TIDMPTRO
RNS Number : 8562K
Pelatro PLC
31 August 2023
31 August 2023
Pelatro Plc
("Pelatro" or the "Company")
Proposed cancellation of admission to trading on AIM and notice
of General Meeting
Further to the announcement of 29 August 2023, Pelatro announces
that the Board has concluded that it is in the best interests of
the Company and its shareholders to seek shareholder approval to
cancel the admission of the Company's Ordinary shares to trading on
AIM (the "Cancellation"). In accordance with Rule 41 of the AIM
Rules for Companies ("Rule 41"), the Company has notified the
London Stock Exchange of the date of the proposed cancellation.
The Directors consider that the Cancellation is in the best
interests of the Company and its Shareholders as a whole and intend
unanimously to recommend that shareholders vote in favour of the
resolutions to effect the Cancellation to be proposed at a General
Meeting of the Company to be convened for this purpose. Pursuant to
Rule 41, the Cancellation requires the approval of not less than
75% of the votes cast by Shareholders (whether present in person or
by proxy) at a General Meeting to be convened for the purpose and
to be held at the company's office at 49, Queen Victoria Street,
London EC4N 4SA at 11.00 am on 21 September 2023. If the relevant
resolutions are passed at the General Meeting it is anticipated
that the Cancellation will become effective, following the issue of
a Dealing Notice, at 7.00am on 29 September 2023. A circular
containing further information on the background to, reasons for,
and implications of the Cancellation will be posted to shareholders
presently, together with a notice convening the General
Meeting.
Background to and reasons for the Cancellation
The Directors have undertaken a review to evaluate the bene ts
and drawbacks to the Company and its Shareholders of retaining the
admission to trading of the Ordinary Shares on AIM. This review has
included, amongst other matters, the public market share trading
and valuation of the Company, the increasing costs of maintaining a
public quotation and especially the inability to raise funds in the
London market (including most recently despite the likely working
capital shortfall experienced by the Group), which was one of the
primary reasons for the Company seeking admission to AIM in the
first place. For these reasons, the Directors have concluded that
the Cancellation are in the best interests of the Company and its
Shareholders as a whole. Further details of the background to and
reasons for the Cancellation are set out below.
The Directors believe that a number of factors have impaired
investor sentiment towards the Company, including, amongst others:
(a) the Company's exposure to events outside its control impacting
its recent trading performance; (b) current market conditions and
the lack of investor appetite for the Company; and (c) lack of UK
market liquidity. Further, the Directors believe that growing the
Group's business within the parameters of a publicly quoted company
will be more challenging due to: (a) continuing adverse sentiment
towards the Company as referred to above; and (b) the legal and
regulatory burden associated in maintaining the Company's AIM
admission. These factors have all led the Directors to consider
that the Company's business may no longer be appropriate for that
of a publicly quoted company.
Due to the setbacks suffered by the Company as a result of
recent events, the Directors believe that having access to capital
in the near to medium-term may be prudent to ensure that the
Company can capitalise successfully on future opportunities and
growth and, as a result of the factors set out above, the Directors
consider it unlikely that an equity fundraise using the public
markets would successfully raise additional capital (or provide the
optimal platform to do so), should it be so required.
More generally, the UK small and micro-cap public markets have
changed signi cantly since the Company's IPO and the Directors
believe that the Company's current public market valuation does not
re ect the underlying potential of the business with the result
that growth prospects are more readily accessible and managed in a
private market environment.
There has been limited liquidity in the Ordinary Shares for some
time and, as a result, the Directors believe that continued
admission to trading on AIM no longer suf ciently provides the
Company with the advantage of providing access to capital in the
medium to longer-term, nor provides liquidity to investors. As a
result, the Directors have concluded that the most likely source of
future funds would be through private capital and debt funding.
The considerable cost, management time and the legal and
regulatory burden associated with maintaining the Company's
admission to trading on AIM is, in the Directors' opinion,
disproportionate to the bene ts of the Company's continued
admission to trading on AIM. Given the lower costs associated with
private limited company status, it is estimated that the
Cancellation will materially reduce the Company's recurring
administrative and adviser costs by approximately $400,000 per
annum, which the Directors believe can be better spent supporting
growth in the Group's business.
As a result of the limited liquidity in Ordinary Shares
highlighted above, the admission of the Ordinary Shares to trading
on AIM does not necessarily offer investors the opportunity to
trade in meaningful volumes or with frequency within an active
market. With low trading volumes, the Company's share price can
move up or down signi cantly following trades of small volumes of
Ordinary Shares. In the opinion of the Directors, the adverse share
price performance is detrimental to the perception of the Group
amongst customers and other partners, which, in turn, has
negatively impacted its staff morale and industry reputation as
highlighted above.
Following careful consideration, the Directors therefore believe
that it is in the best interests of the Company and Shareholders to
seek the proposed Cancellation.
Process for, and principal effects of, the Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Ordinary Shares in the event that the
Cancellation is approved and becomes effective. Such Shareholders
should consider selling their interests in the market prior to the
Cancellation becoming effective.
Under the AIM Rules, the Company is required to give at least 20
clear Business Days' notice of Cancellation. Additionally,
Cancellation will not take effect until at least ve clear Business
Days have passed following the passing of the Cancellation
Resolution. If the Cancellation Resolution is passed at the General
Meeting, it is proposed that the last day of trading in Ordinary
Shares on AIM will be 28 September 2023 and that the Cancellation
will take effect at 7.00 a.m. on 29 September 2023.
