TIDMTRE
RNS Number : 2193L
Trading Emissions PLC
17 April 2018
Trading Emissions PLC
Proposed cancellation of admission to trading and notice of
Extraordinary General Meeting
The Board of Trading Emissions PLC (the "Company") announces the
Company's proposed cancellation from trading on AIM (the
"Cancellation").
As previously announced by the Company on 27 March 2018, the
Directors have concluded that it is in the best interests of the
Company and its Shareholders to cancel the admission of the
Ordinary Shares to trading on AIM.
The Company will today post to its shareholders a circular (the
"Circular") in connection with the Cancellation containing a notice
convening an extraordinary general meeting of the Company (the
"Extraordinary General Meeting") to be held at 10.00 a.m. on 10 May
2018 at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP.
Subject to the Resolution being passed at the Extraordinary
General Meeting, the expected last day of dealings in Ordinary
Shares on AIM will be 17 May 2018 and the Cancellation will become
effective at 7.00 a.m. on 18 May 2018. Pursuant to Rule 41 of the
AIM Rules, the Company, through Liberum Capital, has notified the
London Stock Exchange of the proposed Cancellation.
The above summary should be read in conjunction with the full
text of this announcement and the Circular. Extracts from the
Circular, which sets out the background to and reasons for the
Company seeking Cancellation, are set out below and a copy of the
Circular will shortly be available on the Company's website
https://www.tradingemissionsplc.com.
Defined terms used in this announcement have the meaning set out
at the end of this announcement and as in the Circular.
Enquiries:
Trading Emissions plc +44 (0) 1624 681250
(Philip Scales)
Liberum Capital Ltd +44 (0) 20 3100 2222
(Steve Pearce/ Gillian Martin / Henry Freeman)
Market Abuse Regulation
This announcement is released by Trading Emissions plc and
contains inside information for the purposes of the Market Abuse
Regulation (EU) 596/2014.
The Company's LEI is: 213800UICZJWUHQCMM72
EXTRACTS FROM THE CIRCULAR
The following has been extracted without amendment from, and
should be read in conjunction with, the Circular to Shareholders
dated 17 April 2018, which will be available shortly from the
Company's website: https://www.tradingemissionsplc.com/.
EXPECTED TIMETABLE OF EVENTS
Latest time and date for receipt of Form of Proxy 10:00 a.m. on
8 May 2018
Time and date of EGM 10:00 a.m. on 10 May 2018
Declaration of the Distribution 10 May 2018
Cancellation of trading to AIM effective 18 May 2018
Payment of the Distribution 23 May 2018
The above times and dates are subject to change, any revised
times and/or dates will be notified to Shareholders through an RIS
announcement
LETTER FROM THE CHAIRMAN
17 April 2018
Dear Shareholder
RECOMMED PROPOSALS FOR THE CANCELLATION OF ADMISSION TO TRADING
ON AIM AND PAYMENT OF A DISTRIBUTION
1. BACKGROUND & RATIONALE FOR THE PROPOSALS
The Company was established as a public limited company
incorporated in the Isle of Man in March 2005 and its Ordinary
Shares were admitted to trading on AIM in April 2005. The Company's
investing policy and principal objective was to invest in
environmental and emissions assets together with certain classes of
energy instruments and associated financial products, including
emission reduction credits and related assets such as renewable
energy facilities and companies whose value is enhanced by way of
emission reduction markets and associated regulations.
In 2005 and 2006, the Company raised from investors aggregate
net proceeds of GBP299.9 million.
In 2012 Shareholders amended the investing policy of the Company
to carry out an orderly realisation of the portfolio of carbon and
private equity assets, distribute the net proceeds to Shareholders
and then undertake a voluntary winding-up of the Company. The
assets comprised principally of a trading portfolio of ERPAs
requiring the Company to acquire carbon credits at fixed prices;
and a private equity portfolio of investments in unquoted start up
and operating companies located around the world. New Directors
were appointed to the Board in late 2011, who developed and
implemented strategies to restructure, break up and sell the
Company's portfolio of ERPAs and private equity investments.
The Company is now in the position where it has:
-- Terminated or otherwise exited from substantially all ERPAs
and the associated liabilities;
-- Realised its entire portfolio of eligible carbon credits;
-- Successfully defended the Company against a number of legal
actions and claims brought by ERPA counterparties in China;
-- Maximised operating distributions in the ordinary course of
business from its private equity investments;
-- Realised all of the Company's private equity investments or
their underlying assets;
-- Resolved various tax issues facing the Company and its
private equity investments;
-- Liquidated or placed into liquidation all but three of the
Company's subsidiaries and associates after their underlying assets
had been disposed of and liabilities settled;
-- progressively reduced the Company's operating cost base; and
-- distributed to Shareholders all net cash not required to meet
liabilities and operating costs.
