ULTIMA NETWORKS (UTN)

 

LSE:UTN: Notice of EGM

ULTIMA NETWORKS

25 Sep 2015 07:00:31

Ultima Networks PLC

RNS Number : 1588A
Ultima Networks PLC
25 September 2015
 

25 September 2015

 

Ultima Networks PLC

("Ultima" or the "Company")

 

Posting of Circular and Notice of General Meeting

The Company is pleased to announce that it is today posting a Circular to Shareholders containing a notice convening a general meeting of the Company to be held at 11 a.m. on 14 October 2015, at the Company's registered office, Akhter House, Perry Road, Harlow, Essex, CM18 7PN. 

The Circular contains the Proposals for, inter alia:

 

-     the disposal of the Company's operating activites;

-     a placing to raise £750,000;

-     board changes;

-     a share capital reorganisation;

-     the adoption of a new Investing Policy under AIM Rule 15;

-     the adoption of new articles of association; and

-     a change of name to Onzima Ventures PLC.

 

The proposed Disposal involves the sale of the entire issued share capital of Cognito and UTN Solutions to a newly incorporated company to be owned by Existing Shareholders in Ultima. If the Proposals are approved by Shareholders, Ultima will become an Investing Company pursuant to rule 15 of the AIM Rules. The share capital reorganisation includes a 1 for 10 share consolidation.  Peterhouse Corporate Finance Limited ("Peterhouse") has conditionally raised £750,000 before expenses through a placing of 107,142,854 New Ordinary Shares at a price of 0.7p per New Ordinary Shares.

 

A copy of the Circular is available at: http://www.ultima-networks.com/.

 

Further information on the Proposals and information relating to the Proposed Directors are set out in the letter to Shareholders contained in the Circular, which is set out in full below.

 

The definitions used in this announcement have the same meaning as they have in the Circular.

 

For further information please contact:

 

Ultima Networks PLC                               Tel:  +44 (0) 1279 821 200

Professor Humayun Mughal

 

Nominated Adviser

Cairn Financial Advisers LLP                   Tel:  +44 (0) 20 7148 7900        

Sandy Jamieson/Liam Murray

 

Peterhouse Corporate Finance Limited      Tel:  +44 (0) 20 7469 0930     

Guy Miller/Lucy Williams

 

 

To all Shareholders

 

 

Notice of General Meeting

 

Proposal for:

The Disposal

Share Capital Reorganisation

Placing of 107,142,854 New Ordinary Shares at 0.7 pence per share

Approval of Investing Policy

Adoption of new Articles of Association

Change of Name to Onzima Ventures PLC

 

 

1.       Introduction

 

The Company has today announced a series of proposals, namely the Disposal, the Share Capital Reorganisation, the Placing, the resignation of the Existing Directors, save for Professor Humayun Mughal, and the appointment of the Proposed Directors and the Company Secretary, adoption of the Investing Policy and certain other related matters to be proposed at the General Meeting. The purpose of this letter is to provide Shareholders with the background to and to explain why the Independent Director considers the Proposals to be in the best interests of the Company and Shareholders as a whole and why he recommends that Shareholders should vote in favour of the Resolutions to be proposed at the General Meeting.

 

A notice convening a General Meeting of the Company to be held at the Company's offices, Akhter House, Perry Road, Harlow, Essex, CM18 7PN, on 14 October 2015 at 11 a.m. to consider the Resolutions is set out in the Notice of General Meeting at the end of this Document.

 

2.       Background to the Proposals

 

As announced in the audited results to 31 December 2014, the Group made an operating loss of £1,726,000 from Group revenues of £1,364,000.

 

2014 was a difficult year for the Company and as stated in the audited results, the Group decided it should concentrate efforts in its established markets. Accordingly the Group substantially wrote down the value of its investments in the development of solar farms in Italy, suspended development and deployment of its hybrid solar power solutions and concentrated distribution of its electric bicycle range through established UK channels. Further progress is expected to be made by concentrating available resources on the supply of Solar Photovoltaic installation on an Engineering, Procurement and Construction basis. The IT division continues to generate significant recurring revenue from its support and development services.

