Cancellation of admission to trading on AIM
18 Febrero 2009 - 6:21AM
UK Regulatory
TIDMVYCO
RNS Number : 5165N
Vycon Inc
18 February 2009
VYCON, INC.
("Vycon" or "the Company")
PROPOSED CANCELLATION OF ADMISSION TO TRADING ON AIM
The Company today announces that it is seeking Stockholder approval for the
cancellation of admission to trading on AIM of the Common Shares.
BACKGROUND
On 10 November 2008 Vycon announced that it proposed to raise new funds of up to
US$6.4 million before expenses by way of a subscription for new Convertible Loan
Notes. On 3 December 2008 the Company extended the Offer to 23 December 2008 and
on 24 December 2008 the Company announced that the Offer had closed and
Convertible Loan Notes with a nominal value of US$3.2 million and approximately
4.1 million Warrants had been issued pursuant to the Offer.
In the circular which summarised the Offer Stockholders were informed that in
the event that the Offer was not fully subscribed it would be necessary for the
Company to secure additional funding.
As the Offer was only partially subscribed it has been necessary for the Company
to attempt to secure additional sources of funding. The Directors believe it is
in the best long-term interest of the Company and of the Stockholders, as a
whole, to obtain adequate investment capital for the Company to continue
execution of its business plan and remain a going concern.
Accordingly, a number of meetings have recently taken place with potential
investors. However, whilst these meetings have been productive the potential
investors have not indicated any interest in making an investment in the Company
whilst its Common Shares are traded on AIM. The Company has expended
considerable resources in exploring the best strategy for raising further
capital and the Directors now believe there is very little prospect of Vycon
attracting further investment as a publicly traded company.
CURRENT TRADING
Last year saw substantial progress at Vycon. Significant positive steps in the
execution of its business plan included:
developing channel partner relationships with significant players in each of its
target markets;
repositioning its variable direct current ("VDC") power quality products to
better address market requirements;
completing technical reconfiguration of its VDC product line and obtaining UL
and CE agency certification for those products (agencies which have developed
sets of safety standards for various classes of equipment); and
completing technical reconfiguration of its REGEN product to better address
customer requirements and improve the value proposition to the Company and to
its customers.
With the reconfiguration of the VDC product line and with the added credibility
of the Company's channel partners in the power quality market, orders for these
products were being received as soon as the product had received agency
certification. Similarly in the REGEN market the Company has seen greater
interest in its products as they have proven themselves in the field. This
progress was evidenced by the sales increase in the first half of 2008 as
compared with all of 2007.
This trend in sales has continued through the second half of 2008 and into 2009.
The Company currently has a backlog of orders for its products in both markets
and has seen an accelerating interest in its products, particularly for the VDC
product line in the power quality market.
However, while these efforts have yielded substantial fruit they have not
brought the Company to the point of positive cash flows from its operating
activity and without additional funding the Company will likely not reach this
point.
REASONS FOR THE CANCELLATION
The Directors have been considering for some time the merits or otherwise of the
Company continuing to trade on AIM. The following factors were taken into
account during their review:
* the current economic turmoil has led to significant turbulence and falls in the
values of the global stock markets, from which Vycon is not immune. The stock
market tends to operate on a short term investment horizon which has little
basis in the underlying fundamentals of a business such as ours. The
susceptibility of the share price to market conditions is not to the benefit of
the business;
* Vycon, like most other smaller listed companies, has been unable to raise
capital from institutional investors as they remain uninterested in committing
funds to smaller listed companies with the present problems of the markets. The
Directors do not expect this situation to change in the foreseeable future;
* the low liquidity of Vycon's Common Shares leads to a volatility in the share
price which may not reflect the true worth of the business;
* the costs, management time and regulatory burdens associated with maintaining
trading on AIM; and
* the recent indications from potential investors that they would only be
interested in investing in Vycon as a private company.
The Board now believes that the best course of action is that which will provide
the best means to safeguard the Company's future and, therefore, in view of the
factors referred to above, the Board believes cancellation of the admission of
the Company's Common Shares to trading on AIM should be sought.
SPECIAL MEETING OF STOCKHOLDERS
A Special Meeting of Stockholders is being convened to be held at 23695 Via Del
Rio, Yorba Linda, CA 92887, USA, on 18 March 2009 at 11.00 am, at which a
resolution to approve the cancellation of the admission to trading on AIM of the
Common Shares will be proposed as a special resolution.
If this resolution is passed by not less than 75 per cent. of votes cast by
Stockholders at the SMS then it is anticipated that the cancellation of the
admission to trading on AIM of the Common Shares will become effective from
7.00 am on 27 March 2009.
CANCELLATION
In accordance with Rule 41 of the AIM Rules, the Cancellation is conditional
upon the consent of not less than 75 per cent. of votes cast by Stockholders at
the SMS. Vycon's bylaws require that the holders of at least 40 per cent. of the
total number of shares entitled to vote be present in person or by proxy in
order for the business of the SMS to be transacted.
Subject to the requisite Stockholder approval, the Cancellation is expected to
be effective from 7.00 am on 27 March 2009.
FOLLOWING THE CANCELLATION
The Directors are aware that following the Cancellation Stockholders may still
wish to acquire or dispose of Common Shares and, accordingly, the Company
intends to use reasonable endeavours to put in place and maintain some form of
facility to enable Stockholders or persons wishing to acquire Common Shares to
buy or sell at an agreed price.
The Company intends to continue to communicate with its Stockholders using its
website at www.vyconenergy.com and directly by letter or email where
appropriate.
