TIDMIQH
RNS Number : 7033E
IQ Holdings plc
24 December 2009
?
24 December 2009
IQ Holdings plc ("IQ Holdings", "IQH" or the "Company")
(AIM: IQH)
Proposed disposal of Viewpoint Field
Services Limited & Rosslyn Research
Limited,
Proposed cancellation of Share Premium Account,
cancellation of Capital Redemption Reserve and
reduction of Share Capital,
Change in Investing Policy
Notice of General Meeting
IQ Holdings is pleased to announce that, subject inter alia to Shareholders'
approval, it has entered into a conditional agreement to dispose of Viewpoint
Field Services Limited ("Viewpoint" or "Viewpoint Field Services") and Rosslyn
Research Limited ("Rosslyn") to Rivington Street Holdings plc ("RSH"), for a
consideration of approximately 5,200,000 shares in RSH and the assignment from
IQH to RSH, Viewpoint or Rosslyn of liabilities to the value of approximately
GBP1.8million.
Following the Disposal, the Company will have no remaining trading business and
its principal asset will be its holding of RSH shares. It is intended that the
majority of the RSH shares shall be distributed to IQ shareholders pro rata in
relation to their existing holdings. The Company will retain approximately
GBP50,000 of RSH Shares.
IQ will then become an Investing Company under the AIM rules, with the proposed
strategy to acquire or take an interest in a company or asset involved primarily
in the real estate, manufacturing or marketing sectors. RSH is to make a loan of
GBP50,000 to IQH to give it sufficient working capital to remain as an Investing
Company on AIM for the next 12 months.
A circular will be sent to shareholders today convening a general meeting of the
Company for the purpose of seeking Shareholders' approval to the proposed
disposal.
For further information, please contact:
+-------------------------------------------+----------------------------+
| IQ Holdings plc | |
+-------------------------------------------+----------------------------+
| Julian Green | Tel: +44 (0)20 8099 0560 |
+-------------------------------------------+----------------------------+
+-------------------------------------------+----------------------------+
| Nominated Adviser: | |
| Grant Thornton Corporate Finance | |
+-------------------------------------------+----------------------------+
| Gerry Beaney | Tel: +44 (0) 20 7383 5100 |
+-------------------------------------------+----------------------------+
+-------------------------------------------+----------------------------+
| Nominated Broker: | |
| Rivington Street Corporate Finance | |
+-------------------------------------------+----------------------------+
| Monisha Varadan | Tel: +44 (0)20 7562 3389 |
+-------------------------------------------+----------------------------+
+-------------------------------------------+----------------------------+
| Financial PR: | |
| Bishopsgate Communications | |
+-------------------------------------------+----------------------------+
| Gemma O'Hara | Tel: +44 (0) 20 7562 3355 |
+-------------------------------------------+----------------------------+
Introduction
It was announced on 20 November 2009 that, as a result of continuing difficult
trading conditions, the Board had commenced a strategic review of the Company's
operations. The Company has today announced that, subject amongst other things
to Shareholders' approval, IQH has entered into a conditional agreement to
dispose of Viewpoint Field Services and Rosslyn Research to PLUS quoted RSH.
This is deemed to be a disposal resulting in a fundamental change of business
for the purpose of AIM Rule 15 and therefore is subject to Shareholder approval.
Background
IQH reported unaudited interim figures for the six months to March 2009 showing
turnover of GBP980,000 and a loss before tax of GBP298,000. As announced on 20th
November 2009, continuing difficult trading conditions and the postponement of
certain contracts means that the results for IQH for the year ended 30 September
2009 will be significantly below market expectations.
RSH currently owns 20,000,000 shares in IQ Holdings representing 1.58% of the
equity. The SF t1ps Smaller Companies Growth Fund currently owns 110,000,000
shares in IQ Holdings representing 8.70% of the equity and in September 2009 the
SF t1ps Smaller Companies Growth Fund participated in a fundraise and acquired
GBP75,000 convertible loan notes in IQ Holdings paying a coupon of 10%. Tom
Winnifrith, CEO of RSH holds 250,000 shares in IQH representing 0.02% of the
issued share capital. As the SF t1ps Smaller Companies Growth Fund is managed by
T1M, a wholly owned subsidiary of RSH, even though the fund is a separate legal
entity, the combined holdings of the fund, Tom Winnifrith and RSH are treated as
a joint holding, therefore classifying the Disposal as a related party
transaction under the AIM Rules.
In order to grow the business, IQH would need to make acquisitions and at this
current point in time, it does not have the cash resources to do.
Accordingly the Independent Directors are recommending the Disposal to be in the
best interests of the Company and the Shareholders as a whole.
