19 Sep 2008 08:33
19 September 2008
Danka Business Systems PLC
("Danka" or the "Company")
Board to Propose Members' Voluntary Liquidation at Annual General Meeting
The Board of Danka announces that, subject to certain regulatory clearances being obtained, it intends to propose a resolution, among others, at the Company's Annual General Meeting, which is scheduled to be held no later than 31 October 2008, to approve the entry into by the Company of a members' voluntary liquidation.
As announced on 27 June 2008, the resolution proposed at the Extraordinary General Meeting of Danka held on that date to approve the sale of Danka's operating business to Konica Minolta Business Solutions U.S.A., Inc (the "Disposal") was approved by the requisite majority and the Disposal was completed on that date. However, the resolution proposed at that Extraordinary General Meeting to approve the entry by the Company into members' voluntary liquidation, and related resolutions which were conditioned upon the passing of that resolution, were not approved by the requisite majorities and, consequently, the Company did not enter into members' voluntary liquidation at that time.
Since the completion of the Disposal, the Company has ceased to have any trading operations and the Board of Danka has assessed the alternatives available to distribute the Company's net cash among Danka's shareholders. In assessing the available alternatives, the Board has been mindful of the fact that there is no guarantee that the holders of the 6.50 per cent senior convertible participating shares of US$1.00 each in the capital of the Company (the "Participating Shares") will not take action(s) that may be available to them under applicable law, for example seeking an involuntary liquidation of the Company, to recover amounts to which they are entitled pursuant to the Company's Articles of Association, and, in fact, the Company has been advised that one or more of its Participating Shareholders may seek such a winding up of the Company. Such amounts exceed the amount of the Company's net cash, including the net proceeds of the Disposal. Consequently, the Board believes that in the context of an involuntary liquidation of the Company, the holders of the Company's ordinary shares of £0.0125 each ("Ordinary Shares") and of American Depositary Shares representing Ordinary Shares ("ADSs") would not receive any distribution.
However, as previously announced, the Board has procured the agreement of the holders of the Participating Shares to the holders of Ordinary Shares and ADSs receiving, in the context of a members' voluntary liquidation of the Company, an aggregate amount in cash equal to approximately US$6.5 million, on the basis of a payment in cash of US$0.025 per Ordinary Share and a payment in cash of US$0.10 per ADS, prior to any distribution to the holders of Participating Shares. Following this payment, any additional proceeds of a members' voluntary liquidation would be paid to the holders of Participating Shares in accordance with the Company's Articles of Association and holders of Ordinary Shares and ADSs would not receive any further distribution.
The Board believes that, in light of the provisions of the Company's Articles of Association, the amount of the net cash held by the Company and the steps which may be taken under applicable law by the holders of the Participating Shares, for example to seek an involuntary liquidation of the Company, these undertakings which the Board has procured from the holders of the Participating Shares, and which only apply in the context of a members' voluntary liquidation, represent the only realistic prospect of holders of Ordinary Shares obtaining a return from the Company's net cash. In view of these factors, and of the fact that the Company has ceased to have any trading operations, the Board believes that the entry into members' voluntary liquidation is in the best interests of Danka and Danka shareholders as a whole. Accordingly, subject to receiving certain regulatory clearances from the United States Securities and Exchange Commission and the UK Listing Authority, the Board intends to propose a resolution at the Company's Annual General Meeting, which is scheduled to be held no later than 31 October 2008, to approve the entry into by the Company of members' voluntary liquidation.
The notice convening the Company's Annual General Meeting and other related documents, as well as (subject to the clearances referred to above being obtained) further information relating to the proposed members' voluntary liquidation of the Company will be sent to Danka's shareholders and to holders of ADSs shortly.
This announcement is not intended to, and does not constitute, or form any part of, an offer to sell or an invitation to purchase any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the transactions referred to herein or otherwise. Persons who are not resident in the United Kingdom, or who are subject to the laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe any applicable legal and regulatory requirements.
Enquiries
Danka: Jean Johnson, General Counsel, 00 1 727-456-4460
Weber Shandwick Financial (London)
James White/Laura Vaughan, 020 7067 0700
Evolution Securities Limited (London)
(Sponsor to Danka Business Systems PLC)
Stuart Andrews / Bobbie Hilliam, 020 7071 4300