Taihua Plc - Proposed cancellation of Admission & Notice of AGM
Proposed cancellation of Admission to AIM
Notice of General Meeting
The Company announces that it will, today, be sending a Circular to Shareholders together with a notice convening a General Meeting to seek Shareholder's approval to cancel the admission of the Company's Ordinary Shares to trading on AIM and re-register the Company as a private limited company.
This Circular sets out the background to and reasons for the Delisting, additional information on the implications of the Delisting for the Company and its Shareholders, and why your Board believes the Delisting to be in the best interests of Shareholders as a whole. Having disclosed their interests in the Company and their intentions with regard to their individual holdings, the Directors also unanimously recommend the Delisting.
In addition to the Delisting, the Notice of
2. The Delisting and Re-Registration
2.1 Reasons for the Delisting and Re-Registration
The Directors have undertaken a review of the merits or otherwise of the Company continuing to be admitted to trading on AIM. The Directors have concluded that a proposal to cancel the Admission should be made to Shareholders at the General Meeting. In reaching the decision to propose this to Shareholders, the Directors have taken the following factors into account: -
· The primary purpose of the Company's Admission was the opportunity it provided to raise capital in support of the Company's growth prospects. Given current market conditions, and in particular the lack of investors for the Company's businesses, the Directors are of the opinion that it is difficult for the Company to attract any or meaningful equity investment through its status as a quoted company on AIM and accordingly the Directors will be assessing potential alternatives to raise growth capital.
· There are significant professional fees associated with the Admission.
In the Board's opinion the costs of Admission outweigh any benefits that currently accrue to the Company or its Shareholders and the Admission should therefore be cancelled as it is no longer in the best interests of the Shareholders as a whole.
Once the Company has ceased to be listed on AIM, it would be easier to operate as a private limited company than as a public limited company and it is therefore also proposed that the Company should re-register as a private limited company. This will save a small amount of money on annual running costs and will also allow future corporate actions to be undertaken in a more straight forward and cost effective manner due to the more flexible regime which applies to private companies under the Companies Act.
2.2 Effects of Delisting
The principal effects of the Delisting would be that: -
· there would no longer be a formal market mechanism enabling Shareholders to trade their shares on AIM or any other market or trading exchange;
· the Company would not be bound to announce material events, such as interim or final results, material transactions or administrative changes;
· the Company would no longer be bound to comply with the corporate governance requirements for companies with shares admitted to trading on AIM;
· the Company would no longer be required to comply with the AIM Rules (or to have a nominated advisor), and Shareholders would no longer be required to vote on certain matters prescribed by the AIM Rules; and
· interim reports will not be sent to Shareholders and, as a result, Shareholders will only receive the annual report once a year.
Following the Delisting, although the Ordinary Shares will remain transferable, they will no longer be tradable on AIM. Consequently, it is likely to be more difficult for a Shareholder to purchase or sell any Ordinary Shares following the Delisting. Following the Delisting, transfers of Ordinary Shares may be effected in accordance with those provisions of the Articles concerning off-market transfers of shares.
It is the Company's intention to cancel the CREST facility following the passing of the resolutions at the
2.3 Delisting procedure
Your Board has accordingly concluded that it is in the best interests of Shareholders as a whole that the Delisting be approved.
Under the AIM Rules, the Delisting can only be effected by the Company after securing a special resolution of Shareholders in a general meeting, whereby at least 75 per cent. of votes cast are in favour of such a resolution. A period of at least five Business Days following the Shareholder approval of the Delisting is required before the Delisting may be put into effect.
Resolution 1 contained in the Notice of
2.4 Effect of the Re-registration
Re-registration as a private limited company will not affect the way in which the Company is managed.
In order to achieve Re-registration, in accordance with section 97 of the Companies Act, it is necessary for Shareholders to pass a special resolution in a general meeting. Resolution 2 in the notice of the
If both Resolution 1 and Resolution 2 are passed, the Re-registration of the Company will become effective upon the Registrar of Companies issuing a certificate of incorporation on re-registration which will be issued once the registrar is satisfied that no valid application can be made to cancel Resolution 2.
If Resolution1 to approve the Delisting is passed but Resolution 2 to approve the Re-registration is not passed, the Company will still proceed with the Delisting.
Shareholders should note that, even if the Delisting and Re-registration are approved and become effective, the Company will remain subject to the provisions of the City Code for a period of 10 years. The City Code provides an orderly framework within which takeovers and mergers are conducted and operates principally to ensure that shareholders are treated fairly and not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment. The City Code will however cease to apply to the Company 10 years after the Delisting becomes effective. However, the regulatory regime imposed through the AIM Rules, which applies solely to companies with shares admitted to trading on AIM, will no longer apply. Upon the Delisting becoming effective, WH Ireland will therefore cease to be nominated adviser and broker to the Company.
3. City Code
The City Code is issued and administered by the
The City Code and the
The City Code is based upon a number of General Principles which are essentially statements of standards of commercial behaviour.
4. Intention to purchase Ordinary Shares from other Shareholders after the Delisting
Mr Yunwu Liu and Mr
Mr Yunwu Liu, Mr
5. The Board following Delisting and Corporate Governance
It is intended that Mr
However, the Directors intend to continue to operate the Company for the benefit of all Shareholders. They also intend to continue to keep Shareholders informed of progress. As such, the Directors will:-
· hold annual general meetings and general meetings in accordance with statutory requirements and the Articles; and
· continue to send to Shareholders copies of the Company's annual accounts each year.
6. General Meeting
Set out at the end of the Circular is a notice convening the
7. Irrevocable Undertakings
The Company has received irrevocable undertakings from Yunwu Liu,
8. Actions to be taken -
Enclosed with the Circular is a Form of Proxy for use at the
The Directors consider that all the Resolutions to be considered at the
A copy of the AGM notice will be made available on the Company's website at www.taihuaplc.com.
Capitalised terms used but not otherwise defined in this announcement bear the meanings ascribed to them in the Circular.
Katy Mitchell, WH Ireland Limited +44 161 832 2174
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Notice given to
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Publication of the Circular
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Latest time and date for receipt of Form of Proxy
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Announcements of results of AGM
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Expected last day of dealings in Ordinary Shares on AIM
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Expected time and date that the admission to trading of the Ordinary Shares on AIM will be cancelled
with effect from
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If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a
This information is provided by RNS
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