 

During the six months ended 30 June 2014, the Group continued its investment in the IT Services product portfolio and the development of new products in the Green Technology division in order to generate future growth in revenues. The Green Technology division saw a substantial reduction in sales of its electronic bicycles into mainland Europe resulting in a first half loss. The opportunity for growth in the global renewable energy market remains positive with opportunities to provide innovative solutions. The IT Services division has continued the roll out of the FiLos legal software suite, which provides solutions for complete management of day to day operations of legal firms. The division has a programme of continuous product development which has proved an essential tool in maintaining demand and competitiveness and providing a platform for organic growth.

 

Whilst the listing on AIM has been of value in the past, the Directors believe that the costs of being listed are disproportionate to the current size and scale of the Company and that the regulatory burden of maintaining the Company's shares on AIM outweighs the benefits.

 

In particular, the Directors believe that funds expended in maintaining the AIM listing would be more effectively utilised in the pursuit of growing the bottom line of the Business.

 

In light of which, and having considered the alternatives with its advisers, the Board has concluded that the best available option is to delist the Business from AIM through a disposal of the Subsidiaries, whilst taking advantage of the potential value which the Company's listing holds. In order to facilitate this, the Board is seeking the authority from Shareholders to dispose of the Subsidiaries (which together constitute the entire business of the Group) to NewCo, a newly incorporated private company wholly-owned by Professor Humayun Mughal and held on trust by him for the Existing Shareholders in the same proportion as their shareholding in the Company. The Directors' intend that NewCo and the Subsidiaries will then pursue the development of the business of the IT Services portfolio and the Green Technology division.

 

Accordingly, the Company has reached agreement in principle with NewCo for the sale of the entire issued share capital of Cognito and UTN Solutions (being the "Disposal"). Following completion of the Disposal, Cognito, UTN Solutions and Tre-Sol will, in aggregate, owe the sum of £4,000,000 to the Company (the "Debt"), such amount being the aggregate of various intra-group debts owed to the Company as more particularly described in paragraph 4 of this Part I.

 

In respect of the Disposal, NewCo will first purchase the entire issued share capital of Cognito and then subsequently, not less than seven days later, purchase the entire issued share capital of UTN Solutions. The purchase price for each acquisition will be for a cash consideration amounting to £1, being, in the Directors' opinion the market value of Cognito and UTN Solutions respectively, having regard to the respective debt that each of these companies owe to the Company. The Debt will remain outstanding as market interest rate bearing and unsecured debt owing to the Company by Cognito, UTN Solutions and Tre-Sol as described in more detail in paragraph 4 of this Part I.

 

In order to ensure that any sums repaid in respect of the Debt are accounted for by the Company to the Existing Shareholders only, it is proposed that, prior to completion of the Disposal, the share capital of the Company be reorganised pursuant to the Share Capital Reorganisation with the result that Existing Shareholders will hold one Special Deferred Share for each one Existing Ordinary Share held by them as at the Record Date. Further details of the Share Capital Reorganisation are set out in paragraph 7 of this Part I.

 

Pursuant to the terms of the share purchase agreements to be entered into by the Company in respect of the proposed sale of each of Cognito and UTN Solutions, the Company will undertake, subject to any legal constraints, to distribute a sum equal to any repayment of the Debt to the holders of Special Deferred Shares only (being the Existing Shareholders) by way of a dividend declared on the Special Deferred Shares.

 

On the tax advice that the Company has received, it is anticipated that there will be no tax liability to Existing Shareholders arising from the Disposal or owning shares in NewCo on the basis that the consideration paid by NewCo to acquire Cognito and UTN Solutions is no less than the current market value of the Subsidiaries having regard to their recent trading performance and the intercompany loans owing from the Subsidiaries to the Company, totalling £4,000,000.

 

It will be necessary to recapitalise the Company following the Disposal and Peterhouse has conditionally raised £750,000 before expenses pursuant to the Placing, further details of which are set out in paragraph 9 of this Part I.

 

Following completion of the Proposals, the Company will be an investing company pursuant to rule 15 of the AIM Rules with net cash of approximately £650,000.

