28 October 2019
MediaZest plc
(“MediaZest”, the “Company” or
“Group”, AIM:MDZ)
Posting of Circular and Notice of General Meeting
MediaZest, the AIM quoted creative audio-visual company,
announces that a Circular (the “Circular”) incorporating a
formal Notice of General Meeting (“General Meeting”) and the
associated form of proxy are being posted to Shareholders today,
and will be available to download from the Company’s website at
www.mediazest.com.
NOTICE OF GENERAL MEETING
A General Meeting of the Company to consider, and if thought
fit, approve a Share Capital Reorganisation and to comply with
section 656 of the Companies Act, will be held at the registered
office address of the Company at Unit 9, Woking Business Park,
Albert Drive, Woking, Surrey,
England, GU21 5JY at 10:30
a.m. on 13 November 2019. Key
extracts from the Circular are summarised below.
BACKGROUND
The Board wishes to retain flexibility in seeking alternative
sources of additional working capital and cash resources to enable
the Company to maintain and enhance its business activities,
including by way of issuing further shares.
As a result of challenging market conditions, the existing
ordinary shares of 0.1p each in the capital of the Company (the
“Existing Ordinary Shares”) have, at times, traded on AIM at
a price less than the nominal value of such shares. The issue
of new shares at a price which is less than the current nominal
value of the Existing Ordinary Shares is prohibited by the
Companies Act. The Board, therefore, considers it prudent to
implement the proposed share capital reorganisation (the “Share
Capital Reorganisation”) in order that the market price of the
ordinary shares to be created pursuant to the Share Capital
Reorganisation (the “New Ordinary Shares”) becomes higher
than the nominal value of the same therefore allowing the Company
to raise funds by issuing further shares, should the Directors
elect to do so.
Share Capital Reorganisation
Accordingly, it is proposed to sub-divide and effectively
convert each issued and unissued Existing Ordinary Share into one
New Ordinary Share and one deferred share (the “New A
Deferred Shares”). The purpose of the Circular is to
explain and seek Shareholder approval for the Share Capital
Reorganisation. The Share Capital Reorganisation is similar
to the one implemented in 2009 when the existing deferred shares in
the capital of the Company (the “Existing Deferred Shares”)
were created.
The New Ordinary Shares will have the same rights (including
rights as to voting, dividends and return of capital) as the
Existing Ordinary Shares. New Ordinary Shares will be traded
on AIM in the same way as the Existing Ordinary Shares, with the
exception of the difference in nominal value.
The rights attaching to the New A Deferred Shares are set out in
Resolution 2 in the Notice of General Meeting in the Circular. The
New A Deferred Shares will be effectively valueless as they will
not carry any rights to vote or dividend rights. In addition,
holders of New A Deferred Shares will only be entitled to a payment
on a return of capital or on a winding up of the Company after each
of the holders of New Ordinary Shares have received a payment of
£1,000,000 on each such share, and after the holders of the
Existing Deferred Shares have been repaid the amounts paid up on
the Existing Deferred Shares.
The New A Deferred Shares will not be listed or traded on AIM
and will not be transferable without the prior written consent of
the Company. No share certificates will be issued in respect
of the New A Deferred Shares. The Board may further appoint
any person to act on behalf of all the holders of the New A
Deferred Shares to transfer all such shares to the Company in the
terms of the Companies Act.
It is not intended to issue new share certificate(s) to the
holders of the New Ordinary Shares following the Share Capital
Reorganisation. Pending the issue of a new share certificate
Shareholder’s existing share certificate(s) will remain valid for
the same number of shares but with a different par value of 0.01p
per share. Following the Share Capital Reorganisation should
Shareholders wish to receive an updated share certificate they
should please contact the Company’s Registrars at the address set
out in this the Circular. The CREST accounts of Shareholders
who hold their Existing Ordinary Shares in CREST will be credited
with New Ordinary Shares at approximately 8:00 a.m. on 14 November
2019.
