TIDMPCX
RNS Number : 8256K
Principle Capital Holdings S.A.
27 April 2010
Principle Capital Holdings and Sanlam Group enter into subscription agreement;
and proposed cancellation of listing
Principle Capital Holdings S.A. ("Principle Capital" or the "Company") announces
that on 26 April 2010 it entered into a conditional subscription agreement with
the Sanlam Group, a leading financial services group in South Africa, and
certain members of the Company's management team, pursuant to which these
investors will initially subscribe GBP4 million for 26,666,666 Ordinary Shares
at a price of 15 pence per share.
As part of the initial investment, it is proposed that the nominal value of each
of the Ordinary Shares will be reduced from GBP1.00 to GBP0.01 and that the
admission to trading on AIM of the Ordinary Shares will be cancelled.
The key reasons for the transaction include:
* forming a strategic relationship with the Sanlam Group that the Company
believes will assist the Company in expanding its emerging market alternative
asset management business, particularly in Africa and India, and developing
further its private client trust and fund administration business;
* generating significant synergies and cross-selling opportunities that the
Company believes will be created from the strategic relationship with the Sanlam
Group;
* the injection of an initial investment of GBP4 million into the Company to
develop the business and, subject to certain fundraising and cost saving
conditions being met, the Sanlam Group and the other investors have committed a
second tranche of GBP4 million for the further development of the business.
In order to provide shareholders of the Company with the opportunity to
participate in the investment, the Company will make an open offer to eligible
shareholders prior to the completion of the initial investment. The open offer
will be contained in a separate circular. The investors have also indicated that
they are willing to acquire the shares of any shareholders wishing to sell
following the cancellation of admission to AIM at a price equal to the
subscription price and such shares shall also be available to other shareholders
wishing to participate in the purchase, pro rata to their holdings in the
Company at the time that the details of the shares that have been offered for
sale are sent to shareholders.
The proceeds of the transaction will be used primarily for the launch of new
alternative investment products focused on Africa and India, expansion of the
Company's product distribution capability and the expansion of Silex, the
Company's private client trust and administration business.
These proposals are subject to shareholder approval and accordingly the
directors have convened an EGM to be held on 19 May 2010.The proposals are also
subject to a number of conditions being satisfied, including approvals required
by the UK Financial Services Authority and the British Virgin Islands Financial
Services Commission in relation to certain of the Company's subsidiaries and
Sanlam being granted exchange control approval by the South African Reserve
Bank.
Commenting on the transaction, Jonathan Sieff, Chief Executive of Principle
Capital Holdings said:
"We are delighted to be able to accelerate the growth of the business by forming
this strategic relationship with one of the leading financial services groups in
South Africa and which is rapidly growing its interests elsewhere in Africa.
The transaction will allow the Company to take advantage of opportunities that
have emerged from the market dislocation over the past two years and, through
the open offer, existing shareholders will also be able to participate in the
investment. Consequently, the Board believes that the resolutions which will be
proposed at the upcoming EGM are in the best interests of the Company and
shareholders and is able to recommend that shareholders vote in favour of these
resolutions."
Johan van der Merwe, Chief Executive of Sanlam Investments said that the
acquisition of a shareholding in Principle Capital complements Sanlam's existing
strategy in particularly Africa and India. "We look forward to help building
the business to be the pre-eminent player in the emerging market alternative
asset management space in the countries we choose to operate", he added.
- Ends -
Enquiries
+--------------------------------+----------------------------+
| Principle Capital Holdings | +44 20 7240 3222 |
| Jonathan Sieff | |
| Mark Whitfeld | |
| | |
+--------------------------------+----------------------------+
| Pelham Bell Pottinger | +44 (0) 7812 345 205 |
| Olly Scott | |
| | |
+--------------------------------+----------------------------+
| Singer Capital Markets | +44 20 3205 7500 |
| Jeff Keating | |
| | |
+--------------------------------+----------------------------+
Note: Principle Capital was advised by financial consultants, MENA-RL, which is
now part of Daniel Stewart & Co. plc.
PROPOSED TRANSACTION, CAPITAL REDUCTION AND CANCELLATION OF ADMISSION
1. Introduction
On 26 April 2010, the Company entered into a subscription agreement with the
Investors, which is conditional upon, among other things, the passing of certain
of the Resolutions and the making of the Open Offer, pursuant to which the
Investors will initially subscribe for an aggregate of 26,666,666 Ordinary
Shares at a price of 15 pence per Ordinary Share.
