TIDMCAB
RNS Number : 7214S
Cabot Energy PLC
08 November 2019
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014. With the publication of this announcement, this
information is now considered to be in the public domain.
8 November 2019
Cabot Energy Plc
("Cabot", the "Group" or the "Company")
Posting of Circular
Subscription of 28,615,862 new Ordinary Shares to raise
US$0.7m
Notice of Extraordinary General Meeting
Further to the announcement on 31 October, Cabot Energy Plc
(AIM: CAB), the AIM quoted oil and gas company focussed on creating
predictable production growth in Canada, announces that it will
later today be posting a circular to shareholders (the "Circular")
containing the details of the proposed cancellation of admission of
its Ordinary Shares to trading on AIM (the "Cancellation"),
scheduled to occur on Tuesday 3 December 2019.
The Circular will also be made available on the Company's
website at:
https://www.cabot-energy.com/investors/documents-circulars/
Background to the Cancellation
As announced by the Company on 29 October 2019, the Board has
concluded that it is in the best interests of the Company and its
Shareholders to cancel the admission of the Company's Ordinary
Shares to trading on AIM. Pursuant to Rule 41 of the AIM Rules, the
Company (through its nominated adviser, SP Angel) has notified the
London Stock Exchange of the date of the proposed Cancellation.
The Cancellation is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75 per cent. of the votes
cast by Shareholders (whether present in person or by proxy) at the
Extraordinary General Meeting, notice of which is set out in the
Circular.
The Directors have also concluded that it is in the best
interests of the Company and its Shareholders for the Company to
re-register as a private company and adopt the New Articles
following the Cancellation. The Re-registration and adoption of New
Articles are conditional upon the Cancellation becoming effective
and the approval of not less than 75 per cent. of the votes cast by
Shareholders (whether present in person or by proxy) at the
Extraordinary General Meeting.
Details of the Subscription
As announced by the Company on 19 September 2019, Cabot has
entered into an agreement with High Power Petroleum ("H2P") to
raise US$350,000 gross (GBP280,000), before expenses, by way of a
subscription of new Ordinary Shares pursuant to the Tranche 1
Subscription. The issue price of the Tranche 1 Subscription Shares
was to be fixed at the issue price of new Ordinary Shares to be
offered pursuant to a proposed open offer to Shareholders. As
announced on 29 October 2019, the Company will not now be
proceeding with an open offer, as the Company believes that the
open offer transaction fees and costs will outweigh the expected
open offer proceeds. Accordingly, the Company and H2P have agreed
that the Subscription Price for the Tranche 1 Subscription shall be
1.929 pence per share, being the Company's average closing price
between 29 October 2019 and 6 November 2019 (inclusive) and
accordingly 14,515,292 Tranche 1 Subscription Shares shall be
issued to H2P. Whilst the subscription proceeds for the Tranche 1
Subscription have been received in full, H2P has not yet been
issued with the Tranche 1 Subscription Shares as the issue of these
shares is conditional upon shareholder approval at the
Extraordinary General Meeting in order to authorise the Directors
to issue such shares.
H2P has also now agreed to subscribe for an additional tranche
of Ordinary Shares to the value of US$350,000 gross (GBP272,000),
before expenses, by way of a subscription of 14,100,570 new
Ordinary Shares at the Subscription Price. The issue of the Tranche
2 Subscription Shares to H2P pursuant to the Tranche 2 Subscription
is also conditional upon shareholder approval at the Extraordinary
General Meeting.
Use of proceeds
The proceeds of the Subscription will allow the Company to
proceed with its Summer Work Programme, as first announced by the
Company on 2 September 2019, and will provide the Company with
sufficient liquidity until early December 2019, at which time the
Company intends to approach Shareholders again for further funding.