If approved, following the Disposal, the Company would become an Investing
Company under the AIM Rules, with the proposed strategy to acquire or take a
controlling interest in an asset or a company involved primarily in the real
estate,manufacturing or marketing sectors as detailed in the Investing Policy
section below. Under the AIM Rules the Investing Policy is subject to
Shareholder approval.
Consideration for the Disposal
The consideration for the Disposal is 5,200,000 ordinary shares in RSH
("Consideration Shares") (subject to possible variation as detailed in the
paragraph titled "Principal Terms of the Disposal" below). At the closing market
price of 29.50 pence per share as at 23 December 2009, being the latest
practicable date prior to the posting of this document, the consideration is
valued at GBP1,534,000.
In addition, liabilities of approximately GBP1.8 million are to be assigned from
IQH to RSH, Viewpoint or Rosslyn (including loans from and monies due to Bibby,
HSBC and Media Square as further explained below) and RSH is to make a loan of
GBP50,000 to IQH to give it sufficient working capital to remain as an Investing
Company on AIM for the next 12 months. The loan is unsecured and will carry an
interest of 4% above base rate on default. Further information regarding this
loan can be found in the 'IQH Position following the Disposal'section below.
Proposed distribution of RSH shares to Shareholders
Following completion of the Disposal, the Company will have no remaining trading
business and its principal asset will be its holding of RSH Shares. It is
intended that the majority of the RSH Shares shall be distributed to
Shareholders pro rata to their holdings (the Company will retain approximately
GBP50,000 worth of RSH Shares). The result of this distribution is that
Shareholders will themselves become shareholders in RSH.
It is proposed that this distribution takes place in part by way of a
distribution in specie to Shareholders and in part by way of a return of
capital.
RSH has agreed to waive its right to receive RSH Shares following the Reduction.
In order to be able to make the proposed distribution of the RSH Shares to
Shareholders, the Company needs to have distributable reserves. As explained
below, the Company currently has a deficit on its profit and loss account. In
order to create the necessary distributable reserves, the Company proposes to
cancel its share premium account and its capital redemption reserve. It also
proposes to reduce its share capital and to return part of the capital paid up
on the Ordinary Shares to the Shareholders. The necessary Resolutions to effect
the Reduction are to be proposed at the General Meeting, and are thereafter
subject to the consent of the Court.
Shareholders should note that share prices can go up or down and that the
current share price of the RSH Shares may not be the price at which a
Shareholder may eventually realise any RSH Shares they receive.
A General Meeting has been convened for 10 am on 12 January 2010 for
Shareholders to consider the Proposals.
Principal Terms of the Disposal
On 23 December 2009 IQH entered into a Sale and Purchase Agreement with RSH for
the sale of the entire issued share capital of Rosslyn and Viewpoint Field
Services, both wholly owned subsidiaries of IQH.
The initial consideration for the purchase of the shares is 5,200,000 ordinary
1p shares in RSH. At the closing market price of 29.5pence per RSH Share as at
23 December 2009, being the latest practicable date prior to the posting of this
document, the consideration is valued at GBP1,534,000. The final consideration
payable is dependent on a creditors' statement to be produced 20 business days
from the date of completion. The consideration payable will be adjusted as
follows:
1) If the specified creditors are more than GBP1,830,800 - the
consideration shares shall reduce by 2
ordinary shares of 1p
each for every pound that the specified creditors exceed GBP1,830,800 or
2) If the specified creditors are less than GBP1,830,800 - the consideration
shares shall increase by 2
ordinary shares of 1p each for every
pound that the specified creditors are less than GBP1,830,800
The sale and purchase of Rosslyn and Viewpoint Field Services is conditional on
a number of conditions being fulfilled including:
1) the release
of IQH from certain creditors including guarantees to Bibby and HSBC, the
2009
convertible loan note holders and entry into the Media
Square Settlement Agreement;
2) cancellation of the 2007 warrants
granted by the Company
3) cancellation of the 2008 warrants granted
by the Company; and
4) Shareholder approval.
IQH has also agreed for a period of two years following completion, not to
compete with Rosslyn and Viewpoint Field Services in relation to the two
businesses as carried on at completion and in relation to the brands represented
by the two companies as at the date of such completion.
Furthermore, in accordance with the terms of the SPA, IQH has undertaken, as
soon as reasonably practicable, to apply to the Court for a confirmation of the
Reduction to enable IQH to distribute the majority of the RSH Shares to
Shareholders by way of a return of capital and/or dividend in specie. No later
than 2 business days following confirmation by the Court, IQH will hold a board
meeting at which it will declare the dividend in specie and effect the return of
capital to Shareholders.