As part of the Tranche 1 Subscription, it is proposed that the nominal value of
each of the Ordinary Shares will be reduced from GBP1.00 to GBP0.01 and that the
admission to trading on AIM of the Ordinary Shares will be cancelled. Further
details of the Capital Reduction and the Cancellation are set out in Sections 8
and 10 respectively of this document, which include details of the Tender
Facility, which has been proposed by the Investors to allow other Shareholders
to sell their Ordinary Shares or Depositary Interests following the
Cancellation.
It is also proposed that Shareholders who do not wish to sell will be provided
with an opportunity to participate in the investment in the Company pursuant to
the Open Offer. Further details of the Open Offer are set out in Section 6.
2. Reasons for the Transaction
The Board believes that there are strong strategic reasons for supporting the
Transaction, which are as follows:
· the Board believes that the Transaction will enable the Group to create a
strategic relationship with the Sanlam Group that will assist the Group in
expanding its alternative asset management business in certain of its key
existing and target markets, such as Africa and India, and developing further
its private client trust and fund administration business. Further details in
relation to the Sanlam Group are set out in Section 5;
· the Board believes that significant synergies and cross-selling
opportunities will be created for the Group from the strategic relationship with
the Sanlam Group; and
· in the first tranche of their investment, which is conditional upon,
among other things, the passing of certain of the Resolutions, the Investors
will invest an aggregate of GBP4 million into the Company, which constitutes a
significant capital injection which the Board believes the Group requires in
order to develop its businesses. In addition and subject to certain fundraising
and cost cutting hurdles being achieved, the Investors have committed a further
tranche of GBP4 million for the further development of the business.
The Board has also carefully considered the Subscription Price in relation to
the Tranche 1 Subscription. In considering the proposed Subscription Price,
which represents a discount of 7.69 per cent. to the closing mid market price of
the Ordinary Shares on 26 April 2010 (being the last business day before the
date of this document), the Board has taken into account:
· the recent share price performance of the Ordinary Shares on a standalone
and volume weighted basis;
· the strategic benefits that the Transaction will bring to the Company,
which are outlined above;
· the Open Offer being made to Shareholders, which will allow each of them
to participate in the investment in the same proportion relative to their
current holding of Ordinary Shares as the Management Investors;
· the Board's belief that the Company's net assets (including goodwill) are
unlikely to be attributed any significantly greater value than the Subscription
Price by investors in arriving at a valuation of the Group for the purposes of
any investment; and
· the possible alternatives to raising further equity capital in order to
develop the business, such as a sale of assets, and the costs associated with
those alternatives.
Based upon these factors, the Board considers that the proposed investment at
the Subscription Price represents an important strategic opportunity for the
Group which will provide the Group with the capital injection and relationship
that the Board believes are essential in order to allow the Group to continue to
develop its business within a reasonable timescale.
3. Terms of the Transaction
On 26 April 2010, the Company entered into a conditional subscription agreement
with the Investors pursuant to which the Investors agreed to initially subscribe
for an aggregate of 26,666,666 Ordinary Shares at a price of 15 pence per
Ordinary Share. The subscription by the Investors for the Tranche 1 Shares is
conditional upon, among other things:
· the passing of Resolutions 1 to 4 (inclusive);
· Sanlam being granted exchange control approval by the South African
Reserve Bank in connection with the Tranche 1 Subscription and the Investor
Loans (and related guarantees and other security);
· Sanlam obtaining all necessary consents from the United Kingdom Financial
Services Authority in connection with the Tranche 1 Subscription;
· Silex Trust Company Limited and Silex Fund Administrators International
Limited receiving the approval of the British Virgin Islands Financial Services
Commission in connection with the Tranche 1 Subscription;
· the release of all existing charges, pledges and other security over the
Ordinary Shares held by the Management Investors; and
· the making of the Open Offer by the Company.
It is expected that the subscription for the Tranche 1 Shares will be completed
immediately following satisfaction of these conditions.
