TIDMVIR
RNS Number : 4548E
Viridas PLC
07 April 2011
Viridas Plc
("Viridas" or "the Company")
Notice of General Meeting
Further to the announcements made on 31st March 2011 and 5th
April 2011, a circular (the "Circular") relating to the proposed
new strategic direction of the Company and associated capital
reorganisation, and GBP1,050,000 fundraise, is being posted to
Viridas shareholders today.
The Circular includes a notice convening a General Meeting of
shareholders to be held at the offices of Rivington Street
Corporate Finance, 3rd Floor, 3 London Wall Buildings, London, EC2M
5SY, on 10 May 2011 at 11.00 a.m.
A copy of the Circular and form of Proxy is available at
http://www.viridasplc.com/investors/. Further selected information
extracted from the Circular is set out below.
Save where capitalised terms are expressly defined in this
announcement, all words and phrases defined in the Circular shall
have the same meaning when used in this announcement, except where
the context otherwise requires.
-END-
For further information, please contact:
Viridas plc:
Stanley Wootliff, Executive Chairman +44 (0) 113 235 0632
Nominated Adviser:
Arbuthnot Securities
Antonio Bossi/Paul Gillam +44 (0) 20 7012 2000
Broker to the Placing:
Rivington Street Corporate Finance
Dru Edmonstone +44 (0) 20 7562 3384
The following information has been extracted without material
adjustment from the Circular
Viridas Plc - General Meeting
In the Chairman's statement of June 2010, which accompanied the
financial statements for the year ended 31 December 2009, I
reported that the Board was in discussions with potential investors
with a view to securing an additional GBP1.4 million as the next
stage of the financing programme initiated in November 2009. These
additional funds were needed for the next stage of the Company's
ongoing development plan, the establishment and planting out of a
base farm in Brazil.
However, lack of clarity from the Government regarding future
support for biomass in the renewable energy industry and the
reduction of greenhouse gas emissions in the UK created a high
degree of uncertainty in the financial markets and had a
significant negative impact on the decision making process of
potential investors. This led to a lack of investor interest and
towards the end of 2010 the board decided to review the feasibility
of the Viridas jatropha project.
In January 2011, the Directors announced that they no longer
believed it would be possible to raise the funds necessary to
progress the Viridas jatropha project within an acceptable
timeframe. Consequently your Board started exploring various
opportunities to use Viridas as a quoted vehicle and, on 20 January
2011, the Company announced that it had entered into an option
agreement with a group of African Investors which had interests in
land, property development, gold mines and other activities in
Africa. However, it was not possible to reach agreement with these
investors and after the third instalment of the purchase price of
the option failed to be paid to the Company, the option agreement
lapsed. As a result, the Board considered other options available
to the Company including placing the Company into administration or
other insolvency process which would have delivered very little or
no value to Shareholders. Under the AIM Rules, the Company was at
that point reclassified as an investing company.
On 31 March 2011, the Company announced that it entered into an
agreement with Rivington Street Corporate Finance to raise
GBP750,000 through a placing of zero-coupon, unsecured Convertible
Loan Notes, with a range of institutional and other investors with
the intention that these funds will constitute a major part of a
proposed significant re-positioning of the Company. The Company
also announced that it intended to seek shareholder approval for
its Investing Policy. In addition the Company announced on 5 April
2011 that a further GBP300,000 had been secured via a further issue
of Convertible Loan Notes raising a total of GBP1,050,000.
The purpose of this letter is to provide you with background to
the Proposals and also to seek your approval to the issue of New
Ordinary Shares to the holders of the Convertible Loan Notes and of
the Investing Policy, all of which will be proposed as special
business at the General Meeting of Shareholders of the Company,
notice of which is set out at the end of this document.
Accordingly, I have pleasure in sending you a notice convening a
General Meeting of Shareholders of the Company which will be held
at the office of Rivington, 3 London Wall Buildings, London, EC2M
5SY on 10 May 2011 at 11.00 am (London Time) at which you will be
asked to approve the Resolutions.
Fundraise
As announced on 31 March 2011 and further to the announcement
released on 5 April 2011, the Company has entered into an agreement
with Rivington dated 30 March 2011 and amended on 4 April 2011 for
the raising of GBP1,050,000 through the issue of Convertible Loan
Notes. This funding has been made available to the Company to
provide it with general working capital and to enable the Company
to take initial steps to implement its Investing Policy.