H2P has confirmed to the Board its intention to provide the Company
with the financial support needed to complete the Summer Work
Programme and as required to secure the C$5 million asset-based
term loan facility (the "Loan") from a Calgary-based private energy
lender (the "Lender"). The Loan, which remains subject to the
satisfaction of customary conditions precedent, including the
completion of the Lender's due diligence, will be used to commence
a Winter Work Programme, as first announced by the Company on 2
September 2019. It is anticipated that the first Loan advance of
C$2.5 million will now be drawn down during January 2020 and the
second advance of C$2.5 million is likely to be drawn down during
March 2020. Whilst this represents a short delay in drawing down
the Loan, reflecting the additional time needed to plan a low risk
and cost-effective Winter Work Programme, the Board remains
reasonably confident that the debt facility can be secured and is
working closely with the Lender to this end.
As at the date of this Circular, H2P has an interest in a total
of 33,103,569 Ordinary Shares representing approximately 72.21 per
cent of the total voting rights of the Company. Following
completion of the Subscription H2P will have a resultant interest
in a total of 61,719,431 Ordinary Shares representing approximately
82.89 per cent of the Ordinary Shares in issue immediately
following the Admission of the Subscription Shares.
Related Party Transaction
H2P is a substantial shareholder in the Company and therefore
the Subscription constitutes a related party transaction in
accordance with AIM Rule 13. The independent Non-Executive
Directors for these purposes, having consulted with the Company's
Nominated Adviser, consider the terms of the Subscription by H2P,
as a related party, to be fair and reasonable insofar as all of
Cabot's shareholders are concerned.
Admission of the Subscription Shares
The Company has applied for the Subscription Shares to be
admitted to trading on AIM. These shares will rank pari passu with
existing ordinary shares in all respects. Subject to shareholder
approval at the Extraordinary General Meeting, it is anticipated
that Admission will become effective and dealings in the
Subscription Shares will commence at 8.00 a.m. on 26 November
2019.
Notice of Extraordinary General Meeting
The Company is therefore seeking Shareholders' approval of the
Cancellation and the Re-registration, as well as the issue of the
Subscription Shares, at the Extraordinary General Meeting which has
been convened for 11:00 a.m. on 25 November 2019 at the offices of
Fieldfisher LLP, Riverbank House, 2 Swan Lane, London EC4R 3TT.
A copy of the expected timetable and letter from James Dewar,
Interim Non-Executive Chairman of Cabot, is set out below.
Unless otherwise indicated, all defined terms in this
announcement shall have the same meaning as described in the
Circular.
-Ends-
Enquiries:
Cabot Energy Plc +44 (0)20 7469 2900
James Dewar, Interim Non-Executive
Chairman
Scott Aitken, CEO
Petro Mychalkiw, CFO
SP Angel Corporate Finance LLP +44 (0)20 3470 0470
Nominated Adviser and Broker
David Hignell, Richard Hail, Richard
Redmayne
Luther Pendragon +44 (0)20 7618 9100
Financial PR
Harry Chathli, Alexis Gore, Joe Quinlan
Note to Editors:
Cabot Energy Plc (AIM: CAB) is an oil and gas company focussed
on creating predictable production growth in Canada. Comprehensive
information on Cabot and its oil and gas operations, including
press releases, annual reports and interim reports are available
from Cabot's website: www.cabot-energy.com
EXPECTED TIMETABLE OF PRINCIPAL EVENTS (1) (2)
Notice provided to the London Stock Exchange 29 October 2019
to notify it of the proposed Cancellation
Publication and posting of the Circular 8 November 2019
--------------------------
Latest time and date for receipt of online 11.00 a.m. on 21 November
proxy votes or completed Forms of Proxy 2019
in respect of the Extraordinary General
Meeting
--------------------------
Extraordinary General Meeting 11.00 a.m. on 25 November
2019
--------------------------
Expected date of Admission and dealings 8.00 a.m. on 26 November
in the Subscription Shares to commence 2019
on AIM
--------------------------
Expected last day of dealings in Ordinary 2 December 2019
Shares on AIM
--------------------------
Expected date of Cancellation(3) 7.00 a.m. on 3 December
2019
--------------------------
Expected date of Re-registration(4) By 30 December 2019
--------------------------
Notes:
(1) All of the times referred to in this Circular refer to London time, unless otherwise stated.