 

The Proposals are conditional upon Shareholder approval at the General Meeting, notice of which is set out at the end of this Document.

 

3.       NewCo

 

NewCo was incorporated on 27 November 2014 with an issued share capital of 279,176,540 ordinary shares of £0.000001 each. The entire issued share capital of NewCo is held by Professor Humayun Mughal on trust for the Existing Shareholders on a one-for-one basis, meaning that each Existing Shareholder's beneficial interest in NewCo will mirror their holding of Existing Ordinary Shares (i.e. Existing Shareholders will beneficially own one ordinary share in NewCo for each Existing Ordinary Share they hold in the Company.)  As soon as reasonably practical following the completion of the Disposal, Professor Humayun Mughal will transfer the shares in NewCo to the Existing Shareholders.

 

A copy of the articles of association of NewCo and a copy of the Deed of Trust executed by Professor Humayun Mughal will be available for inspection at the General Meeting and on the Company's website at www.ultima-networks.com.

 

The current director of NewCo is Professor Humayun Mughal. Wassim Javade Mughal will be appointed as a director of NewCo on passing of all the Resolutions of the Company at the General Meeting.  Subject to the Proposals being approved, Anthony Klein will step down as a Director and as Company Secretary and will not be appointed as a director of NewCo.

 

4.       Pre-Disposal Reorganisation

 

In contemplation of the proposed Disposal, prior to the date of this Document, the following internal reorganisation of the Group has been effected:

 

(a)      part of the total intra-group debt owing from the Company to Cognito has been formally waived pursuant to a deed of waiver with the balance remaining being off-set in full against an interim dividend declared by Cognito of an amount equal to all its distributable reserves;

 

(b)      all of the trading assets and liabilities (including all intangible assets and employees), excluding debt owed from the Subsidiaries as referred to in paragraph 2 above, of the Company have been transferred to Cognito for total cash consideration of £2,057,033 which remains outstanding; and

 

(c)      the entire issued share capital of Tre-Sol has been transferred from the Company to Cognito for a consideration of €1,000.00. There is an outstanding unsecured, market interest rate bearing intra-group debt of £934,875 owing from Tre-Sol to the Company as at the date of this Document.

 

In light of the steps referred to above, the total outstanding interest bearing debt at market interest rates due to the Company (being the Debt) as at the date of this Document is £4,000,000, made up as follows:

 

·      the sum of £934,875 is owed by Tre-Sol (the "Tre-Sol Debt");

·      the sum of £1,000,178 is owed by UTN Solutions (the "UTN Debt"); and

·      the sum of £2,064,947 is owed by Cognito (the "Cognito Debt").

 

5.       Disposal and Related Party Transaction

 

Under Rule 15 of the AIM Rules, the Disposal will constitute a fundamental change in the Business of the Company and will also constitute a substantial property transaction for the purposes of section 190 of the Companies Act 2006, and will therefore require the approval of Shareholders.

 

The Disposal is also a related party transaction under the AIM Rules as Professor Humayun Mughal is the legal owner of the entire issued share capital, and a director, of NewCo as well as a Director and a substantial shareholder of the Company. Under the AIM Rules, if a company enters into a related party transaction, the Independent Director is required to consider, after consultation with the Company's Nominated Adviser, whether the terms of the transaction are fair and reasonable insofar as the Shareholders are concerned.

 

The Independent Director considers, having consulted with Cairn Financial Advisers LLP, the Company's Nominated Adviser, that the terms of the Disposal are fair and reasonable insofar as Shareholders are concerned.

 

Resolution 1 seeks Shareholders' approval for the Disposal.

 

Following completion of the Disposal, the Company will become an investing company under the AIM Rules and will be under an obligation to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy, in each case, within twelve months, failing which the Company's New Ordinary Shares will be suspended from trading on AIM. In the event that the Company's New Ordinary Shares are so suspended and the Investing Policy has not been implemented within 6 months of the suspension, the admission to trading on AIM of the Company's New Ordinary Shares would be cancelled. Details of the Company's proposed Investing Policy are set out in paragraph 13 of this Part I.

 

Details of the Board following the Disposal are contained in Paragraph 14 of this Part I.

