TIDMMEDI
RNS Number : 0625F
Medilink-Global UK Limited
15 May 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
15 May 2017
MEDILINK-GLOBAL UK LIMITED
("Medilink-Global", the "Company" or the "Group")
Update re proposed cancellation and notice of EGM
Medilink-Global UK Limited (AIM: MEDI), the electronic health
card network service provider, today provides an update on the
Company's proposed cancellation from trading on AIM
("Cancellation").
As previously announced by the Company, the Directors consider
that it is in the best interest of shareholders of Medilink for the
Company to seek Cancellation. On 9 November 2016, the Company
announced that one of its major shareholders had indicated that it
would not be supportive of the Cancellation, however, the Directors
understand that this is no longer the case. The Directors have
therefore concluded that the Company should proceed with the
Cancellation.
The Company will today post to its shareholders a circular (the
"Circular") containing a notice convening an extraordinary general
meeting (the "EGM") to be held at 9:00 a.m. on 06 June 2017 at
Suite C-16-3, Level 16, Tower C, Wisma Goshen, Plaza Pantai, No. 5,
Persiaran Pantai Baru, Off Jalan Pantai Baru, 59200 Kuala Lumpur,
Malaysia.
Extracts from the Circular, which sets out the reasons for
seeking Cancellation, are set out below and a copy of the Circular
will shortly be available on the Company's website,
www.medilink-global.com.
For further information contact:
MediLink-Global UK Limited Tel: + 603 2296 3028
Shia Kok Fat, Chief Executive
Officer
www.medilink-global.com
Allenby Capital Limited Tel: +44 (0)20 3328 5656
(Nominated Adviser and
Broker)
Nick Athanas, James Reeve,
Liz Kirchner
EXTRACTS FROM THE CIRCULAR
The following has been extracted without amendment from, and
should be read in conjunction with, the Circular to Shareholders
dated 15 May 2017, available from the Company's website,
www.medilink-global.com.
EXPECTED TIMETABLE OF EVENTS
Dispatch of this document 15 May 2017
Latest time for receipt of 9.00 a.m. on 04
Form of Proxy June 2017
Extraordinary General Meeting 9.00 a.m. on 06
to be held June 2017
Expected last day for dealings 13 June 2017
in Ordinary Shares on AIM
Expected time and date that 7.00 a.m. on 14
admission of Ordinary Shares June 2017
to trading on AIM will be cancelled
with effect from
LETTER FROM THE CHAIRMAN
1. Introduction
The Company announced on 27 July 2016 that it intended to seek
Shareholders' approval to cancel the admission of the Company's
Shares to trading on AIM ("Cancellation"). The Company subsequently
announced on 9 November 2016 that one of the Company's
shareholders, who holds in excess of 20 per cent. of the Ordinary
Shares, had indicated that they would not be supportive of the
proposed Cancellation. The Directors, in consultation with the
shareholder, have subsequently been considering various options in
relation to the Company's future strategy. This exercise resulted
in the sale of the Company's interest in Medilink China in April
2017. Having concluded this exercise the Company considers that
Cancellation remains the best option for the Company, for the
reasons set out in paragraph 2 below. The Directors understand that
it is no longer the case that the major shareholder remains
unsupportive of the proposed Cancellation and the Directors have
therefore decided to proceed with Cancellation.
This letter sets out the background and reasons for the proposed
Cancellation.
The Company has had its shares admitted to trading on AIM since
November 2008. One of the primary objectives of seeking such
admission was to provide the Company with access to further equity
capital in the UK, should it be required. Over the past three years
it has become apparent to the Directors that it has not been
possible to raise the funds the Company requires for working
capital from the UK investor community and has instead been
required to seek alternative funding. As a result, the Directors
have agreed that it is in the best interests of the Company and its
Shareholders as a whole if the admission of the Ordinary Shares to
trading on AIM is cancelled. Pursuant to Rule 41 of the AIM Rules,
the Directors have notified the London Stock Exchange of the date
of the proposed Cancellation.
Any Shareholders wishing to sell their Ordinary Shares in the
Company following Cancellation should contact the Company using the
details set out in paragraph 7 of this Circular. The Company will
use its reasonable endeavours to find purchasers for any Ordinary
Shares post Cancellation.
The AIM Rules provide that Cancellation be conditional upon the
approval of the Special Resolution set out as special resolution 1
in the notice convening the EGM, enclosed with this document, by
not less than 75 per cent of the votes cast, whether in person or
by proxy, by Shareholders in a general meeting. The Company has
received irrevocable undertakings to vote in favour of the Special
Resolution in respect of 42.72 per cent of the issued share capital
of the Company.