The Investors have also agreed to subscribe for a second tranche of an
additional 26,666,666 Ordinary Shares conditional upon, among other things, the
Group meeting certain fund raising and cost saving targets; regulatory approvals
from the South African Reserve Bank, the United Kingdom Financial Services
Authority and the British Virgin Islands Financial Services Commission; no
material claim having been made by Sanlam under the warranties contained in the
Subscription Agreement; and the approval of Shareholders being obtained in
respect of the required increase in the Company's authorised share capital and
the disapplication of pre-emption rights in respect of the additional Ordinary
Shares. It is expected that the subscription for the second tranche will be
completed immediately following satisfaction of these conditions, which is
currently expected to be within 18 months following the EGM.
Shareholders are not being asked to approve any resolutions necessary to effect
the subscription of the second tranche at this time. However, it is the Board's
intention to offer Shareholders the opportunity to participate in the tranche 2
subscription in the same proportion relative to their holding of Ordinary Shares
as the Management Investors, although, as the conditions are currently expected
to take up to 18 months to be satisfied, it will need to review all
circumstances existing at the time. Any participation by Shareholders in the
second tranche will be satisfied from the Ordinary Shares that would otherwise
be allotted to the Management Investors pursuant to the Subscription Agreement.
The Investors consist of Sanlam, which is a member of the Sanlam Group, one of
South Africa's leading financial services groups, and the following members of
the Company's management team: Nicholas Holdings, in which Brian Myerson has a
potential beneficial interest; Heritage, in which Jonathan Sieff has a potential
beneficial interest and which owns 6.08 per cent. of the Company; Gristel
Holdings, the shares of which are owned by Brian Padgett and which owns 5.28 per
cent. of the Company and Andrew James Peggie, who owns 3.94 per cent. of the
Company. Brian Myerson is a Director and Executive Chairman of the Company,
Jonathan Sieff is a Director and Chief Executive Officer of the Company and
Brian Padgett is a Director. Nicholas Holdings, Heritage and Gristel Holdings
are related parties for the purposes of AIM Rule 13.
The Company is not giving any warranties or indemnities to Sanlam in connection
with the Transaction on the basis that the Management Investors have agreed to
give significant warranties and indemnities to Sanlam in relation to the Company
and all of the Group's businesses. Sanlam also has a right to terminate the
Subscription Agreement in the event that any matter arises prior to Tranche 1
Completion which would constitute a material breach of those warranties. In
addition, the Management Investors have agreed to a lock-in from selling their
Ordinary Shares for a period of five years from the Tranche 1 Completion or, if
later, the date of the repayment of all amounts by the relevant Management
Investor under any Investor Loan.
In addition to the commitments by the Management Investors, each of the Investor
Managers has agreed to a 25 per cent. reduction in their salary with effect from
1 January 2010; to exclusion from any future option grants under the Company's
existing option plan; and to an obligation to sell their Ordinary Shares in the
event that they leave the business, in certain circumstances at a discount to
the fair value (as determined by an independent valuer) of up to 66 per cent.
In addition, the Company has agreed to put into place a new bonus plan with
effect from Tranche 1 Completion pursuant to which each of the Investor Managers
will receive a share of a bonus pool which is equal to fifty per cent. of the
performance fees and carried interests earned by the Group after the adoption of
the plan.
4. SHAREHOLDERS' AGREEMENT AND ARTICLES OF INCORPORATION
Resolution 4 of the Resolutions proposes that the Revised Articles will be
adopted by the Company conditional upon the later of the Tranche 1 Completion
and the Cancellation. The Revised Articles include, among other things,
restrictions on the transfer of Ordinary Shares by Shareholders and provisions
allowing for a proposal right for the nomination of Directors by the Management
Investors and Sanlam. In addition, pursuant to the terms of the Subscription
Agreement, the Investors have agreed that on the Tranche 1 Completion they will
enter into the Shareholders' Agreement, which will govern the relationship of
the Investors in relation to the Company.
5. BACKGROUND ON SANLAM
Sanlam is part of the Sanlam Group, a leading financial services group in South
Africa with its head office in Bellville near Cape Town. The Sanlam Group has
offices throughout South Africa and also has business interests elsewhere in
Africa, Europe, India and Australia.
In its South African operations the Sanlam Group employs about 9,400 staff
members, about 2,300 accredited brokers, 4,000 advisers and agents with about
2,600 advisers and agents in the rest of Africa and about 20,500 in India.
