TIDMTEL
RNS Number : 8482U
Teliti International Ltd
06 December 2013
6 December 2013
Teliti International Limited
("Teliti" or the "Company")
Disposal of Teliti Datacentres
Posting of Circular
Notice of Extraordinary General Meeting
Cancellation of AIM Admission
Posting of Circular
Further to the announcement dated 24 October 2013, Teliti
announces that the circular to shareholders ("Circular") convening
an Extraordinary General Meeting ("General Meeting") for the
purpose of, inter alia, approving the sale of its entire interest
in Teliti Datacentres Sdn Bhd ("Teliti Datacentres") has been
posted to shareholders and is available on the Company's website
www.teliti.com.
Notice of Extraordinary General Meeting
The General Meeting has been convened for 9.00am on 23 December
2013 at the offices of Daniel Stewart & Company Plc at Becket
House, 36 Old Jewry, London, EC2R 8DD.
Cancellation of AIM Admission
The Directors wish to reduce the administrative work and costs
associated with maintaining the listing on AIM. As the Company's
Ordinary Shares were suspended from trading in June 2013, and given
that the Directors have decided to discontinue their discussions
with new non-executive directors, the Ordinary Shares will remain
suspended. As a result, the Company's AIM admission will be
cancelled on 23 December under AIM Rule 41.
Expected timetable of principal events
Date of this document 5 December 2013
Latest time and date for receipt 9:00 a.m. on 20 December
of Forms of 2013
Instruction for the General Meeting
Latest time and date for receipt 9:00 a.m. on 21 December
of Forms of 2013
Proxy for the General Meeting
Cancellation of AIM Admission 23 December 2013
Date and time of General Meeting 9:00 a.m. on 23 December
2013
Anticipated completion of the 23 December 2013
Sale
Introduction
On 24 October 2013, the Company announced that it had entered
into a conditional agreement with Noah Ventures to sell the entire
issued share capital of Teliti Datacentres for an aggregate cash
consideration of RM15,000,001 (approx GBP2.9 million) to be
received in three tranches. Noah Ventures will also take on the
responsibility for the RM250.465,451 of debt currently owed by
Teliti Datacentres.
The Sale requires the approval of Shareholders under Rule 15 of
the AIM Rules. A notice convening a general meeting to consider the
Resolution is set out at the end of the Circular.
Teliti was admitted to AIM in November 2011 with the intention
of growing the datacentre business. Whilst the Company's two
subsidiaries, Teliti Solutions and Teliti Services, remain
profitable, following the sale of Teliti Datacentres, the Directors
believe that no advantage will accrue from continuing the AIM
admission. In addition, the Directors wish to reduce the
administrative work and costs associated with maintaining the
listing on AIM. As the Company's Ordinary Shares were suspended
from trading in June 2013, and given that the Directors have
decided to discontinue their discussions with new non-executive
directors, the Ordinary Shares will remain suspended. As a result,
the Company's AIM admission will be cancelled on 23 December under
AIM Rule 41.
The purpose of the Circular is to provide Shareholders with a
summary of the principal terms of the Sale, the cancellation of
Admission, and the reasons why the Directors consider that the Sale
is in the best interests of the Company and its Shareholders as a
whole and to convene the General Meeting.
Background to and reasons for the Sale
At the time of the Company's admission to trading on AIM on 3
November 2011, its strategy was for Teliti Datacentres, its
wholly-owned subsidiary, to complete the construction of a
state-of-the-art datacentre in Malaysia. This would enable the
Existing Group to offer co-location hosting services and cloud
based computing services. The latter would draw on the expertise
inherent within its two operating divisions, Teliti Solutions and
Teliti Services, which would also continue to grow their own
business with departments of the Malaysian Government and other
clients.
However, since November 2011, the construction of the datacentre
by Teliti Datacentres has been beset by a number of problems. On 30
January 2012, the Company announced that the delivery and receipt
of key equipment to the datacentre had been delayed until July
2012; on 19 June 2012 it was announced that due to a delay in
payments to the Company's debt provider, the datacentre would not
be operational until the first quarter of 2013; then on 21 December
2012 the Company announced that the datacentre would not become
fully operational until the fourth quarter of 2013.
