TIDMJUST

RNS Number : 3678I

Just Group PLC

12 August 2021

12 August 2021

Just Group plc (the "Company" or "Just")

Publication of Circular Convening a General Meeting

Introduction

As set out in the Chair's Statement in the 2020 Annual Report, in 2019 Just embarked on a programme to adapt its business model with a view to reducing the overall capital intensity of the business, strengthening the headline capital position and increasing its organic capital generation. During 2020 and continuing into the first half of 2021, the Company has demonstrated the success of this repositioning and has continued to strengthen its capital position, both in terms of the Solvency II capital coverage ratio and its overall resilience, while also delivering an improved operating performance.

Alongside the improving headline levels of Solvency II capital, the Board has also been monitoring the optimal capital mix in order to provide a prudent and effective base to support Just's business and its expected growth going forward.

Overall, the Board is comfortable with the current capital position of the Group. Nevertheless, the Board is proposing that Shareholders delegate to the Board additional flexibility to manage the capital position on an ongoing basis by authorising the issue of further Solvency II-compliant restricted tier 1 bonds, structured as contingent convertible securities ("Restricted Tier 1 Bonds"), in addition to other forms of subordinated debt.

Accordingly, the Board wishes to seek authority from Shareholders to issue new Restricted Tier 1 Bonds that are convertible into ordinary shares of the Company ("Ordinary Shares") upon the occurrence of certain trigger events ("Trigger Events"). Under the prudential rules applicable to the Group, Restricted Tier 1 Bonds must either be converted to equity or written off upon the occurrence of certain Trigger Events. The conversion feature is more tax and solvency capital efficient for the Group.

The circumstances in which the Restricted Tier 1 Bonds may convert into Ordinary Shares would be limited to the occurrence of a Trigger Event. A Trigger Event will occur if the Group determines, in consultation with the PRA, that it has ceased to comply with its capital requirements under Solvency II in a significant way. This may occur if the amount of capital held by the Group falls below 75% of its capital requirements, if the Group fails to comply with its capital requirements for a continuous period of three months or more or if the Group fails to comply with other minimum capital requirements applicable to it. Only if a Trigger Event occurs (and not under any other circumstances) will any Restricted Tier 1 Bonds issued by the Company convert into new Ordinary Shares. The holders of any Restricted Tier 1 Bonds would not have the option to require conversion of the Restricted Tier 1 Bonds at their discretion.

The Board continues to monitor the Company's and the Group's capital position, including in respect of a possible issue of Restricted Tier 1 Bonds or other forms of subordinated debt instruments, as part of its overall capital management. If passed, the Board will look to exercise the authorities and powers granted by the resolutions to be proposed at the General Meeting (as defined below) in support of any such issue of Restricted Tier 1 Bonds.

Circular and Notice of General Meeting

Accordingly, Just has today made available to Shareholders a circular (the "Circular") containing a notice convening, and explaining the reasons for, a general meeting of the Company (the "General Meeting"), which will take place at Enterprise House, Bancroft Road, Reigate, Surrey, RH2 7RP on Tuesday, 31 August 2021 at 10:00 am.

The Circular is now available on the Company's website at www.justgroupplc.co.uk/investors/shareholder-information. Printed copies of the Circular together with a Form of Proxy will be posted today to those Shareholders who have requested it.

The General Meeting is being held for the purpose of considering and, if thought fit, passing the resolutions summarised below (the "Resolutions"):

Resolution 1: Allotment Resolution: an ordinary resolution seeking the approval of Shareholders to provide the Directors with the necessary authority and power to allot Ordinary Shares and grant rights to subscribe for or convert any security into Ordinary Shares up to an aggregate nominal amount equal to GBP50,000,000 (representing approximately 48% of the issued Ordinary Share Capital as at the Latest Practicable Date) in connection with any issue(s) of Restricted Tier 1 Bonds. This authority will apply until the end of the Company's next Annual General Meeting (or, if earlier, at the close of business on 30 June 2022); and

Resolution 2: Disapplication Resolution : a special resolution seeking the approval of Shareholders to confer on the Directors the power to allot Ordinary Shares and grant rights to subscribe for or convert any security into Ordinary Shares in connection with any issue(s) of Restricted Tier 1 Bonds pursuant to Resolution 1 without first offering them to existing Shareholders in proportion to their existing shareholdings. This authority will apply until the end of the Company's next Annual General Meeting (or, if earlier, at the close of business on 30 June 2022).