Since the Board was restructured in 2011, the Company has made
distributions to Shareholders of an aggregate of GBP93.7 million,
equivalent to 37.5p per Ordinary Share.
At 16 April 2018, the Company holds cash net of liabilities of
GBP9.7 million, and is entitled to receive further proceeds
from:
-- TEP Solar, which at 16 April 2018 holds cash of:
(a) EUR1.0 million, which will become distributable to TEP to
the extent that valid claims of up to EUR1.0 million in aggregate
are not received by 30 June 2018 in connection with the realisation
of a private equity investment; and
(b) EUR2.0 million placed in escrow, which will become
distributable to TEP to the extent that valid claims are not
received by 18 December 2018 in connection with the realisation of
four private equity investments.
-- the realisation of the EWG Slupsk wind farm project in Poland
should the project proceed, which is uncertain given the recent
policies announced by the Polish Government designed to promote
power generation from sources other than wind.
The Board has conducted a review of the benefits and drawbacks
to the Company and its Shareholders of retaining its admission to
AIM and believes that Cancellation is in the best interests of the
Company and its Shareholders as a whole. In reaching this
conclusion, the Board has considered the following key factors:
-- The Company has realised all of its investments. The
continuing principal investment activity of the Company is to
maximise the remaining proceeds receivable from TEP Solar and from
the realisation of EWG Slupsk. The amounts receivable are small in
comparison with the realisation proceeds generated to date and the
distributions made to Shareholders, including the Distribution.
-- The cost, management time and the legal and regulatory burden
associated with maintaining the Company's admission to trading on
AIM are, in the Directors' opinion, disproportionate to the
benefits to the Company. The Directors are cognisant of the level
of the Company's operating costs relative to the projected future
activities of the Company. The Cancellation is expected to deliver
direct cost savings for the Company as there will be no further
obligation to pay London Stock Exchange, nominated adviser or
broker fees. Additional operating cost savings are expected
from:
(a) a change to the composition of the Board;
(b) a reduction in Directors' fees; and
(c) a reduction in the administration fee payable by the
Company. Further details of these operating cost savings are
provided in Section 2 below.
The operating cost savings are intended to maximise the
remaining monies available for distribution to Shareholders, while
maintaining appropriate continuing corporate governance and
oversight. The estimated operating cost savings form part of the
basis of calculation of the Distribution and are intended to
maximise one or more further distributions to Shareholders.
Following the Cancellation, the Company will continue to
maintain its website https://www.tradingemissionsplc.com/, through
which it will make annual financial statements available to all
Shareholders and provide information on significant events and
developments relating to the Company. Following the Cancellation,
the Board intends that access to the website will be password
protected.
At the EGM, Shareholders will be requested to approve:
-- the cancellation of the admission to trading on AIM by means
of the Cancellation; and
-- the Distribution.
If the Resolutions (which are conditional on each other) are not
passed at the EGM, the admission to trading on AIM will be
maintained and the Distribution will not be made. In these
circumstances the Board intends to resolve to make a distribution
to Shareholders of a smaller amount than the Distribution on the
basis that additional working capital will be required to support
the Company's ongoing operations and compliance with the AIM
Rules.
Pursuant to the AIM Rules, an Investing Company that has
disposed of all, or substantially all, of its assets has twelve
months to implement its investing policy otherwise trading in its
shares will be suspended by the London Stock Exchange. The London
Stock Exchange will cancel the admission of a company's AIM
securities where these have been suspended from trading for six
months.
On 5 April the Company announced the completion of the sale of
its remaining Italian solar operating subsidiary, Solar Energy
Italia 1 Srl. On this date the Company had disposed of all, or
substantially all, of its assets therefore if the Resolutions are
not passed at the EGM, the Company has twelve months from 5 April
2018 to implement its investing policy otherwise its shares will be
suspended.
The investing policy of the Company is to carry out an orderly
realisation of the portfolio of carbon and private equity assets,
distribute the net proceeds to Shareholders and then undertake a
voluntary winding-up of the Company. No new private equity
investments will be made.
