Proposed AIM Cancellation & EGM
04 Mars 2009 - 8:01AM
UK Regulatory
TIDMMTG
RNS Number : 2658O
Metnor Group PLC
04 March 2009
4 March 2009
Metnor Group plc ("Metnor" or "the Company")
Proposed Cancellation of AIM Admission & Notice of EGM
Metnor announces that it is seeking Shareholder approval for the cancellation of
admission to trading on AIM of its Ordinary Shares.
An Extraordinary General Meeting ("the EGM") is being convened to be held on
20 March 2009 at 11.00 am, at 5th Floor, Quayside House, 110 Quayside ,
Newcastle upon Tyne, NE1 3DX at which a resolution which seeks Shareholder
approval for the Cancellation will be proposed.
A circular convening the EGM will today be posted to shareholders. Copies of the
circular will shortly be available on the Company's website www.metnor.co.uk.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
+-------------------------------------------+----------------------------+
| Latest time and date for receipt of Forms | 11.00 am on 18 March 2009 |
| of Proxy for the Extraordinary General | |
| Meeting | |
| | |
+-------------------------------------------+----------------------------+
| Extraordinary General Meeting | 11.00 am on 20 March 2009 |
| | |
+-------------------------------------------+----------------------------+
| Cancellation of admission to trading on | With effect from 7.00 am |
| AIM of the Ordinary Shares | on |
| | 1 April 2009 |
| | |
+-------------------------------------------+----------------------------+
The dates and times are based on the Company's expectation and may be subject to
change. Any changes to the expected timetable will be announced publicly.
CONTACTS
+--------------------------------------------+---------------------------+
| Metnor | 0191 268 4000 |
| Stephen Rankin - Chief Executive & | |
| Executive Chairman | |
| Keith Atkinson - Finance Director | |
+--------------------------------------------+---------------------------+
| Teathers (Nominated Adviser) | 020 7426 9000 |
| Gareth Price | |
| Simon Brown | |
+--------------------------------------------+---------------------------+
BACKGROUND TO AND REASONS FOR THE CANCELLATION
Concerns over the recent trading and share price performance of the Company have
led the Directors to undertake a review of the merits or otherwise of the
Company continuing to be admitted to trading on AIM. This concern has been
discussed with the Company's advisers and has focused, inter alia, on the
following key factors:
+-----------------------------------------------------------------------------------------------+
| · trading volumes in the Company's Ordinary Shares are very low - median daily volume over |
| the |
| past two years on the London Stock Exchange has been less than 4,000 Ordinary Shares per day |
| (less than 0.025% of the current issued share capital). In the twelve months to 31 January |
| 2009 there were 85 trading days when no Ordinary Shares were traded on the London Stock |
| Exchange (33% of trading days) and 165 trading days when less than 5,000 Ordinary Shares were |
| traded (65%); |
| |
+-----------------------------------------------------------------------------------------------+
| · Metnor, like many other small AIM companies, has a tightly held register of shareholders |
| and |
| suffers from a lack of liquidity for its Ordinary Shares. The current share register shows |
| that more than 90 per cent of the Company's Ordinary Shares are held by 15 shareholders. In |
| practical terms this results in a small free float and low trading volumes, which further |
| reduces demand for the Ordinary Shares; |
| |
+-----------------------------------------------------------------------------------------------+
| · it is unlikely that Metnor will need to raise money through a new share issue or issue new |
| shares |
| in connection with an acquisition and therefore the lack of Ordinary Shares in free float and |
| low trading volumes will continue; |
| |
+-----------------------------------------------------------------------------------------------+
| · there is a limited investor appreciation of the Company's business areas and an increasing |
| difficulty in attracting and maintaining institutional investors in the Company, particularly |
| in the current economic environment; |
| |
+-----------------------------------------------------------------------------------------------+
| · in light of the limited trading in the Company's Ordinary Shares, the tangible costs |
| associated |
| with maintaining admission to trading on AIM (estimated at more than GBP150,000 per annum) is |
| disproportionately high to the benefits of trading on AIM and the Directors consider that |
| these funds could be better utilised in running the business; |
| |
+-----------------------------------------------------------------------------------------------+
| · the management time, legal and regulatory burden associated with maintaining the Company's |
| admission to trading on AIM is disproportionate to the benefit to the Company; |
| |
+-----------------------------------------------------------------------------------------------+
| · the current economic turmoil has led to significant falls in the values of global stock |
| markets, from which Metnor is not immune. The susceptibility of the share price to the wider |
| general equity market conditions is not to the benefit of the business; |
| |
+-----------------------------------------------------------------------------------------------+
| · the stock market tends to operate on a short term investment horizon which has little basis |
| in the |
| underlying fundamentals of a business such as Metnor. The Directors consider that an ability |
| for management to pursue the Company's long term strategic business plan free from the |
| requirements to meet the stock market's short term expectations would be beneficial to the |
| Company as a whole; and |
| |
+-----------------------------------------------------------------------------------------------+
| · the Group has grown organically and from targeted acquisitions during the last ten years, |
| consistently producing strong profits, and yet the market capitalisation of the Company is |
| today lower than when it came to market in August 1998. |
| |
+-----------------------------------------------------------------------------------------------+
Having undertaken this review and after careful consideration of the matters set
out above, the Directors strongly believe that it is no longer in the best
interests of the Company or its Shareholders as a whole to maintain admission to
trading on AIM of its Ordinary Shares.