(2) Each of the times and dates in the above timetable is
subject to change. If any of the above times and/or dates change,
the revised times and dates will be notified to Shareholders by an
announcement through a Regulatory Information Service and/or the
Company's website.
(3) The Cancellation requires the approval of not less than 75%
of the votes cast by Shareholders at the Extraordinary General
Meeting.
(4) The Re-registration requires the approval of not less than
75% of the votes cast by Shareholders at the Extraordinary General
Meeting.
Dear Shareholder,
Proposed cancellation of admission of Ordinary Shares to trading
on AIM
Re-registration as a private limited company
Adoption of New Articles
Subscription of 28,615,862 new Ordinary Shares to raise US$0.7
million
and
Notice of Extraordinary General Meeting
1. Introduction
As announced by the Company on 29 October 2019, the Board has
concluded that it is in the best interests of the Company and its
Shareholders to cancel the admission of the Company's Ordinary
Shares to trading on AIM. Pursuant to Rule 41 of the AIM Rules, the
Company (through its nominated adviser, SP Angel) has notified the
London Stock Exchange of the date of the proposed Cancellation.
The Cancellation is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75 per cent. of the votes
cast by Shareholders (whether present in person or by proxy) at the
Extraordinary General Meeting, notice of which is set out in Part
IV of this Circular.
The Directors have also concluded that it is in the best
interests of the Company and its Shareholders for the Company to
re-register as a private company and adopt the New Articles
following the Cancellation. The Re-registration and adoption of New
Articles are conditional upon the Cancellation becoming effective
and the approval of not less than 75 per cent. of the votes cast by
Shareholders (whether present in person or by proxy) at the
Extraordinary General Meeting.
The Company is therefore seeking Shareholders' approval of the
Cancellation and the Re-registration, as well as the issue of the
Subscription Shares, at the Extraordinary General Meeting which has
been convened for 11:00 a.m. on 25 November 2019 at the offices of
Fieldfisher LLP, Riverbank House, 2 Swan Lane, London EC4R 3TT.
The purpose of this Circular is to:
(a) provide you with the details of the Subscription and why the
Directors unanimously consider the Subscription to be in the best
interests of the Company and its Shareholders as a whole;
(b) provide you with the information on the background to and
reasons for the Cancellation and the Re-registration, explain the
consequences of the Cancellation and the Re-registration and why
the Directors unanimously consider the Cancellation and the
Re-registration to be in the best interests of the Company and its
Shareholders as a whole; and
(c) seek Shareholders' approval for the Resolutions.
The Notice of the Extraordinary General Meeting is set out in
Part IV of this Circular.
2. Details of the Subscription
As announced by the Company on 19 September 2019, the Company
has entered into an agreement with H2P to raise US$350,000 gross
(GBP280,000), before expenses, by way of a subscription of new
Ordinary Shares pursuant to the Tranche 1 Subscription. The issue
price of the Tranche 1 Subscription Shares was to be fixed at the
issue price of new Ordinary Shares to be offered pursuant to a
proposed open offer to Shareholders. As announced on 29 October
2019, the Company will not now be proceeding with an open offer, as
the Company believes that the open offer transaction fees and costs
will outweigh the expected open offer proceeds. Accordingly, the
Company and H2P have agreed that the Subscription Price for the
Tranche 1 Subscription shall be 1.929 pence per share, being the
Company's average closing price between 29 October 2019 and 6
November 2019 (inclusive) and accordingly 14,515,292 Tranche 1
Subscription Shares shall be issued to H2P. Whilst the subscription
proceeds for the Tranche 1 Subscription have been received in full,
H2P has not yet been issued with the Tranche 1 Subscription Shares
as the issue of these shares is conditional upon Shareholders
passing Resolutions 3 and 4 at the Extraordinary General Meeting in
order to authorise the Directors to issue such shares.