Sanlam Limited (SLM), which listed on the JSE Limited and the Namibian Stock
Exchange after its demutualisation in 1998, had 544,564 shareholders on 31
December 2009.
The Sanlam Group's operational strategy centres around five pillars: optimal
capital utilisation, earnings growth, costs and efficiencies, diversification
and transformation.
At 31 December 2009, the Sanlam Group had assets of US$72,359 million under
management.
6. THE OPEN OFFER
In order to provide Shareholders with the opportunity to participate in the
investment in the Company, the Company will make the Open Offer to Eligible
Shareholders of up to 5,935,113 Ordinary Shares at the Subscription Price. The
making of the Open Offer by the Company is one of the conditions to the
completion of the subscription for the Tranche 1 Shares by the Investors and the
Company anticipates that the Open Offer will be made immediately prior to the
Tranche 1 Completion. Each of the Investors, Jonathan Sieff, David Cooley,
Concerto, Valira International and Principle Capital Investments Limited has
agreed under the terms of the irrevocable undertakings not to participate in the
Open Offer.
The terms of the Open Offer will be contained in a separate circular which will
be sent to Eligible Shareholders at the time that the Open Offer is made.
However, the principal terms will be as follows:
· Eligible Shareholders will be given the opportunity to subscribe for the
Open Offer Shares at a price of 15 pence per Open Offer Share, pro rata to their
existing shareholding on the basis of 3 Open Offer Shares for every 4 existing
Ordinary Shares held by the Eligible Shareholder on the Open Offer Record Date;
· Entitlements of Eligible Shareholders will be rounded down to the nearest
whole number of Open Offer Shares;
· the Open Offer will not be underwritten; and
· the Open Offer Shares will, when issued and fully paid, rank pari passu
with the existing Ordinary Shares and will be issued subject to the terms of the
articles of incorporation of the Company.
7. the TranCHE 1 Shares
The Tranche 1 Shares will be issued credited as fully paid and will rank pari
passu in all respects with the issued Ordinary Shares, including the right to
receive dividends and other distributions declared, made or paid after the date
of their issue.
8. THE CAPITAL REDUCTION
There are currently 18,644,806 Ordinary Shares in issue, of which 48.22 per
cent. are owned by Concerto, Jonathan Sieff and the Management Investors
(principally Concerto, which owns 30.30 per cent.). It is proposed that as part
of the Tranche 1 Subscription the issued share capital of the Company will be
reduced from GBP18,644,806, divided into 18,644,806 ordinary shares of GBP1.00
each, to GBP186,448.06, divided into 18,644,806 ordinary shares of GBP0.01 each.
The Capital Reduction is proposed in light of the Company's current share price
in order to allow the Company to proceed with the Tranche 1 Subscription by
reducing the nominal value of the Ordinary Shares to an amount below the
Subscription Price.
Pursuant to Article 7.6 of the Company's current articles of incorporation, the
Company may reduce its share capital provided that it obtains the approval of
its shareholders in a general meeting, further details of which are set out in
Section 11. Following the Capital Reduction (and subject to the creditor
protections outlined below), a special reserve will be credited by the aggregate
amount by which the share capital is reduced (being GBP18,458,357.94).
Under the Act, creditors whose claims predate the publication of the Resolutions
in the Mémorial may, within 30 days from their publication, apply to the
Tribunal d'Arrondissement for security to be put into place in order to
safeguard their interests. Until such time as the applications of the creditors
have been considered by the Tribunal d'Arrondissement, no payments of any amount
credited to the special reserve of the Company may be made to the Shareholders.
It should be noted that it is not currently proposed that the Capital Reduction
will involve any distribution or repayment of capital by the Company to any
Shareholder.
It should also be noted that the Capital Reduction will not involve any
reduction in the Company's underlying assets and the reduction in the nominal
value of the Ordinary Shares should not in itself affect their market value.
9. REASONS FOR THE CANCELLATION
It is proposed that as part of the Tranche 1 Subscription the admission of the
Ordinary Shares to trading on AIM will be cancelled. The Directors have
considered the benefit to the Company and its Shareholders of maintaining the
admission of the Ordinary Shares in the event that the Tranche 1 Subscription
proceeds in light of the following factors:
? the limited market appreciation of the Group's businesses
resulting in the Ordinary Shares having very limited 'market' value;
? the concentration of the shareholder base, of which the Management
Investors, Concerto, Jonathan Sieff, David Cooley, Valira International and
Principle Capital Investments Limited own approximately 68.12 per cent.,
resulting in limited trading liquidity in the Ordinary Shares; and
? the costs and regulatory burdens associated with maintaining an
admission to AIM.