The delays to the datacentre led to a significant increase in
costs from the interest, which accrued over the elongated
construction time. At the same time, the delay to commencing
operations has adversely impacted the Existing Group's ability to
increase its revenue base. The combined consequence has been to
seriously constrain the Existing Group's cash flows.
Since the release of the Company's half yearly results, the
Company has continued to look for additional investment and has
been in discussions with a number of parties with respect to the
Existing Group's funding requirements. These searches and
discussions have unfortunately failed to realise any new
investment.
As a result, the Directors have agreed to dispose of Teliti
Datacentres (and its liabilities of RM250.465,451) to remove the
constraints on the Company's cash flows and hence preserve the
value of Teliti Solutions and Teliti Services. Noah Ventures, being
associated with the main contractor for the construction of the
datacentre, will conditionally acquire Teliti Datacentres, together
with all its outstanding debt, with a view to completing the
construction work of the datacentre. The consideration for the sale
of Teliti Datacentres will be RM15,000,001. This will enable the
Company to remove the debt burden from the Group and the cash
consideration will be used to increase the working capital of the
remaining operating businesses, Teliti Services and Teliti
Solutions.
It is for this reason that the Company believes the Sale is in
Shareholders' best interests as it will remove the debt burden of
Teliti Datacentres whilst allowing the Company to concentrate on
the profitable and growing subsidiaries of Teliti Services and
Teliti Solutions.
The Sale Agreement
Pursuant to the Sale Agreement, the Company has conditionally
agreed to sell the entire issued share capital of Teliti
Datacentres to Noah Ventures for a total aggregate cash
consideration of RM15,000,001payable in three tranches on the First
Payment Date, Second Payment Date and Third Payment Date. The Sale
Agreement also provides that Teliti Datacentres will repay its
outstanding RM28,000,000 debt to Teliti Computers in three tranches
on the First Payment Date, Second Payment Date and Third Payment
Date. Completion is conditional upon, inter alia, approval by
Shareholders of the Sale at the General Meeting, the Noah Ventures'
receipt of the Affin Bank Berhad Confirmations and the Company
Confirmations.
Assuming the conditions of the Sale Agreement are satisfied,
issuance of the Bank Guarantee is expected to follow within one
month of the General Meeting.
On completion of the Sale, the RM250,465,451 debt held by Teliti
Datacentres shall remain with Teliti Datacentres and the Group
shall have no liability or repayment obligations in respect of the
same.
A summary of the principal terms of the Sale Agreement are set
out in the Circular.
Unaudited Pro Forma Statement of Net Assets for the Group
following the Disposal
Set out below is an unaudited pro forma statement of
consolidated net assets of the Group following the Disposal, which
is based on the unaudited net assets of the Group as at 30
September 2013.
The unaudited pro forma statement of consolidated net assets has
been prepared for illustrative purposes only and, because of its
nature, addresses a hypothetical situation and therefore does not
represent the Group's actual financial position or results
following the Disposal. Its purpose is to illustrate the effect on
the consolidated net assets of Teliti as if the Disposal had taken
place on 30 September 2013.
The pro forma statement of net assets has been prepared on the
basis described in the notes set out below and after making the
adjustments described in those notes.