The purpose of this document is to explain why the Directors
consider the proposal to be in the best interests of the Company
and its Shareholders as a whole and to recommend that Shareholders
vote for the Special Resolution required to implement the proposal
at the EGM, scheduled to take place at 9.00 a.m. (4.00 p.m.
Malaysia time) on 06 June 2017, notice of which is enclosed at the
end of this document.
2. Reasons for the proposed Cancellation
The Directors' rationale for seeking the original admission of
the Company's Ordinary Shares to trading on AIM in 2008 included,
inter alia, access to equity capital markets to fund business
opportunities and provide working capital. The Directors have
reached the view that it is not possible to raise funds through the
issue of equity in the UK at a price that would be acceptable to
the Directors or the Company's Shareholders. As a result, the
Company has been required to secure additional funding through the
support of the Directors, management and key shareholders, as well
as the strategic disposal of certain operating assets of the
business, including the disposal of the Company's 49 per cent.
interest in Medilink China, which was completed in April 2017.
There are significant costs, management time and legal and
regulatory burden associated with the Company's Ordinary Shares
being admitted to trading on AIM. The costs include fees payable to
the London Stock Exchange, nominated adviser fees, shareholder
communication time and costs, and other professional fees.
Cancellation will, accordingly, reduce the Company's recurring
administrative costs significantly, in which such expenses can be
better spent in running the business in a private capacity.
After careful consideration, the Directors have therefore
concluded that the commercial disadvantages and costs of
maintaining a listing at this point in the Company's development
outweigh the potential benefits and that it is therefore no longer
in the Company's or its Shareholders' best interests to maintain
its quotation. Particular consideration has been given by the
Directors to the very low liquidity of trading in the Company's
shares. As at 12 May 2017, the last business day prior to the
publication of this document, the mid-market price of the Ordinary
Shares was 1.25 pence providing a market capitalisation of
approximately GBP1.5 million, which the Directors consider to be
materially below the true value of the Company.
The Directors believe that it would be better for the Company to
operate as an unquoted company as further capital can be more
easily raised within the Company's local markets in South East Asia
when funding is considered necessary, thus enabling the Company to
succeed in its long-term objective of developing its operations in
Malaysia and within the South-East Asia region.
Pursuant to AIM Rule 41, the Cancellation can only be effected
by the Company after securing a resolution of Shareholders passed
by a requisite majority being not less than 75 per cent of the
votes cast by Shareholders (in person or by proxy) at a general
meeting. Under the AIM Rules, the Cancellation can only take place
after the expiration of a period of twenty Business Days from the
date on which notice of the Cancellation is given. In addition, a
period of at least five Business Days following the Shareholder
approval of the Cancellation is required before the Cancellation
may be put into effect.
The Company, through its nominated adviser, has notified the
London Stock Exchange of the proposed Cancellation and it is
expected that trading in the Shares on AIM will cease at the close
of business on 13 June 2017, with Cancellation taking effect at
7.00 a.m. on 14 June 2017.
3. Current trading and outlook
For the year ended 31 December 2016, Medilink Malaysia, the
Group's primary operating subsidiary, registered a turnover of
GBP1,196,777 (2015: GBP998,058) and a net profit before tax of
GBP104,309 (2015: GBP103,548), based on the unaudited financial
statements for the period. 2017 has started positively for Medilink
Malaysia and the Directors anticipate an improved performance
during the financial year 2017 in terms of revenue and profit.
Medilink Singapore continued to experience declining revenue in
2016 and, as such, is expected to remain unprofitable for the
financial year ended 31 December 2016. This decline is expected to
continue during 2017.
Medilink China, an associate company in which the Company had a
49 per cent. shareholding as at 31 December 2016, continued to
register losses during the financial year 2016 with stagnated
growth in revenue and membership. The Company completed the sale of
its remaining interest in Medilink China in April 2017.
Overall, Group revenue for the year ended 31 December 2016 is
expected to be marginally behind that recorded in 2015 and profit
before tax is expected to be broadly in line with 2015, based on
unaudited financial statements.
The Directors expect continued growth in revenue for Medilink
Malaysia in FY 2017 and Cancellation, should it proceed, would
result in a significant reduction in corporate expenses, which
should lead to improved profitability for the Group.
As at 30 April 207, the Group's cash position was GBP440,000 and
it had total liabilities of GBP2,985,000, including loans
outstanding to a director and other parties. Further details of the
loan outstanding to Mr Shia Kok Fat can be found in the Company's
announcement of 22 December 2016.
