Notice of EGM
22 Dicembre 2008 - 12:47PM
UK Regulatory
RNS Number : 5923K
Argentvive PLC
22 December 2008
22 December 2008
ArgentVive plc
("ArgentVive" or "the Company")
Notice of General Meeting
Details of the disposal of Solcara Limited
Capital Reorganisation
The Board of ArgentVive announces that it is today posting a circular to shareholders providing details on the disposal of Solcara,
proposing a resolution which, if passed, will allow the Company to undertake a capital reorganisation and to convene a meeting in accordance
with Section 142 of the Companies Act.
The Board announced on the 5 November 2008 that it had completed the sale of Solcara to Access Intelligence for a total cash
consideration of �750,000 following a conditional offer made by Access Intelligence and which was announced on 9 October 2008. Pursuant to
the requirement set out in Rule 15 of the AIM Rules for Companies, the Company is required to obtain consent from the Shareholders for the
Transaction at a general meeting. The Transaction was not put to Shareholders ahead of its completion due to the urgency with which the
Company needed to raise cash from the sale and instead, the Company is seeking retrospective consent from the Shareholders at the General
Meeting.
As a consequence of the financial position of the Company, its net assets have fallen to half or less of its called up share capital. As
a result, under section 142 of the Act, the Company is required to convene a general meeting in order to consider the Company's financial
position and what steps, if any, should be taken to address the situation.
Trading in the Company's shares was suspended on 30 September 2008 pending publication of the Company's Report and Accounts for the year
ended 31 March 2008. The Directors anticipate that they will be in a position to announce the year end results and the interim results for
30 September 2008 in the first quarter of 2009 whereupon the suspension should be lifted.
Background to and reasons for the disposal of Solcara
The Board announced on 25 June 2008 that it was undertaking a restructuring of the business. It had been the Board's intention that the
restructuring would involve the disposal of the non-core activities and that it would focus on the business of Solcara. However, it became
clear that in the current economic climate the Company would not be able to achieve the level of refinancing necessary to ensure Solcara's
long term success. The Company was also facing pressing working capital requirements such that without the sale of Solcara the Company would
not have been able to continue trading. It was therefore decided to sell Solcara to Access Intelligence for a total cash consideration of
�750,000 which provided the Company with cash of approximately �720,000 after costs.
As at 31 March 2008 Solcara had negative net assets of approximately �460,000, including loans of �184,778, which have remained with
Solcara following completion of the Transaction. In the year to 31 March 2008 Solcara achieved profit before tax of �177,620. The terms of
the Sale Agreement are summarised below. The Directors, with the exception of Ray Jackson, who was involved in the Transaction as a related
party, consulted with Charles Stanley and considered that the terms of the Transaction were fair and reasonable insofar as the Shareholders
are concerned.
Under the AIM Rules the disposal of Solcara constituted a fundamental change of business and therefore required shareholder approval.
Given the financial situation of the Company, the disposal of Solcara was not put to a Shareholder vote at the time but it is to be put
before the Shareholders at the forthcoming General Meeting. The Company has received irrevocable undertakings to vote in favour of the
resolution approving the Transaction (Resolution 1) from Shareholders representing 53.0% of the issued share capital of the Company.
Following the Transaction the business of ArgentVive comprises the Waterside Book Services, Retail8 and retailOn. The Board continues to
consider restructuring options for these remaining activities, including the possibility of either disposing or closing them.
The proceeds from the disposal of Solcara have been used to facilitate the Company's restructuring plans and for general working capital
purposes. However, shareholders should be aware that the Board is continuing to explore further restructuring alternatives that will be
necessary to secure the Company's future.
Summary of the acquisition agreement
On 4 November 2008, the Company entered into the Sale Agreement with Access Intelligence pursuant to which Access Intelligence purchased
the entire issued share capital of Solcara for the sum of �750,000, which was paid in cash on completion of the Transaction. Under the Sale
Agreement, the Company has given standard warranties to Access Intelligence in respect of Solcara. No breach of a warranty claim can be made
after 4 November 2010 in respect of the warranties (other than the tax warranties), and unless the amount of that claim together with all
other single claims exceeds �25,000. In respect of the tax warranties, no breach of warranty claim can be made after 4 November 2015 and
such tax warranties along with limitations relating thereto are set out in a schedule to the Sale Agreement. The maximum aggregate liability
of the Company in respect of all claims is limited to an amount equal to the price paid for Solcara, which is �750,000.
As part of the Sale Agreement, Ray Jackson resigned from his position as Managing Director of ArgentVive and has taken up the position
of Non-Executive Director with Access Intelligence.
Section 142 of the Companies Act 1985
As the net assets of the Company have fallen to half or less of its called up share capital the Company is required under section 142 of
the Act to convene a general meeting for the purposes of considering whether any, and if so, what steps should be taken to deal with the
situation.
The above matter, and the general financial position and prospects of the Company, will therefore be considered at the forthcoming
General Meeting. One of the steps that the Board is proposing to help address the situation is to substantially increase the authority of
the Directors to allot shares on a non pre-emptive basis to enable the Board to raise equity finance should it be able to find an investor.
These authorities are described in more detail in the next section.
