PROMETHEAN PLC The Directors, whose names appear on page 4 of this document, accept responsibility for the information contained in this document. To the best of the knowledge and belief of each of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and this document makes no omission likely to affect the import of such information.
Promethean plc(Incorporated in the Isle of Man under the Isle of Man Companies Act 2006 with registration number 003750V)
Proposed Members' Voluntary Liquidation Proposed cancellation of admission to trading on AIM of the Ordinary Shares and Notice of Extraordinary General Meeting
This document should be read as a whole in conjunction with the accompanying Form of Proxy. Your attention is drawn to the letter to Shareholders from the Chairman of Promethean, which is set out on pages 4 to 6 of this document. This letter explains the background to and reasons for the proposed Members' Voluntary Liquidation and proposed cancellation of the admission of the Ordinary Shares to trading on AIM and contains a recommendation that you vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting referred to below.
An application has been made to the London Stock Exchange for the cancellation of the admission to trading o n AIM of the Ordinary Shares. Subject to the resolution being passed at the Extraordinary General Meeting, it is expected that cancellation of the admission of the Company's Ordinary Shares to trading on AIM will occur at 7 :00 am on 10 December 2014.
Notice of the Extraordinary General Meeting of Promethean to be held at Clinch's House, Lord Street, Douglas, Isle
of Man IM99 1RZ on 9 December 2014 at 10:00 a.m. local time is set out at the end of this document.
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CONTENTS
Page
Expected timetable of principal events 2
Definitions 3
Letter from the Chairman 4
Notice of Extraordinary General Meeting 7
Form of Proxy 9
Publication and despatch of this document and the Form of Proxy 10 November 2014 to Shareholders
Latest time and date for receipt of Forms of Proxy 10:00 a.m. on 7 December
2014
Suspension of trading on AIM of the Ordinary Shares 7.30 a.m. on 9 December
2014
Extraordinary General Meeting 10:00 a.m. local time on 9
December 2014
Last day of dealings in Ordinary Shares on AIM and in CREST 8 December 2014
Cancellation of admission to trading on AIM of the Ordinary Shares with effect from 7:00 a.m. on 10 December 2014
Notes:
(1) If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by an announcement through the regulatory information service of the London Stock Exchange plc.
(2) All references in this document are to London times unless otherwise stated.
(3) The proposed appointment of a liquidator and the proposed cancellation of trading on AIM requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the Extraordinary General Meeting.
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DEFINITIONS
The following definitions apply throughout this document unless the context otherwise requires:
'Admission' the admission of the Ordinary Shares to trading on AIM
'Act' the Companies Act 2006 (an Act of Tynwald, the parliament of the Isle of
Man), as amended and including those provisions of the Companies Act
1931 applied thereto by s.182 of the Companies Act 2006
'AIM' the AIM market operated by the London Stock Exchange
'AIM Rules' the AIM Rules for companies admitted to trading on AIM published by the
London Stock Exchange, as amended from time to time
'Cancellation' or the proposed cancellation of the Company's Ordinary Shares from trading
'Delisting' on AIM
'Company' or Promethean plc
'Promethean'
'CREST' the relevant system (as defined on the Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the Regulations)
'Directors' or 'Board' the directors of the Company
'Extraordinary General
Meeting'
the Extraordinary General meeting of the Company convened for 10:00 a.m. local time on 9 December 2014 and any adjournment thereof, notice of which is set out at the end of this document
'Form of Proxy' the form of proxy accompanying this document for use in connection with the Extraordinary General Meeting
'London Stock Exchange' London Stock Exchange plc
'Members' Voluntary a Members' Voluntary Winding Up within the meaning of the Act
Liquidation'
'Ordinary Shares' ordinary shares of £0.01 each in the capital of the Company
'Proposals' the proposed Members' Voluntary Liquidation, appointment of the
Proposed Liquidator and Cancellation
'Proposed Liquidator' Dennis Anthony McGurgan of Grant Thornton Limited, Third Floor, Exchange House, 54-62 Athol Street, Douglas, IM1 1JD
'Regulations' the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755 of
Parliament), as amended from time to time
'Resolutions' the resolutions set out in the notice of the Extraordinary General Meeting at the end of this document and Resolution means any of them, as the context may require
'Shareholders' the holders of the Ordinary Shares
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LETTER FROM THE CHAIRMAN Promethean plc(Incorporated in the Isle of Man under the Isle of Man Companies Act 2006 with registration number 003750V)
Directors: Registered Office:
Sir Peter Burt (Chairman) Clinch's House Elizabeth Tansell (Director and Secretary) Lord Street Martin Negre (Director) Douglas
Isle of Man
IM99 1RZ
10 November 2014
Dear Shareholder
As you know from the Company's announcement to the London Stock Exchange on 16 July 2014, the Company's proposed acquisition of securities in T.I.S Holdings Ltd ("TIS") and of the Protected Asset TEP Fund plc participating shares did not proceed. As a result, the Company is now a listed entity with only one investment - its interests in TIS - and some residual cash. Further to this outcome, the Board has come to the conclusion that the most appropriate next step for the Company is for it to be wound up and a liquidator appointed. A consequence of such appointment would be the Cancellation.