30 September Adjustments Pro forma
2013 net assets
at 30 September
2013
Note 1 Note 2 Note 3
RM' RM' RM' RM'
millions millions millions millions
ASSETS
Non-current assets
Property, plant and equipment 253.3 (253.3) - -
Development costs 5.3 (5.3) - -
Deferred tax assets 0.3 (0.3) - -
Fixed deposits with licensed
banks 0.5 (0.5) - -
Total non-current assets 259.4 (259.4) - -
------------------------------ ------------ -------------- --------- ----------------
Current assets
Trade and other receivables 0.4 (0.4) - -
Amounts from ultimate
holding company 20.5 - - 20.5
Cash and cash equivalents 0.1 - 14.4 14.5
------------------------------ ------------ -------------- --------- ----------------
Total current assets 21.0 (0.4) 14.4 35.0
------------------------------ ------------ -------------- --------- ----------------
TOTAL ASSETS 280.4 (259.8) 14.4 35.0
------------------------------ ------------ -------------- --------- ----------------
LIABILITIES
Non-current liabilities
Borrowings (96.3) 96.3 - -
Finance lease payable (1.0) 1.0 - -
------------------------------ ------------ -------------- --------- ----------------
Total non-current liabilities (97.3) 97.3 - -
------------------------------ ------------ -------------- --------- ----------------
Current liabilities
Trade and other payables (116.7) 114.8 - (1.9)
Amount due to ultimate
holding company (32.1) 32.1 - -
Borrowings (10.7) 10.7 - -
Finance lease payable (0.3) 0.3 - -
Taxation (2.6) - - (2.6)
------------------------------ ------------ -------------- --------- ----------------
Total current liabilities (162.4) 157.9 - (4.5)
------------------------------ ------------ -------------- --------- ----------------
TOTAL LIABILITIES (259.7) 255.2 - (4.5)
------------------------------ ------------ -------------- --------- ----------------
NET ASSETS 20.7 (4.6) 14.4 30.5
------------------------------ ------------ -------------- --------- ----------------
Notes
1. The pro forma financial information has been prepared
in a manner consistent with the accounting policies
adopted by Teliti in its last audited financial statements,
being for the year ended 30 September 2012. The column
'30 September 2013' represents the consolidated net
assets of the Group which have been extracted without
adjustment from the unaudited financial statements of
the Group for the year ended 30 September 2013.
2. This column represents the adjustment to reflect the
disposal of the total assets and total liabilities of
Teliti Datacentres. These figures have been extracted
without adjustment from the unaudited financial statements
of that company for the year ended 30 September 2013.
3. This column represents the cash proceeds of RM15 million
arising from the sale of Teliti Datacentres, less estimated
costs of the transaction of RM0.6 million.
Trading Statement
In the year to 30 September 2013, Teliti Solutions and Teliti
Services have a combined turnover of RM55 million (approx GBP11
million) and profits of RM3.7 million (approximately GBP0.75
million); with both subsidiaries also showing a strong increase on
2012 numbers.
Cancellation of AIM Admission
The Company's Depositary Interests are currently suspended from
trading on AIM pending the appointment of two non-executives to
replace the two who resigned in June 2013. With the Company having
now decided that no advantage will accrue, post the Sale, from
continuing the AIM admission, no new non-executive directors will
be appointed and hence the Depositary Interests will remain
suspended. As a result, the AIM admission will be cancelled on 23
December under AIM Rule 41, being 6 months since the Depositary
Interests were suspended from trading.
Upon the cancellation of the Company's AIM admission, Daniel
Stewart and Company Plc will cease to be nominated adviser to the
Company. The Company will no longer be required to comply with the
AIM Rules. The Company will no longer be bound (nor able) to
announce, via a regulatory information service, material events,
administrative changes or material transactions nor to announce
interim or final results. The Company will no longer be required to
comply with any of the additional specific corporate governance
requirements for companies admitted to trading on AIM.
In addition, following the cancellation of the Company's AIM
admission, the Company's CREST facility will be cancelled on 9
January 2014 and Shareholders who hold Ordinary Shares in
uncertificated form prior to the cancellation of the Company's AIM
admission will receive share certificates.
On cancellation of the Company's AIM admission, there will be no
market facility for dealing in the Ordinary Shares and no price
will be publically quoted. As a result the shareholdings in the
Company are likely to be illiquid and Shareholders may find it
difficult to realise their investment.
General Meeting
A notice convening the General Meeting, to be held at the
offices of Daniel Stewart & Company Plc at Becket House, 36 Old
Jewry, London, EC2R 8DD at 9:00 a.m. on 23 December 2013 is set out
at the end of the Circular at which an ordinary resolution will be
proposed to approve the Sale of the Teliti Datacentre in accordance
with the terms of the Sale Agreement.
