TIDMARCH
RNS Number : 9506B
ARC Capital Holdings Limited
13 January 2015
13 January 2015
ARC Capital Holdings Limited
Notice of General Meeting
ARC Capital Holdings Limited ("ARCH" or the "Company") (AIM:
ARCH), the closed-end investment company admitted to trading on
AIM, announces its general meeting ("GM") as follows:
Background
On 24 December 2014, the Company received a requisition from the
Requisitionist, as a member of the Company representing at least 10
per cent. of the issued ordinary capital of the Company, requiring
the Directors to convene a general meeting to propose resolutions
to remove the current Board and replace it with a new board
comprising nominees of the Requisitionist.
Under the Company's articles of association the Directors are
required to convene the requisitioned general meeting within 21
days of receipt of the requisition failing which the Requisitionist
could itself convene the general meeting.
The Board has considered with its advisers whether to resign and
appoint the Requisitionist's nominees as a new board without
convening the general meeting. It has however decided to convene a
General Meeting because significant minority shareholders have
approached the Board and requested that the GM be convened so that
they may cast their votes at it as a matter of record and ask
questions and speak at the GM.
Information on Requisitionist's Shareholding
By a form TR-1: Notification of major interests in shares dated
16 December 2014 (the "Notification"), PAG Holdings Limited ("PAG")
notified the Company that three of its subsidiaries (a) Cielo
Overseas Limited, (b) ACP Trading Limited and (c) ARC Capital
Partners Limited (together with PAG, the "PAG Concert Party") had
between them acquired an interest in 114,272,413 Ordinary Shares
representing 50.09 per cent. of all such shares.
The Notification also disclosed that the transactions by which
such acquisitions occurred pre-dated 10 December 2014.
The significance of whether the PAG Concert Party acquired an
interest in more than 50 per cent. of the Company's Ordinary Shares
prior to 10 December 2014 is material as it was on that date that
the Company amended its articles of association to include
provisions whereby, inter alia, any person (together with other
persons acting in concert with it) holding interests in 30 per
cent. to 50 per cent. of the issued share capital of the Company
which then increased its interest in the Company's Ordinary Shares
from anywhere between 30 per cent. and 50 per cent. may be obliged
to make an offer to acquire all of the issued shares of the Company
not owned by it or its concert party.
The Board has sought to verify when the PAG Concert Party
acquired its interests in Ordinary Shares as referred to above. The
Board can confirm that in this regard:
(a) it has received evidence that 83,715,931 Ordinary Shares
were purchased by Cielo Overseas Limited prior to 10 December 2014;
and
(b) it has received similar evidence in respect of a separate
transfer of (i) 28,476,085 Ordinary Shares to Cielo Overseas
Limited and (ii) 1,414,830 ordinary shares to ACP Trading
Limited.
Based on the evidence received by the Board it would appear that
the information in the Notification is correct and accordingly the
Board is not aware of information which would entitle it to require
the Requisitionist or any member of the PAG Concert Party to make a
takeover offer under the provisions of the articles of association
of the Company.
Matters for Shareholders
In light of the fact that the Requisitionist would appear to be
able to determine the outcome of each vote on the Resolutions to be
put at the GM, the Board does not believe it would be appropriate
to recommend how Shareholders should vote on the Resolutions.
However the Board believes that Shareholders should be aware of the
following matters:-
(i) The Company's Nominated Adviser, Grant Thornton UK LLP, has
obligations under the AIM Rules for Nominated Advisers that require
it, amongst other things, to investigate and consider the
suitability of each of the proposed directors and to consider the
effect the Board changes proposed by the Requisitionist will have
on the efficacy of the Board as a whole for the Company's needs.
Grant Thornton UK LLP is in the process of obtaining information
from the Requisitionist and the proposed directors to enable it to
discharge these obligations.
On the basis that the PAG Concert Party owns or controls more
than 50 per cent. of the Ordinary Shares, Grant Thornton UK LLP
informed the Requisitionist on 29 December 2014 that the following
proposals should be implemented (the "Proposals"). As at the date
of this document, it is not clear whether the PAG Concert Party
will agree to the Proposals:
(a) a controlling shareholder agreement entered into between the
Company and the PAG Concert Party to ensure that the Company can
run independently of the PAG Concert Party;
(b) arrangements put in place whereby the election and
re-election of directors who are independent of the PAG Concert
Party be undertaken independently of the PAG Concert Party; and
(c) arrangements put in place whereby the cancellation of the
Company's admission to trading on AIM will require, in addition to
the approval of 75 per cent. of shareholders voting on the
resolution, the approval of a simple majority of independent
shareholders (which would exclude the PAG Concert Party).
