medicines in the UK and Ireland to GPs and hospitals
through its regionally managed sales force. The business' principal product is
Diclomax(R), a medicine for use in the treatment of musculo-skeletal
disorders, and it also sells products in the areas of osteoporosis, migraine
and dermatology.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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