The Directors have concluded based upon the above factors that it is no longer
in the best interests of the Company or its Shareholders to maintain admission
to AIM of the Ordinary Shares.
10. THE CANCELLATION
In accordance with Rule 41 of the AIM Rules, the Company has today notified the
London Stock Exchange of the Cancellation, which is conditional upon the consent
of not less than 75 per cent. of votes cast by Shareholders at the EGM. The
Cancellation is expected to be effective from 27 May 2010. Upon the
Cancellation becoming effective, Singer will cease to be nominated adviser and
broker to the Company and the Company will no longer be required to comply with
the AIM Rules. In addition, the Depositary Interest facility will no longer be
made available and the Depositary Interests will be cancelled in accordance with
the terms of the facility.
Following the Cancellation, there will no longer be a public market or trading
facility on any recognised investment exchange and the opportunity for
Shareholders and holders of Depositary Interests to realise their investment in
the Company will therefore be more limited. There is no current intention to
make any formal or market facility, such as a matched bargain settlement
facility, available to facilitate trading in the Ordinary Shares following the
Cancellation. However, any Shareholders or holders of Depositary Interests
wishing to sell any Ordinary Shares or Depositary Interests should notify the
Company's registrar, Computershare, in writing at Computershare Investor
Services PLC, Corporate Actions Projects, Bristol BS99 6AH following the closing
of the Open Offer as the Investors have informed the Company that they are
willing to acquire any Ordinary Shares or Depositary Interests held by any
holders wishing to sell on the following terms:
· the price offered per Ordinary Share or Depositary Interest will be 15
pence, being the same price as the Subscription Price;
· any Shareholder or holder of Depositary Interests wishing to sell any
Ordinary Shares or Depositary Interests will be required to contact
Computershare during the period commencing on the date of the closing of the
Open Offer, which will be communicated to Shareholders at the time that the Open
Offer is made, and ending on the date which is 30 days following such date to
confirm that it wishes to sell its Ordinary Shares or Depositary Interests at
the Subscription Price; and
· Computershare will be acting to provide a third party service only in
respect of putting the holders of Ordinary Shares or Depositary Interests in
contact with the Investors and facilitating the transfer of shares and the issue
of consideration payments as an off-market transaction. No financial advice will
be given by Computershare.
In order to give any remaining Shareholders the opportunity to participate in
the Tender Facility, details of any Ordinary Shares or Depositary Interests that
are offered for sale pursuant to the Tender Facility will be sent to those
Shareholders by the Company following the expiry of the 30 day period outlined
above and they will be given the opportunity to participate in the purchase
pursuant to the terms of the Revised Articles pro rata to their holding of
Ordinary Shares and/or Depositary Interests at the time that the details of the
Ordinary Shares or Depositary Interests that have been offered for sale are sent
to them. Each of Jonathan Sieff, David Cooley, Concerto, Valira International
and Principle Capital Investments Limited has agreed under the terms of their
irrevocable undertakings not to participate in the Tender Facility.
Shareholders should be aware that the Tender Facility being proposed by the
Investors will only be made available following the passing of the resolution
necessary to effect the Cancellation and after Tranche 1 Completion and the Open
Offer.
11. Requirement for Shareholder Approval
In connection with the Tranche 1 Subscription, it is necessary for the Directors
to seek the authority of the Shareholders to reduce the Company's issued share
capital, to decrease the Company's authorised share capital, to authorise the
Directors to issue the Tranche 1 Shares and the Open Offer Shares within the
limits and conditions provided for under the new authorised share capital and to
disapply the statutory pre-emption rights of existing Shareholders under
Luxembourg law in accordance with, and for the reasons set out in, the Report.
In addition, Rule 41 of the AIM Rules requires that any cancellation by a
company of the admission of its shares to trading on AIM will be conditional
upon the consent of not less than 75 per cent. of votes cast by its shareholders
given in a general meeting. Accordingly, the Directors have convened the EGM at
which Shareholders will consider and if thought fit pass the Resolutions, among
other things, to approve the Capital Reduction, to authorise the Directors to
issue the Tranche 1 Shares and the Open Offer Shares and to approve the
Cancellation.