The principal effects of the Cancellation will include the
following:
-- there will be no formal market mechanism enabling the
Shareholders to trade Ordinary Shares;
-- it is possible that, following the publication of this
Document, the liquidity and marketability of the Ordinary Shares is
reduced and their value adversely affected (however, as set out
above, the Directors believe that the existing liquidity in the
Ordinary Shares is in any event limited);
-- the Ordinary Shares may be more dif cult to sell compared to
shares of companies traded on AIM (or any other recognised market
or trading exchange);
-- in the absence of a formal market and quote, it may be dif
cult for Shareholders to determine the market value of their
investment in the Company at any given time;
-- the regulatory and nancial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
-- Shareholders will no longer be afforded the protections given
by the AIM Rules, such as the requirement to be noti ed of price
sensitive information or certain events and the requirement that
the Company seek shareholder approval for certain corporate
actions, where applicable, including substantial transactions,
reverse takeovers, related party transactions and fundamental
changes in the Company's business, including certain acquisitions
and disposals;
-- the levels of disclosure and corporate governance within the
Company may not be as stringent as for a company quoted on AIM;
-- the Company will no longer be subject to UK MAR regulating
inside information and other matters;
-- the Company will no longer be required to publicly disclose
any change in major shareholdings in the Company under the
Disclosure Guidance and Transparency Rules;
-- the Takeover Code will cease to apply to the Company following the Cancellation;
-- finnCap will cease to be nominated adviser to the Company;
-- whilst the Company's CREST facility will remain in place
immediately post the Cancellation, the Company's CREST facility may
be cancelled in the future and, although the Ordinary Shares will
remain transferable, they may cease to be transferable through
CREST (in which case, Shareholders who hold Ordinary Shares in
CREST will receive share certi cates);
-- stamp duty will be due on transfers of shares and agreements
to transfer shares unless a relevant exemption or relief applies to
a particular transfer; and
-- the Cancellation and Re-registration may have personal
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 on them.
For the avoidance of doubt, the Company will remain registered
with the Registrar of Companies in England & Wales in
accordance with and, subject to the Companies Act, notwithstanding
the Cancellation.
The Company currently intends to continue to provide certain
facilities and services to Shareholders that they currently enjoy
as shareholders of an AIM company. The Company will:
-- continue to communicate information about the Company
(including annual accounts) to its Shareholders, as required by the
Companies Act; and
-- continue, for at least 12 months following the Cancellation,
to maintain its website, www.pelatro.com and to post updates on the
website from time to time, although Shareholders should be aware
that there will be no obligation on the Company to include all of
the information required under the Disclosure Guidance and
Transparency Rules, AIM Rule 26 or to update the website as
required by the AIM Rules.
Matched Bargain Facility
In the event that the Cancellation becomes effective, the
Company intends to put in place a Matched Bargain Facility to
assist Shareholders to trade in the Ordinary Shares to be put in
place from the date of Cancellation. The Matched Bargain Facility
will be provided by J P Jenkins. J P Jenkins is an appointed
representative of Prosper Capital LLP, which is authorised and
regulated by the Financial Conduct Authority.
Under the Matched Bargain Facility, Shareholders or persons
wishing to acquire or dispose of Ordinary Shares will be able to
leave an indication with J P Jenkins, through their stockbroker (J
P Jenkins is unable to deal directly with members of the public),
of the number of Ordinary Shares that they are prepared to buy or
sell at an agreed price. In the event that J P Jenkins is able to
match that order with an opposite sell or buy instruction, it would
contact both parties and then effect the bargain (trade). Should
the Cancellation become effective and the Company puts in place the
Matched Bargain Facility, details will be made available to
Shareholders on the Company's website at www.pelatro.com
The Matched Bargain Facility will operate for a minimum of six
months after Cancellation. The Directors' current intention is that
it will continue beyond that time but Shareholders should note that
it could be withdrawn and therefore inhibit the ability to trade
the Ordinary Shares. Further details will be communicated to the
Shareholders at the relevant time.
If Shareholders wish to buy or sell Ordinary Shares on AIM they
must do so prior to the Cancellation becoming effective. As noted
above, in the event that Shareholders approve the Cancellation, it
is anticipated that the last day of dealings in the Ordinary Shares
on AIM will be 28 September 2023 and that the effective date of the
Cancellation will be 29 September 2023.
Board Composition
There will be no change to the composition of the Board
immediately following the Cancellation. Harry Berry and Pieter
Verkade (being the two Non-Executive Directors of the Company)
have, however, noti ed the Company that they are considering
stepping down from their roles as directors in the period shortly
following the Cancellation. A key purpose of their current
positions is to bring independence to the Board, and help ensure
that the Company meets its obligations under the AIM Rules, and
such a role is unlikely to exist or be economically or
operationally justi ed should the Cancellation take place.
Recommendation
The Directors consider that the Cancellation is in the best
interests of the Company and its Shareholders as a whole and,
therefore, unanimously recommend that you vote in favour of the
Resolutions at the General Meeting, as they intend to do in respect
of their own beneficial holdings amounting to 12,933,553 Ordinary
shares representing approximately 13.8 per cent. of the issued
share capital.
For further information contact:
Pelatro Plc
Subash Menon, Managing Director c/o finnCap
finnCap Limited (Nominated Adviser and
Broker) +44 (0)20 7220 0500
Carl Holmes/Milesh Hindocha (Corporate
Finance)
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END
MSCQBLFXXVLBBBV
(END) Dow Jones Newswires
August 31, 2023 02:00 ET (06:00 GMT)
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