TIDMLWT
RNS Number : 5746N
Loudwater Trust Limited
10 September 2013
10 September 2013
LOUDWATER TRUST LIMITED
("LOUDWATER" OR "THE COMPANY")
NOTICE OF EGM RELATING TO THE CANCELLATION OF ADMISSION TO
TRADING IN AIM
Loudwater Trust Limited, the authorised closed-ended investment
company incorporated in Guernsey, is pleased to announce that the
Company has today posted a circular to Shareholders regarding a
proposal relating to the cancellation of admission to trading on
AIM.
The Company announced on 4 September 2013 that it had entered
into an agreement to dispose of all of its Remaining Investments
(the "Transaction") for a cash consideration of GBP10.53 million to
Loudwater Capital LP. Loudwater Capital LP is a newly established
partnership with monies principally committed by funds advised by
Headway Capital Partners LLP and Committed Advisors SAS.
The Company also announced a total forecast return of capital of
circa 18.6 pence per Share, comprising an initial forecast return
of capital of 18.4 pence per Share, and a final estimated return of
capital of circa 0.2 pence per Share. The initial forecast return
of capital of 18.4 pence per Share was approved by the Board of
Directors and announced on 4 September 2013. The final estimated
return of capital of circa 0.2 pence per Share is following, and
subject to, the cancellation of admission to trading on AIM and a
voluntary windind-up of the Company.
Following the Transaction, the Company's sole investment is
cash. In accordance with the Company's investing policy, the
Company would not make any new investments other than follow-on
investments in existing portfolio companies, and that cash proceeds
from realisations in full following the exit of a portfolio
investment will be distributed to Shareholders.
Given that the Company's remaining investments have been
realised and converted into cash, the Board has reviewed the
Company's investing policy and does not propose to put forward a
new investing policy to Shareholders.
As such, the Board is pleased to place before Shareholders a
proposal for the cancellation of the admission to trading on AIM of
the Company's Shares (the "Cancellation"). It is the intention of
the Board that, following the proposed Cancellation, the Company
will put forward proposals to Shareholders for the voluntary
winding-up of the Company and the appointment of an
administrator.
Extracts of the letter to Shareholders is set out below.
For further information
Loudwater Trust Limited
Rhys Davies +41 (0)79 620 0215
Loudwater Investment
Partners Limited
Edward Forwood +44 (0)20 3372 6400
Panmure Gordon (UK) Limited
Andrew Potts +44 (0)20 7886 2500
Note
http://www.loudwatertrust.com
EXPECTED TIMETABLE*
Latest time and date for prior to 10.00 a.m.
receipt of Forms of Proxy on 27 September 2013
for the EGM
EGM 10.00 a.m. on 1 October
2013
Expected last day for trading 3 October 2013
in the Shares for normal
market settlement prior to
Cancellation (i.e. to settle
on a "T + 3" basis)
Cancellation of admission 7.00 a.m. on 9 October
of the Shares to trading 2013
on AIM
* Each of the times and dates above in the above expected
timetable may be extended without further notice. If any of the
above times and/or dates change, the revised time(s) and/or date(s)
will be notified to Shareholders by an announcement. All times are
London and Guernsey times.
........................................................................................................
Extract of the letter to Shareholders contained in the circular
to Shareholders dated 10 September 2013 (the "Circular"):
Introduction
The Company announced on 4 September 2013 that it had entered
into an agreement to dispose of all of its Remaining Investments
(the "Transaction") for a cash consideration of GBP10.53 million to
Loudwater Capital LP. Loudwater Capital LP is a newly established
partnership with monies principally committed by funds advised by
Headway Capital Partners LLP and Committed Advisors SAS.
The consideration of GBP10,529,263 (17.48 pence per share) for
the Transaction compares to the carrying value of the Remaining
Investments as follows:
-- at 31 December 2012 (the date of the Company's last audited
financial statements) of GBP19,116,314 or 31.74 pence per share
-- at 30 June 2013 (being the date of the Company's last
unaudited net asset value as announced on 31 July 2013) of
GBP19,699,983 or 32.71 pence per share.