Action to be taken
A Form of Proxy for completion by the holders of Ordinary Shares
and a Form of Instruction for completion by the holders of
Depositary Interests are enclosed with this document for use at the
General Meeting. Whether or not you intend to be present at the
General Meeting, if you are a holder of Ordinary Shares you are
requested to complete and return the Form of Proxy or if you are a
holder of Depositary Interests you are requested to complete and
return the Form of Instruction in accordance with the instructions
printed thereon as soon as possible.
To be valid, completed Forms of Proxy must be received by
Computershare Investor Services (Cayman Islands) Ltd, Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZY not later than 9:00 a.m. on 21 December 2013, being two
Business Days before the time appointed for holding the General
Meeting. Completion of the Form of Proxy will not preclude you from
attending the meeting and voting in person if you so wish.
To be valid, completed Forms of Instruction must be received by
Computershare Investor Services (Cayman Islands) Ltd, Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZY not later than 9:00 a.m. on 20 December 2013, being no
later than 72 hours before the time of the Meeting, for the taking
of the poll at which it is to be used. Completion of the Form of
Instruction will not preclude you from attending the meeting and
voting in person if you so wish.
Documents available
Copies of the Circular will be available to the public, free of
charge, at the Company's registered office and at the offices of
Daniel Stewart & Company Plc at Becket House, 36 Old Jewry,
London, EC2R 8DD during usual business hours on any weekday
(Saturdays, Sundays and public holidays excepted) for one month
from the date of the Circular. The Circular will also be available
on the Company's website, www.teliti.com.
Irrevocable undertaking
The Company has received an irrevocable undertaking to vote in
favour of the Resolution from Teliti Computers, the majority
shareholder of the Company, holding in aggregate 20,000,000
Ordinary Shares representing approximately 79.1 per cent. of the
existing issued share capital of the Company.
Recommendation
The Directors consider that the Sale is in the best interests of
the Company and its Shareholders as a whole and unanimously
recommend Shareholders to vote in favour of the Resolution.
Teliti International Ltd
Hj Mohamed Nasir Abdul Majid, Chief
Executive Officer
Rosmida Din, Chief Financial Officer +603 7873 7733
Daniel Stewart and Company plc
Antony Legge, Ciaran Walsh +44 (0)20 7776 6550
Luther Pendragon Ltd
Harry Chathli, Claire Norbury +44 (0)20 7618 9100
DEFINITIONS
The following definitions apply throughout the Circular, unless
the context otherwise requires:
"GBP" and "pence" respectively pounds and pence sterling,
the lawful currency of the United
Kingdom;
"Affin Bank Berhad" Affin Bank Berhad (Company No.:
25046-T) of Menara Affin, 80 Jalan
Raja Chulan, 50200 Kuala Lumpur;
"Bank Guarantee" a guarantee to secure payment of
the datacentre construction costs
payable by Teliti Datacentres;
"Affin Bank Berhad Confirmations" the written confirmation from Affin
Bank Berhad to Noah Ventures confirming
inter alia, that it;
1. agrees to the restructuring
of all existing banking facilities
granted to Teliti Datacentres;
2. consents to the sale;
3. will grant the Bank Guarantee
to Noah Ventures; and
4. will issue a letter stating
that it is ready, willing and able
to issue the Bank Guarantee to
Noah Ventures and will assist Noah
Ventures to remit this letter to
Noah Ventures' shareholder.;
"AIM" the market of that name operated
by the London Stock Exchange;
"AIM Rules" the AIM Rules for Companies published
by the London Stock Exchange;
"Board" or "Directors" the board of directors of the Company
whose names appear on page 7 of
this document;
"Business Day" any day (other than a Saturday
or Sunday or a public holiday)
on which banks are generally open
for business in London (other than
solely for settlement and trading
in Euro);
"Company" or "Teliti" Teliti International Limited, a
company incorporated in the Cayman
Islands with limited liability
and with registered number CT-233360;
