30 Nov 2011 16:39
For immediate release: 30 November 2011
Creon Corporation plc
("Creon", the "Company" or the "Group")
Placing and Notice of GM
The Company released an announcement on 22 September 2011, informing Shareholders of a temporary suspension in trading of the Existing Ordinary Shares on AIM due to the financial uncertainty of the Company.
Since the release of that announcement, the Board has been in discussions with Rivington Street Corporate Finance Limited ("RSCF") and Daniel Stewart & Company Plc with a view to raising additional funds for the Company to remove this uncertainty and allow the Company to restore trading on AIM. The Company is pleased to announce that it has raised £278,000 before expenses (approximately £25,000), through the subscription of 278,000,000 New Ordinary Shares. The proceeds of the Placing will allow the Company to satisfy existing creditors (including directors' fees) and enable the Group to explore opportunities to create shareholder value. The Placing is conditional on approval of the resolutions set out in the Notice of General Meeting contained in a Circular that has today been sent to Shareholders ("Circular").
The resolutions set out in the Circular include the approval of a new Investment Policy, a share capital reorganisation, a proposed change of name to Creon Resources plc, the appointment of a new Director and the issue of the Placing Shares. A full copy of the Circular is available on the Company's website at www.creoncorporation.com.
The General Meeting of Shareholders of the Company will be held at the office of RSCF, 3 London Wall Buildings, London, EC2M 5SY on 16 December 2011 at 11.00 a.m. (London Time).
It is proposed that, should all of the Resolutions be passed, Robert Eijkelhof will resign with effect from the conclusion of the General Meeting. It is also anticipated that trading in the Company's shares is expected to be restored shortly after the General Meeting.
Defined terms are set out at the end of this announcement.
Shareholders should be aware that the Proposals are conditional upon the passing of all of the Resolutions. If any of the Resolutions is not passed then the Placing will not proceed and the Company may need to consider commencing liquidation proceedings.
Placing
The Company has raised £278,000 before expenses, through the subscription for 278,000,000 New Ordinary Shares at an issue price of £0.001 per New Ordinary Share. These shares have been placed with persons whose individual holdings will not exceed 29.9% of the Enlarged Share Capital. RSCF have confirmed to the Company that, to the best of their knowledge based on information provided by the Placees, the Placees are independent from, and unconnected with, each other and further that, as between the Placees, there are no concert parties within the meaning of the City Code on Takeovers and Mergers. The Placing, which has been arranged by RSCF, is subject to the approval of the Resolutions at the General Meeting.
Following completion of the Placing and the Share Capital Reorganisation, the Placees will, in aggregate, hold approximately 86.28% of the Enlarged Share Capital. There are currently 44,190,545 Existing Ordinary Shares in issue.
This funding will enable the Company to satisfy existing creditors, which includes the Directors in respect of unpaid fees, and provide the Company with general working capital to enable it to take initial steps to implement the new Investing Policy as set out below.
Proposals
Share Capital Reorganisation and New Articles
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 in the Placing is less than the current nominal value of its Existing Ordinary Shares. Accordingly, it will be necessary to undertake the Share Capital Reorganisation to enable the Placing to proceed.
The Company currently has 44,190,545 Existing Ordinary Shares in issue. Resolution 1 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 and one Deferred Share, such Deferred Shares having the rights attached to them as set out in the New Articles to be adopted pursuant to the approval of Resolution 6.
The New Ordinary Shares 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 not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return on capital on a winding up other than the nominal amount paid on such shares. Subject to the passing of the Resolutions, the Company will have the right to purchase the Deferred Shares from any Shareholder for a consideration of one penny in aggregate for all that Shareholder's Deferred Shares. As such, the Deferred Shares effectively have no value. Share certificates will not be issued in respect of the Deferred Shares.
It is proposed that the Company will adopt the New Articles. The New Articles will reflect the rights attaching to the New Ordinary Shares and the Deferred Shares. A copy of the New Articles will be available for inspection at the General Meeting and will be made available on the Company's website at www.creoncorporation.com. 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.
Application for the Placing Shares issued in connection with the Proposals will be made to AIM. Admission is expected to occur on or around 19 December 2011 ("Admission"). On Admission, trading of the Company's shares will be restored on AIM.
Share capital
Pursuant to the adoption of the New Articles under Resolution 6 to be proposed at the General Meeting, the limit on the Company's share capital authority will be removed such that there are no limits. In addition, the Company is seeking authorisation to allot additional equity securities on a non pre-emptive basis up to the nominal amount of £380,000. Further details are set out in the Circular.
Investing Policy AIM Rules
Resolution 2 to be proposed at the General Meeting proposes the adoption of the new Investing Policy.
