FFI.L Regulatory News (FFI)

26 July 2019

FFI Holdings PLC

("FFI" or the "Group")

Proposed Cancellation of Admission to Trading on AIM

Re-registration as a private limited company and adoption of new articles of association

Publication of Circular and Notice of General Meeting

Further to the recommended mandatory offer for FFI by Lumiere Acquisitions Company LLC ("Lumiere") announced on 2 July 2019, FFI today announces that it is proposing to cancel the admission to trading on AIM of its ordinary shares of £0.01 each (the "Ordinary Shares") (the "Delisting") and is seeking approval to re-register as a private limited company (the "Re-registration") and to adopt new articles of association (the "New Articles").

A circular will be published and sent to all FFI shareholders later today setting out further details of the Delisting, the related Re-registration and adoption of New Articles and the implications for FFI shareholders (the "Circular"). Extracts from the Circular are included within the Appendix of this announcement. The Circular will contain a notice convening a general meeting of FFI which is to be held at 9000 Sunset Boulevard, Suite 1400, Los Angeles, California 90069, USA at 10:00 am Pacific Daylight Time ("PDT") on 19 August 2019, at which the approval of Shareholders of the Delisting and the related matters will be sought. Owing to Lumiere and other members of the Lumiere Concert Party (as defined in the Appendix) now owning or controlling over 75 per cent. of the issued shares in the Company, the Company expects that the relevant resolutions will be passed. Accordingly, Shareholders are expected to approve the Delisting and related matters and it is anticipated that trading in the Ordinary Shares on AIM will cease at close of business on 27 August 2019 and cancellation of admission to trading on AIM of the Ordinary Shares will become effective at 7:00 a.m. UK time on 28 August 2019. Following cancellation becoming effective the Company will re-register as a private company and adopt the New Articles.

ENQUIRIES:

Appendix - Extract from Circular

EXPECTED TIMETABLE

2019

Notice provided to the London Stock Exchange to notify it of 26 July

the proposed Cancellation

Posting of this document, Offer Document, Form of Acceptance and Notice of Availability 26 July

to Shareholders

Latest time and date for receipt of proxy votes in respect 10:00am PDT 15 August

of the General Meeting

Time and Date of General Meeting 10:00am PDT 19 August

Expected last day of dealings on AIM in the Ordinary Shares 27 August

Cancellation of the admission to trading on AIM of the Ordinary Shares 28 August

expected to be effective

Notes:

All references to times of day in this document are to London time unless specified otherwise.

Dates set out against events that are expected to occur after the date of the General Meeting assume that the General Meeting is not adjourned and that the Resolutions are passed at the General Meeting.

All of the above times and dates are subject to change at the Company's discretion. In the event of any change, the revised times and dates will be notified to Shareholders by an announcement through a Regulatory Information Service (as defined in the AIM Rules).

1. Introduction

As further described in the Offer Document, on 2 July 2019, Lumiere announced that the Independent FFI Directors and Lumiere had reached agreement on the terms of a recommended mandatory cash offer to be made by Lumiere for the entire issued and to be issued ordinary share capital of the Company not already acquired or agreed to be acquired by Lumiere at a price of 25 pence per Ordinary Share.

As stated in such Announcement, the Board has concluded, regardless of the outcome of the Offer, that it is in the best interests of the Company and its Shareholders to cancel the admission of the Ordinary Shares to trading on AIM, re-register the Company as a private limited company and amend the Company's Existing Articles. As such, the Board noted its intention in the Announcement to send a circular to Shareholders convening a general meeting to put forwards resolutions to approve the Cancellation, Re-registration and adoption of New Articles as soon as reasonably practicable.

Accordingly, the Company is today convening a meeting of Shareholders in order to:

·; approve the cancellation of the Company's admission to trading on AIM;

·; re-register the Company as a private limited company; and

·; approve the adoption of the New Articles.

The purpose of this document is to provide you with information about the background to and the reasons for the Cancellation, to explain why the Board considers the Cancellation to be in the best interests of the Company and its Shareholders as a whole and why the Board unanimously recommends that you vote in favour of the Resolutions to be proposed at the General Meeting, notice of which is set out at the end of this document.