4. Future strategy of the Company
The Company shall continue to conduct its regular business in
providing third party administration to insurance companies and
corporate organisations in the South-East Asia region, with special
focus in Malaysia, whilst continuing to explore business
opportunities in licensing its Healthcare Claims System in emerging
markets.
5. Effect of Cancellation
The principal effect of the proposed Cancellation is that 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. The underlying liquidity in the
Ordinary Shares is low and, in the opinion of the Directors, likely
to remain that way for the foreseeable future. As described below,
the Company will seek to facilitate any trades should Shareholders
wish to buy or sell Ordinary Shares following Cancellation.
However, such a facility is likely to offer a substantially lesser
degree of liquidity and potentially less attractive share prices
than are currently available via the Company's admission to
AIM.
The Company intends to maintain its existing CREST facility
following Cancellation. Shareholders will continue to be able to
hold their Ordinary Shares in dematerialised form (or alternatively
to be issued share certificates in respect of their Shares), and
the Ordinary Shares will continue to be transferable through CREST
in accordance with the applicable procedures.
Shareholders should also be aware that the Company will no
longer be bound by the AIM Rules or be subject to the Takeover Code
and that, as a consequence, certain previously prescribed corporate
governance procedures may not be adhered to in the future and the
Company will no longer be required to announce material events or
transactions including releasing interim results or final results.
As the Company will no longer be subject to the AIM Rules,
Shareholders will no longer be required to vote on certain matters
as provided in the AIM Rules. However, following Cancellation, the
Company will continue to maintain a website at
www.medilink-global.com for the foreseeable future, providing
information on any significant events or developments of the
Company.
Upon Cancellation, the Company will cease to have a nominated
adviser. The Company is currently required under the AIM Rules to
consult with its nominated adviser on, for example, transactions
constituting "related party transactions" under those rules, and to
inform the nominated adviser of key decisions such as any proposed
changes to the Board. Following Cancellation, the Shareholders will
no longer benefit from the protection afforded by the nominated
adviser.
Accordingly, as a result of the Cancellation, the protections
available to Shareholders are likely to be limited to those
available under Jersey law, certain details of which are summarised
in paragraph 6 below.
The Cancellation may have taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
The Company will continue to be bound by its articles of
association following the Cancellation.
The above considerations are non-exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
6. Takeover Code
The Takeover Code currently applies to the Company and as such
the Shareholders currently benefit from a number of protections
contained in the Takeover Code. Following Cancellation, the
Company's place of central management and control will not be in
the United Kingdom, the Channel Islands or the Isle of Man and,
pursuant to paragraph 3(a)(ii) of the Introduction to the Takeover
Code, the Company will no longer be subject to the Takeover
Code.
Shareholders should note that, if the Special Resolution becomes
effective, they will not receive the protections afforded by the
Takeover Code in the event that there is a subsequent offer to
acquire their Ordinary Shares.
Brief details of the Takeover Code and the protections given by
the Takeover Code are described below. Before giving your consent
to the Cancellation, you may wish to take independent professional
advice from an appropriate financial adviser.
The Takeover Code
The Takeover Code is issued and administered by the Takeover
Panel (the "Panel"). The Company is presently a company to which
the Takeover Code applies and its Shareholders are accordingly
entitled to the protections afforded by the Takeover Code.
The Takeover Code and the Panel operate principally to ensure
that shareholders are treated fairly and are not denied an
opportunity to decide on the merits of a takeover and that
shareholders of the same class are afforded equivalent treatment by
an offeror. The Takeover Code also provides an orderly framework
within which takeovers are conducted. In addition, it is designed
to promote, in conjunction with other regulatory regimes, the
integrity of the financial markets.
The General Principles and Rules of the Takeover Code
The Takeover Code is based upon a number of general principles
("General Principles") which are essentially statements of
standards of commercial behaviour. The General Principles apply to
all transactions with which the Takeover Code is concerned. They
are expressed in broad general terms and the Takeover Code does not
define the precise extent of, or the limitations on, their
application. They are applied by the Panel in accordance with their
spirit to achieve their underlying purpose.
In addition to the General Principles, the Takeover Code
contains a series of rules ("Rules"), of which some are effectively
expansions of the General Principles and examples of their
application and others are provisions governing specific aspects of
takeover procedure. Although most of the Rules are expressed in
more detailed language than the General Principles, they are not
framed in technical language and, like the General Principles, are
to be interpreted to achieve their underlying purpose. Therefore,
their spirit must be observed as well as their letter. The Panel
may derogate or grant a waiver to a person from the application of
a Rule in certain circumstances.