The Convertible Loan Notes have been issued to a group of
institutional and private investor clients of Rivington. The
Convertible Loan Notes will not be admitted to trading and are
convertible into New Ordinary Shares at 5 day's notice. Both the
Company and the holders of Convertible Loan Notes may elect to
convert the Convertible Loan Notes into New Ordinary Shares at any
time following the General Meeting.
Subject to the Resolutions being passed at the General Meeting
each of the Convertible Loan Notes shall be convertible into 400
New Ordinary Shares at a price of 0.25 pence per New Ordinary
Share. If the conversion right is not exercised the Convertible
Loan Notes will become repayable on 31 December 2012, unless
otherwise agreed between the Company and the holders of the
Convertible Loan Notes. It is the intention of the Company to
exercise such conversion rights immediately following the General
Meeting
If exercised in full, the conversion of the Convertible Loan
Notes would result in the issue of 420,000,000 New Ordinary Shares
representing 92.7 per cent. of the Company's Enlarged Share
Capital. The issue of New Ordinary Shares to the holders of the
Convertible Loan Notes will require a reorganisation of the
Company's share capital to allow it to issue the New Ordinary
Shares at 0.25 pence each. Approval for such reorganisation and
authority for the Directors to allot the New Ordinary Shares
deriving from the conversion of Convertible Loan Notes will be
sought at the General Meeting.
Section 561 of the 2006 Act contains pre-emption rights that
require all equity shares which it is proposed to allot for cash to
be offered to existing shareholders in proportion to existing
shareholdings, unless a special resolution is passed to disapply
such rights. Such rights do not apply to an issue other than for
cash, such as an issue in consideration of an acquisition. In order
to enhance the attractiveness of the Company and to enable the
Company to convert the Convertible Loan Notes into New Ordinary
Shares the Board is seeking authorisation under Resolution 4, to
allow the Directors to allot shares amounting to an additional
aggregate nominal amount of GBP1,000,000 other than on a
pre-emptive basis including those to be issued on conversion of the
Convertible Loan Notes.
In each case, the authority conferred shall expire fifteen
months after the passing of this resolution or at the conclusion of
the next annual general meeting of the Company following the
passing of this resolution, whichever occurs first.
The Investing Policy of the Company following Completion
The Company also announced on 31 March 2011 its intention to
adopt, as required by the AIM Rules, an Investing Policy to allow
the Company to focus on the natural resources sector. Where
appropriate, the Company is prepared to take an active role in its
investments
Possible investments could include permits and licences, mining
and production licences or processing and development projects,
through acquisitions, partnerships or joint venture arrangements.
Such investments may result in the Company acquiring the whole or
part of a company or project. The Company's investments may take
the form of equity, joint venture, debt, convertible instruments,
licence rights or other financial instruments. The Company will
consider opportunities anywhere in the world, with a particular
focus on Africa, South America, Australasia and Central and Eastern
Europe.
The returns to Shareholders are expected to be by way of
dividends and growth in the value of the Company's shares.
Share Capital Reorganisation
The Act prohibits the Company from issuing ordinary shares at a
price below their nominal value. The price at which the Company has
been able to raise additional capital is less than the current
nominal value of its Existing Ordinary Shares. Accordingly, it will
be necessary to undertake the Share Capital Reorganisation.
Immediately following the General Meeting and before any
Convertible Loan Notes have been converted, the Company will have
32,857,956 Existing Ordinary Shares in issue. Resolution 2 to be
proposed at the General Meeting, proposes that all of the Existing
Ordinary Shares of the Company be split into one New Ordinary Share
of 0.1 pence and one Deferred Share of 9.9 pence, such deferred
shares having the rights attached to them as set out in the
Articles to be amended pursuant to the approval of Resolution 5
below. Essentially, the passing of Resolution 2 would change the
par value of the Company to 0.1 pence per share.
The New Ordinary Shares of 0.1 pence each will continue to carry
the same rights as attached to the Existing Ordinary Shares (save
for the reduction in nominal value). The 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
rights of the Deferred Shares are very limited - they do not carry
voting rights and carry no rights to participate in the profits of
the Company. On a return of capital in a winding up, they only have
rights to return of capital after very substantial sums have first
been paid to the holders of New Ordinary Shares. As such, all the
value in the issued shares is vested in the New Ordinary Shares and
not the Deferred Shares.