H2P has also now agreed to subscribe for an additional tranche
of Ordinary Shares to the value of US$350,000 gross (GBP272,000),
before expenses, by way of a subscription of 14,100,570 new
Ordinary Shares at the Subscription Price. The issue of the Trance
2 Subscription Shares to H2P pursuant to the Tranche 2 Subscription
is also conditional upon Shareholders passing Resolutions 3 and 4
at the Extraordinary General Meeting.
The proceeds of the Subscription will allow the Company to
proceed with its Summer Work Programme, as first announced by the
Company on 2 September 2019, and will provide the Company with
sufficient liquidity until early December 2019, at which time the
Company intends to approach Shareholders again for further funding.
H2P has confirmed to the Board its intention to provide the Company
with the financial support needed to complete the Summer Work
Programme and as required to secure the C$5 million asset-based
term loan facility (the "Loan") from a Calgary-based private energy
lender (the "Lender"). The Loan, which remains subject to the
satisfaction of customary conditions precedent, including the
completion of the Lender's due diligence, will be used to commence
a Winter Work Programme, as first announced by the Company on 2
September 2019. It is anticipated that the first Loan advance of
C$2.5 million will now be drawn down during January 2020 and the
second advance of C$2.5 million is likely to be drawn down during
March 2020. Whilst this represents a short delay in drawing down
the Loan, reflecting the additional time needed to plan a low risk
and cost-effective Winter Work Programme, the Board remains
reasonably confident that the debt facility can be secured and is
working closely with the Lender to this end.
As at the date of this Circular, H2P has an interest in a total
of 33,103,569 Ordinary Shares representing approximately 72.21 per
cent of the total voting rights of the Company. Following
completion of the Subscription H2P will have a resultant interest
in a total of 61,719,431 Ordinary Shares representing approximately
82.89 per cent of the Ordinary Shares in issue immediately
following the Admission of the Subscription Shares.
The Company has applied for the Subscription Shares to be
admitted to trading on AIM. If Resolutions 3 and 4 are passed at
the Extraordinary General Meeting, it is anticipated that Admission
will become effective and dealings in the Subscription Shares will
commence at 8.00 a.m. on 26 November 2019.
3. Background and reasons for Cancellation
As announced by the Company on 29 October 2019, the Directors
have conducted a careful review of the benefits and drawbacks to
the Company and the Shareholders in retaining the Company's
quotation on AIM and believe that the Cancellation is in the best
interests of the Company and the Shareholders as a whole.
In reaching this conclusion, the Board has consulted certain
Shareholders and has considered the following key factors, amongst
others:
(a) the Board believes that the Company is unlikely to attract
material investment from third party equity investors (i.e.
investors with no current connection to the Company) in these
current market conditions. The Board believes this is largely due
to historical challenges faced by the Company as well as a drop in
investment "appetite" in oil and gas companies globally,
specifically fossil fuels;
(b) in order to put the Company in a position whereby providers
of finance may be more inclined to advance funds, the Board
believes that a material reduction in corporate overheads is
required. Hence the Board is of the view that for the foreseeable
future, the considerable cost, management time and the legal and
regulatory obligations associated with maintaining the Company's
admission to trading on AIM are materially disproportionate to the
benefits to the Company. The Company has estimated that a delisting
could save Cabot up to approximately US$1 million per annum in
overhead and transaction costs. This is significant for all
Shareholders given the Company's current market capitalisation and
the Board believes that these funds could be better invested in the
workover programmes and production improvements that are the basis
for future growth;
(c) the current shareholding structure of Cabot is such that the
Company has a limited free float and liquidity in the Ordinary
Shares, with the consequence that the AIM quotation does not offer
investors the opportunity to trade in meaningful volumes or with
frequency within an active market;
(d) the Board also believes that a delisting could allow for a
period of restructuring, cost reduction and general repositioning
of Cabot that would benefit all shareholders in the longer term.