It is proposed that the Company's Investment Policy will be to invest principally, but not exclusively in the resources and/or resources infrastructure sectors, with no specific national or regional focus. The Company may be either an active investor and acquire control of a single company or it may acquire non-controlling shareholdings.
The proposed investments to be made by the Company may be either quoted or unquoted; made by direct acquisition or through farm-ins; may be in companies, partnerships, joint ventures; or direct interests in resources projects. Target investments will generally be involved in projects in the exploration and/or development stage. The Company's equity interest in a proposed investment may range from a minority position to 100 per cent. ownership.
The Company will initially focus on projects located in the Middle East and Asia but will also consider investments in other geographical regions.
The Company will identify and assess potential investment targets and where it believes further investigation is required, intends to appoint appropriately qualified advisers to assist.
The Company proposes to carry out a comprehensive and thorough project review process in which all material aspects of any potential investment will be subject to rigorous due diligence, as appropriate. It is likely that the Company's financial resources will be invested in a small number of projects or potentially in just one investment which may be deemed to be a reverse takeover under the AIM Rules.
Where this is the case, it is intended to mitigate risk by undertaking an appropriate due diligence process. Any transaction constituting a reverse takeover under the AIM Rules will require Shareholder approval. The possibility of building a broader portfolio of investment assets has not, however, been excluded.
The Company intends to deliver shareholder returns principally through capital growth rather than capital distribution via dividends. Given the nature of the Company's Investing Policy, the Company does not intend to make regular periodic disclosures or calculations of net asset value.
The proceeds of the Placing will enable the Company to take initial steps to implement this new strategy and it is likely that the Company will undertake a further fundraising in the future to provide additional capital for the Company.
Change of Name
Subject to Shareholder approval, it is proposed that the name of the Company be changed to Creon Resources plc, to reflect the new Investing Policy. Resolution 5 is proposed for the purposes of obtaining Shareholder approval for the proposed name change.
Proposed Director
In accordance with the proposed Investing Policy of the Company, it is proposed that Mr Aamir Ali Quraishi (age 41) will join the Board as a non-executive director following the General Meeting.
Aamir has over 15 years of investment banking experience in London and the Middle East and has worked at Dresdner Kleinwort Benson and Libertas Capital Group Plc. Aamir is currently a member of the senior investment banking team of MAC Capital Limited, a fully regulated investment bank registered with the Dubai Financial Services Authority and located in the Dubai International Financial Centre in Dubai, UAE.
Aamir qualified as a chartered accountant with Price Waterhouse and is a member of the ICAEW and the Securities Institute. Aamir holds an M.A. (Hons) in Economics from Cambridge University.
During his career, Aamir has advised on and raised capital for a number of resources companies in the oil & gas and mining sectors. These have included companies from across Africa, Europe, the Asia-Pacific, the Americas and more recently from South Asia.
Aamir is also a director of Montpelier Holdings Limited and Benedict Investments Limited, both of which are registered as International Business Companies in the Republic of Seychelles.
Aamir has no interest in any securities of the Company.
Anticipated Directors
It is anticipated that, following the General Meeting and subject to completion of satisfactory due diligence, Mr Jeswant Natarajan (age 60) will join the board of directors of the Company as Chief Executive Officer with the remit to lead the Company in executing the new Investing Policy.
Jeswant graduated from the University of Malaya in 1974 with a BA in Economics (Business Administration). Since then, he has enjoyed a varied career in business with over 30 years' experience in a variety of sectors and roles in industry both as director and in a corporate advisory capacity. Having started his career as a merchant banker, Jeswant moved into industry in corporate advisory, management and board roles during which time he oversaw the execution of various acquisition, divestment and restructuring strategies. Between 1983 and 2002, amongst others, he served on the board of Kuala Lumpur Stock Exchange-listed YTL Corp Bhd and Sunrise Bhd. Most recently, from 2003 to 2010, Jeswant served as an advisor to Kuala Lumpur-based UOA Bhd, and oversaw the listing of their Malaysian-based REIT on the Kuala Lumpur Stock Exchange. He served on the board of the REIT until late 2010. Currently, Jeswant advises a few select listed and private family groups on corporate strategy and manages his own portfolio of investments and assets.
Share Option Scheme
The Directors anticipate that the Company will establish a share option scheme to incentivise management and directors of the Company following Completion. The scheme will be limited to a maximum of 15 per cent. of the issued share capital of the Company from time to time.
Ordinary Resolutions
Resolution 1, which will be proposed as an ordinary resolution, seeks approval for the subdivision of each Existing Ordinary Share into 1 New Ordinary Share and 1 Deferred Share.
Resolution 2, which will be proposed as an ordinary resolution, seeks approval for the proposed Investing Policy.