The pro forma net asset value at 30 June 2013, taking into
account the proceeds of the Transaction, would be GBP12,211,290 and
the resultant net asset value per ordinary share would be 19.73
pence.
The Company also announced a total forecast return of capital of
circa 18.6 pence per Share, comprising an initial forecast return
of capital of 18.4 pence per Share, and a final estimated return of
capital of circa 0.2 pence per Share. The initial forecast return
of capital of 18.4 pence per Share was approved by the Board of
Directors and announced on 4 September 2013. The final estimated
return of capital of circa 0.2 pence per Share is following, and
subject to, the cancellation of admission to trading on AIM and a
voluntary winding up of the Company.
Following the Transaction, the Company's sole investment is
cash. In accordance with the Company's investing policy, the
Company would not make any new investments other than follow-on
investments in existing portfolio companies, and that cash proceeds
from realisations in full following the exit of a portfolio
investment will be distributed to Shareholders.
Given that the Company's remaining investments have been
realised and converted into cash, the Board has reviewed the
Company's investing policy and does not propose to put forward a
new investing policy to Shareholders.
As such, the Board is pleased to place before Shareholders a
proposal for the cancellation of the admission to trading on AIM of
the Company's Shares (the "Cancellation"). It is the intention of
the Board that, following the proposed Cancellation, the Company
will put forward proposals to Shareholders for the voluntary
winding-up of the Company and the appointment of an
administrator.
Background to and Rationale for the Cancellation
The Company has been admitted to trading on AIM since 29 January
2007, and raised GBP74.25 million net of expenses. Following the
approval of Shareholders at an extraordinary general meeting of the
Company on 5 November 2008, the Company made several changes to its
investment policy such that it no longer intended to make any
investments in new portfolio companies and that cash proceeds from
realisations in full following the exit of a portfolio investment
would be distributed to Shareholders subject to the retention of
sufficient cash for follow-on investments in existing portfolio
companies where further funding was required. Since the adoption of
this policy a total of GBP58,015,811 has been returned to
Shareholders, including the forecast return of capital of circa
18.6 pence per Share following the Transaction and the tender offer
as announced on 17 October 2008.
At the extraordinary general meeting of the Company on 5
November 2008, Shareholders also approved a shortening of the
Company's life from indefinite to that of a continuation vote at
the annual general meeting of the Company to be held to consider
the accounts for the financial period ended 31 December 2013, and
that a similar continuation vote would be proposed at every second
annual general meeting thereafter. If at any time a continuation
vote was not passed, the Directors would be required to formulate
proposals to wind up the Company. The revised investing policy also
stated that if the Board considered that it would be attractive to
recapitalise the Company, the Board would seek Shareholder approval
to amend the investing policy to make investments in new
companies.
As stated in the 2012 annual report, given the continuation vote
at the annual general meeting for the year ended 31 December 2013,
which was expected to be held in May 2014, the Board and the
Investment Advisor considered options to enable the sale of the
remaining portfolio and return of the proceeds to shareholders, in
addition to single asset disposals, and that discussions were
taking place with a number of parties.
The Investment Advisor engaged the services of Bluetower
Associates, who conducted an exhaustive process of identifying
potentially interested parties who would consider the acquisition
of the Remaining Investments. Given prior disposals and subsequent
returns of capital, the investment portfolio had become more
concentrated, and one of the investee companies represented 47.5%
of the carrying value of the Remaining Investments at 30 June 2013.
In negotiations on the consideration, Headway Capital Partners LLP
and Committed Advisors SAS formed a different view on the value of
this investee company which impacted the overall consideration.
Whilst the consideration for the Transaction was below the 30
June 2013 carrying values of the Remaining Investments, the Board,
having received advice from the Investment Advisor, believed that
the Transaction reduced uncertainty over the timing and value that
could be obtained from future asset sales and future running costs,
and also removed any risk of the Company being required to provide
additional funding in the future to any of the investee companies,
as the Company did in early 2013 with a GBP500,000 loan to preserve
value for one of the Company's investments. The Investment Advisor
and the Board also consulted with a significant number of
Shareholders (by percentage of Loudwater's share capital) on the
Transaction process.