Following this period of restructuring, the Board could be in a
better position to consider re-listing the Company in the future,
in London or elsewhere;
(e) even after the Cancellation, the Board is committed to
continued corporate governance procedures for the protection of all
Shareholders and investors; and
(f) the Board believes that it can make satisfactory
arrangements for Shareholders to freely transfer their shares
periodically via an auction-based secondary market trading facility
(see paragraph 8 of this Part for further details).
Following careful consideration, the Board has concluded that it
is in the best interests of the Company and Shareholders to seek
the proposed Cancellation at the earliest opportunity in line with
AIM Rule 41.
4. Process for, and principal effects of, the Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Ordinary Shares in the event that the
Cancellation is approved and becomes effective. Such Shareholders
should consider selling their interests in the market prior to the
Cancellation becoming effective.
Under the AIM Rules, the Company is required to give at least 20
clear Business Days' notice of Cancellation. Additionally,
Cancellation will not take effect until at least five clear
Business Days have passed following the passing of the Cancellation
Resolution.
If the Cancellation Resolution is passed at the Extraordinary
General Meeting, it is proposed that the last day of trading in
Ordinary Shares on AIM will be 2 December 2019 and that the
Cancellation will take effect at 7.00 a.m. 3 December 2019.
The Independent Directors believe that the proposed Cancellation
is in the best interests of the Company and all Shareholders. As
such, the Independent Directors in their sole discretion, have
waived the restriction imposed by the Relationship Agreement
between Cabot and the Company's majority shareholder High Power
Petroleum LLC ("H2P") to allow H2P to vote on the Cancellation at
the Extraordinary General Meeting.
Should the Cancellation Resolution not be passed by
Shareholders, it is the strong belief of the Independent Directors
that the Company will not be able to rely upon the continued
financial support of H2P. As described in paragraph 3 of Part I,
the Board believes that the Company is unlikely to attract material
investment from third party equity investors in these current
market conditions. On that basis, should the Cancellation
Resolution not be passed by Shareholders the Company may not be
able to continue operations and trading in the Ordinary Shares
would be at risk of suspension.
The principal effects of the Cancellation will be that:
(a) there will no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares on AIM (or any other
recognised market or trading exchange);
(b) however, the Ordinary Shares will remain freely transferable
and an auction-based secondary market trading facility is intended
to be set up through Asset Match Limited for a period following
Cancellation (see paragraph 8 below for further details).
Notwithstanding this, the Ordinary Shares may be more difficult to
sell compared to shares of companies traded on AIM;
(c) it may be more difficult for Shareholders to determine the
market value of their investment in the Company at any given
time;
(d) the Company will no longer be subject to the AIM Rules and,
accordingly, Shareholders will no longer be afforded the
protections given by the AIM Rules. In particular, the Company will
not be bound to:
-- make any public announcements of material events, or to announce interim or final results;
-- comply with any of the corporate governance practices applicable to AIM companies;
-- announce substantial transactions and related party transactions; or
-- comply with the requirement to obtain shareholder approval
for reverse takeovers and fundamental changes in the Company's
business;
(e) the Company will cease to retain a nominated adviser and broker; and
(f) the Cancellation might have either positive or negative
taxation consequences for Shareholders (Shareholders who are in any
doubt about their tax position should consult their own
professional independent adviser immediately).