The purpose of this letter is to explain the background to and the reasons for these Proposals, and to explain why the Directors unanimously consider the Proposals to be in the best interests of the Company and its shareholders as a whole and, further, to seek your approval for the placing of the Company into Members' Voluntary Liquidation, the appointment of the Proposed Liquidator and the Cancellation at the Extraordinary General Meeting convened for this purpose. The notice of the Extraordinary General Meeting is set out at the end of this document. Your attention is drawn to paragraph 7 below which contains a unanimous recommendation from the Directors that you vote in favour of the Proposals.
The Prospectus dated 2 May 2014, which was issued to Shareholders, provided a comprehensive operating and financial review of the then current position of both the Company and of TIS. As was made clear in the Prospectus (pages 146 et seq), TIS' future prospects are dependent on the outcome of a large number of variables and consequently were extremely difficult to evaluate.
As of 31 March 2014, TIS had current bank debt of £10.8 million and further, non-current, financial indebtedness of
£55.818 million in the form of loans and accrued interest on those loans ("Loans") granted by the Company and the original TIS vendor shareholders (the "Vendors"). Promethean had an interest (described in the Prospectus as "Investor Loan Notes") of £26.858 million. The Vendors' interests in the Loans (described in the Prospectus as "Management Loan Notes and Deep Discounted Bonds") amounted to £28.960 million. Once the bank debt is repaid, the Loans would become repayable on demand. Given the total bank debt which ranks ahead of the Loans and any equity interest, it seems extremely unlikely that there will be any value attaching to the residual interests of
the Company in TIS. As a consequence the Company has no reason to continue its existence.
On the advice of Promethean's lawyers, discussions about the possibility of converting all the loan notes and accrued interest into ordinary TIS shares were held with the representative of the other TIS shareholders and loan note holders. The level of bank debt suggests there would be virtually no prospect of any value being derived from the loan notes and consequently, to all intents and purposes, there would be no possible value in the TIS equity. Unfortunately, the representative of the other TIS creditors and shareholders was unwilling to agree.
A proposal has been made by an investor connected to TIS management to acquire TIS for £200,000, such sum to be divided equally between the Company and the Vendors ("the Proposed Transaction"). If the Proposed Transaction were to proceed, Promethean would receive £100,000 in full and final settlement of what it is owed.
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The proposal as discussed is conditional inter alia upon obtaining regulatory and tax clearance and on agreeing the purchase of the bank debt at a substantial discount. There is no certainty that the Proposed Transaction will proceed.
The Board was approached with a view to providing the funds to acquire the discounted bank debt but, having discussed the opportunity with a number of the Company's institutional shareholders, it was clear that there was no enthusiasm amongst the Company's shareholders for making any further investment in TIS.Although £100,000 is a negligible fraction of the nominal value of the loans and accrued interest owed to the Company by TIS, there is little practical possibility of the Company recovering any greater value than that represented by the Proposed Transaction.