 

6.       Repayment of the Debt and restriction on transfer of the Deferred Shares

 

As described in paragraph 2 above, upon shareholder approval of the Proposals, Cognito and UTN Solutions will be sold to NewCo for a consideration of £1 each with the Debt (being the aggregate amount of the Tre-Sol Debt, the UTN Debt and the Cognito Debt) remaining outstanding. 

 

Upon the Proposals being approved, each of the Tre-Sol Debt, the UTN Debt and the Cognito Debt will each continue as outstanding debts owed to the Company, that will be interest bearing at market interest rates with a 10 year term. Each debt may be repaid early at the discretion of the relevant debtor to the Company. 

 

Upon repayment of all or any part of any of the Tre-Sol Debt, the UTN Debt and the Cognito Debt, providing the Company has sufficient distributable reserves, the Company will effect a distribution of a sum equivalent to the proceeds of such repayment as a special dividend to the holders of the Special Deferred Shares (the "Special Dividend"). In the event that the Company does not at that time have sufficient distributable reserves, the term of the relevant debt (or debts) shall be extended by one year. Further details of the Special Deferred Shares are set out in paragraph 7 of this Part I below.

 

The Special Deferred Shares will be transferrable only upon a simultaneous transfer - to the same transferee - of ordinary shares in NewCo. The number of Special Deferred Shares that may be transferred or sold together with the NewCo ordinary shares will equate to the exact same number of ordinary shares in NewCo that are to be sold or transferred by the shareholder and the Special Deferred Shares will be compulsorily sold or transferred with the sale or transfer of shares in NewCo and vice-versa.

 

7.       Share Capital Reorganisation and restriction on transfer of Special Deferred Shares

 

In order to facilitate (i) the distribution of the proceeds of repayment of the Debt as referred to in paragraph 2; and (ii) the Placing as described in paragraph 9, it is proposed that, prior to the Disposal, the share capital of the Company be reorganised as follows:

 

(a)      each Existing Ordinary Share with a par value of 1 pence will be subdivided into:

 

(i)       one ordinary share of 0.01 pence each; and

 

(ii)      one special deferred share of 0.99 pence each (being the "Special Deferred Shares"); and

 

(b)      the ordinary shares of 0.01 pence each resulting from the subdivision referred to in paragraph (a) above be will consolidated into new ordinary shares of 0.1 pence each (being the "New Ordinary Shares") on the basis of one New Ordinary Share for every 10 ordinary shares of 0.01 pence each.

 

Where the Share Capital Reorganisation results in any Shareholder being entitled to a fraction of a New Ordinary Share, such fraction shall be aggregated and the Directors intend to sell (or appoint another person to sell) such aggregated fractions in the market and retain the net proceeds for the benefit of the Company.

 

The New Ordinary Shares will be freely transferable and application will be made for the New Ordinary Shares to be admitted to trading on AIM. The Special Deferred Shares will be transferable only with the consent of the Company and will not be admitted to trading on AIM (or any other investment exchange). The holders of the Special Deferred Shares shall not, by virtue or in respect of their holdings of Special Deferred Shares, have any right to receive notice of any general meeting of the Company nor the right to attend, speak or vote at any such general meeting. Save as required by law, the Company need not issue share certificates to the holders of the Special Deferred Shares in respect of their holding thereof. The holders of Special Deferred Shares shall not be entitled to receive any dividend or distribution other than the Special Dividend and shall only be entitled to any repayment of capital on a winding up once the holders of New Ordinary Shares have received £1,000,000 in respect of each New Ordinary Share held by them.

 

One consequence of the Share Capital Reorganisation is that Shareholders holding fewer than 10 Existing Ordinary Shares will receive no New Ordinary Shares, they will, however, receive Special Deferred Shares. Shareholders should also be aware that if the Proposals are approved, they will hold an interest in NewCo on a pro-rata basis to their holdings in the Company on the Record Date.  This consequence is illustrated in the table below:

 

Number of Existing Ordinary Shares currently held

Number of New Ordinary Shares held

Number of Special Deferred Shares held

Number of ordinary shares held in the capital of NewCo

1

0

1

1

6

0

6

6

10

1

10

10

15

1

15

15

100

10

100

100

 

8.       Adoption of Articles of Association

 

The Directors have decided to adopt new articles of association which will replace the existing Articles. The principal change from the Company's existing Articles is that the new Articles of the Company will set out the rights attaching to the Special Deferred Shares. A copy of the new Articles will be available for inspection at the General Meeting and will be made available on the Company's website at www.ultima-networks.com.