The above considerations are not exhaustive, and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
The Company currently intends that it will continue to provide
certain facilities and services to Shareholders that they currently
enjoy as shareholders of an AIM company following the proposed
Cancellation. It is intended that the Company will continue to:
(a) communicate information about the Company (including annual
accounts) to its Shareholders, as required by law; and
(b) maintain its website, https://www.cabot-energy.com and to
post updates on the website from time to time, although
Shareholders should be aware that there will be no obligation on
the Company to include all of the information required under AIM
Rule 26 or to update the website as required by the AIM Rules.
5. Re-registration
Following the proposed Cancellation, the Board believes that the
requirements and associated costs of the Company maintaining its
public company status will be difficult to justify and that the
Company will benefit from the more flexible requirements and lower
overhead costs associated with private limited company status. It
is therefore proposed to re-register the Company as a private
limited company.
In connection with the Re-registration, it is proposed that the
New Articles be adopted to reflect the change in the Company's
status to a private limited company. The principal effects of the
adoption of the New Articles on the rights and obligations of
Shareholders and the Company are summarised in Part II of this
Circular.
Subject to and conditional upon the Cancellation and the passing
of the Re-registration Resolution, application will be made to the
Registrar of Companies for the Company to be re-registered as a
private limited company. Re-registration will take effect when the
Registrar of Companies issues a certificate of incorporation on
Re-registration. The Registrar of Companies will not issue the
certificate of incorporation on Re-registration until the Registrar
of Companies is satisfied that no valid application can be made to
cancel the resolution to re-register as a private limited
company.
If the Cancellation Resolution and the Re-registration
Resolution are passed at the Extraordinary General Meeting and the
Registrar of Companies issues a certificate of incorporation on
Re-registration, it is anticipated that the Re-registration will
become effective by 30 December 2019.
6. Process for Cancellation and Re-registration
Under the AIM Rules, it is a requirement that Cancellation must
be approved by not less than 75 per cent. of votes cast by
shareholders at a general meeting. Accordingly, the Notice of
Extraordinary General Meeting set out in Part IV of this Circular
contains a special resolution (Resolution number 1) to approve the
Cancellation.
Furthermore, Rule 41 of the AIM Rules requires any AIM company
that wishes the London Stock Exchange to cancel the admission of
its shares to trading on AIM to notify shareholders and to
separately inform the London Stock Exchange of its preferred
cancellation date at least 20 Business Days prior to such date. In
accordance with AIM Rule 41, the Directors (through the Company's
nominated adviser, SP Angel) have notified the London Stock
Exchange of the Company's intention, subject to the Cancellation
Resolution being passed at the Extraordinary General Meeting, to
cancel the Company's admission of the Ordinary Shares to trading on
AIM on 3 December 2019.
Under the Companies Act 2006, it is a requirement that
re-registration and adoption of new articles of association must be
approved by not less than 75 per cent. of votes cast by
shareholders at a general meeting. Accordingly, the Notice set out
in Part IV of this Circular contains a special resolution
(Resolution number 2) to approve the Re-registration and adoption
of the New Articles.
7. Transactions in the Ordinary Shares post the proposed Cancellation
Shareholders should note that they are able to trade in the
Ordinary Shares on AIM prior to the Cancellation.
The Board is aware that the proposed Cancellation, should it be
approved by Shareholders at the Extraordinary General Meeting,
would make it more difficult to buy and sell Ordinary Shares in the
Company following the Cancellation. Therefore, the Company has
arranged a secondary market trading facility to assist Shareholders
to trade in the Ordinary Shares, and this will be put in place from
the day of Cancellation.
8. Secondary market trading facility
The secondary market trading facility will be provided by Asset
Match and will be reviewed on an annual basis. This facility will
allow existing shareholders of the Company, and new investors, to
trade Ordinary Shares by matching buyers and sellers through
periodic auctions. Asset Match operates an open auction system
where volumes of bids and offers at different prices are displayed
on its website together with the closing date of the auction. At
the end of each auction period Asset Match passes this information
through a non-discretionary algorithm that determines a "fair"
share price based on supply and demand and allocates transactions
accordingly. Bids and offers may be made and withdrawn at any time
before the closing date of each auction.