The Directors intend to ask Shareholders at the EGM: (1) to reduce the issued
share capital of the Company from GBP18,644,806, divided into 18,644,806
ordinary shares of GBP1.00 each, to GBP186,448.06, divided into 18,644,806
ordinary shares of GBP0.01 each; (2) to approve a decrease in the authorised
share capital of the Company from GBP24,500,000 to GBP538,089.14; to renew the
Directors' authorisation to issue new Ordinary Shares up to the new authorised
share capital amount on the terms provided in Article 7.2 to Article 7.5 of the
Company's existing articles of incorporation for a further period of five years
and to disapply the statutory pre-emption rights of existing Shareholders under
Luxembourg law in accordance with, and for the reasons set out in, the Report.
The Company does not, however, have any current intention of using this
authority save in respect of the issue of the Tranche 1 Shares and the Open
Offer Shares and pursuant to the exercise of options under the Company's
existing share option arrangements; (3) to make consequential amendments to the
Company's articles of incorporation to reflect the previous resolutions; (4)
conditional upon the later of the Tranche 1 Completion and the Cancellation, to
adopt the Revised Articles; and (5) to approve the Cancellation.
Shareholders should be aware that, in the event that Resolutions 1 to 4 are
passed (which only require the approval of two thirds of Shareholders with a
quorum of the holders of more than half of the issued share capital of the
Company present or represented) but Resolution 5 (which approves the
Cancellation and which requires the approval of 75 per cent. of votes at the
EGM) is not passed, the Investors have agreed to re-apply for the Cancellation
following the completion of the Tranche 1 Subscription and the Open Offer at
which time the Investors and those Shareholders that have undertaken to vote in
favour of the Resolutions will together hold in excess of 75 per cent. of the
issued share capital of the Company.
12. Related Party TRANSACTION
As part of Sanlam's participation in the Transaction, Sanlam and the Company
agreed that the following Management Investors would subscribe for Ordinary
Shares at a price of 15 pence per Ordinary Share: Nicholas Holdings, in which
Brian Myerson has a potential beneficial interest; Heritage, in which Jonathan
Sieff has a potential beneficial interest and which owns 6.08 per cent. of the
Company; and Gristel Holdings, the shares of which are owned by Brian Padgett
and which owns 5.28 per cent. of the Company.
Under AIM Rule 13, such an arrangement constitutes a related party transaction
as Brian Myerson, Jonathan Sieff and Brian Padgett are Directors. Taking into
account the factors set out in Section 2 above (including, in particular, the
Open Offer to be made to Eligible Shareholders, which will allow them to
participate in the investment in the same proportion relative to their current
holding of Ordinary Shares as the Management Investors), in accordance with AIM
Rule 13, the Independent Directors, deemed to be independent directors for these
purposes, consider, having consulted with Singer, that the terms of the
transaction between the Company and the Directors (excluding the Independent
Directors) are fair and reasonable insofar as the Company's Shareholders are
concerned.
13. BOARD CHANGES
In connection with the Transaction, Leonard O'Brien and David Cooley have each
agreed to resign as Director with effect from the Tranche 1 Completion and
Richard Bolton has agreed to resign with effect from the later of Tranche 1
Completion and the Cancellation. Robert Roux and Johan van der Merwe of the
Sanlam Group will each be appointed as a Director with effect from the Tranche 1
Completion, subject to such appointments being confirmed at the next general
meeting of the Company following their appointment.
14. USE OF PROCEEDS
The proceeds of the Transaction will be used for the development of the
Group's businesses. The primary focus will be on: the launch of several new
alternative investment products focused on Africa and India (including the
financing of the typical investment manager commitments to those products), a
significant expansion in the Group's product distribution capability and the
expansion of Silex, the Group's private client trust and fund administration
business.