RECENT TRADING
On 15 September 2008 the Company announced its interim results for the six
months period ended 30 June 2008. The results for the period showed sales
revenue of GBP44.5 million (6 months ended June 2007: GBP38.3 million) and
profit before tax of GBP1.11 million (6 months ended June 2007: GBP1.03
million).
On 27 January 2009 the Company issued a trading update indicating that, as a
result of the dramatic and wide ranging impact of the deterioration in the
economy, profit before tax for the year ended 31 December 2008 would be below
market expectations, but would not be less than GBP2 million and that the
overall financial position of the Company should enable it to weather any
further economic deterioration in 2009.
Since issuing this trading update, there has been no material change in
the Company's financial position. The Company remains hopeful that its recently
submitted planning applications for a student scheme and a care home scheme will
be successful but is unlikely to be able to commence development of these sites
until there is an easing in the credit markets and bank funding is available.
CANCELLATION
Rule 41 of the AIM Rules for Companies requires an AIM company which wishes the
London Stock Exchange to cancel admission of its shares to trading on AIM to
notify such intended cancellation and separately inform the London Stock
Exchange of its preferred cancellation date at least 20 business days prior to
such date. The cancellation is conditional upon the consent of not less than 75
per cent. of votes cast by shareholders given at the Extraordinary General
Meeting.
The Notice of Extraordinary General Meeting contains a special resolution which
proposes that the Company's admission to trading on AIM is cancelled.
The Company has notified London Stock Exchange of its preferred cancellation
date and if the resolution is approved at the Extraordinary General Meeting it
is anticipated that Cancellation will occur on 1 April 2009.
STRATEGY FOLLOWING THE CANCELLATION
Following the Cancellation, it is the intention of the Board to continue to
operate the Group's business in the same manner, and with the same objectives
and strategy, as at present. The focus, however, will be on a medium to longer
term horizon and will concentrate on realising value from the Company's
investments in development properties that have been made over the past two
years.
The current economic climate, and in particular the shortage of bank credit in
the market as a whole, means that it is likely to take some time before the
Company is able to achieve its objectives but without the need to satisfy short
term expectations, the Directors believe that they will be able to maximise
returns over time.
Following the Cancellation, the Board intends to continue to keep Shareholders
informed of the Company's financial and operational performance through regular
updates on the Company's website: www.metnor.co.uk.
Finally, the Directors have reviewed the Board structure, as announced on 24
February 2009 when Stephen Rankin assumed the position of Executive Chairman
following the departure of the previous Chairman, Peter Cussins. The Board
believes that, as the Company will no longer be an AIM company following the
Cancellation it will no longer require the services of Non-Executive Directors
and Stephen Rankin will accordingly remain as Executive Chairman. The other
Executive Directors also intend to continue to serve the Company and to continue
to lead its direction.
FOLLOWING THE CANCELLATION
Following the Cancellation, there will be no market facility for dealing in the
Ordinary Shares and no price will be publicly quoted for the Ordinary Shares. As
such, holdings of Ordinary Shares are unlikely to be capable of sale and will be
difficult to value. Furthermore, following Cancellation the financial and other
publicly available information required under the AIM Rules will be discontinued
although the Company intends to continue to provide financial information to its
Shareholders via its website.