Having discussed the overall position with a number of the Company's institutional shareholders, and in recognition of the ongoing costs of running the Company, the Board has decided to recommend that the Company be wound up and a liquidator be appointed as soon as possible to distribute pro rata in specie to Shareholders the Company's interests in the Loans and in the TIS shares, together with the residual cash. In the event that the Proposed Transaction completed, there would be neither TIS loans nor shares to distribute in specie - there would only be the residual cash left to distribute.
To this end, the Board has decided to call an Extraordinary General Meeting to be held on 9 December 2014 to consider the Resolutions. The Resolutions authorise (i) the Cancellation, (ii) the placing of the Company into Members' Voluntary Liquidation, (iii) the appointment of Dennis Anthony McGurgan of Grant Thornton Limited to liquidate the Company, to repay its outstanding creditors and to return the residual cash and any remaining TIS interest to Shareholders, thereafter progressing a dissolution of the Company once that process is complete, (iv) the fixing of the remuneration of the Liquidator, and (v) authorising the Liquidator to make distributions in specie . The notice calling the EGM and the Resolutions on which shareholders are asked to vote is attached.
The Company has notified the London Stock Exchange of the proposed Cancellation. In the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 8
December 2014 and that the effective date of the Cancellation will be 10 December 2014.
If the Resolutions are approved by the Shareholders, the Company will commence a Members' Voluntary Liquidation following the Cancellation and the appointment of a liquidator is accordingly required. The appointment of the Proposed Liquidator is subject to the approval of a majority of Shareholders (in person or by proxy) at the Extraordinary General Meeting. Accordingly, the Resolutions set out in the notice of Extraordinary General Meeting on pages 7 to 8 of this document seek Shareholder approval for, inter alia, the appointment of the Proposed Liquidator. Subject to the Resolutions being passed, the Proposed Liquidator will be appointed immediately upon the commencement of the Members' Voluntary Liquidation.
In the course of the Members' Voluntary Liquidation, any surplus cash and assets of the Company will be returned to Shareholders (less any costs and expenses associated with the liquidation).
In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the intention to delist, subject to Shareholder approval, giving twenty business days' notice. Under the AIM Rules, it is a requirement that the Delisting is approved by not less than 75 per cent of votes cast by Shareholders (in person or by proxy) at the Extraordinary General Meeting. Accordingly, the Resolutions set out in the notice of Extraordinary General Meeting on pages 7 to 8 of this document seek Shareholder approval for the Delisting. Subject to the Resolution approving the Delisting being passed at the Extraordinary General Meeting, it is anticipated that trading in the Ordinary Shares on AIM will be suspended at 7.30 a.m. UK time on 9 December 2014 with Delisting taking effect at 7:00 am UK time on 10 December 2014.
Following the Cancellation of trading in the Company's shares on AIM, the Ordinary Shares will not be traded on any public market and the CREST facility (through which the depositary interests representing Ordinary Shares are currently traded) will be cancelled. The Ordinary Shares will remain capable of being transferred in paper form (and therefore not through CREST) for a limited time until the Members' Voluntary Liquidation is completed at the discretion of the Liquidator. A Shareholder will be unable to purchase or sell any Ordinary Shares following Cancellation.
Transfers of interests in shares in certificated form should be sent to the Company's UK Transfer Agent, Capita Registrars, 34 Beckenham Road, Beckenham, Kent BR3 4TU, United Kingdom. Existing share certificates remain valid until completion of the Members' Voluntary Liquidation.
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If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation becoming effective. As noted above, in the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 8 December 2014 and that the effective date of the Cancellation will be 10 December 2014.Upon the Delisting becoming effective, S. P. Angel Corporate Finance LLP will cease to be nominated adviser and broker to the Company and the Company will no longer be required to comply with the rules and corporate governance requirements to which companies admitted to trading on AIM are subject, including the AIM Rules.
5. Shareholder indications and total voting rights
Shareholders should be aware that Shareholders who hold more than 50% of the Company's share capital have indicated that they are likely to vote for the Resolutions. As certain of the resolutions are Special Resolutions, they will require a majority of 75%, not 50%, of the votes cast.
At the date of this document, the Company's issued share capital consists of 45,190,000 Ordinary Shares. Each Ordinary Share carries the right to one vote at a general meeting and therefore the total voting rights in the Company as at 6.00pm on the day immediately prior to the date of this document is 45,190,000.