Rationale for the disposal
IQ Holding has been loss making since being admitted to trading on AIM and the
expected benefits of a public listing have not been forthcoming. The economic
downturn and difficult trading conditions have exacerbated the position. IQ
Holdings does not have the critical mass to justify the cost of an AIM listing.
Moreover, it does not have the cash to take advantage of the acquisition
opportunities which exist in a fragmented market and with current market
conditions, the Company is unable to raise sufficient funds to allow it to grow
as it would wish. Therefore the directors have concluded that as an independent
company it cannot generate meaningful returns for Shareholders.
The consideration for the Disposal is to be RSH Shares but, as RSH is a quoted
entity, Shareholders may be able to realise the RSH Shares they are to receive
should they wish to do so. Shareholders will also be keeping a stake in IQH as
an Investing Company with potential future upside if a suitable acquisition is
identified and completed.
RSH is believed to be an attractive acquirer. t1ps.com, the forerunner of RSH
was established in April 2000 and has since then grown from a company employing
one person to one employing 53. RSH has a consistent track record of
profitability, cash generation and of adding value for shareholders. It also has
a track record of buying smaller businesses and helping them grow. As part of a
larger media group, it is expected that there will be cost savings and synergies
following completion. Moreover RSH has cash which will allow the Rosslyn and
Viewpoint operations to be expanded via acquisition thereby delivering further
economies of scale and reaching critical mass. Further details of RSH are
provided below.
Based on an independent valuation report, the Independent Directors believe the
consideration offered by RSH for Viewpoint and Rosslyn to be fair. The Directors
believe Shareholder value can now best be delivered through the investment
policy as set out in this document.
Information about Rosslyn, Viewpoint and RSH is set out below.
Rosslyn Research
Rosslyn was acquired by IQH on 29th November 2007. Rosslyn was founded in 1979
as a specialist agency for market research, opinion polling and business and
management consultancy. Whilst Rosslyn has remained a relatively small and
independent research agency, operating through an international call centre
covering the major business languages of the world and via a network of partner
agencies, it has been able to conduct research in countries in North America,
South America, Europe and Asia. A proportion of Rosslyn's revenue is derived
from traditional quantitative and qualitative research of an international
nature.
For the 12 month audited period to 30 September 2008, Rosslyn delivered turnover
of GBP517,385 (2007: GBP497,000) and a loss before tax of GBP116,807
(2007:GBP296,032). Unaudited management figures for the year to September 2009
show turnover of GBP508,240 and a profit before tax of GBP45,388.
Viewpoint Field Services
Viewpoint Field Services comprises two divisions: Viewpoint Field and Viewpoint
Studios.
Viewpoint Field Services Limited was acquired by IQH on 29 January 2009.
Viewpoint Field was established in 1990. It is a field force recruitment company
which specialises in sourcing and recruiting respondents, who go on to attend a
focus group, or another type of market researching session, such as a depth
interview. Viewpoint Field can also provide suitable freelance moderators, whose
role is to oversee focus groups, facilitate discussion and steer the structured
conversation away from distracting themes. Viewpoint Field aims to offer a
quality service, which involves monitoring respondent lists to ensure that
respondents are not overly familiar with the market research process. Viewpoint
Field has access to over 1,000 interviewers nationwide, including 50 medical
interviewers and an in-house telephone unit. Viewpoint Field also provides
quantitative face-to-face data collection services. Viewpoint Field operates
from a large house in East Molesey, which also houses studios which are used for
conducting focus groups as part of Viewpoint Studios' 'Studio' business.
Viewpoint Studios was established in 1989. The business is based in two
locations - East Molesey and Sunbury - both of which are conveniently located
near to excellent transport links to central London, major motorways and
Heathrow and Gatwick airports. The East Molesey complex includes three air
conditioned studios, demonstration kitchens, flexible meeting spaces and access
to a large garden. Sunbury has three air conditioned studios and two
demonstration kitchens.Both sets of studios are equipped with what the Directors
consider to be leading edge technology including wireless broadband, video
conferencing, web streaming and facilities where the respondents can evaluate
the 'usability' of internet sites.
Unaudited figures provided in IQH's admission document in January 2009, show
Viewpoint Division (the business of Viewpoint Field Services) achieving turnover
for 12 months to 29 February 2008 of GBP3,450,000 and profit before tax of
GBP393,000. Unaudited management figures for the 8 months to September 2009, the
period under ownership of IQH, show turnover of GBP1,663,398 and profit before
tax of GBP41,311.
