TIDMEBP
RNS Number : 0022Q
East Balkan Properties PLC
01 November 2012
East Balkan Properties plc ("EBP" or the "Company")
1 November 2012
Proposed cancellation of Admission to AIM, and Notice of
Extraordinary General Meeting
East Balkan Properties plc today announces that it is posting a
circular to Shareholders convening an extraordinary general meeting
at 10.00 a.m. on 28 November 2012 to seek shareholder approval to
cancel the admission of the Company's Shares to trading on AIM. A
full copy of the letter to Shareholders contained in the circular
is set out below.
The Directors have concluded that:
-- there is a clear lack of liquidity in the Shares of the Company;
-- the ability to secure new equity participation or asset
disposals at levels which fairly reflect the existing net asset
value is significantly undermined by the low share price; and
-- the costs associated with maintaining a listing on AIM are
now disproportionate to the value provided by the listing, and
management expects savings arising from the Cancellation to amount
to approximately GBP50,000 per annum.
If the Resolution to approve the Cancellation is passed at the
extraordinary general meeting, it is proposed that Cancellation
will take effect at 7.00 a.m. on 6 December 2012.
For further information please contact:
IOMA Fund and Investment Management Ltd
Graham Smith
grahams@iomagroup.co.im
Tel: +44 1624 681 250
Westhouse Securities Limited
Nominated Adviser and Broker
Richard Johnson/ Antonio Bossi
Tel: +44 20 7601 6100
A copy of the circular to Shareholders will shortly be available
at: www.ebp-plc.com.
"Dear Shareholder,
Proposed cancellation of Admission to AIM
and
Notice of Extraordinary General Meeting
Introduction
The Company announced earlier today that it is seeking
Shareholder approval to cancel the admission of the Shares to
trading on AIM.
The purpose of this document is to:
(a) give you further information about the background to and
reasons for the proposed Cancellation and to seek your approval to
the Resolution at the Extraordinary General Meeting convened for
this purpose. This letter also sets out why the Board believes the
proposed Cancellation to be in the best interests of Shareholders
as a whole, and also includes a recommendation from the Directors
to vote in favour of the Resolution; and
(b) convene an extraordinary general meeting of the Company for
the purpose of seeking your approval of the proposed
Cancellation.
Your attention is drawn to the recommendation from the
Directors, on page 7, that you vote in favour of the
Resolution.
If the Resolution to approve the Cancellation is passed at the
Extraordinary General Meeting, it is proposed that Cancellation
will take effect at 7.00 a.m. on 6 December 2012.
Background
East Balkan Property plc has been quoted on AIM since December
2005. In July 2008 the Shareholders voted in favour of a resolution
to implement a revised investment strategy focused on the
realisation of value from the Company's property portfolio.
While the Company has been successful in rationalising and
stabilising the portfolio over the past four years since this
strategy was adopted, the prolonged downturn in the region has
prevented the successful realisation of value from the property
portfolio.
The Board remains committed to achieving its strategic goal of
value realisation, however does not expect that this will be
delivered in the immediate future. Efforts to realise value through
asset sales and refinancing have been hampered by continued
operational pressure at the asset level and an extreme scarcity of
debt finance in the region.
Although the Company has managed to stabilise net asset value at
approximately EUR0.38 per share, the Group operates under a
constrained working capital position, without regular access to
income from its portfolio and insufficient cash balances to provide
meaningful capital support to its portfolio assets.
Trading in the Company's Shares remained sporadic for a
sustained period of time since 2010, and the Shares have traded at
a sustained discount to NAV which has now extended to over 75%. The
current share price of 6.50p, being the closing price on 30 October
2012 (the latest price available prior to publication of this
document) is equivalent to a 79% discount to the latest published
NAV of EUR0.38 as at 30 June 2012.
In light of this situation the Company announced in its 2012
interim results, on 29 August 2012, that the Board was reviewing
the merits of its AIM quote.