Capital Reorganisation
When the Company's shares were suspended from trading on 30 September 2008 the closing mid-market price was 1.375 pence which is below
the 10 pence nominal value of each Ordinary Share in the Company. Under company legislation it is not possible for a company to allot new
shares at less than their nominal value and, accordingly, the Company needs to reduce the nominal value of its shares if it is to have the
ability to undertake an equity fundraising, should it wish to do so. A resolution is therefore being proposed at the General Meeting to 1)
sub-divide each issued Ordinary Share of 10 pence each into one New Ordinary Share of 0.1p each and one Deferred Share of 9.9p each, and 2)
to divide each authorised but unissued Ordinary Share of 10 pence each into 100 New Ordinary Shares of 0.1 pence each.
This Capital Reorganisation will not affect the inherent value of your Ordinary Shares as the number of issued Ordinary Shares in
existence both before and after the Capital Reorganisation will remain the same. Existing share certificates in respect of Ordinary Shares
will remain valid in respect of the newly denominated New Ordinary Shares and replacement certificates will only be sent out for trades or
transfers effected on or after 12 January 2009.
The Deferred Shares will have no voting rights at general meetings of the Company, no dividend entitlement and a very limited capital
entitlement. The Deferred Shares will not be admitted to trading on AIM and, accordingly, the Deferred Shares will have little or no
economic value and share certificates will not be issued in respect of them. For administrative purposes the Company may register the
Deferred Shares in the name of a nominee for the Shareholders.
It is also proposed to substantially increase the authority of the Directors to allot shares on a non pre-emptive bases, thereby
enabling the Company to undertake an equity fundraising should it need to. Having regard to the last closing mid-market price for the shares
in the Company, the Board is recommending that it be granted authority at the General Meeting to be able to allot non pre-emptively up to
150 million New Ordinary Shares. If all of this authority were to be used, and assuming no existing Shareholders were part of any new equity
fundraising, the existing Shareholders at the date of this announcement would be diluted to an aggregate holding of approximately 21.5% of
the enlarged issued Ordinary Share capital.
Irrevocable undertakings
Irrevocable undertakings to vote in favour of Resolution 1 at the forthcoming General Meeting, when convened, have been given by the
Directors and certain other Shareholders in respect of 21,843,794 Ordinary Shares representing approximately 53.0% of the Company's issued
share capital.
General Meeting
A General Meeting at which the Resolutions will be proposed has been convened for Shareholders at 10.00 a.m. on 9 January 2009 at the
offices of Charles Stanley Securities, 25 Luke Street, London EC2A 4AR. Details of the Resolutions are set out in the circular posted to
Shareholders.
Recommendation
The Board believes, having consulted with Charles Stanley, that the terms of the Transaction were and are fair and reasonable as far as
Shareholders are concerned.
Accordingly, the Directors recommend that Shareholders vote in favour of the Resolutions relating to the Proposals as they intend to do
in respect of their own beneficial holdings of Ordinary Shares, representing approximately 1 per cent. of the existing share capital of the
Company.
Enquiries:
ArgentVive plc Tel: 01932 569912
Kevin Fleming
Charles Stanley Securities Tel: 020 7149 6000
Nominated Adviser
Russell Cook / Carl Holmes
DEFINITIONS
The following definitions apply throughout this announcement unless the context requires otherwise:
"Access Intelligence" Access Intelligence plc
"Act" the Companies Act 1985, as amended
"AIM" the AIM market regulated by the London Stock
Exchange
"AIM Rules" the rules, published by the London Stock
Exchange governing the admission to and
operation of companies admitted to AIM
"Capital Reorganisation" the division of the current 41,191,307 Ordinary
Shares with a nominal value of 10 pence into
41,191,307 New Ordinary Shares with a nominal
value of 0.1 pence each and 41,191,307 Deferred
Shares with a nominal value of 9.9 pence each
and the division of each authorised but unissued
Ordinary Shares with a nominal value of 10 pence
each into 100 New Ordinary Shares with a nominal
value of 0.1 pence each
"Charles Stanley" Charles Stanley Securities, a division of
Charles Stanley & Co. Limited, the Company's
nominated adviser for the purposes of the AIM
Rules
"Company" or "ArgentVive" ArgentVive plc
"Deferred Shares"` the deferred shares of 9.9 pence each in the
capital of the Company created pursuant to the
Capital Reorganisation
"Directors" or "Board" the directors of the Company as at the date of
this announcement
"Form of Proxy" the form of proxy for use at the General Meeting
"FSA" the Financial Services Authority
"General Meeting" the General Meeting of the Company convened by
the Notice of General Meeting
"London Stock Exchange" London Stock Exchange plc
"Notice of General Meeting" the notice of the General Meeting as set out at
the end of the circular posted to Shareholders
"New Ordinary Shares" the new ordinary shares of 0.1 pence each in the
capital of the Company created pursuant to the
Capital Reorganisation
"Ordinary Shares" ordinary shares having a nominal value of 10p
each in the capital of the Company prior to the
Capital Reorganisation
"Proposals" the proposals set out in this announcement
"Resolutions" the resolutions set out in the Notice of General
Meeting
"Sale Agreement" the share sale agreement entered into by the
Company and Access Intelligence in respect of
the sale of Solcara to Access Intelligence
"Shareholders" holders of Ordinary Shares
"Solcara" Solcara Limited
"Transaction" the sale of Solcara to Access Intelligence as
further described in the circular posted to
Shareholders
This information is provided by RNS
The company news service from the London Stock Exchange
END
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