2. OPERATING COST SAVINGS FOLLOWING CANCELLATION
Conditional on the Cancellation becoming effective, the Company
will benefit from direct cost savings as there will be no further
obligation to pay London Stock Exchange, nominated adviser or
broker fees. Additional operating cost savings are expected
from:
(a) a change to the composition of the Board. Conditional on the
Cancellation becoming effective, Neil Duggan has expressed his
intention to resign as a Director;
(b) a reduction in Directors' fees. Conditional on the
Cancellation becoming effective, each of the remaining Directors,
Martin Adams, Philip Scales and Mark Lerdal has agreed to reduce
his annual remuneration by 50 per cent.; and
(c) a reduction in the administration fee payable by the
Company. Conditional on the Cancellation becoming effective, the
fee payable to the Administrator will reduce from GBP180,000 per
annum to GBP100,000 per annum.
The additional operating cost savings are a direct result of the
simplified oversight and administration of the affairs of the
Company following the Cancellation. For example, it is the
intention that the Company will no longer produce and publish
interim financial statements.
3. CANCELLATION
In accordance with Rule 41 of the AIM Rules, the Company has
notified the London Stock Exchange of the intention to cancel its
admission to trading on AIM. Under the AIM Rules it is a
requirement that the Cancellation is approved by not less than 75
per cent. of the votes cast by Shareholders (in person or by proxy)
at the EGM.
The principal effects of the Cancellation will be that:
-- the Ordinary Shares will no longer be admitted to trading on
a public market and there will be no formal market mechanism
enabling the Shareholders to trade Ordinary Shares;
-- while the Ordinary Shares will remain freely transferrable,
it is likely that the liquidity and marketability of the Ordinary
Shares will, in the future, be significantly reduced and the
secondary market value of the Ordinary Shares may be adversely
affected as a consequence;
-- there is no assurance that Shareholders will be able to
realise their investment prior to the winding-up of the
Company;
-- there is no assurance of the future value of the Company's
remaining assets or of the price at which Ordinary Shares may be
bought or sold;
-- in the absence of a formal market and quote, it will be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply and Shareholders will no longer be afforded the
protections provided by the AIM Rules and the Market Abuse
Regulation, such as the requirement to be notified of certain
events, or to vote on certain substantial transactions.
In particular, the Company will not be bound to make any public
announcements of material events, or to announce financial
results;
-- the levels of transparency and corporate governance within
the Company will not be equivalent to those for a company admitted
to trading on AIM;
-- the Company will cease to have a nominated adviser and broker;
-- whilst the Company's CREST facility will remain in place
immediately following the Cancellation, the Company's CREST
facility may, if the Board so determines, be cancelled in the
future in order to save the associated costs. Although under such
circumstances the Ordinary Shares will remain transferable, they
will cease to be transferable through CREST. In this instance,
Shareholders who hold Ordinary Shares in CREST will receive share
certificates; and
-- the Cancellation may have taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
The above considerations are not exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation.
If Shareholders wish to buy or sell Ordinary Shares on AIM they
must do so prior to the Cancellation. Conditional on the
Cancellation becoming effective, it is currently expected that the
last day of dealings in the Ordinary Shares on AIM will be 17 May
2018 and that the effective date of the Cancellation will be 18 May
2018.
Shareholders should be aware that the Takeover Code will
continue to apply to the Company for a period of 10 years from the
Cancellation. Although the Takeover Code will continue to apply to
the Company, certain Shareholders hold a significant percentage of
the current issued share capital and may seek to exert increased
influence over the Company.
Following the Cancellation becoming effective, the Company,
being a closed-ended investment company governed by the Isle of Man
Companies Act 2006 will maintain appropriate corporate governance
and oversight. The Company will also remain subject to the
provisions of its memorandum and articles of association pursuant
to which Shareholder approval is required for certain matters.
Following the Cancellation, the Company will continue to
maintain its website through which it will make annual financial
statements available to all Shareholders and provide information on
significant events and developments relating to the Company.
However, there will be no obligation on the Company to include all
of the information required by AIM Rule 26 or to update the website
as required by the AIM Rules. Following the Cancellation, the Board
intends that access to the website will be password protected.
If the Resolutions (which are conditional on one other) are not
passed at the EGM, the Company's admission to trading on AIM will
be maintained. However, the estimated operating costs will not
reduce as projected and the Distribution will not be made. In these
circumstances the Board intends to resolve to make a distribution
to Shareholders of a smaller amount than the Distribution on the
basis that additional working capital will be required to support
the Company's ongoing operations and compliance with the AIM
Rules.
4. DISTRIBUTION
Conditional, inter alia, upon the Resolutions being passed at
the EGM, the Company will (subject to the Directors being
satisfied, on reasonable grounds, that the Company will satisfy the
Solvency Test immediately following the Distribution) declare and
effect the Distribution.