 

9.       The Placing

 

Following completion of the Disposal, it will be necessary to recapitalise the Company.

 

Having taken advice from its advisers, the Board considers that it is not possible to raise monies with the current share capital structure and accordingly, it will be necessary to reorganise the share capital of the Company pursuant to the Share Capital Reorganisation.

 

Conditional upon (i) completion of the Disposal, (ii) completion of the Share Capital Reorganisation, and (iii) Admission, Peterhouse has conditionally raised £750,000 before expenses through the placing of 107,142,854 Placing Shares at the Placing Price, representing 79.33 per cent. of the Enlarged Share Capital. The Placing Shares will be issued following the passing of the Resolutions and completion of the Disposal.

 

An application will be made for the admission of the New Ordinary Shares and the Placing Shares to AIM.

 

10.     Existing and future Options and warrants

 

There are currently no outstanding issued options or warrants.

 

The Company has granted, conditional on all Resolutions being approved at the General Meeting, share options to the Proposed Directors to acquire up to, in aggregate, 10 per cent. of the Enlarged Share Capital immediately following the General Meeting, for a period of ten years in whole or in part from the date of passing the Resolutions and at the Placing Price per New Ordinary Share as follows:

 

Name

Number of New Ordinary Shares under option

Gavin Burnell:

10,804,840

Luke Cairns:

2,701,210

 

In connection with the Placing and conditional on the Proposals being approved by Shareholders and upon approval of the Resolutions, the Company has agreed to enter into a warrant instrument (the "Warrant Instrument") pursuant to which it will issue the warrants to Peterhouse (being the "Broker Warrants") to subscribe for such number of New Ordinary Shares as equals to up to 3 per cent. of the Enlarged Share Capital, equating to 4,051,815 Broker Warrants.

 

The Broker Warrants may be exercised at any time up to 22 August 2019 and will entitle Peterhouse to acquire one New Ordinary Share for each Broker Warrant held, at a price of 0.7 pence per New Ordinary Share.

 

The Broker Warrants will not be admitted to trading on AIM.

 

11.     Dis-application of pre-emption rights and authority to allot shares

 

In order to facilitate the Placing and to enable the Company to raise further funds to implement its proposed Investing Policy, Shareholders' approval is being sought for the authority of the Directors to allot New Ordinary Shares, and to grant rights to subscribe for New Ordinary Shares on a non-pre-emptive basis for cash up to 180 per cent. of the issued New Ordinary Share capital of the Company following the Capital Reorganisation, such authority to expire at the conclusion of the next annual general meeting of the Company or 15 months from the date of passing of the Resolution, whichever is the earlier.

 

12.     Proposed dealing arrangements for shares in NewCo

    

The current directors and proposed directors of NewCo are aware that shareholders of NewCo may still wish to acquire or dispose of shares in NewCo following the Disposal and will be appointing JP Jenkins (London Matched Markets Exchange Limited) to operate a matched bargain dealing facility in the shares of NewCo.

 

13.     Proposed Investing Policy

 

On Completion, the Company will have disposed of all of its trading businesses and therefore, under Rule 15 of the AIM Rules, it will be re-classified as an investing company and will be required to adopt an Investing Policy, which must also be approved by Shareholders.

 

The Company will seek to invest a minimum of 75 per cent. of its deployable capital in, and/or acquire companies or interests within, the natural resources sector - in which the Proposed Directors have substantial experience as founders, investors and advisers.

 

The Company will participate as investors in fundraisings for entities being admitted to trading on AIM, in secondary fundraisings, or where such entities plan to be admitted to trading on an Exchange within 18 months of investment by the Company.