15. INVESTOR LOANS
As part of the Transaction, Sanlam has agreed to loan to Nicholas Holdings and
Heritage the monies required by them in connection with: (i) the subscription
for the Transaction Shares; (ii) the acquisition of any Ordinary Shares pursuant
to the Tender Facility; and (iii) the subscription for Ordinary Shares in the
tranche 2 subscription. Sanlam has also agreed to make loans available to any
of the other Management Investors should they be required in connection with the
tranche 2 subscription. The security provided to Sanlam in connection with the
loan arrangements includes share charges in favour of Sanlam in respect of the
Ordinary Shares to be issued to Nicholas Holdings and Heritage at the Tranche 1
Completion.
16. EGM
The EGM is to be held at 58, rue Charles Martel, L-2134 Luxembourg on 19 May
2010 at 10.00 a.m. CET in order to consider and vote on the Resolutions.
17. Irrevocable Undertakings
The Board has, at the date of this document, received irrevocable undertakings
from Shareholders owning 14.70 per cent. of the Ordinary Shares to vote in
favour of the Resolutions. In addition, each of Concerto, Jonathan Sieff,
Heritage, Gristel Holdings, Valira International and David Cooley have given
irrevocable undertakings to vote their Ordinary Shares, representing in
aggregate 53.42 per cent. of the Ordinary Shares, in favour of the Resolutions.
Therefore, in aggregate, a minimum of 68.12 per cent. of the Ordinary Shares are
committed to be voted in favour of the Resolutions.
18. Recommendation
Resolutions 1 to 4 (inclusive) will be passed if more than two thirds (66.6 per
cent.) of votes of the Shareholders (or their proxies) are cast in favour of
those Resolutions, provided that a quorum of more than half of the issued share
capital of the Company is present or represented at the EGM. Resolution 5
approving the Cancellation will be passed if more than 75 per cent. of the votes
cast by Shareholders (or their proxies) are cast in favour of the Resolution.
The Board believes that the Resolutions contained in the Notice of Meeting are
in the best interests of the Company and Shareholders as a whole and unanimously
recommends Shareholders to vote in favour of the Resolutions, as each of
Concerto, the family vehicle of Brian Myerson (Executive Chairman); Jonathan
Sieff (Chief Executive Officer); Heritage, the family vehicle of Jonathan Sieff;
Gristel Holdings, the interest of Brian Padgett; Valira International, the
interest of Leonard O'Brien; and David Cooley, shall do in respect of their
beneficial shareholdings representing in aggregate 53.42 per cent. of the
Ordinary Shares.
Definitions
In this document:
Act means the Luxembourg Law of 10 August 1915 governing commercial companies,
as amended from time to time;
AIM means the market of that name operated by the London Stock Exchange plc;
AIM Rules means the rules for companies whose securities are traded on AIM and
their nominated advisers published by the London Stock Exchange plc as amended
from time to time;
Board means the board of directors of the Company composed of Brian Alan
Myerson, Jonathan Sieff, David John Cooley, Brian Sean Padgett, Leonard Joseph
O'Brien and Richard John Bolton;
Cancellation means the proposed cancellation of admission to trading on AIM of
the Ordinary Shares in accordance with the AIM Rules;
Capital Reduction means the proposed reduction of the issued share capital of
the Company from GBP18,644,806, divided into 18,644,806 ordinary shares of
GBP1.00 each, to GBP186,448.06, divided into 18,644,806 ordinary shares of
GBP0.01 each;
Circular means the circular to be sent to Shareholders in connection with the
EGM;
Company means Principle Capital Holdings S.A. (registered number R.C.S.