Set out at the end of this document is a notice of an Extraordinary General Meeting which is to be held at Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ at 10:00 a.m. local time on 9 December 2014 at which the Resolutions will be put to Shareholders.
Shareholders will find enclosed with this document a Form of Proxy for use at the Extraordinary General Meeting. The form of Proxy should be completed and returned in accordance with the instructions printed thereon so as to arrive at the Company's registrars, SMP Fund Services Ltd, Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ, as soon as possible and not later than 10:00 a.m. on 7 December 2014. Completion and return of the Form of Proxy will not prevent a Shareholder from attending and voting at the Extraordinary General Meeting should they so wish.
My thanks are due to Martin Negre and to Elizabeth Tansell of SMP Fund Services Limited for their unstinting efforts to successfully implement the change in investment policy introduced following the financial crisis. Given the crisis which struck in 2008, Promethean's performance has been better than many of its contemporaries and Shareholders owe both Martin and Liz a considerable gratitude for all their hard work.
Despite such performance, it is for the reasons set out above that the Directors believe that the Proposals are in the best interests of the Company and of Shareholders as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Proposals.
Yours faithfully
Sir Peter Burt
Chairman
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Promethean plc(Incorporated in the Isle of Man under the Isle of Man Companies Act 2006 with registration number 003750V)
(the "Company")
NOTICE OF AN EXTRAORDINARY GENERAL MEETINGNOTICE IS HEREBY GIVEN that an Extraordinary General meeting of the Company will be held at Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ at 10:00 a.m. local time on 9 December 2014 for the purpose of considering and, if thought fit, passing the following resolutions:
SPECIAL RESOLUTIONS1. THAT the admission of the Company's Ordinary Shares of £0.01 each to trading on AIM be cancelled (the "Delisting") and that the directors of the Company be and are hereby authorised to take all steps which are necessary or desirable in order to effect the Delisting.
2. THAT the Company be wound up voluntarily, pursuant to section 214(1)(b) of the
Companies Act 1931 as applied to the Company by section 182 of the Companies Act
2006.
Subject to the passing of Resolution 2 above by the requisite majority:
ORDINARY RESOLUTIONS3. THAT Dennis Anthony McGurgan of Grant Thornton Limited be and hereby is appointed Liquidator of the Company for the purposes of such winding up such appointment to be effective from the time and date of the passing of Resolution 2.
4. THAT the Liquidator's remuneration be fixed by reference to the time properly spent by him and his staff in attending to matters arising prior to and during the winding up of the Company (including without limitation, the implementation of the Proposals and any matters outside the statutory duties of the Liquidator and undertaken at the request of the members of a majority of them) and the Liquidator be and he is hereby authorised to draw such remuneration monthly or at such further intervals as he may determine and to pay expenses properly incurred by him to give effect to the winding up of the Company.
SPECIAL RESOLUTION5. THAT the Liquidator be and he is hereby authorised to exercise powers to divide amongst the members of the Company in specie or in kind the whole or any parts of the assets of the Company.
By order of the Board Registered Office Clinch's House Lord Street
Douglas
Isle of Man
IM99 1RZ
10 November 2014
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Notes:
1. A member entitled to attend and vote at the meeting may appoint one or more proxies to attend and, on a poll, vote instead of him. A proxy need not also be a member. A Form of Proxy is enclosed.
2. The Form of Proxy, if used, and the power of attorney or other authority (if any) und er which it is signed or a certified copy of such power or authority must be lodged at the offices of the Company's Registrars, SMP Fund Services Ltd, Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ not less than 48 hours before the time fixed for holding the meeting.
3. Completing and returning a Form of Proxy will not preclude a member from attending in person at the meeting and voting should he or she wish to do so.
4. In the case of a corporation, the Form of Proxy must be executed under its common seal or the hand of an officer or attorney duly authorised.
5. Entitlement to attend and vote at the meeting and the number of votes which may be cast thereat will be determined by reference to the Register of Members of the Company at 7 December 2014. Changes to entries on the Register of
Members after that time shall be disregarded in determining the rights of any person to attend and vote at the meeting.