 

Investments are likely to be held for the short to medium term in the case of publicly-traded holdings and for the longer term in respect of private holdings until there is a liquidity event when the Company may seek to reduce its exposure. There will be no minimum or maximum limit on the length of time an investment is held.

 

Initially the geographical focus will be Africa and North America but investments may be considered in other regions to the extent that the Board considers that an opportunity exists where significant returns can be made.

 

The Company may also invest in assets, projects or joint ventures using equity or debt structures, gaining direct exposure. Investments will generally be made on a passive basis unless there is a requirement to provide management or other expertise to the investee entity in seeking to generate positive returns for the Company.

 

In selecting investment opportunities, the Board will focus on companies, assets and/or projects that it believes are available at attractive valuations and where there is an opportunity to benefit from value uplift. The Company's equity holdings or interests may range from a minority position to 100 per cent. ownership.

 

The Proposed Directors will conduct due diligence appraisals of potential investments, businesses or projects and, where they believe further diligence is required or warranted, intend to utilise appropriately qualified persons to assist. The Proposed Directors believe they have a network which is likely to provide various opportunities which may prove suitable.

 

The Company does not plan to have cross-holdings in entities save where there is a portfolio of related assets outside of the Company's control.

 

The Board considers that as investments are made, and new investment opportunities arise, further funding of the Company may also be required which is likely to be in the form of equity, until such time as the Company is self-funding.

 

It is intended that returns for Shareholders will initially be in the form of capital growth, subject to appreciation in the value of the investments made by the Company. In the longer term, if the Company becomes cash generative, then the plan will be to put in place an appropriate dividend policy as appropriate for a Company with its activities at that time.

 

The Company plans to have a maximum of fifteen investments / interests at any one time. Though there will be no maximum exposure to any one investment, it will generally seek to diversify its portfolio holdings. The Company's financial resources may ultimately be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules requiring shareholder approval.

 

The Company also intends to acquire over a period of time a diversified portfolio of royalties. These will consist, in varying proportions, of royalties over:

 

-   producing properties purchased at a discount to perceived value;

-   producing properties with enhanced production possibilities; and

-   non-producing properties where advanced exploration is likely.

 

It is intended that over the longer term the royalty investments will provide cashflow to finance further investment opportunities, minimising dilution to Shareholders through reduced equity financing requirements.

 

The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate. The Board may also offer New Ordinary Shares in the capital of the Company by way of consideration as well as utilising cash, preserving the Company's cash for additional opportunities and working capital.

 

Following on from adopting an Investing Policy, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of the General Meeting, failing which the ordinary shares would then be suspended from trading on AIM. If the Investing Policy has not been implemented within 18 months of the General Meeting the admission to trading on AIM of the ordinary shares would be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.

 

The Proposed Directors and Continuing Director believe that their broad collective business experience in the areas of corporate advisory services, investment, corporate and financial management will assist them in the identification and evaluation of suitable opportunities and will enable the Company to achieve its investing objectives.

 

Under the Company's investing policy the remaining 25 per cent. of the Company's deployable capital can be invested in to non-natural resource based interests that fit the same criteria as above.

 

In the first instance, the net proceeds of the Placing will be used for working capital purposes and to identify, evaluate and select investment opportunities. Investments may be made in either quoted or unquoted companies and structured as a direct acquisition, joint venture or as a direct interest in a project with equity interests in any proposed investment.

 

The adoption of the Investing Policy will provide the Continuing Director and the Proposed Directors with the flexibility to actively seek out and acquire new investment opportunities, which the Continuing Director and the Proposed Directors believe has the potential to create significant value for Shareholders.

 

14.     Proposed Board Changes

 

The Board currently consists of Professor Humayun Mughal (Chairman and Chief Executive Officer) and Anthony Klein (Finance Director).

 

Subject to the Resolutions being approved, it is proposed that Anthony Klein will resign from office immediately following the General Meeting with no compensation for loss of office, and will waive all claims against the Company under his appointment letter. Professor Humayun Mughal will resign his executive status but will remain as a non-executive director of the Company.

 

It is proposed that the Proposed Directors will join the Board: Gavin Burnell will be appointed as Chief Executive Officer and Luke Cairns as Non-Executive Director of the Company.