The Share Capital Reorganisation will not of itself affect the
value of Shareholder’s holdings, as can be seen from the worked
example (which assumes a market price per share of 0.07p)
below:
Example
Existing Ordinary Shares held prior
to the Share Capital Reorganisation |
100,000 |
Current market price per Existing
Ordinary Share |
0.07p |
Current aggregate market value of
shareholding |
£70 |
Number of New Ordinary Shares held
immediately following Share Capital Reorganisation |
100,000 |
Market price per New Ordinary Share
immediately following Share Capital Reorganisation |
0.07p |
Aggregate market value of New
Ordinary shareholding immediately following Share Capital
Reorganisation |
£70 |
Number of New A Deferred Shares held
immediately following Share Capital Reorganisation |
100,000 |
Value of New A Deferred shareholding
immediately following Share Capital Reorganisation |
£Nil (effectively) |
By effecting the Share Capital Reorganisation in this way, the
Company’s issued share capital remains the same. Similarly,
the nominal value of Shareholder’s holdings will remain
unchanged. In the example above, the 100,000 Existing
Ordinary Shares held today each have a nominal value of 0.1p giving
a total nominal value for the holding of £100. The New
Ordinary Shares will have a nominal value of 0.01p (£10 in
aggregate nominal value) which when added to the aggregate nominal
value of the New A Deferred Shares (£90) means that the nominal
value of the holding remains at £100.
Amendments to the Articles of
Association
Certain amendments to the Company’s Articles of Association are
required to implement the Share Capital Reorganisation and require
approval at the General Meeting. The proposed amendments
relate to the recategorisation of the Existing Ordinary Shares as
New Ordinary Shares and New A Deferred Shares and certain
consequential amendments. The changes are set out in Part 2
of the Circular.
Section 656 of the Companies Act
2006
It has recently come to the attention of the Board that the
value of the Company’s net assets has become less than half of its
called-up share capital. It is a requirement of section 656 of the
Companies Act that, where the net assets of a public company are
half or less of its called-up share capital, the directors must
call a general meeting of the company to consider whether any, and
if so what, steps should be taken to deal with the situation. This
is termed a serious loss of capital.
Accordingly, the business to be conducted at the General Meeting
will also include consideration of what, if any, such steps should
be taken. The Board is of the view that the serious loss of capital
does not pose any risk to the solvency of the Company, therefore no
specific measures are proposed to deal with the serious loss of
capital. Notwithstanding, the Board recognises this technical
requirement and invites Shareholders to discuss accordingly.
Resolutions
A notice convening the General Meeting, which is to be held at
the registered office address of the Company at Unit 9, Woking
Business Park, Albert Drive, Woking, Surrey, England, GU21 5JY at 10:30 a.m. on 13 November
2019, is set out within the Circular. At the General
Meeting, in addition to considering the serious loss of capital,
the following Resolutions will be proposed:
1.
an ordinary resolution to effect the Share Capital Reorganisation;
and
2.
a special resolution to alter the Articles of Association to
reflect the capital structure changes made pursuant to the Share
Capital Reorganisation, incorporating provisions relating to the
New A Deferred Shares and the Existing Deferred Shares.
Action to be taken
A Form of Proxy will be posted with the Circular for use at the
General Meeting and available at the Company’s website.
Whether or not Shareholders intend to be present at the General
Meeting they are requested to complete, sign and return the Form of
Proxy to the Company’s Registrars as soon as possible, but in any
event so as to arrive not later than 10:30
a.m. on 11 November 2019 in
accordance with the notes to the Form of Proxy. The
completion and return of a Form of Proxy will not preclude
Shareholders from attending the meeting and voting in person should
they subsequently wish to do so.
RECOMMENDATION
The Board believes that the Resolutions are in the best
interests of the Company and Shareholders, taken as a whole. The
Board unanimously recommends the Shareholders to vote in favour of
the Resolutions, as the Directors intend to do so in respect of
their own beneficial holdings amounting in aggregate to 88,160,365
Existing Ordinary Shares representing approximately 6.31 per cent
of the Existing Ordinary Shares.
Unless otherwise indicated, all defined terms in this
announcement shall have the same meaning as described in the
Circular.
This announcement contains inside information for the
purposes of Article 7 of Regulation (EU) 596/2014.
Enquiries: |
|
Geoff Robertson
Chief Executive Officer
MediaZest Plc |
0845 207 9378 |
David Hignell/Stephen Wong
Nominated Adviser
SP Angel Corporate Finance LLP |
020 3470 0470 |
Claire Noyce
Broker
Hybridan LLP |
020 3764 2341 |
Notes to Editors:
About MediaZest
MediaZest is a creative audio-visual systems integrator that
specialises in providing innovative marketing solutions to leading
retailers, brand owners and corporations, but also works in the
public sector in both the NHS and Education markets. The Group
supplies an integrated service from content creation and system
design to installation, technical support, and maintenance.
MediaZest was admitted to the London Stock Exchange's AIM market in
February 2005. For more information,
please visit www.mediazest.com .