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Promethean plc(Incorporated in the Isle of Man under the Isle of Man Companies Act 2006 with registration number 003750V)
(the "Company")
FORM OF PROXYFor use at the Extraordinary General meeting of the Company to be held at Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ at 10:00 a.m. local time on 9 December 2014 and at any adjournment thereof.
Please complete in BLOCK CAPITALS: To: Promethean plc (the 'Company')
I/We ............................................................................................................................................................. of..................................................................................................................................................................
being holder(s) of Ordinary Shares of the Company, hereby appoint the person named below (or if no person named below then the Chairman of the Meeting) as my/our proxy to vote for me/us on my/our behalf at the Extraordinary General Meeting of the Company to be held on 9 December 2014 and at any adjournment thereof, and I/we direct my/our proxy to vote on the resolution set out in the Notice of the Extraordinary General Meeting as follows:
Name of Proxy.............................................................................................................................................
If you wish to appoint multiple proxies please see note 9 overleaf. Please also tick here if you are appointing more than one proxy:
Resolution | For | Against | Abstain |
Delisting of the Company's Ordinary Shares and the cancellation of admission to trading in the Ordinary Shares on AIM | |||
Approving the Members' Voluntary Liquidation of the Company | |||
Appointment of Dennis Anthony McGurgan of Grant Thornton Limited as Liquidator of the Company | |||
Approving terms for Liquidator's remuneration | |||
Authorising distribution in specie |
Please indicate with an 'X' in the appropriate space how you wish your vote to be cast. Unless otherwise directed, the proxy will vote or abstain from voting as he/she thinks fit. Date ................................................................... 2014
Signature(s) ..........................................................................................................
Notes:
1. To be valid, the Form of Proxy together with the power of attorney or authority (if any) under which it is signed or a notarially certified copy thereof must be sent to the Company's Registrars,
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SMP Fund Services Ltd, Clinch's House, Lord Street, Douglas, Isle of Man IM99 lRZ, no less than 48 hours before the lime ofthe meeting.
2. In the case of a corporation, this Form of Proxy rnust be under its cornrnon seal or under the hand of a duly authorised officer or attomey.
3. A proxy need not be a member ofthe Company but must attend the meeting in person to represent you.
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NOTES
Appointment of proxies
1. As a member of the Company, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using procedures set out in these notes.
2. A proxy does not need to be a member of the Company but must attend the meeting to represent you. Details of how to appoint the Chairman of the meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not the Chairman) and give instructions directly to them.
3. If you do not give your proxy an indication of how you wish to vote on any resolution, your proxy will vote or abstain from voting at his or her own discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting.
Appointment of proxy using hard copy proxy form
4. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
- completed and signed; and
- sent or delivered to the Company's Registrars: SMP Fund Services Ltd, Clinch's House, Lord Street,
Douglas, Isle of Man IM99 1RZ to be received no later than 10:00 a.m. UK time on 7 December 2014.
Appointment of proxy by joint member
5. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first named being the most senior).
Changing proxy instructions
6. To change your proxy instructions simply submit a new proxy appointment using the methods set out above.
Note that the cut-off time for receipt of proxy appointments (see above) also applies in relation to amended instructions; any amended proxy appointment received after the relevant cut off time will be disregarded.
Where you have appointed a proxy using the hard copy proxy form and would like to change the instructions using another hard copy proxy form, please contact SMP Fund Services Ltd, Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ.
If you submit more than one valid proxy appointment, the appointment received last before the latest time for receipt of proxies will take precedence.
Termination of proxy appointments
7. In order to revoke a proxy instruction you will need to inform SMP Fund Services Ltd by writing to SMP Fund Services Ltd, Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ clearly stating your intention to revoke your proxy appointment. This must be received no later than 10:00 am UK time on 7 December 2014. If you attempt to revoke your proxy appointment but the revocation is received after the specified time then, subject to the paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated.
Communication
8. Members who have general queries about the meeting should contact the Company at its registered office address, Clinch's House, Lord Street, Douglas, Isle of Man IM99 1RZ (Tel: 01624-683229).
9. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder's name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you).Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the same envelope.
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