 

Gavin John Burnell, Chief Executive Officer (aged 37)

 

Mr. Burnell has 13 years' experience of advising smaller companies and is a Director of Corporate Finance at Sanlam Securities UK Limited. He is a founder and/or director of several public and private companies in varying sectors including Globo Plc (AIM: GBO), Magnolia Petroleum Plc (AIM: MAGP), Hot Rocks Investments Plc (PLUS: HRIP), Hellenic Capital Plc (PLUS: HECP), Sula Iron & Gold plc (AIM: SULA) and Woodland Capital Limited.

 

In addition to the proposed directorship of the Company, the Proposed Director holds or has held the following directorships (including directorships of companies registered outside England and Wales), or has been a partner in the following partnerships within the five years prior to the date of this Document:

 

Director

Current Directorships/Partnerships

Past Directorships/Partnerships

Gavin Burnell

 

Globo plc

Hellenic Capital plc

Hot Rocks Investments plc

Lizzy Bet Limited

Magnolia Petroleum plc

Rift Resources Limited

Ruegg & Co Limited

Woodland Capital Limited

Berkeley Estates & Management Limited

Elephant Oil Limited

Goldcrest Resources plc

Prospex Oil and Gas plc

Lombard Capital plc

IT & Web Technology Limited

Stratex West Africa Limited

Sula Iron & Gold plc

North American Petroleum plc

Sports 1st Limited

 

 

 

There are no other matters under paragraph (g) of Schedule 2 of the AIM Rules to be disclosed.

 

As at the date of this Document, Gavin Burnell does not hold any Existing Ordinary Shares.

 

Luke Sebastian Cairns, Non-Executive Director (aged 37)

 

Mr. Cairns has spent over 14 years working in corporate finance and is a former head of corporate finance and managing director at Northland Capital Partners ("Northland"). Having left Northland, Mr. Cairns founded LSC Advisory Limited to provide advisory and consultancy services to growth companies. Mr. Cairns is a former nominated adviser for the London Stock Exchange's AIM market and has provided financial, regulatory and commercial advice to many growth companies across a number of sectors and regions on a wide range of transactions including: IPOs, secondary fundraisings, mergers and acquisitions, corporate restructuring and takeovers. He is an Associate of the Chartered Institute of Secretaries.

 

In addition to the proposed directorship of the Company, the Proposed Director holds or has held the following directorships (including directorships of companies registered outside England and Wales), or has been a partner in the following partnerships within the five years prior to the date of this Document:

 

Director

Current Directorships/Partnerships

Past Directorships/Partnerships

Luke Cairns

LSC Advisory Ltd

Northland Capital Partners Limited

 

Uflutter Holdings Limited

Swan Alley (Nominees) Limited

 

Rame Solar Limited

 

 

There are no other matters under paragraph (g) of Schedule 2 of the AIM Rules to be disclosed.

 

As at the date of this Document, Luke Cairns does not hold any Existing Ordinary Shares.

 

15.     Lock-In Agreements

 

On passing of the Resolutions, Professor Humayun Mughal will, in aggregate, hold 11,232,517 New Ordinary Shares, representing 8.3 per cent. of the Enlarged Share Capital. Professor Humayun Mughal has agreed with the Company and Cairn Financial Advisers LLP, save for certain standard exceptions, not to dispose of any interest in the New Ordinary Shares held by him for a period of 12 months following the passing of all Resolutions.

 

16.     Future Dividends Policy

 

The initial focus of the Company will be the achievement of capital growth for Shareholders and therefore the Company will only consider the payment of dividends as and when it is appropriate to do so. As such, it is not possible at this stage to give an indication of the likely level or timing of any future dividends. To the extent that any dividends are paid they will be paid in accordance with any applicable laws and the regulations to which the Company is subject. The amount of the dividends paid to Shareholders will fluctuate according to the levels of profits earned by the Company and will be dependent on sufficient distributable reserves being available to the Company.

 

17.     Change of Name

 

In view of the change in the nature of the business, it is proposed that the Company's name be changed to Onzima Ventures PLC.