The Distribution accounts for approximately 73% of the cash held
by the Company at 16 April 2018, after allowing for liabilities and
estimated operating costs up to the projected winding up of the
Company.
The Distribution will be made as soon as practicable following
the EGM and is expected to be 3.5 p per Ordinary Share, to be paid
on 23 May 2018 to Shareholders recorded on the register on 18 May
2018. The Ordinary Shares will be marked "ex" on 17 May 2018.
5. VOLUNTARY WINDING-UP
After the Company has received the remaining proceeds from TEP
Solar and from the realisation of EWG Slupsk (See Section 1.
above), the Board intends to distribute substantially all remaining
cash to Shareholders, subject to retaining sufficient monies to
meet outstanding liabilities and the costs of liquidation of the
Company and its remaining subsidiaries. A further extraordinary
general meeting of Shareholders will be convened to approve the
voluntary winding-up of the Company. It is the intention of the
Board that the final material distribution to Shareholders will be
made prior to the appointment of a liquidator of the Company.
6. EXTRAORDINARY GENERAL MEETING
The EGM will be held at 10 a.m. on 10 May 2018 at IOMA House,
Hope Street, Douglas, Isle of Man IM1 1AP, British Isles. The
Notice of EGM is provided in Part 2 of this document.
The first resolution to be proposed at the EGM is the
Cancellation Resolution, which will be a special resolution
(requiring at least 75 per cent. of the voting rights cast at the
EGM to be in favour of the Cancellation Resolution) that the
admission of the Company to trading on AIM be cancelled. The second
resolution to be proposed at the EGM is the Distribution
Resolution, which will be an ordinary resolution (requiring at
least 50 per cent. of the voting rights cast at the EGM to be in
favour of the Distribution Resolution) that the Distribution be
approved and made.
Each of the Resolutions to be proposed at the EGM is conditional
upon the passing of the other Resolution to be proposed at the
EGM.
7. ACTION TO BE TAKEN
A Form of Proxy for use at the EGM is provided with this
document. Whether or not you propose to attend the EGM in person,
you are requested to complete and sign the Form of Proxy as soon as
possible and in any event no later than 10 a.m. on 8 May 2018 and
send the completed and signed form to the Company's registrars at
IOMA House, Hope Street, Douglas, Isle of Man IM1 1AP.
Completion and return of a Form of Proxy will not prevent you
from voting in person at the EGM should you so wish.
8. RECOMMENDATION
The Directors consider the Resolutions to be in the best
interests of the Company and Shareholders as a whole and therefore
unanimously recommend that Shareholders vote in favour of the
Resolutions.
Martin M. Adams
Chairman
DEFINITIONS
2006 Act the Isle of Man Companies Act 2006 (as amended from
time to time)
AIM the AIM market of London Stock Exchange plc
AIM Rules the AIM rules for companies whose securities are
admitted to trading on AIM as published by the London Stock
Exchange from time to time
Articles the articles of association of the Company
Board the board of Directors at the date of this document
Cancellation the proposed cancellation of admission of the
Ordinary Shares to trading on AIM, currently intended to take place
on 18 May 2018
Company or TEP Trading Emissions plc, registered in the Isle of
Man with company number 007837V
Director a director of the Company at the date of this
document
Distribution the proposed distribution of 3.5p per Ordinary
Share as detailed in this document
EGM the extraordinary general meeting of Company convened for 10
May 2018 notice of which is set out on page 10 of this document
ERPA Emission Reduction Purchase Agreements
EWG Slupsk EWG Slupsk Sp. z o.o a company registered in Poland
that obtained approvals for a Polish wind farm project previously
owned by the Company
Form of Proxy the form of proxy for use in connection with the
EGM
Group the Company and its subsidiaries
London Stock Exchange London Stock Exchange plc
Ordinary Shares ordinary shares of 1 penny each in the capital
of the Company
Resolutions the resolutions to be proposed at the EGM or any
one
or more of them as the context so requires
RIS Regulatory Information Service
Shareholders holders of Ordinary Shares
Solvency Test the statutory solvency test set out in section 49
of the 2006 Act namely that (i) a company is able to pay its debts
as they become due in the normal course of business and (ii) the
value of a company's assets exceed the value of its liabilities
Takeover Code The City Code on Takeovers and Mergers which
applies to companies listed on the London Stock Exchange
TEP Solar TEP (Solar Holdings) Limited, a wholly owned
subsidiary of the Company incorporated in the Republic of
Ireland
This information is provided by RNS
The company news service from the London Stock Exchange
END
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