Rivington Street Holdings Plc
RSH is a media and financial services group founded in 2004 and quoted on PLUS
since November 2008. RSH provides a range of services to over 100 companies
quoted on AIM and PLUS. It operates and generates revenues through 6
subsidiaries.
T1ps.com Limited
T1ps.com, a company authorised by the Financial Services Authority is the oldest
subsidiary and was set up in 2000 as a single tipsheet providing investment
ideas to private investors. t1ps.com has grown both organically and through
acquisition over the last 5 years. It currently owns 14 subscription websites
and newsletters which provide investment ideas and research on various areas of
the market. It also owns an independent research brand, Growth Equities and
Company Research, which provides research on AIM and PLUS quoted companies. In
addition, t1ps.com generates revenue through whitelabel sites, conferences and
advertising.
Bishopsgate Communications Limited
Bishopsgate Communications Limited is a financial PR advisor to both AIM and
PLUS quoted companies. It advises clients on PR strategy, drafts press releases
and seeks to manage press coverage for its clients.
Rivington Street Corporate Finance Limited
Acquired in July 2007 as Lion Capital Corporation Limited, FSA authorised RSCF
currently advises a number of companies quoted on AIM and PLUS. It provides
broking services to its AIM clients, advisory services to its PLUS clients and
acts as corporate finance advisor on one-off M&A and corporate restructuring
projects. RSCF currently acts as AIM broker to the Company. In March this year
RSCF acquired JP Jenkins Limited which provides an execution only share dealing
service to its private clients and owns a match bargain trading facility for
unquoted companies. The downturn in the market has resulted in an increase in
the number of companies moving away from AIM and PLUS towards JP Jenkins Limited
as a trading facility.
T1ps Investment Management Limited
T1ps Investment Management is an FSA authorised subsidiary providing investment
management services to a range of funds. T1M manages 2 unit trusts focused on
smaller quoted companies and gold exploration and production companies, a PLUS
quoted investment vehicle investing in PLUS quoted companies and on 13 November
2009 it launched its first EIS fund. The SF T1ps Smaller Companies Growth Fund
was launched on 19 November 2007 and for the period up to 21 December 2009, the
fund increased in value by 80.3% outperforming the UK Smaller Companies Index
significantly, the benchmark index rose by 49.7%. (source: trustnet.com)
Sharecrazy.com
Sharecrazy.com is an internet portal that provides data and information on
companies quoted on the London Stock Exchange and AIM. It provides an online
'execution-only' share dealing service to its clients. Sharecrazy hosts a
popular internet TV platform that showcases a range of shows. Sharecrazy.com is
an authorised representative of Rivington Street Corporate Finance Limited.
Commodity Watch and Oil Barrel
In November 2008, Rivington Street Holdings Limited completed its IPO through a
reverse into Commodity Watch Plc ("Commodity Watch"), then a PLUS quoted
company. Commodity Watch is the owner of resources focused investor relations
websites like Minesite.com. Minesite.com has successfully run investor
conferences in London, Paris, Geneva and Zurich. It also hosts a website which
provides news, information and independent commentary on mining companies across
the world. In November 2008 RSH acquired Oilbarrel.com, a similar oil and gas
focused website providing news and independent commentary on quoted and unquoted
oil stocks across the world. Like Minesite.com, Oilbarrel.com runs successful
investor focused conferences in London every month.
Current Trading and Prospects
For the 12 months to 31 August 2008, prior to the acquisition of Commodity
Watch, RSH delivered group turnover of GBP3,774,343 (2007: GBP2,532,013) and
EBITDA of GBP1,103,574 (2007: GBP337,459).
Subsequently in the interim financial statement to 28 February 2009 published in
April, RSH recorded net cash of GBP1,050,178. For the six months to 28 February
2009 RSH posted group turnover of GBP1,899,519 (2008: GBP1,953,454). At the
EBITDA level, RSH reported earnings of GBP236,581 (2008: GBP522,553). At the
half year, RSH had a strong balance sheet reflecting its cash position, debtors
of GBP1,209,437 and investments of GBP314, 578. The interim statement included a
contribution of just three months from the newly acquired subsidiaries Commodity
Watch and Oilbarrel.com and no contribution at all from the acquisition of JP
Jenkins Limited which was announced on 10 March 2009.
The directors of RSH are confident about the prospects for the company going
forward and intend to publish the year end results of RSH to August 2009
shortly.
Agreement with main IQH creditors - HSBC, Bibby, Media Square
Bibby
Bibby Factors Slough Limited, an invoice factoring supplier to IQH, has provided
both IQH and RSH an indicative term sheet, outlining the terms on which it will
deal with Viewpoint and Rosslyn after completion. The terms are acceptable by
both parties and at the time of completion, once approval has been sought from
Shareholders, both IQH and RSH intend to enter into legally binding agreements
with Bibby. The term sheet confirms that IQH will be released of all its
obligations and guarantees as per the terms of the transfer to RSH.