The Lumiere Concert Party now holds, in aggregate, a sufficient number of Ordinary Shares to meet the 75% approval threshold required to pass the resolutions in relation to the Cancellation, Re-registration and adoption of New Articles at the General Meeting and all members of the Lumiere Concert Party have undertaken to vote in favour of such resolutions at the General Meeting. Accordingly, regardless of votes cast by other Shareholders at the General Meeting, providing all members of the Lumiere Concert Party vote at the General Meeting in accordance with the terms of the Concert Party Agreement, there is certainty that the resolutions in relation to the Cancellation, Re-registration and adoption of New Articles will be passed and that Cancellation, Re-registration and adoption of New Articles shall take effect regardless of the outcome of the Offer.

Shareholders should note that the Cancellation, Re-registration and adoption of the New Articles are inter conditional and conditional upon the Resolutions being passed at the General Meeting. It is expected that the Company's admission to trading on AIM will be cancelled on 28 August 2019.

2. Background and reasons for Cancellation

Reasons for Cancellation

The Directors have conducted a review of the benefits and drawbacks to the Company and its Shareholders in retaining its AIM quotation, and believe that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Directors have considered the following key factors, amongst others:

·; the considerable cost, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM are, in the Directors' opinion, disproportionate to the benefits to the Company at the present time and for the foreseeable future;

·; prior to the Offer, a large number of Ordinary Shares were held in the hands of a small group of investors which led to limited liquidity in the Ordinary Shares. As a result of the Offer and Lumiere's market purchases of Ordinary Shares, the Ordinary Shares will be held in the hands of an even smaller group of investors with the consequence that the Directors believe that the Company's admission to trading on AIM does not, in itself, offer investors the opportunity to trade in meaningful volumes or with frequency in an active market; and

·; the depressed share price has defeated one of the core reasons for the Company retaining its AIM quotation, namely to implement its growth strategy, which involves further acquisitions of ancillary services businesses. Further to Cancellation, the Directors believe that the Company will be able to raise further funds based on a longer term investment horizon.

Following careful consideration, the Board has therefore concluded that the commercial disadvantages and costs of maintaining an AIM quotation at this time in the Company's development, outweigh the potential benefits and that it is therefore in the best interests of the Company and Shareholders to seek the proposed Cancellation at the earliest opportunity.

Current trading

The Company announced a trading update on 4 March 2019 ahead of reporting its results for the fiscal year ending 31 March 2019 (the "FY19 Profit Forecast"). The FY19 Profit Forecast was further refined in a trading update issued on 17 May 2019 in which the Company stated:

"FFI Holdings PLC (AIM: FFI) FFI, the world leader in the provision of completion contracts to the entertainment industry and one of the largest providers of production services and equipment to film makers, is pleased to confirm that it expects Underlying EBIT will be within, but at the lower end of, the range of $7.5 to $11.5m set out in its trading statement of 4 March 2019.

Other than completion contracts, which has been exposed to a number of previously disclosed headwinds in the financial year, all of the Company's divisions are expected to report trading in line with or ahead of the Board's expectations."

Copies of the FY2019 Profit Forecast and trading update issued on 17 May 2019 are available on the Company's website at: http://www.filmfinances.com. The Directors confirm that the FY19 Profit Forecast remains valid as at the date of this document.

3. Prior to, process for, and principal effects of, the Cancellation

Prior to Cancellation

Shareholders should note that they are able to trade in the Ordinary Shares on AIM, prior to Cancellation. In addition, as further detailed in the Announcement, Lumiere, a direct, wholly-owned subsidiary of the 777 Group, has made a recommended mandatory offer to acquire all of the shares in the Company not already held by Lumiere. Shareholders wishing to accept the Offer may do so in accordance with the Offer Document and Form of Acceptance (which are being published and posted to Shareholders on the date of this document). The Cancellation will not take effect until after the Offer has closed for acceptances.

A copy of the Announcement, Offer Document and Form Of Acceptance are available on the Company's website at: http://www.filmfinances.com.

Effect of Cancellation

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider either selling their interests in the market prior to the Cancellation becoming effective or accepting the Offer. Lumiere is permitted to purchase or arrange to purchase Ordinary Shares otherwise than under the Offer, at the offer price of 25 pence per Ordinary Share. Any Shareholders who are interested in selling their Ordinary Shares in cash can contact Cantor Fitzgerald Europe on +44 20 7894 7590 who have authority to make market purchases on behalf of Lumiere. 