"Company Confirmations" certain confirmations and the provision
of documentary evidence by the
Company to Noah Ventures from the
Company, confirming, inter alia,
that:
1. Teliti Datacentres is not a
party to , and no amount has been
drawdown from Bai' Bithaman Ajil
facility of RM 18.5 million from
Small Medium Enterprise Development
Bank Malaysia Berhad to Teliti
Computers to part finance the asset
requirements of the datacentre;
2. the Company has made the relevant
employer's contributions and/or
payments deducted from the employees'
salaries the relevant authorities,
Malaysian authorities or organisations;
3. there is no liability to Teliti
Datacentres under the service agreement
date 27 October 2011 made between,
inter alia, Teliti Computers, the
Company and NTH Technology Sdn
Bhd; and
4. the Certificate of Practical
Completion identified in the Articles
of Agreement and Conditions of
Contract between Teliti Datacentres
and S&F Construction Sdn Bhd dated
22 June 2010 has been issued.;
"Completion" completion of the Sale on the terms
set out in the Sale Agreement;
"Daniel Stewart" Daniel Stewart & Company plc, financial
adviser, nominated adviser and
broker to Teliti;
"Depositary Interests" a dematerialised depositary interest
representing an entitlement to
Ordinary Shares which may be traded
through CREST in dematerialised
form;
"Existing Group" the Company and its Subsidiaries
(including Datacentres);
"FCA" the Financial Conduct Authority;
"First Payment Date" within sixty (60) days from the
issuance of a bank guarantee to
Noah Ventures to secure payment
of the construction costs due from
Teliti Datacentres in a form to
be proposed by Noah Ventures and
agreed by Affin Bank Berhad;
"Form of Proxy" the form of proxy for use by Shareholders
in connection with the General
Meeting, which is enclosed with
this document;
"General Meeting" the general meeting of the Company
convened for 9:00 a.m. on 23 December
2013, notice of which is set out
at the end of this document;
"Group" the Company and its Subsidiaries
but excluding Datacentres;
"IFRS" International Financial Reporting
Standards
"London Stock Exchange" London Stock Exchange plc;
"Minority Shareholders" all Shareholders with the exception
"Noah Ventures" of Teliti Computers and the Board
Noah Ventures Sdn Bhd, (Company
No.: 1059869-X), a private company
limited by shares incorporated
under the laws of Malaysia and
having its registered office at
19-3, Jalan Tasik Selatan 3, Bandar
Tasik Selatan, 57000 Kuala Lumpur;
"Notice of General Meeting" the notice of General Meeting set
out at the end of this document;
"Ordinary Shares" ordinary shares of US$0.10 each
in the capital of the Company;
"Resolution" the resolution to be proposed at
the General Meeting and set out
in the Notice of General Meeting
at the end of this document;
"RM" Malaysian Ringgit, the lawful currency
of Malaysia;
"Sale" the proposed sale by the Company
of its Subsidiary, Datacentres,
to Noah Ventures pursuant to the
Sale Agreement;
"Second Payment Date" within six (6) months from the
First Payment Date;
"Shareholder" a holder of Ordinary Shares and
/ or Depositary Interests;
"Sale Agreement" the conditional sale and purchase
agreement dated 24 October 2013
made between (1) the Company (2)
Noah Ventures (3) Teliti Computers
and (4) Teliti Datacentres;
"Subsidiary" has the meaning given to it in
section 1159 of the Companies Act
2006;
"Teliti Computers" Teliti Computers Sdn Bhd., a shareholder
of the Company and a party to the
Sale Agreement;
"Teliti Datacentres" Teliti Datacentres Sdn Bhd., a
Subsidiary of the Company and the
subject of the proposed sale;
"Teliti Services" Teliti Services Sdn Bhd., a Subsidiary
of the Company;
"Teliti Solutions" Teliti Solutions Sdn Bhd., a Subsidiary
of the Company;
"Third Payment Date" within six (6) months from the
Second Payment Date;
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland;
"US$" United States dollars and cents,
the legal currency of the United
States.
TECHNICAL GLOSSARY
"SAP" SAP AG together with its subsidiaries
and products as the context may
require.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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