TIDMINVU
RNS Number : 9359R
Invu plc
01 November 2013
1 November 2013
Invu PLC
(AIM: INVU)
Proposed cancellation of trading on AIM
Invu plc ("the Company"), the AIM listed document management
software provider today announces that it intends to seek
Shareholder approval for the cancellation of admission of its
Ordinary Shares to trading on AIM (the "Cancellation").
Under the AIM Rules, Rule 41, it is a requirement that any
cancellation of admission to trading on AIM must be approved by not
less than 75 per cent. of votes cast by shareholders voting in a
general meeting. Accordingly, the Company is today sending to
Shareholders a circular and notice of general meeting convening the
General Meeting at which a special resolution will be proposed to
approve the Cancellation (the "Circular"). The Circular will be
available shortly on the Company's website at www.invu.net
The General Meeting will be held at the offices of the Company,
being Blisworth Hill Farm, Blisworth, Northampton, NN7 3DB at 9:00
a.m. on 19 November 2013. Should the Cancellation be approved at
the General Meeting, it is expected that it will take effect at
7:00 a.m. on 2 December 2013.
Capitalised terms used but not defined in this announcement have
the same meaning as given to them in the Circular.
Expected timetable of events
Despatch of this document 1 November 2013
Last date and time for receipt of Forms 9:00 a.m. on 15 November
of Proxy 2013
General Meeting 9:00 a.m. on 19 November
2013
Expected last day for dealings in Ordinary 29 November 2013
Shares on AIM
Expected time and date that admission of with effect from 7:00
Ordinary Shares to a.m. on 2 December
trading on AIM will be cancelled 2013
Notes:
1. References to time shown in this document are based on London time
2. If any of the above times or dates should change, the revised
times and/or dates will be notified to Shareholders by an
announcement on a Regulatory Information Service
3. All events in the above timetable following the General
Meeting are conditional upon approval by Shareholders of the
Resolution to be proposed at the General Meeting
Contacts:
Invu plc www.invu.net
Colin Gallick, Chief Executive +44 (0) 1604 859 893
Ian Smith, Finance Director
WH Ireland Limited www.wh-ireland.co.uk
Mike Coe +44 (0) 117 945 3470
Background to the Cancellation
The Company was admitted to AIM on 7 December 2007 following the
acquisition of Invu Inc which had been listed on AIM since January
2004. At that time the Group's objective was to establish itself as
a leading global supplier of information and document management
software and services. For the financial year ending 31 January
2008, the Group reported sales of GBP8.7 million, profit of GBP1
million, total equity of GBP8.7 million and had employed an average
of 62 people in the year. The business was based on selling
software as a product through a channel and therefore had
significant working capital requirements.
Following significant losses in the next two financial years
totaling, GBP13.3 million in aggregate during that period and a
significant business re-organisation, the business has emerged as
profitable and cash flow positive but on a much smaller scale. In
the financial year ending 31 January 2013, the Group reported sales
of GBP2.7 million, profit of GBP0.3 million, a deficit on equity of
GBP0.5 million with an average of 28 employees in the year. The
business is now focused predominantly in the UK and has refocused
on the supply of software as a solution rather than a product and
consequently substantially reduced its working capital
requirements.
The re-organisation referred to above was financed by the issue
of 50 million ordinary shares of GBP0.01 each raising GBP1 million,
GBP500,000 convertible loan notes and a loan of GBP500,000, all
issued in August 2009, and various Shareholder loans, which,
including interest, amounted to GBP2,441,765 on 30 June 2011. The
Company completed a capital re-organisation on 29 July 2011 which
resulted in the issue of 305 million A Ordinary Shares which
included conversion of the Shareholder loans and a subscription for
cash which was used to repay the GBP500,000 loan. The A Ordinary
Shares rank in priority to the Ordinary Shares, with respect to any
distribution of assets of the Company on a winding-up, and have no
rights to attend and vote at general meetings of Shareholders of
the Company, but otherwise rank pari passu in all respects with the
issued Ordinary Shares, including the right to receive all
dividends and other distributions declared, made or paid on the
Company's share capital. The authorised, allotted and fully paid
share capital at the date of this document compromises 168,752,662
Ordinary Shares, 305,000,000 A Ordinary Shares and deferred shares
which have no economic value.
Reasons for the Proposal
The Directors believe that the Company is too small to benefit
from the Ordinary Shares continuing to be traded on AIM.
The Directors have been able to improve profit and cash flow in
the last few financial years without the need for equity funding
from an issue of new Ordinary Shares and have no current plans to
use equity funding as a source of working capital finance in the
future.
Given the requirements of the AIM Rules with respect to any
acquisition which constitutes a reverse takeover, the Directors
consider that the costs of making acquisitions are too high and
consequently a barrier to an acquisition strategy for the Company
at its current scale. The Directors believe that this is
exacerbated by the lack of liquidity in the Company's shares which
limits their attraction, as an acquisition currency, to the owners
of potential targets.
The Directors believe that an exit strategy is similarly
hampered, while the Ordinary Shares continue to be traded on AIM,
as the associated compliance costs are a substantial proportion of
the Group's current EBITDA and consequently impact significantly on
third party valuations which tend to be based on this metric. The
Directors believe that any potential exit strategy is also impaired
by the lack of liquidity in the Company's shares as this has a
negative impact on the Company's share price and hence market
valuation, indicating a valuation to potential acquirers below that
of privately held peers.
Effect of the Cancellation on Shareholders
The principal effects of the Cancellation would be that:
(a) 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;
(b) the Company would not be obliged to announce material
events, administrative changes or material transactions nor to
announce interim or final results;
(c) the Company would no longer be required to comply with any
of the additional specific corporate governance requirements for
companies admitted to trading on AIM; and
(d) the Company would no longer be subject to the AIM Rules and
Shareholders would no longer be required to vote on certain matters
as provided in the AIM Rules.
It is possible that the Cancellation could have taxation
consequences for Shareholders. Shareholders who are in any doubt
about their tax position should consult their own professional
independent adviser.
Governance following the Cancellation
The Directors' intention is that the Company should remain a
public limited company but without having its shares admitted to
trading on a public market or multilateral trading facility. The
Board intends to continue to include at least one independent
non-executive director, Mark Wells, on the Board for the time being
to ensure appropriate independent judgement on issues of strategy,
performance, resources and corporate governance that they consider
vital to the continued success of the Company.
Notwithstanding the Cancellation, the Company will continue to
publish annual reports and accounts and hold Annual General
Meetings and other General Meetings in accordance with the
applicable statutory requirements and the Company's articles of
association. Where the Directors consider it to be in the interests
of the Company to do so, it will continue to post certain
additional information relating to the Company on its website. In
addition, the City Code on Takeovers and Mergers will continue to
apply to the Company following the date of Cancellation.
Share trading facility following Cancellation
The Directors are aware that the Cancellation, should it be
approved by Shareholders, would make it more difficult for
Shareholders to buy and sell Ordinary Shares should they wish to do
so. The Company therefore intends to put in place a third party
trading facility to assist Shareholders to trade in the Ordinary
Shares. Under this third party facility, Shareholders or persons
wishing to acquire or dispose of Ordinary Shares would be able to
leave an indication with the third party facility provider that
they are prepared to buy or sell at an agreed price. In the event
that the third party facility provider is able to match that order
with an opposite sell or buy instruction, it would contact both
parties and then effect the bargain.
When such arrangements are set up by the Company, details will
be made available to Shareholders on the Company's website.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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