HSBC
IQH has an outstanding loan facility with HSBC. HSBC has provided an indicative
term sheet which outlines the terms on which HSBC is willing to transfer the
loan facility to Viewpoint Field Services and Rosslyn. The terms are indicative
and both IQH and RSH intend to enter into legally binding agreements with HSBC
at the time of completion. The term sheet confirms that IQH will be released
from all its obligations and guarantees as per the terms of the transfer to RSH.
Media Square
RSH, IQH, Viewpoint, Illuminas, Media Square and Turnbegin Limited intend to
enter into the MSQ Settlement Agreement. The deed will deal primarily with the
transfer of obligations of the Deferred Consideration to RSH following the
acquisition of Viewpoint and Rosslyn. RSH will also agree to take on a number of
liabilities in respect of the acquisition agreements signed at the time of the
acquisition of Viewpoint and Wire in December 2008, including but not limited to
rent on properties occupied by Viewpoint and unpaid creditors.
RSH will also agree with Media Square that following the distribution of the
Consideration Shares and in the event of a share buy back by RSH, RSH will be
allowed to reduce the Deferred Consideration payable in accordance with the
level of buy back. The terms, payment schedule and conditions of this agreement
will be detailed in the MSQ Settlement Agreement. RSH, Illuminas and Viewpoint
will also sign a Supply Agreement which outlines the terms upon which Viewpoint
will provide its services to Media Square following the Disposal by IQH.
Since Media Square is a substantial shareholder in IQH, the MSQ Settlement
Agreement is deemed to be a related party transaction under AIM Rule 13. The
directors, having consulted Grant Thornton Corporate Finance, consider the terms
of the MSQ Settlement Agreement to be fair and reasonable in so far as the
Shareholders are concerned.
Proposed change of IQH Directors
The following directors will remain on the board of IQH following completion of
the proposed Disposal
Timothy Michael Hearley (Non-Executive Chairman)
John Mitchel (Director)
Upon completion Julian Green, Neil McGowan, Joe Seydel and Gale Blears will
resign as directors of IQH. The directors of Rosslyn and Viewpoint will keep
their positions.
IQH position following the Disposal
Following the Disposal, IQH will have no remaining business and its principal
asset will be its holding of RSH Shares.
In order to allow the Company to meet its liabilities associated with
maintaining its AIM trading facility and otherwise as they fall due, conditional
upon the Disposal, RSH has agreed to make a loan of GBP50,000 to the Company
which will be repayable upon the Company completing an acquisition. The loan is
unsecured and interest is payable at 4% above base rate from default. The loan
will be made available in two equal tranches of GBP25,000, one on completion of
the Disposal and the second on demand. The loan will be repayable on completion
of a reverse transaction by IQH. As this loan is being provided by RSH, it is a
related party transaction for the purposes of the AIM rules. The Independent
Directors having consulted with Grant Thornton Corporate Finance, consider that
the terms of the transaction are fair and reasonable insofar as Shareholders are
concerned.
Proposed Investing Policy
Following the Disposal, the Company will be classified under the AIM Rules as an
Investing Company. Accordingly, the Company's new Investing Policy, details of
which are set out below, is subject to the approval of Shareholders at the
General Meeting. The Company will be required to make an acquisition or
acquisitions which constitute a reverse takeover under the AIM Rules or
otherwise implement its Investing Policy within 12 months of the General
Meeting, failing which, the Company's Ordinary Shares would then be suspended
from trading on AIM. If the Investing Policy is still not implemented within a
further six months, the admission of the Ordinary Shares to AIM would be
cancelled.
IQH's proposed strategy is to seek acquisition opportunities in the real estate,
manufacturing or marketing sectors. It will seek to make investments directly in
real estate or acquire controlling interests in property, manufacturing or
marketing companies. In particular, the Independent Directors believe that the
Indian property market may offer attractive opportunities. They also consider
that there may be attractive opportunities in the manufacturing or marketing
sectors in the UK.
These investments will be actively managed and it is anticipated will be held
for the long term.
The Company will seek to raise further capital to deliver on its business plan
either by way of equity or debt subject to the cash requirements appropriate for
growing the business.
Capital Reduction
Introduction
The Company's statutory accounts for the year ended 30 September 2008 show an
accumulated deficit of GBP511,000 on its profit and loss account. Further
difficult trading conditions mean that since the year end, the deficit on the
Company's profit and loss account has continued to increase.