Giving up the protection of the Takeover Code
Shareholders will be giving up certain important protections
upon the Cancellation. Your attention is drawn in particular to the
following protections under the Takeover Code: (i) all holders of
Ordinary Shares must be afforded equivalent treatment and,
moreover, if a person acquires 30 per cent. or more of the Ordinary
Shares in the Company (other than in the context of a voluntary
offer to all Shareholders) such person would be required to make a
mandatory offer to all of the other Shareholders; (ii) the holders
of Ordinary Shares must have sufficient time and information to
enable them to reach a properly informed decision on any bid; where
it advises the holders of Ordinary Shares, the Board must give its
views on the effects of implementation of the bid on employment,
conditions of employment and the locations of the Company's place
of business; (iii) the Board would be required to act in the
interests of the Company as a whole and must not deny any holders
of Ordinary Shares the opportunity to decide on the merits of a bid
for the Company; and (iv) if a bid for the Company were to be made,
the Board would be required to obtain competent independent advice
as to whether the financial terms of any offer (including any
alternative offers) are fair and reasonable and the substance of
such advice must be made known to Shareholders.
The Jersey framework for takeovers following Cancellation
Certain brief details of the Jersey legal framework for
takeovers, which following Cancellation will be applicable to the
Company, as appropriate, are described below.
Acquisitions
A Jersey public limited company may be acquired in a number of
ways, including by means of a "scheme of arrangement" between the
company and its shareholders or by means of a takeover offer.
Scheme of arrangement
A "scheme of arrangement" is a statutory procedure under the Act
pursuant to which the Royal Court of Jersey may approve an
arrangement between a Jersey company and some or all of its
shareholders. In a "scheme of arrangement," the company would make
an initial application to the Royal Court of Jersey to convene a
meeting or meetings of its shareholders at which a majority in
number of shareholders representing 3/4ths of the voting rights of
the shareholders present and voting either in person or by proxy at
the meeting must agree to the arrangement by which they will sell
their shares in exchange for the consideration being offered by the
bidder. If the shareholders so agree, the company will return to
the Royal Court of Jersey to request the court to sanction the
arrangement. Upon such a scheme of arrangement becoming effective
in accordance with its terms and the Act, it will bind the company
and such shareholders.
Takeover offer
A takeover offer is an offer to acquire all of the outstanding
shares of a company (other than shares which at the date of the
offer are already held by the offeror). The offer must be made on
identical terms to all holders of shares to which the offer
relates. If the offeror, by virtue of acceptances of the offer,
acquires or contracts to acquire not less than 90 per cent. in
nominal value of the shares to which the offer relates, the Act
allows the offeror to give notice to any non-accepting shareholder
that the offeror intends to acquire his or her shares through a
compulsory acquisition (also referred to as a "squeeze out"), and
the shares of such non-accepting shareholders will be acquired by
the offeror 6 weeks later on the same terms as the offer, unless
the shareholder objects to the Royal Court of Jersey and the court
enters an order that the offeror is not entitled to acquire the
shares or specifying terms of the acquisition different from those
of the offer.
The Act permits a scheme of arrangement or takeover offer to be
made relating only to a particular class or classes of a company's
shares.
7. Trading in the Ordinary Shares after Cancellation
Whilst the Board believes that the Cancellation is in the
interest of the Shareholders as a whole, it recognises that the
Cancellation will make it more difficult for Shareholders to buy
and sell Ordinary Shares should they wish to do so. Following the
Cancellation, although the Ordinary Shares will remain transferable
they will no longer be tradable on AIM. Accordingly, the Board
will, following the Cancellation, set up a matched bargain
settlement facility which will be managed by the Directors, to
enable Shareholders to trade their Ordinary Shares.
Shareholders or persons wishing to trade in the Company's
Ordinary Shares following Cancellation should contact the Company
via email to bod@medilink-global.com, giving an indication that
they are prepared to buy or sell at an agreed price. In the event
that the Company is able to match that indication with an opposite
buy or sell instruction, the Company will contact both parties to
effect the bargain. Shareholders who wish to buy or sell ordinary
shares in the Company should do so via a stockbroker as the Company
is unable to deal directly with members of the public.
The Board intends to monitor the popularity of this arrangement
amongst Shareholders and will review it at regular intervals to
consider whether it remains effective. Information relating to the
post Cancellation dealing facilities will be made available on the
Company's website (www.medilink-global.com).