Resolution 3, which will be proposed as an ordinary resolution, seeks to grant the directors of the Company authority to allot New Ordinary Shares in the capital of the Company up to the nominal amount of £380,000.
Resolution 4, which will be proposed as an ordinary resolution, seeks to approve the appointment of Aamir Ali Quraishi as a Director of the Company.
Special Resolutions
Resolution 5, which will be proposed as a special resolution, seeks approval to change the name of the Company to Creon Resources plc.
Resolution 6, which will be proposed as a special resolution, seeks approval for the adoption of the New Articles.
Resolution 7, which will be proposed as a special resolution, seeks to disapply the statutory pre-emption rights over New Ordinary Shares authorised for allotment pursuant to Resolution 3. This will enable the Placing Shares to be issued and additionally disapply statutory pre-emption rights over approximately 31.7 per cent. of the Enlarged Issued Share Capital.
Each of the Resolutions is conditional on each of the other Resolutions being passed.
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 may be an insolvency process which the Directors believe would deliver very little or no value to Shareholders. The Directors therefore recommend that Shareholders vote in favour of the Resolutions.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of the Circular | 30 November 2011 |
Latest time and date for receipt of Forms of Proxy | 11.00 a.m. on 14 December 2011 |
General Meeting | 11.00 a.m. on 16 December 2011 |
Commencement of dealings in the New Ordinary Shares and the Placing Shares | 7.30 a.m. on 19 December 2011 |
Crediting of New Ordinary Shares and Placing Shares to Crest Accounts | 19 December 2011 |
Despatch of New Ordinary Shares and Placing Shares in certificated form | by 31 December 2011 |
For further information please contact:
Creon Corporation plc
Guus Berting + 31 (6) 2061 8295
Daniel Stewart & Company Plc
Oliver Rigby/James Felix +44 (0)20 7776 6550
GTH Media Relations
Toby Hall/ Suzanne Johnson-Walsh +44 (0)20 3103 3900
DEFINITIONS
The following definitions apply throughout this announcement unless the context otherwise requires:
"Act" | the Companies Act 2006, as amended from time to time; |
"AIM" | a market operated by the London Stock Exchange; |
"AIM Rules" | AIM Rules for Companies February 2010, as amended from time to time; |
"Circular" | The circular sent to shareholders today, to inter alia, approve the Resolutions; |
"Completion" | the completion of the Proposals which is subject to approval of the Resolutions by Shareholders; |
"Creon" or the "Company"
| Creon Corporation plc, incorporated and registered in England and Wales with company number 05216336; |
"Daniel Stewart" | Daniel Stewart & Company Plc, the Company's Nominated Advisor and Broker; |
"Deferred Shares" | deferred shares of 0.9 pence each in the capital of the Company to be created as part of the Share Capital Reorganisation; |
"Directors" | the directors of the Company; |
"Enlarged Share Capital" | the issued share capital of Creon following the Share Capital Reorganisation and the Placing; |
"Existing Ordinary Shares" | the existing ordinary shares of 1 pence each in the capital of the Company; |
"General Meeting" | the general meeting of the Company to be held on 16 December 2011 at 11.00 a.m. as convened by the Notice; |
"Investing Policy" | the proposed new investing policy of the Company as described on page 7 of the Circular; |
"New Articles" | the proposed new articles of association of the Company to be adopted at the General Meeting; |
"New Ordinary Shares" | new ordinary shares of 0.1 pence each in the share capital of the Company to be created as part of the Share Capital Reorganisation; |
"Notice" | the notice of General Meeting set out in the Circular sent to shareholders today; |
"Placees" | the placees subscribing for the Placing Shares pursuant to the Placing; |
"Placing" | the placing by RCSF to institutional and other investors of 278,000,000New Ordinary Shares at the Placing Price; |
"Placing Shares" | the 278,000,000New Ordinary Shares subject to the Placing; |
"Placing Price" | means 0.1 pence per Placing Share; |
"Proposals" | the proposals set out in the Circular including adoption of the Investing Policy, the Share Capital Reorganisation and other matters to be considered at the General Meeting; |
"Proposed Director" | Mr Aamir Ali Quraishi; |
"Resolutions" | the resolutions contained in the Notice; |
"Rivington Street Corporate Finance" or "RSCF" | Rivington Street Corporate Finance Limited, which is authorised and regulated in the UK by the FSA and is incorporated in England and Wales with company number 02075091 with its registered office address at 3rd Floor, 3 London Wall Buildings, London, EC2M 5SY; |
"Share Capital Reorganisation" | the reorganisation of the Company's share capital resulting in the splitting of each Existing Ordinary Share into one New Ordinary Share and one Deferred Share; and |
"Shareholders" | the shareholders of the Company at the date of the Circular. |