 

18.     Share Certificates

 

New share certificates will be issued as a result of the Company's Change of Name and Share Capital Reorganisation to all Shareholders who hold their shares in certificated form. Until new share certificates are issued, existing certificates of 10 Existing Ordinary Shares or more will remain valid. Once new share certificates have been issued, the existing share certificates will be void.

 

19.     General Meeting

 

The Notice convening the General Meeting at which the Resolutions will be proposed is set out at the back of this Document. A summary of the Resolutions is set out below. Please note that the Resolutions are inter-conditional therefore, unless all of the Resolutions are passed the Proposals outlined in this Circular will not proceed.

 

At the General Meeting, the following Resolutions will be proposed, of which resolutions 1 to 4 will be proposed as ordinary resolutions and resolutions 5 to 7 will be proposed as special resolutions:

 

Ordinary Resolutions

 

Resolution 1, which will be proposed as an ordinary resolution, seeks approval for the Disposal.

 

Resolution 2, which will be proposed as an ordinary resolution, seeks approval for the Share Capital Reorganisation.

 

Resolution 3, which will be proposed on an ordinary resolution, seeks approval for the new Investing Policy.

 

Resolution 4, which will be proposed as an ordinary resolution, seeks to grant the Directors of the Company authority to allot New Ordinary Shares in the capital of the Company. To enable the Placing Shares to be issued pursuant to the Placing, the Company is seeking authorisation for the Directors to exercise the powers of the Company to allot New Ordinary Shares up to an aggregate nominal amount of £350,000. This includes the amount required to effect the Placing and on the basis that the Broker Warrants are exercised in full, plus a further one third of the issued share capital of the Company (as increased by the Placing and on the basis that the Warrants are exercised in full). Such authority is to expire at the conclusion of the next annual general meeting of the Company or the date which is 15 months after the date of the passing of the resolution, whichever is the earlier.

 

Special Resolutions

 

Resolution 5, which will be proposed as a special resolution, seeks approval to change the name of the Company to Onzima Ventures PLC.

 

Resolution 6, which will be proposed as a special resolution, seeks to dis-apply the pre-emption provisions of the Company's Articles in respect of the allotment for cash of New Ordinary Shares pursuant to the Placing and up to an aggregate nominal amount of £250,000, representing 180 per cent. of the Company's issued ordinary share capital (as increased by the Placing and on the basis that the Broker Warrants are exercised in full), such disapplication to expire on the same date as the expiration of any authority given in terms of Resolution 6.

 

Resolution 7, which will be proposed as a special resolution, seeks to adopt new Articles of Association of the Company.

 

20.     Action to be taken by Shareholders

 

A Form of Proxy for use in connection with the General Meeting accompanies this Document. The Form of Proxy should be completed in accordance with the instructions printed thereon and returned to the Company's registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA, as soon as possible, but in any event so as to be received by 11 a.m. on 12 October 2015.

 

The completion and return of a Form of Proxy will not preclude Shareholders from attending the General Meeting and voting in person, should they so wish. Shareholders who hold their Existing Ordinary Shares through a nominee should instruct the nominee to submit the Form of Proxy on their behalf.

 

21.     Documents available

 

Copies of this Document will be available to the public, free of charge, at the offices of the Company, Akhter House, Perry Road, Harlow, Essex, CM18 7PN, during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) for one month from the date of this Document. This Document will also be available on the Company's website www.ultima-networks.com.

 

22.     Additional Information

 

Your attention is drawn to the risk factors set out in Part II of this Document and the information contained in the notice of General Meeting.

 

23.     Recommendation

 

The Independent Director considers, having consulted with Cairn Financial Advisers LLP, the Company's Nominated Adviser, that the terms of the Disposal are fair and reasonable insofar as Shareholders are concerned and recommends that Shareholders vote in favour of the Resolutions.

 

The Existing Directors intend to vote in favour of the Resolutions to be proposed at the General Meeting in respect of their shareholdings which in aggregate amount to 112,325,176 Existing Ordinary Shares representing 40.23 per cent. of the existing issued ordinary share capital.

 

Yours faithfully,

 

 

Anthony Klein

Independent Director

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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