Shareholders will continue to be able to hold their shares in
uncertificated form (i.e. in CREST) and should check with their
existing stockbroker whether they are willing or able to trade in
unquoted shares. Shareholders wishing to trade shares through Asset
Match must do so through a stockbroker and a comprehensive list of
stockbrokers who have signed up to access the Asset Match platform
is available on request.
Should the Cancellation become effective the Company will put in
place the secondary market trading facility and details will be
made available to Shareholders on the Company's website at
https://www.cabot-energy.com and directly by letter or e-mail
(where appropriate).
Further information about the secondary market trading facility,
including indicative prices and a history of transactions, will be
available on the Asset Match website which is located at
www.assetmatch.com.
Should Cancellation proceed, Shareholders may contact Asset
Match in relation to any queries regarding trading via the
secondary market trading facility by emailing
dealing@assetmatch.com.
9. Takeover Code
Notwithstanding the Cancellation and Re-registration, under the
Takeover Code the Company will continue to be subject to its terms
for a period of 10 years following the Cancellation (subject to the
Re-registration occurring). However, the Takeover Code may cease to
apply earlier, if a majority of the Directors cease to be resident
in the UK, Channel Islands or Isle of Man.
Under Rule 9 of the Takeover Code, when any person or group of
persons acting in concert, individually or collectively, are
interested in shares which in aggregate carry not less than 30 per
cent. of the voting rights of a company but do not hold shares
carrying more than 50 per cent. of the voting rights of a company
and such person or any person acting in concert with him acquires
an interest in any other shares, which increases the percentage of
the shares carrying voting rights in which he is interested, then
that person or group of persons is normally required by the Panel
to make a general offer in cash to all shareholders of that company
at the highest price paid by them for any interest in shares in
that company during the previous 12 months. Rule 9 of the Takeover
Code further provides that where any person, together with persons
acting in concert with him, holds over 50 per cent. of the voting
rights of a company to which the Takeover Code applies and acquires
additional shares which carry voting rights, then that person will
not generally be required to make a general offer to the other
shareholders to acquire the balance of the shares not held by that
person or his concert parties. At the date of this Circular, H2P
holds an interest in 33,103,569 Ordinary Shares representing 72.2
per cent of the existing issued Ordinary Shares and voting rights
in the Company. Accordingly, H2P is able to acquire further
interests in Ordinary Shares without incurring any obligation under
Rule 9 to make a general offer.
Following the expiry of the 10 year period from the date of the
Cancellation (subject to the Re-registration occurring), or such
other date on which the Takeover Code ceases to apply to the
Company, the Company will no longer be subject to the provisions of
the Takeover Code. A summary of the protections afforded to
Shareholders by the Takeover Code which will be lost is set out in
Part III of this Circular.
10. Relationship Agreement
Once the Cancellation becomes effective, a number of the
undertakings given by H2P in the Relationship Agreement will cease
to be relevant. Further, from the date of the Cancellation, the
Company will no longer be required to have a nominated adviser and
therefore the undertakings given in favour of SP Angel will cease
to be of any effect. The Board has therefore concluded that the
interests of the Company's minority Shareholders are better served
by terminating the Relationship Agreement effective from the date
of the Cancellation and instead including in the New Articles
provisions which reserve certain matters for the approval of a
majority of Shareholders holding 75% of the voting rights attaching
to the Ordinary Shares. These reserved matters effectively address
undertakings contained in the Relationship Agreement concerning the
approval of the amendment of the Company's articles of association,
transactions between the Company and H2P (and other related
parties) and the appointment and removal of directors. Further
details of the matters to be reserved to Shareholders in the New
Articles can be found in Part II of this Circular.
Shareholders should also note that upon termination of the
Relationship Agreement H2P will cease to have the benefit of
provisions which entitle it to appoint two directors to the board
of directors of the Company and pre-emption rights on future
fundraisings.