At the same time, the Company's accounts showed a sum of GBP984,000 standing to
the credit of the Company's share premium account. Since the year end, as a
result of further allotment of shares, the Company's Share Premium Account has
risen to GBP1,813,915.52.
Following the capital reorganisation in January 2009, the Company also had
3,370,643,640 Deferred Shares in issue. The rights attaching to the Deferred
Shares on issue included, as set out in the Company's Articles of Association as
Article 6.1.3 thereof, a right for the Company to appoint any person to execute
on behalf of the holders of such Deferred Shares, a transfer of such shares to
the Company without any payment therefore and without the sanction of the
holders of the Deferred Shares.
The Company proposes now to exercise its right under Article 6.1.3 to appoint a
person to execute a transfer of the Deferred Shares to the Company. The Deferred
Shares so transferred will be cancelled and the value of the share capital
cancelled carried to a capital reserve in the Company's books called the Capital
Redemption Reserve. This will result in a credit to the capital redemption
reserve of GBP337,064.364.
.
Both the share premium account and the capital redemption reserve are
undistributable reserves. Accordingly, the purposes for which a company can use
any sums credited to those reserves are very limited. However, with the approval
of Shareholders and the consent of the Court, a company may reduce or cancel its
share premium account and capital redemption reserve. The reserves arising on
such a reduction of capital may be used, inter alia, in diminishing or
extinguishing a deficit on the Company's profit and loss account and, to the
extent that they exceed such a deficit, in creating a distributable reserve
which, subject to the protection of creditors, the Company may apply for the
purpose of paying dividends to Shareholders and for other corporate purposes.
The Company therefore proposes to cancel both of its share premium account and
its capital redemption reserve and to apply the reserve arising on such
cancellation first in eliminating the deficit on its profit and loss account and
then in creating a substantial distributable reserve.
At the same time, the Company also proposes to reduce its share capital by
returning part of the capital paid up on the ordinary shares to the holders
thereof. The proposed return of capital will be satisfied by the distribution to
the holders of the Ordinary Shares (other than RSH which has agreed to waive its
entitlement to receive RSH shares on return of capital) RSH shares currently
held by the Company save for the GBP50,000 worth of RSH shares which the Company
is obliged to retain in order to maintain sufficient net assets on its balance
sheet.
It is proposed that the Company's share capital be reduced to GBP50,559.47 (such
sum representing an amount required to maintain the Company's status as a public
company and to ensure that the Company can satisfy its liabilities for the
following 12 months. As with the cancellation of the share premium account and
of the Capital Redemption Reserve, the reduction of capital requires the
sanction of a special resolution of shareholders and the confirmation of the
Court.
The Court application
The cancellation of the Company's share premium account, the cancellation of the
Capital Redemption Reserve and the reduction of the Company's share capital will
only take effect if sanctioned by the Shareholders at the GM and confirmed by
the Court and upon the appropriate documents being lodged with the Registrar of
Companies.
If Shareholders approve the Resolutions approving the reduction, at the GM, the
Company intends to present an application to confirm the Reduction promptly
thereafter.
The Directors have been advised that, having regard to the circumstances at the
date of this document the Court should confirm the Reduction. The Directors are
not, however, able to guarantee the Court's confirmation of the Reduction. It is
important to note that the Reduction will not take effect unless it is confirmed
by the Court.
The Directors have also been advised that the Court is likely to require that
the Company give undertakings for the protection of the Company's creditors at
the date that the reduction of capital becomes effective. The Company will give
such undertakings to the Court for the protection of creditors as it may be
advised are appropriate to be given.
The application to the Court will be made as soon as practicable after the
passing of the Resolutions and the procedure is expected to be completed within
six to eight weeks. The Court order confirming the Reduction will then need to
be registered at Companies House, which it is anticipated will be done
immediately upon the Court Order being made.
Summary of proposed changes to the Articles of Association
Under the provisions of the Companies Act 2006, the concept of an authorised
share capital is no longer recognised and, in particular, a company can increase
its share capital simply by allotting shares. Further, the provisions of what
was the Memorandum of Association have automatically become provisions of the
Articles of Association as the position of the Memorandum of Association as a
constitutional document has also been effectively abolished by that Act.
The existence of an "authorised capital" clause of the sort which currently
appears in clause 6 of the Company's Memorandum of Association consequently acts
only as a limit or "cap" on the amount of capital which the Company is able to
allot. Accordingly, the Company intends to remove the authorised capital
provision which appeared in its Memorandum of Association and now forms part of
its Articles so as to remove that limit.