Rationale for the Cancellation
The Directors have concluded that a resolution should be put to
Shareholders to approve a Cancellation for the following
reasons:
-- There is a clear lack of liquidity in the Shares of the Company;
-- The ability to secure new equity participation or asset
disposals at levels which fairly reflect the existing net asset
value is significantly undermined by the low share price; and
-- The costs associated with maintaining a listing on AIM are
now disproportionate to the value provided by the listing, and
management expects savings arising from the Cancellation to amount
to approximately GBP50,000 per annum.
Process for, and Principal Effects of, the Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Shares in the event that the Cancellation is
approved and becomes effective.
To the extent that Shareholders are unable or unwilling to hold
Shares in the Company following the Cancellation becoming
effective, such Shareholders should consider selling their
interests in the market prior to the Cancellation becoming
effective.
Under the AIM Rules the Company is required to give at least 20
clear Business Days' notice of Cancellation. Additionally,
Cancellation will not take effect until at least 5 clear Business
Days have passed following the passing of the Resolution. If the
Resolution is passed at the Extraordinary General Meeting, it is
proposed that Cancellation will take effect at 7.00 a.m. on 6
December 2012.
In the event that the Cancellation proceeds, there will be no
market facility for dealing in the Shares and no price will be
publicly quoted for Shares as from close of business on 5 December
2012. As such, interests in Shares are unlikely to be readily
capable of sale and where a buyer is identified, it may be
difficult to place a fair value on any such sale.
While there can be no guarantee that Shareholders will be able
to sell any Shares, any Shareholder seeking to do so following
Cancellation should contact the Company in writing at the
registered office of the Company, IOMA House, Hope Street, Douglas,
Isle of Man IM1 1AP (email: info@ebp-plc.com). The Company will
then be able to advise as to whether the Directors are aware of any
prospective buyers for any Shares which the holder thereof wishes
to sell at that time.
It is the Board's intention currently to assess at the time of
future annual general meetings whether the Company's financial
position will enable it to propose a further buy back of Shares and
if any such buy back is proposed, this may provide a further
opportunity for Shareholders to realise their investment. However,
any such future buy back will depend on the financial position of
the Company and may also be subject to such approvals by
Shareholders as shall be required so as to ensure that no
obligation arises for any Shareholder to make a mandatory offer
under Rule 9 of the City Code. The Company will remain subject to
the Takeover Code for 10 years after Cancellation. There can be no
certainty that any further buy back of Shares by the Company will
be made and the Board makes no commitment in this respect.
The Company has sought and received assurances from its mortgage
lenders that existing financing will not be adversely impacted by
the Cancellation. The Company will continue to post information
about the Company on its website (www.ebp-plc.com) and will
continue to send its Annual Report and Accounts to Shareholders and
to hold general meetings in accordance with the applicable
statutory requirements and the Company's articles.
Risks associated with retaining an interest in the Company
following the Cancellation
The Directors draw to the attention of Shareholders the
following factors which should be taken into account in assessing
whether or not to retain their interests in Shares in the event
that the Cancellation is approved and becomes effective:
-- as indicated above, there will be no market facility for
dealing in the Shares and no price will be publicly quoted for
Shares. As such, interests in Shares are unlikely to be readily
capable of sale and where a buyer is identified, it may be
difficult to place a fair value on any such sale;
-- as an unquoted company, it will no longer be subject to the
AIM Rules and shareholders will only be able to rely on the
protections afforded to minority shareholders under general English
law;
-- the Company will no longer be subject to the rules relating
to disclosure of interests in Shares set out in the DTR, such that
it may be difficult to ascertain the ownership of Shares from time
to time;
-- the levels of transparency and corporate governance within
the Company are unlikely to be as stringent as for a company quoted
on AIM;
-- certain existing or prospective customers and suppliers may
be unwilling to trade or continue to trade with the Company on
terms which the Company has become accustomed to trade in the event
that the Company's Shares are no longer traded on AIM;
-- the Company's bankers may not be prepared to deal with the
Company on terms to which the Company has become accustomed in the
event that the Company's Shares are no longer traded on AIM.