As and when the Directors believe the Company has the resources to do so, the
Company may take advantage of opportunities to buy back its Ordinary Shares. The
timing of any purchases cannot be forecast as they would always be dependent
upon the circumstances at the time.
The Directors are aware that Shareholders may still wish to acquire or dispose
of Ordinary Shares. The Directors intend to make available a new matched bargain
service. Under this facility Shareholders or persons wishing to acquire Ordinary
Shares will be able to leave an indication with the matched bargain settlement
facility provider that they are prepared to buy or sell at an agreed price. In
the event that the matched bargain settlement facility provider is able to match
that order with an opposite sell or buy instruction, the matched bargain
settlement facility provider will contact both parties and then effect the
order. Shareholders will need to have their own broker and will need to register
with the matched bargain settlement facility provider as a new client. This can
take some time to process and therefore Shareholders who consider they are
likely to avail themselves of this facility are encouraged to commence it at the
earliest opportunity. The contact details of the matched bargain settlement
facility provider, once arranged, will be made available to Shareholders on the
Company's website at www.metnor.co.uk and directly by letter or e-mail where
appropriate.
Shareholders should note that following the Cancellation the Company will remain
subject to the provisions of the City Code on Takeovers and Mergers, on the
basis set out in those provisions.
EXTRAORDINARY GENERAL MEETING
An Extraordinary General Meeting is being convened to be held on 20 March 2009
at 11.00 am, at 5th Floor, Quayside House, 110 Quayside, Newcastle upon Tyne,
NE1 3DX at which a resolution which seeks Shareholder approval for the
Cancellation will be proposed. To be effective the resolution must be passed on
a show of hands or on a poll by at least 75 per cent. of those Shareholders
present in person or (being a corporation) present by a duly authorised
representative or by proxy and voting at the Extraordinary General Meeting.
If this resolution is passed by Shareholders at the Extraordinary General
Meeting then it is anticipated that the Cancellation will become effective from
7.00 am on 1 April 2009.
RECOMMENDATION
The Directors unanimously consider the Cancellation to be in the best interests
of the Company and its Shareholders as a whole. The Directors recommend that
Shareholders vote in favour of the resolution to be proposed at the
Extraordinary General Meeting as they intend to do in respect of their
beneficial holdings of Ordinary Shares amounting to, in aggregate, 8,799,613
Ordinary Shares, representing approximately 56.9% per cent. of the current
issued share capital of the Company.
DEFINITIONS
The following definitions apply in this announcement unless the context requires
otherwise:
+-----------------------+------------------------------------------------+
| "AIM" | AIM, a market operated by the London Stock |
| | Exchange |
| | |
+-----------------------+------------------------------------------------+
| "AIM Rules for | the rules for companies governing the |
| Companies" | admission to, and the operation of, AIM as |
| | published by the London Stock Exchange from |
| | time to time |
| | |
+-----------------------+------------------------------------------------+
| "Cancellation" | the proposed cancellation of admission to |
| | trading on AIM of the Ordinary Shares |
| | |
+-----------------------+------------------------------------------------+
| "Company" or "Metnor" | Metnor Group plc |
| | |
+-----------------------+------------------------------------------------+
| "Directors" or | the Directors of the Company |
| "Board" | |
+-----------------------+------------------------------------------------+
| "Extraordinary | the Extraordinary General Meeting of the |
| General Meeting" or | Company (including any adjournment thereof) |
| "Meeting" | |
+-----------------------+------------------------------------------------+
| "Group" | the Company and its subsidiary undertakings |
| | |
+-----------------------+------------------------------------------------+
| "London Stock | the London Stock Exchange plc |
| Exchange" or "the | |
| Exchange" | |
+-----------------------+------------------------------------------------+
| "Ordinary Shares" | fully paid ordinary shares in the capital of |
| | the Company which have a nominal value of one |
| | pence each, and "Ordinary Share" means any one |
| | of them |
| | |
+-----------------------+------------------------------------------------+
| "Shareholders" | the holders of Ordinary Shares and |
| | "Shareholder" means any one of them |
| | |
+-----------------------+------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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