Recommendation
Your Independent Directors believe that the Disposal is in the best interests of
the Company and, having consulted with Grant Thornton Corporate Finance,
consider that the terms of the proposed Disposal are fair and reasonable in so
far as the Shareholders are concerned.
The Directors believe that the Disposal, the proposed Capital Reduction and the
approval of the Resolutions set out in the notice of the GM to be in the best
interests of the Company and Shareholders as a whole.
Accordingly the Independent Directors unanimously recommend that you vote in
favour of Resolutions 1 to 7 to be proposed at the General Meeting as they
intend to do so in respect of their own aggregate holdings of 8,854,167 Ordinary
Shares in which they are interested representing approximately 0.7%% of the
existing issued ordinary share capital of the Company.
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
+-----------------------+---------------------------------------------------+
| "2007 Warrants" | the warrants issued by the Company on 28 October |
| | 2007 to subscribe for shares in the capital of |
| | the Company pursuant to the 2007 warrant |
| | instrument; |
+-----------------------+---------------------------------------------------+
| "2008 Warrants" | the warrants issued by the Company on |
| | 5 December2008 to subscribe for shares in the |
| | capital of the Company pursuant to the 2008 |
| | warrant instrument; |
+-----------------------+---------------------------------------------------+
| "Act" | the Companies Act 2006; |
+-----------------------+---------------------------------------------------+
| "AIM" | AIM, a market operated by the London Stock |
| | Exchange; |
+-----------------------+---------------------------------------------------+
| "AIM Rules" | the rules governing the admission to, and |
| | operation of AIM contained in the document |
| | entitled the "AIM Rules for Companies" published |
| | by the London Stock Exchange; |
+-----------------------+---------------------------------------------------+
| "Articles" | the Company's articles of association; |
+-----------------------+---------------------------------------------------+
| "Bibby" | Bibby Factors Slough Limited; |
+-----------------------+---------------------------------------------------+
| "Capital Redemption | the Company's capital redemption reserve of |
| Reserve" | GBP337,064.364 which will arise on the purchase |
| | by the Company of the Deferred Shares as more |
| | particularly described in this announcement; |
+-----------------------+---------------------------------------------------+
| "Circular" | this GM circular dated 23rd December 2009 |
+-----------------------+---------------------------------------------------+
| "Company" or "IQ | IQ Holdings plc and its relevant subsidiaries as |
| Holdings" or "IQH" or | the context requires; |
| "Group" | |
+-----------------------+---------------------------------------------------+
| "Court" | the High Court of Justice in England and Wales; |
+-----------------------+---------------------------------------------------+
| "Deferred | the total sum of GBP600,000 payable to Media |
| Consideration" | Square under the terms of the acquisition |
| | agreement signed at the time of the acquisition |
| | by the Company of Viewpoint and The Wire in |
| | December 2008, payable as per the schedule in the |
| | MSQ Settlement Agreement |
+-----------------------+---------------------------------------------------+
| "Deferred Shares" | 3,370,643,640 deferred shares of 0.01p each in |
| | the capital of the Company in issue at the time |
| | of this announcement; |
+-----------------------+---------------------------------------------------+
| "Directors" or the | the directors of the Company, whose names appear |
| "Board" | in the Circular posted today; |
+-----------------------+---------------------------------------------------+
| "Disposal" | the proposed sale of Viewpoint and Rosslyn as |
| | explained in this announcement; |
+-----------------------+---------------------------------------------------+
| "EBITDA" | earnings before interest, tax, depreciation and |
| | amortisation; |
+-----------------------+---------------------------------------------------+
| "Form of Proxy" | the form of proxy enclosed with this document for |
| | use at the |
| | General Meeting; |
+-----------------------+---------------------------------------------------+
| "GM" or "General | the general meeting of the Company convened for |
| Meeting" | 10 a.m. on |
| | 12th January 2010 by the Notice of GM and any |
| | adjournment thereof; |
+-----------------------+---------------------------------------------------+
| "Grant Thornton | the corporate finance division of Grant Thornton |
| Corporate Finance" or | UK LLP which is authorised by the FSA to carry on |
| "Nominated Adviser" | investment business; |
+-----------------------+---------------------------------------------------+
| "Grant Thornton UK | A limited liability partnership registered in |
| LLP" | England and Wales whose principal place of |
| | business is Grant Thornton House, Melton Street, |
| | Euston Square, London, NW1 2EP and which is the |
| | UK member firm of Grant Thornton International; |
+-----------------------+---------------------------------------------------+
| "HMRC" | Her Majesty's Revenue and Customs; |
+-----------------------+---------------------------------------------------+