Following the Transaction, the Company's sole investment is
cash. In accordance with the Company's investing policy, the
Company would not make any new investments other than follow-on
investments in existing portfolio companies, and that cash proceeds
from realisations in full following the exit of a portfolio
investment will be distributed to Shareholders. Given that the
Company's remaining investments have now been realised and
converted into cash, the Board has reviewed the Company's investing
policy and does not propose to put forward a new investing policy
to Shareholders.
The Company also announced an initial forecast return of capital
of 18.4 pence per Share, and a final estimated return of capital
following, and subject to Cancellation and a voluntary winding-up
of the Company, a final estimated distribution of circa 0.2 pence
per Share.
Accordingly, following the payment of the 18.4 pence per Share
distribution being made to Shareholders, the Company's remaining
assets will be minimal. Given this, the Board has reviewed the
merits of the AIM quotation and concluded that there are some cost
savings as a result of effecting a Cancellation as soon as
practicable.
As such, the Board is pleased to place before Shareholders a
proposal for the Cancellation. It is the intention of the Board
that, as soon as practicable following the proposed Cancellation,
the Company will put forward proposals to shareholders for the
voluntary winding-up of the Company and the appointment of an
administrator.
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 for Companies 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 EGM, it is proposed
that Cancellation will take effect at 7.00 a.m. on 9 October 2013.
Accordingly, the latest date for trading in Shares through the
market on normal market timings to settle prior to the Cancellation
(i.e. to settle on a "T + 3" basis) will be 3 October 2013.
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 8 October
2013. 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, PO Box 296 Sarnia House, Le
Truchot, St Peter Port, Guernsey, GY1 4NA. 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.
As described above, it is the intention of the Board that, as
soon as practicable following the proposed Cancellation, the
Company will put forward proposals to Shareholders for the
voluntary winding-up of the Company and the appointment of an
administrator. At this stage it is not possible to determine the
time that it may take to effect a voluntary winding-up of the
Company as the Company has not engaged in detail with a proposed
administrator, and as a result, when the final estimated
distribution will be available to payable to Shareholders.
However, the Board intends to effect a voluntary winding-up of
the Company and the appointment of an administrator as soon as
feasible, and to seek the payment of the final estimated
distribution to Shareholders, before the end of 2013, although the
timing of this depends to a certain extent on the winding up
process.
The Company will continue to post information about the Company
on its website www.loudwatertrust.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 for Companies 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; and
-- certain existing or prospective investors may be unwilling to
trade or continue to trade in the Company's Shares 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 the
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 the Circular contains a special
resolution to approve the application to London Stock Exchange for
Cancellation. The EGM will be held at Sarnia House, Le Truchot, St
Peter Port, Guernsey, GY1 4NA commencing at 10.00 a.m. on 1 October
2013. If this resolution is approved with the requisite majority,
it is expected that Cancellation will take effect on 9 October
2013.
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
intend to do in respect of their 17,650,000 Shares, representing
approximately 29 per cent. of the Company's issued Shares.
.......................................................................................................
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"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 "LWT" Loudwater Trust Limited;
"Directors" or the directors of the Company
"Board" whose names are set out on
page 4 of the Circular;
"DTR" Disclosure Rules and Transparency
Rules;
"EGM" the extraordinary general
meeting of the Company convened
for 10.00 a.m. on 1 October
2013, notice of which is set
out at the end of the Circular;
"Form of Proxy" the form of proxy enclosed
with the Circular for use
by Shareholders in connection
with the EGM;
"Group" the Company and its current
and future subsidiaries;
"Investment Advisor" Loudwater Investment Partners
Limited;
"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;
"Remaining Investments" the Company's interests in
Antenova Limited, The Engine
Group Limited, Glimmerglass
Networks Inc., Somethin' Else
Limited, Top Layer Networks,
Inc. and AgraQuest Inc.;
"Resolution" the resolution to be proposed
at the EGM as set out in the
notice at the end of the Circular;
"Shares" the ordinary shares of no
par value in the capital of
the Company; and
"Shareholders" the holders of Shares.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
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