The above considerations are non-exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
Taxation
If you are in any doubt about your tax position, and/or are
subject to tax in a jurisdiction other than the UK, you should
consult an appropriate independent professional adviser. You should
note that following Cancellation the Company's shares will no
longer be quoted on AIM or any other public market.
Extraordinary General Meeting
Under the AIM Rules for Companies, it is a requirement that any
Cancellation must be approved by not less than 75 per cent. of
votes cast by Shareholders in a general meeting. Accordingly the
notice of EGM set out at the end of this document contains a
special resolution:
(i) to approve the application to London Stock Exchange for
cancellation of admission of the Shares to trading on AIM; and
(ii) to approve such cancellation.
The EGM will be held at IOMA House, Hope Street, Douglas, Isle
of Man IM1 1AP commencing at 10.00 a.m. on 28 November 2012. If
approved it is expected that the Cancellation will take effect from
7.00 a.m. on 6 December 2012.
Actions to be taken
You will find enclosed with this document a stamped addressed
envelope and Form of Proxy for use at the EGM. Whether or not you
intend to be present at the EGM in person, Shareholders are
requested to complete and sign the Form of Proxy and return it to
the offices of IOMA Fund and Investment Management Limited, IOMA
House, Hope Street, Douglas, Isle of Man IM1 1AP, as soon as
possible and, in any event, not later than 10.00 a.m. on 26
November 2012. Unless the Form of Proxy is received by this date
and time, it will be invalid. The completion and return of the Form
of Proxy will not preclude you from attending the EGM and voting in
person if you wish.
Further Information
Copies of this document may be inspected at the Company's
registered office during usual business hours on any weekday
(Saturdays, Sundays and public holidays excepted) for one month
from the date of this document. The document will also be available
on the Company's website, www.ebp-plc.com.
Recommendation
The Directors consider that the Resolution is in the best
interests of the Company and the Shareholders as a whole.
Accordingly, your Directors unanimously recommend that Shareholders
vote in favour of the Resolution to be proposed at the EGM, as they
have irrevocably undertaken to do in respect of their beneficial
shareholdings totalling 40,000 Shares, representing approximately
0.03 per cent. of the Company's issued Shares.
Yours faithfully
James Ede-Golightly
Non-Executive Chairman"
DEFINITIONS
"Admission" admission of the Shares to
trading on AIM
"AIM" the market of that name operated
by London Stock Exchange
"AIM Rules for the rules for companies applying
Companies" for admission to and whose
securities are traded on AIM
and published by London Stock
Exchange as amended from time
to time
"Business Day" any day upon which the London
Stock Exchange is open for
business
"Cancellation" the cancellation of Admission,
subject to the passing of a
resolution at the EGM
"Company" or "East East Balkan Properties plc
Balkan"
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001) operated
by Euroclear UK & Ireland Limited
which facilitates the transfer
of title to shares in uncertificated
form
"Directors" or the directors of the Company
"the Board" whose names are set out on
page 4 of this document
"DTR" Disclosure Rules and Transparency
Rules
"EGM" the extraordinary general meeting
of the Company convened for
10.00 a.m. on 28 November 2012,
notice of which is set out
at the end of this document
"Form of Proxy" the form of proxy enclosed
with this document for use
by Shareholders in connection
with the EGM
"Group" the Company and its current
and future subsidiaries
"London Stock London Stock Exchange plc
Exchange"
"NAV" net asset value of the Company
as determined from time to
time by the Company's administrator
or other valuer instructed
for the purpose
"Resolution" the resolution to be proposed
at the EGM as set out in the
notice at the end of this document
"Shares" the ordinary shares of EUR0.01
in the capital of the Company
"Shareholders" holders of Shares
This information is provided by RNS
The company news service from the London Stock Exchange
END
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