Luxembourg B 98144), a 1929 holding company incorporated in the Grand Duchy of
Luxembourg;
Computershare means Computershare Investor Services PLC;
Concerto means Concerto Capital Corporation Limited (registered number 42347), a
private company incorporated in the British Virgin Islands, the entire issued
share capital of which is beneficially owned by the Nicholas Trust;
Consulate Trust means a discretionary trust established by a Declaration of
Trust dated 13 October 2008 settling certain property on discretionary trusts
for the benefit of potential beneficiaries who include Jonathan Sieff and
certain members of his family;
Depositary Interests means depositary interests representing the Ordinary
Shares;
Directors means the directors of the Company;
EGM means the extraordinary general meeting of the Company to be held at 58, rue
Charles Martel, L-2134 Luxembourg on 19 May 2010 at 10.00 a.m. CET;
Eligible Shareholders means the holders of Ordinary Shares at the Open Offer
Record Date;
Gristel Holdings means Gristel Holdings Limited (registered number 526641), a
private company incorporated in the British Virgin Islands, the entire issued
share capital of which is owned by Brian Padgett;
Group means the Company and its subsidiaries;
Heritage means Heritage Property Investment Limited (registered number 1462379),
a private company incorporated in the British Virgin Islands, the entire issued
share capital of which is beneficially owned by the Consulate Trust;
Independent Directors means Leonard Joseph O'Brien, David John Cooley and
Richard John Bolton, being those Directors who are not involved in the
Transaction for the purposes of AIM Rule 13;
Investor Loans means the loans from Sanlam to certain of the Management
Investors in connection with, among other things, the subscription for the
Transaction Shares, details of which are set out in Section 15 of this document;
Investor Managers means Brian Myerson, Jonathan Sieff, Brian Padgett and Andrew
James Peggie;
Investors means Sanlam and the Management Investors;
Johannesburg Stock Exchangemeans JSE Limited;
Management Investors means Nicholas Holdings, Heritage, Gristel Holdings and
Andrew James Peggie;
Nicholas Holdings means Nicholas Holdings Limited (registered number 5598), a
private company incorporated in the British Virgin Islands, the entire issued
share capital of which is beneficially owned by the Nicholas Trust;
Nicholas Trust means a discretionary trust established by a Deed of Settlement
dated 21 March 1988 settling certain property on discretionary trusts for the
benefit of potential beneficiaries who include Brian Alan Myerson and certain
members of his family;
Notice of Meeting means the notice of EGM and its agenda, which is set out in
Annexure A of the Circular;
Open Offer means the proposed open offer (or, in the event that the Cancellation
has occurred prior to the Open Offer, a private placement) of Ordinary Shares to
Eligible Shareholders, details of which are set out at Section 6;
Open Offer Record Date means close of business on the business day immediately
preceding the date of the Open Offer;
Open Offer Shares means the 5,935,113 Ordinary Shares which are to be made
available for subscription by Eligible Shareholders under the Open Offer;
Ordinary Shares means the ordinary shares of GBP1 each in the issued share
capital of the Company, the nominal value of which it is proposed will be
reduced to GBP0.01 pursuant to the Capital Reduction;
Report means the report as set out in Annexure C of the Circular, prepared by
the Board in accordance with the Act, setting out the detailed reasons why the
preferential subscription rights of the Shareholders will be disapplied in
connection with the issue of the Tranche 1 Shares;
Resolutions means the resolutions to be proposed to Shareholders at the EGM and
which are set out in Annexure A of the Circular (being the Agenda of the EGM);
Revised Articles means the revised form of articles of incorporation of the
Company, the adoption of which will be proposed in Resolution 4 of the
Resolutions and a copy of which is enclosed with the Circular;
Sanlam means Sanlam Netherlands Holding B.V., a company incorporated in The
Netherlands;
Sanlam Group means Sanlam Limited and its subsidiaries;
Shareholders means the shareholders in the Company;
Shareholders' Agreement means the shareholders' agreement to be entered into
between the Investors, Concerto and the Investor Managers on the Tranche 1
Completion;
Singer means Singer Capital Markets Limited;
Subscription Agreement means the agreement dated 26 April 2010 between the
Company and the Investors pursuant to which the Investors have agreed to
conditionally subscribe for an aggregate of 53,333,332 Ordinary Shares at a
price of 15 pence per Ordinary Share in two tranches;
Subscription Price means 15 pence per Ordinary Share;
Tender Facility means the facility proposed by the Investors to allow other
Shareholders to sell their Ordinary Shares or Depositary Interests following the
Cancellation, details of which are set out in Section 10;
Tranche 1 Completion means completion of the Tranche 1 Subscription;
Tranche 1 Shares means the 26,666,666 Ordinary Shares to be issued on the
Tranche 1 Completion;
Tranche 1 Subscription means the subscription for the Tranche 1 Shares by the
Investors;
Transaction means the subscription for the Transaction Shares by the Investors;
Transaction Shares means the 53,333,332 Ordinary Shares to be issued pursuant to
the Transaction in two tranches;
Valira International means Valira International Limited (registered number
526531), a private company incorporated in the British Virgin Islands, the
entire issued share capital of which is owned by Leonard O'Brien;
GBP or Pounds Sterling means the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLFFEVSEIRFII
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