RECOMMENDATION
The Directors unanimously consider the Cancellation to be in the best interests
of the Company and its Stockholders as a whole and the Directors recommend that
Stockholders vote in favour of the resolution to be proposed at the SMS as they
and certain Stockholders connected with them intend to do in respect of their
beneficial holdings of Common Shares amounting to, in aggregate, 12,578,696
Common Shares, representing approximately 41.5 per cent. of the current issued
share capital of the Company.
CIRCULAR
A circular is being posted to Stockholders today with a Notice of Special
meeting of Stockholders to approve the Cancellation.
For further information please contact:
Vycon, Inc:
Vatche ArtinianTel: 001 714 386 3810
Craig GlynnTel: 001 714 386 3800
Smith & Williamson Corporate Finance Limited:
Nick ReeveTel: +44 (0)117 933 3344
David Abbott
Barrie Newton
Cardew Group:
Rupert PittmanTel: +44 (0)20 7930 0777
Shan Shan Willenbrock
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
+----------------------------------------------------+-------------------------+
| Date of this announcement | 18 February 2009 |
+----------------------------------------------------+-------------------------+
| Latest time and date for receipt by Capita | 6.00 pm (GMT) on |
| Registrars of Forms of Proxy for the Special | 16 March 2009 |
| Meeting of Stockholders | |
+----------------------------------------------------+-------------------------+
| Special Meeting of Stockholders | 11.00 am (Pacific |
| | Daylight Time) on |
| | 18 March 2009 |
+----------------------------------------------------+-------------------------+
| Cancellation of admission to trading on AIM of the | 7.00 am (GMT) on |
| Common Shares | 27 March 2009 |
+----------------------------------------------------+-------------------------+
| References to time in this announcement are to local time, as appropriate. |
+----------------------------------------------------+-------------------------+
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
+------------------------------+-----------------------------------------------+
| "AIM" | the market known as AIM operated by the |
| | London Stock Exchange; |
+------------------------------+-----------------------------------------------+
| "AIM Rules" | the 'AIM Rules for Companies' as published by |
| | the London Stock Exchange from time to time; |
+------------------------------+-----------------------------------------------+
| "Board" or "Directors" | the directors of Vycon; |
+------------------------------+-----------------------------------------------+
| "Business Day" | any day other than a Saturday or a Sunday or |
| | public holiday when banks generally are open |
| | in London for general banking business; |
+------------------------------+-----------------------------------------------+
| "Cancellation" | the proposed cancellation of admission to |
| | trading on AIM of the Common Shares; |
+------------------------------+-----------------------------------------------+
| "certificated" or "in | the description of a share or other security |
| certificated form" | which is not in uncertificated form (that is, |
| | not in CREST); |
+------------------------------+-----------------------------------------------+
| "Common Shares" | the common shares of par value of US$0.0001 |
| | each of the Company; |
+------------------------------+-----------------------------------------------+
| "Company" or "Vycon" | Vycon, Inc.; |
+------------------------------+-----------------------------------------------+
| "Convertible Loan Notes" | the unsecured subordinated convertible loan |
| | notes of the Company created by a loan note |
| | instrument dated 7 November 2008; |
+------------------------------+-----------------------------------------------+
| "CREST" | the computerised settlement system (as |
| | defined in the CREST Regulations) operated by |
| | Euroclear which facilitates the transfer of |
| | title to shares in uncertificated form; |
+------------------------------+-----------------------------------------------+
| "DGCL" | Delaware General Corporation Law; |
+------------------------------+-----------------------------------------------+
| "Euroclear" | Euroclear UK & Ireland Limited; |
+------------------------------+-----------------------------------------------+
| "London Stock Exchange" | London Stock Exchange PLC; |
+------------------------------+-----------------------------------------------+
| "Notice of SMS" | the notice of the Special Meeting of |
| | Stockholders set out at the end of this |
| | document; |
+------------------------------+-----------------------------------------------+
| "Offer" | the offer for Convertible Loan Notes on the |
| | terms and subject to the conditions set out |
| | in the circular to Stockholders dated 10 |
| | November 2008 and the accompanying |
| | Application Form; |
+------------------------------+-----------------------------------------------+
| "Optionholders" | holders of Options pursuant to the Share |
| | Option Schemes; |
+------------------------------+-----------------------------------------------+
| "Options" | the options granted by Vycon pursuant to the |
| | Share Option Schemes entitling the holder to |
| | subscribe for Common Shares; |
+------------------------------+-----------------------------------------------+
| "Share Option Schemes" | the 2006 Incentive Award Plan adopted by |
| | Vycon on 4 October 2006 and the Vycon |
| | Non-Qualified Stock Option Plan; |
+------------------------------+-----------------------------------------------+
| "Special Meeting of | the special meeting of stockholders of the |
| Stockholders" or "SMS" | Company (including any adjournment thereof), |
| | being convened in relation to the |
| | Cancellation; |
+------------------------------+-----------------------------------------------+
| "Stockholders" | holders of Common Shares; |
+------------------------------+-----------------------------------------------+
| "UK" or "United Kingdom" | the United Kingdom of Great Britain and |
| | Northern Ireland; |
+------------------------------+-----------------------------------------------+
| "United States" | the United States of America, its territories |
| | and possessions, any state of the United |
| | States of America, the District of Columbia |
| | and all other areas subject to its |
| | jurisdiction; |
+------------------------------+-----------------------------------------------+
| "US$" | United States dollars, the lawful currency of |
| | the United States; |
+------------------------------+-----------------------------------------------+
| "Warrants" | the warrants to subscribe for Common Shares |
| | issued to subscibers for Convertible Loan |
| | Notes pursuant to the Offer. |
+------------------------------+-----------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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