| "HSBC" | HSBC Bank Plc; |
+-----------------------+---------------------------------------------------+
| "Illuminas" | Illuminas Limited, a wholly owned subsidiary of |
| | Media Square, incorporated in England and Wales |
| | with registered number 4273580; |
+-----------------------+---------------------------------------------------+
| "IQ Research" | IQ Research Limited, a wholly owned subsidiary of |
| | the Company; |
+-----------------------+---------------------------------------------------+
| "Independent | Timothy Michael Hearley, Neil Grant McGowan and |
| Directors" | Joachim (Joe) Eberhard Seydel; |
+-----------------------+---------------------------------------------------+
| "Investing Company" | any AIM company, which has as its primary |
| | business or objective, the investing of its funds |
| | in securities, business or assets of any |
| | description; |
+-----------------------+---------------------------------------------------+
| "Investing Policy" | The investing policy proposed to be followed by |
| | the Company following the Disposal as explained |
| | in this announcement; |
+-----------------------+---------------------------------------------------+
| "London Stock | London Stock Exchange plc; |
| Exchange" | |
+-----------------------+---------------------------------------------------+
| "Media Square" | Media Square Plc incorporated in England and |
| | Wales with registered number 4006884; |
+-----------------------+---------------------------------------------------+
| "MSQ Settlement | The agreement to be entered into by Media Square, |
| Agreement" | Illuminas, Viewpoint, Wire, RSH, IQH and |
| | TurnBegin Limited detailing the proposed plan |
| | with regards to the repayment of the deferred |
| | consideration and assumption of certain |
| | liabilities by RSH; |
+-----------------------+---------------------------------------------------+
| "Notice of GM" | the notice of GM set out at the end of this |
| | document; |
+-----------------------+---------------------------------------------------+
| "Ordinary Shares" | ordinary shares of 0.01pence each in the capital |
| | of |
| | the Company; |
+-----------------------+---------------------------------------------------+
| "PLUS" or "PLUS | the PLUS-quoted market operated by PLUS Markets |
| Markets" | Group PLC which allows trading of shares in |
| | unquoted companies |
+-----------------------+---------------------------------------------------+
| "Proposals" | the Disposal, the Reduction and the change in |
| | Investing Policy; |
+-----------------------+---------------------------------------------------+
| "Prospectus Rules" | the prospectus rules made by the Financial |
| | Services Authority |
| | pursuant to section 73A of the Financial Services |
| | and Markets |
| | Act 2000, as amended; |
+-----------------------+---------------------------------------------------+
| "Reduction" | together, the cancellation of the Company's share |
| | premium account, the cancellation of the Capital |
| | Redemption Reserve the reduction of share |
| | capital; |
+-----------------------+---------------------------------------------------+
| "Resolutions" | the resolutions set out in the Notice of GM; |
+-----------------------+---------------------------------------------------+
| "Rosslyn" or "Rosslyn | Rosslyn Research Limited, a wholly owned |
| Research" | subsidiary of the Company; |
+-----------------------+---------------------------------------------------+
| "RSCF" | Rivington Street Corporate Finance Limited, a |
| | wholly owned subsidiary of Rivington Street |
| | Holdings Plc; |
+-----------------------+---------------------------------------------------+
| "RSH" | Rivington Street Holdings Plc; |
+-----------------------+---------------------------------------------------+
| "RSH Shares" or | Approximately 5.2 million shares of 1p each in |
| "Consideration | RSH to be issued to the Company pursuant to the |
| Shares" | SPA |
+-----------------------+---------------------------------------------------+
| "Shareholders" | holders of Ordinary Shares; |
+-----------------------+---------------------------------------------------+
| "SPA" or "Sale and | the conditional agreement dated 23rd December |
| Purchase Agreement" | 2009 relating to the Disposal, further details of |
| | which are set out in this announcement; |
+-----------------------+---------------------------------------------------+
| "The Wire Services" | The Wire Services (UK) Limited incorporated in |
| or "The Wire" | England and Wales with registered number 6518386, |
| | formerly a wholly owned subsidiary of the |
| | Company; |
+-----------------------+---------------------------------------------------+
| "T1M" or "T1ps | T1ps Investment Management Limited, a wholly |
| Investment Management | owned subsidiary of RSH; |
| Limited" | |
+-----------------------+---------------------------------------------------+
| "Turnbegin Limited" | A company incorporated in England and Wales |
| | (company number 3346228), the sole director of |
| | which is John Green; and |
+-----------------------+---------------------------------------------------+
| "Viewpoint" or | Viewpoint Field Services Limited, a wholly owned |
| "Viewpoint Field | subsidiary of the Company |
| Services" | |
+-----------------------+---------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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