Only the New Ordinary Shares will be traded on AIM, in place of
the Existing Ordinary Shares, and application for the New Ordinary
Shares to be admitted to trading in place of the Existing Ordinary
Shares with effect from 7.00am on 11 May 2011 will be made to
AIM.
The practical effect of this change, if implemented, will be
that each Shareholder will receive the same number of New Ordinary
Shares as they hold in Existing Ordinary Shares, without diminution
in rights.
In the New Articles of Association, the Company has reflected
those principal changes to the existing Articles which are referred
to in the Explanatory Notes on page 10 of this Document.
Repurchase of Deferred Shares
Conditional upon the passing of the other Resolutions, including
those described in the paragraph titled "Share Capital
Reorganisation" above, the Company and the holders of the Deferred
Shares will have the ability, subject to compliance with any legal
requirements, to enter into a Repurchase Agreement whereby the
holders of the Deferred Shares will agree to transfer (without
receiving any payment therefore, in accordance with the New
Articles) all of the Deferred Shares held by them to a person
designated by the Board. That designated person will then agree to
the Company repurchasing all the Deferred Shares to be held by him,
for one penny in aggregate and following such repurchase, all of
the Deferred Shares will be cancelled. It would be the intention
that any such repurchase of the Deferred Shares could be financed
out of the proceeds of the issue of New Ordinary Shares. According
to the class rights of the Deferred Shares, any member of the Board
may be designated the person to sign a Repurchase Agreement on
behalf of the holders of Deferred Shares.
General Meeting
The Notice convening the General Meeting is set out on pages 12
and 13 of this Document at which the Resolutions will be proposed
for the purposes of the transaction. A summary of the Resolutions
is set out below:
Resolution 1, which will be proposed as an ordinary resolution,
seeks approval to remove the limit on the Company's ability to
issue shares in the capital of the Company;
Resolution 2, which will be proposed as an ordinary resolution
and is subject to the passing of Resolution 1, seeks approval for
the subdivision of each Existing Ordinary Share into 1 New Ordinary
Share of 0.1 pence each and 1 Deferred Share of 9.9 pence each;
Resolution 3, which will be proposed as an ordinary resolution
and is subject to the passing of Resolutions 1 and 2, seeks
approval for the proposed Investing Policy;
Resolution 4, which will be proposed as an ordinary resolution
and is subject to the passing of Resolutions 1 to 3, seeks to grant
the Directors authority to allot New Ordinary Shares in the capital
of the Company;
Resolution 5, which will be proposed as a special resolution and
is subject to the passing of Resolutions 1 to 4, seeks approval for
the adoption of the new Articles of Association of the Company;
Resolution 6, which will be proposed as a special resolution and
is subject to the passing of Resolutions 1 to 5, seeks to grant the
Directors the power to disapply statutory pre-emption rights over
certain shares; and
Resolution 7, which will be proposed as a special resolution and
is subject to the passing of Resolutions 1 to 6, seeks approval for
the Company to enter into a contract to re-purchase the Deferred
Shares for the sum of 1 penny.
Action to be taken
Shareholders will find a Form of Proxy enclosed for use at the
General Meeting. Whether or not you intend to be present at the
General Meeting, you are requested to complete and return the Form
of Proxy in accordance with the instructions printed thereon as
soon as possible. To be valid, completed Forms of Proxy must be
received by the Company's Registrars, Share Registrars Limited,
Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey, GU9
9LL, not later than 11.00 a.m. on 8 May 2011, being 48 hours before
the time appointed for holding the General Meeting. Completion of
the Form of Proxy will not preclude you from attending and voting
at the General Meeting in person if you so wish.
Recommendation
The Directors consider the Proposals to be in the best interests
of the Company and the Shareholders as a whole as the only
alternative would be an insolvency process which would deliver very
little or no value to Shareholders. The Directors therefore
recommend that you vote in favour of the Resolutions, as they
intend to do in respect of their own beneficial holdings, amounting
in aggregate to 6,254,691 Existing Ordinary Shares representing
approximately 19.0 per cent of the issued share capital of the
Company at the date of this Document.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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