Should Grant Thornton UK LLP not be able to satisfactorily
conclude on the suitability of each of the proposed directors and
the efficacy of the new board, nor obtain a satisfactory level of
support from the PAG Concert Party to the Proposals before or
within a reasonable period of time after the GM, Grant Thornton UK
LLP has indicated its intention to resign as Nominated Adviser to
the Company.
Were this to occur, and unless a replacement Nominated Adviser
is appointed by the Company concurrently, the resignation of Grant
Thornton UK LLP would result in an immediate suspension of trading
in the Ordinary Shares pursuant to the AIM Rules for Companies. If
within one month of such suspension the Company fails to appoint a
replacement Nominated Adviser, the admission of the Ordinary Shares
to trading on AIM would be cancelled.
(ii) The Board has no verifiable information as to the
relationship between the PAG nominee directors and the members of
the PAG Concert Party.
(iii) The Company has been investigating and pursuing litigation
claims against its former investment manager (ARC Capital Partners
Limited) and other related parties including the ongoing
proceedings against the former investment manager issued in the
High Court in London in relation to Orient Home. The
Requisitionist, that is seeking to replace the Board in its
entirety, is, as explained above, an affiliate of the former
investment manager, and indeed the former investment manager is one
of the PAG Concert Parties.
General Meeting and Action to be Taken
A General Meeting has been convened for 2.00 p.m. on 2 February
2015 at 1 Finsbury Circus, London EC2M 7SH for the purpose of
considering and, if thought fit, passing the following resolutions
which will be proposed as ordinary resolutions.
1 THAT Alpay Ece, having indicated his willingness to act, be
and is hereby appointed a director of the Company with immediate
effect.
2 THAT Sean Hurst, having indicated his willingness to act, be
and is hereby appointed a directed of the Company with immediate
effect.
3 THAT Cosimo Borrelli, having indicated his willingness to act,
be and is hereby appointed a director of the Company with immediate
effect.
4 THAT Steven Feniger be and is hereby removed from the office
of director of the Company with immediate effect.
5 THAT Helen Wong be and is hereby removed from the office of
director of the Company with immediate effect.
6 THAT Tian-Cho Chu be and is hereby removed from the office of
director of the Company with immediate effect.
7 THAT any other person who was a director of the Company
immediately before the passing of the resolution numbered 1 above
be and is hereby removed from the office of director of the Company
with immediate effect.
For more information, please contact:
ARC CAPITAL HOLDINGS LIMITED: NOMINATED ADVISER:
Steve Feniger, Chairman Philip Secrett
of the Board Grant Thornton UK LLP
Steve.feniger@gmail.com T: (44) 20 7383 5100
Philip.J.Secrett@uk.gt.com
------------------------------ ----------------------------
BROKER:
Numis Securities Limited
David Benda / Hugh Jonathan
T: (44) 20 7260 1000
F: (44) 20 7260 1001
d.benda@numiscorp.com
------------------------------ ----------------------------
Current Directors of the Company
Steve Feniger (Chairman)
Steve Feniger was born in the UK, and has 25 years international
experience in sourcing, manufacturing and retailing, the last 15
years being based in Hong Kong & Shanghai. In 2006 he resigned
from corporate life and set up 55Consulting for companies wanting
to improve their sourcing in Asia. Involvement starts with an
assessment of how to professionalize the client's sourcing in Asia,
then implementing the recommendations and optimize their
operations. Between 2001 and 2006, Mr Feniger was CEO of Linmark
Group, a buying agency, and led a successful IPO on the Main Board
of the Hong Kong Stock Exchange. Previously, Mr Feniger ran global
sourcing & manufacturing at Warnaco Inc. overseeing production
of Calvin Klein Jeans, Calvin Klein Underwear, Chaps Ralph Lauren
and Speedo. Mr Feniger started his career as a buyer at Marks &
Spencer for 19 years, in London, Paris and finally Hong Kong.
Tian-Cho Chu
Tian-Cho Chu is a Director of Port Jackson Partners in Sydney,
Australia. Prior to joining Port Jackson, he was a Director of
McKinsey & Company, Inc. for 28 years.
Arc Capital (LSE:ARCH)
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