11. Related Party Transaction
H2P is a substantial shareholder of the Company and therefore
regarded as a related party as defined by the AIM Rules. The
subscription for new Ordinary Shares by H2P pursuant to the terms
of the Subscription is therefore deemed to be a related party
transaction for the purposes of Rule 13 of the AIM Rules.
The Independent Directors, being James Dewar, Rachel Maguire and
Paul Lafferty consider, having consulted with the Company's
Nominated Adviser, that the terms of the Subscription by H2P are
fair and reasonable insofar as Shareholders are concerned.
12. Application for Admission
Application will be made to the London Stock Exchange for the
Subscription Shares to be admitted to trading on AIM conditional on
Resolutions 3 and 4 being passed at the Extraordinary General
Meeting. The Subscription Shares are expected to be admitted to AIM
and commence trading at 8.00 a.m. on 26 November 2019. Immediately
following Admission and the issue of the Subscription Shares the
Company will have 74,460,984 Ordinary Shares in issue.
The Subscription Shares will rank pari passu in all respects
with the existing Ordinary Shares including the right to receive
all dividends and other distributions declared, paid or made after
the date of issue of the Subscription Shares.
If the Cancellation Resolution is passed at the Extraordinary
General Meeting, it is proposed that the last day of trading in
Ordinary Shares on AIM will be 2 December 2019 and that the
Cancellation will take effect at 7.00 a.m. 3 December 2019.
13. Extraordinary General Meeting
The Extraordinary General Meeting will be held at the offices of
Fieldfisher LLP, Riverbank House, 2 Swan Lane, London EC4R 3TT
commencing at 11.00 a.m. on 25 November 2019. The resolutions to be
proposed at the Extraordinary General Meeting are as follows:
(a) special resolution to approve the Cancellation (Resolution 1);
(b) special resolution to approve the Re-registration and
adoption of the New Articles (Resolution 2), subject to and
conditional upon the Cancellation becoming effective;
(c) ordinary resolution to grant the Directors authority to
allot Ordinary Shares in connection with the Subscription and
otherwise up to an aggregate nominal amount of GBP372,304.92 (being
equal to approximately 50% of the nominal value of the enlarged
issued share capital of the Company following the issue of the
Subscription Shares) (Resolution 3); and
(d) special resolution to disapply statutory pre-emption rights
to empower the Directors to allot equity securities pursuant to the
power conferred by Resolution 3 on a non-pre-emptive basis
(Resolution 4). Resolution 4 will be subject to and conditional
upon the passing of Resolution 3.
14. Action to be taken
A Form of Proxy for use in connection with the Extraordinary
General Meeting is enclosed with this Circular. Whether or not you
intend to be present at the Extraordinary General Meeting, you are
requested to complete, sign and return a Form of Proxy in
accordance with the instructions printed thereon so as to be
received by the Registrar, Neville Registrars Limited at Neville
House, Steelpark Road, Halesowen, B62 8HD, not later than 11.00
a.m. on 21 November 2019. Completion and return of a Form of Proxy
will not preclude you from attending and voting in person at the
Extraordinary General Meeting, if you wish to do so.
15. Recommendation
For the reasons noted above, the Directors consider that the
Resolutions to be put to the meeting are in the best interests of
the Company and its Shareholders as a whole and therefore
unanimously recommend that you vote in favour of all of the
Resolutions to be proposed at the Extraordinary General Meeting, as
Paul Lafferty, currently the only Shareholding Director, intends to
do in respect of his own holding of 108,027 Ordinary Shares,
representing approximately 0.24 per cent. of the Company's issued
share capital as of the date of this Circular.
Yours faithfully,
J D Dewar
Interim Non-Executive Chairman
Cabot Energy plc
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLFFLLLELDIIA
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November 08, 2019 02:00 ET (07:00 GMT)
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