The principal effects of Cancellation and the Re-registration (as further described in paragraph 3 (Background to and Reasons for the Recommendation of the Independent FFI Directors) of Part 1 of the Offer Document) will be that:

·; there will be no public market or trading facility on any recognised investment exchange for the Ordinary Shares and, consequently, there can be no guarantee that a Shareholder will be able to purchase or sell any Ordinary Shares. The underlying liquidity in the Ordinary Shares is currently low and, in the opinion of the Directors, if the Cancellation does not proceed will likely remain that way for the foreseeable future. However, as a private company the opportunity for Shareholders to realise their investment in the Company will be subject to further limitations;

·; there shall be a significant reduction in the liquidity and marketability of Ordinary Shares;

·; the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply. The Company will, therefore, achieve cost savings as a result of no longer being subject to the provisions of this regime;

·; Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events, including substantial transactions, financing transactions, related party transactions and fundamental changes in the Group's business, including certain acquisitions and disposals;

·; the Company will cease to have a nominated adviser and broker;

·; as an unlisted private company, the Company will be subject to less stringent accounting disclosure requirements;

·; the Cancellation may have either positive or negative taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately; and

·; it is the intention of the Company that, following Re-registration and completion of settlement in connection with the Offer, its CREST facility will be cancelled and although the Ordinary Shares will remain transferable, they will cease to be transferable through CREST. Following Re-registration and completion of settlement in connection with the Offer, Shareholders who hold Ordinary Shares in CREST will receive share certificates.

The Takeover Code currently applies to the Company. However, following Cancellation, and for a period of ten years following Re-registration, the Takeover Code will not apply to the Company for so long as a majority of the Board remain resident outside of the United Kingdom (after which period the Takeover Code shall not apply to the Company regardless of the residency of a majority of the Board). As such, Shareholders should note that, if the resolution to re-register the Company as a private company becomes effective, for so long as a majority of the Board remain resident outside of the United Kingdom, they will not receive the protections afforded by the Takeover Code in the event that there is a subsequent offer to acquire their Ordinary Shares.

Brief details of the Panel, the Takeover Code and the protections given by the Takeover Code are described in paragraph 4 of this Part 1. The above considerations are not exhaustive and, before giving your consent to the Re-registration, you may want to consider the contents of paragraph 3 (Background to and Reasons for the Recommendation of the Independent FFI Directors) of Part 1 of the Offer Document and take independent professional advice from an appropriate independent financial adviser.

Cancellation process

Under the AIM Rules, the Cancellation can only be effected by the Company after the passing of a resolution approved by at least 75 per cent. of the votes cast by Shareholders (present in person or by proxy) in a general meeting, and the expiration of a period of 20 Business Days from the date on which notice of the Cancellation is given, which is deemed to have been given in the announcement made by the Company on 26 July 2019. In addition, a period of at least five Business Days following approval of the Cancellation is required before the cancellation of admission of the Ordinary Shares to trading on AIM will be effective. The Company, through its nominated adviser, Liberum, has notified the London Stock Exchange of the proposed Cancellation.

Shareholders' attention is drawn to paragraph 6 below and the level of shareholder support in favour of the Cancellation.

Transactions in Ordinary Shares

Shareholders should note that, if effected, and for those shareholders who have not accepted the Offer, the Cancellation will significantly reduce the liquidity and marketability of the Ordinary Shares. Neither the Directors, nor, as set out in the Announcement, the 777 Group, intend to provide, seek or support any trading facilities for Ordinary Shares or arrangement whereby Ordinary Shares can be bought or sold on a matched bargain facility basis following the Cancellation becoming effective. Accordingly, interests in Ordinary Shares are unlikely to be readily capable of sale and, where a buyer is identified, it will be difficult to place a fair value on any such sale.

4. The Takeover Code

The Takeover Code is issued and administered by the Panel. FFI is a company to which the Takeover Code applies and its shareholders are accordingly entitled to the protections afforded by the Takeover Code.

The Takeover Code and the Panel operate principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror. The Takeover Code also provides an orderly framework within which takeovers are conducted. In addition, it is designed to promote, in conjunction with other regulatory regimes, the integrity of the financial markets.