The Directors believe it is in the best interests of the Company for the Board to have the additional flexibility to issue further convertible Restricted Tier 1 Bonds, in addition to other forms of subordinated debt instruments, in order to optimise its capital structure and may use the authority sought in the Allotment Resolution if, in the opinion of the Directors at the relevant time, such an issuance of Restricted Tier 1 Bonds would be desirable to improve the capital structure of the Company and market conditions allow.

The Disapplication Resolution would permit the Company the flexibility necessary to allot equity securities pursuant to any proposal to issue Restricted Tier 1 Bonds without the need to comply with the strict pre-emption requirements of the UK statutory regime. Together with the Allotment Resolution, the Disapplication Resolution is intended to provide the Directors with the flexibility to issue Restricted Tier 1 Bonds which may convert into Ordinary Shares. This will enhance the Company's ability to manage its capital.

The explanatory letter from John Hastings-Bass, the Chair of Just, which forms part of the Circular, provides further information on Restricted Tier 1 Bonds and sets out the Directors' reasoning for putting the Resolutions to Shareholders.

Recommendation

The Board considers the Resolutions to be in the best interests of the Company and its Shareholders taken as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of both Resolutions, as the Directors intend to do in respect of their own beneficial holdings, which amount in aggregate to 2,023,566 Ordinary Shares and represent approximately 0.19% of the Company's issued ordinary share capital as at 9 August 2021, being the Latest Practicable Date prior to issuing the Circular.

COVID-19

Although the UK Government has lifted the COVID-19 restrictions as of 19 July 2021, the situation is still evolving. We are closely monitoring the situation and if circumstances should change materially before the date of the General Meeting, we may adapt our proposed arrangements in accordance with UK Government guidelines and mindful of public health concerns. If these arrangements do change, we will notify any changes as early as possible before the date of the General Meeting. Shareholders should continue to monitor our website www.justgroupplc.co.uk/investors/shareholder-information) and our regulatory announcements for any updates in relation to the General Meeting.

National Storage Mechanism

Copies of the Circular and Form of Proxy will be submitted to the National Storage Mechanism and will shortly be available for viewing at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

Capitalised terms used in this announcement have the meanings given to them in the Circular, which is available on the Company's website ( www.justgroupplc.co.uk )

 
 Enquiries 
 
  General                                   Media 
  Simon Watson, Group Company Secretary     Stephen Lowe, Group Communications 
  Telephone: +44 (0) 20 7444 8400           Director 
                                            Telephone: +44 (0) 1737 827 301 
  Investors / Analysts                      press.office@wearejust.co.uk 
  Alistair Smith, Head of Investor 
  Relations                                 Temple Bar Advisory 
  Telephone: +44 (0) 1737 232 792           Alex Child-Villiers 
  alistair.smith@wearejust.co.uk            William Barker 
                                            Telephone: +44 (0) 20 7183 1190 
  Paul Kelly, Investor Relations 
  Manager 
  Telephone: +44 (0) 20 7444 8127 
  paul.kelly@wearejust.co.uk 
 

A copy of this announcement will be available on the Group's website www.justgroupplc.co.uk.

JUST GROUP PLC

GROUP COMMUNICATIONS

Enterprise House

Bancroft Road, Reigate

Surrey RH2 7RP

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August 12, 2021 02:05 ET (06:05 GMT)

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