8. Special Resolution to be proposed at the Extraordinary General Meeting
The Cancellation is subject to Shareholders passing the
following special resolution:
1. "That the admission of the ordinary shares of 5 pence each in
the capital of the Company to trading on AIM, a market operated by
London Stock Exchange plc, be cancelled and that the directors of
the Company be authorised to take all steps which they consider to
be necessary or desirable in order to effect such
cancellation."
The Resolution is proposed as a special resolution of the
Company. In accordance with the AIM Rules, the special resolution
detailed at point 1, above, will be required to be passed by a
majority of not less than 75 per cent. of the votes cast by
Shareholders (in person or by proxy) at the EGM.
9. Irrevocable undertakings
The Company has received irrevocable undertakings to vote in
favour of the Special Resolution at the Extraordinary General
Meeting from Shareholders in respect of their respective beneficial
holdings of, in aggregate, 51,899,880 Ordinary Shares, representing
approximately 42.72 per cent. of the total issued share capital of
the Company.
10. Action to be taken
A Form of Proxy for use in connection with the EGM is enclosed
with this document. Whether or not you intend to be present at the
EGM in person, it is important that you duly complete, execute and
return the Form of Proxy, by hand or by post, to Medilink-Global UK
Limited, Suite C-16-3, Level 16, Tower C, Wisma Goshen, Plaza
Pantai, No. 5, Persiaran Pantai Baru, Off Jalan Pantai Baru, 59200
Kuala Lumpur, Malaysia, by fax to +603 2283 3757 or by email to
bod@medilink-global.com in accordance with the instructions printed
thereon.
To be valid, a completed Form of Proxy must be executed in
accordance with the instructions printed thereon and returned as
soon as possible and, in any event, so as to be received by post to
Medilink-Global UK Limited, Suite C-16-3, Level 16, Tower C, Wisma
Goshen, Plaza Pantai, No. 5, Persiaran Pantai Baru, Off Jalan
Pantai Baru, 59200 Kuala Lumpur, Malaysia, by fax to +603 2283 3757
or by email to bod@medilink-global.com, not later than 9.00 a.m. on
04 June 2017 (48 hours before the time appointed for the
Extraordinary General Meeting). Completion and return of a Form of
Proxy will not prevent you from attending and voting at the EGM in
person should you wish to do so.
11. Recommendation
The Directors consider the resolution to be proposed at the EGM
to be in the best interests of the Company and the Shareholders as
a whole. Accordingly, the Directors recommend Shareholders to vote
FOR the Special Resolution to be proposed at the EGM, as they have
undertaken to do so in respect of their own holdings of Ordinary
Shares, representing, in aggregate, 15.32 per cent. of the total
issued share capital of the Company.
DEFINITIONS
"AIM" the AIM market operated by
London Stock Exchange plc;
"AIM Rules" the AIM Rules for Companies
published by London Stock
Exchange plc;
"Allenby Capital" Allenby Capital Limited, the
Company's nominated adviser
and broker;
"BST" British Summer Time;
"Cancellation" the cancellation of admission
of the Shares to trading on
AIM becoming effective in
accordance with Rule 41 of
the AIM Rules;
"Company" or "Medilink" Medilink-Global UK Limited;
"Companies Law" or The Companies (Jersey) Law,
the "Act" 1991 (as amended);
"Directors" or "Board" the directors of the Company
whose names appear on page
4 of this document;
"Form of Proxy" the form of proxy enclosed
with this document for use
by Shareholders in connection
with the Extraordinary General
Meeting;
"EGM" or "Extraordinary the extraordinary general
General Meeting" meeting of the Company to
be held on 06 June 2017 at
9.00 a.m. (4.00 p.m. Malaysia
time), convened by the relevant
notice set out at the end
of this document;
"Group" the Company and its subsidiaries;
"Medilink China" Medilink (Beijing) TPA Services
Co., Ltd;
"Medilink Malaysia" MedilinkGlobal (Malaysia)
Sdn Bhd;
"Medilink Singapore" Medilink-Global (Asia) Pte
Ltd;
"Ordinary Shares" ordinary shares of 5p each
in the capital of the Company;
"Shareholders" the holders of the Ordinary
Shares in the Company;
"Special Resolution" the special resolution to
be proposed at the Extraordinary
General Meeting as set out
in the notice set out in the
end of this document; and
"Takeover Code" The City Code on Takeovers
and Mergers.
This information is provided by RNS
The company news service from the London Stock Exchange
END
NOEKMGMKVZMGNZM
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