The General Principles and Rules of the Takeover Code

The Takeover Code is based upon a number of General Principles which are essentially statements of standards of commercial behaviour. For your information, these General Principles are set out in Part 2. The General Principles apply to all transactions with which the Takeover Code is concerned. They are expressed in broad general terms and the Takeover Code does not define the precise extent of, or the limitations on, their application. They are applied by the Panel in accordance with their spirit to achieve their underlying purpose.

In addition to the General Principles, the Takeover Code contains a series of Rules, of which some are effectively expansions of the General Principles and examples of their application and others are provisions governing specific aspects of takeover procedure. Although most of the Rules are expressed in more detailed language than the General Principles, they are not framed in technical language and, like the General Principles, are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter. The Panel may derogate or grant a waiver to a person from the application of a Rule in certain circumstances.

Giving up the protection of the Takeover Code

A summary of key points regarding the application of the Takeover Code to takeovers generally is set out in Part 3. You are encouraged to read this information carefully as it outlines certain important protections which you will be giving up if you agree to the Re-registration.

5. Re-registration and adoption of New Articles

It is proposed that, if the Resolutions are approved, the Company, which is currently a public limited company, be re-registered as a private company and that amendments to reflect this change in status be made to the Company's articles of association subject to the passing, if applicable, of the statutory period of time before the resolution giving effect to the Re-registration may be registered at Companies House and the certificate of incorporation on re-registration issued. Resolution 2 contained in the Notice of General Meeting seeks Shareholder approval for the Re-registration and adoption of the New Articles.

Under Resolution 2, in conjunction with Re-registration the Board is asking Shareholders to approve the adoption by the Company of the New Articles with effect from Re-registration. The New Articles will include provisions which the Directors believe to be appropriate for a private limited company incorporated under the Act with a broad shareholder base, including drag along, tag along and pre-emption rights. The Directors believe re-registration of the Company as a private limited company should provide the Company with greater flexibility to structure potential future transactions to grow the business.

The principal effects that the Re-registration will have are as follows:

·; private companies with one class of shares may authorise their Directors to allot shares up to an unlimited number;

·; private companies are not required to hold annual general meetings;

·; following Re-registration the Company will not be permitted to make a public offer of shares; and

·; various changes will be required to the Existing Articles to reflect the change in status from a public to a private company, which will be effected by the adoption of the New Articles. A summary of these changes are set out in Part 4.

As set out in the Announcement, the Concert Party Agreement contains certain pre-emption rights and other provisions. Shareholders should note that until the Concert Party Agreement is terminated, in the event of any inconsistency between the provisions of the New Articles and the Concert Party Agreement, the terms of the Concert Party Agreement will take precedence.

Notwithstanding Re-registration and the changes that will be made by the adoption of the New Articles, the Company will remain subject to the requirements of English company law, which contains various provisions for the protection of minority shareholders, and the Company will continue to communicate information about the Company to the Shareholders in accordance with the requirements of the Act.

A copy of the Company's Existing Articles and the proposed New Articles will be available for inspection during normal business hours (excluding Saturdays, Sundays and bank holidays) at the Company's registered office from the date of this document until the close of the General Meeting. The proposed New Articles will also be available for inspection at the General Meeting at least 15 minutes prior to the start of the meeting and up until the close of the meeting.

6. Voting commitments in the Concert Party Agreement

Under the terms of the Concert Party Agreement, the members of the Lumiere Concert Party, holding 125,166,206 Ordinary Shares, representing 79.3% of the Ordinary Shares in issue, have undertaken irrevocably to vote in favour of the Resolutions. This increase in the aggregate shareholding of the Lumiere Concert Party reflects Ordinary Shares acquired in the market by Lumiere since the Announcement.

In light of the above, FFI Shareholders should note that, regardless of votes cast by other Shareholders at the General Meeting, providing all members of the Lumiere Concert Party vote at the General Meeting in accordance with the terms of the Concert Party Agreement, there is certainty that the Resolutions will be passed and following the General Meeting, admission to trading on AIM of Ordinary Shares will be cancelled.

7. Resolutions to be voted on at the General Meeting

For the purposes of effecting the Cancellation, Re-registration and adoption of New Articles, the Resolutions will be proposed at the General Meeting. Set out at the end of this document is a notice convening the General Meeting to be held at 9000 Sunset Boulevard, Suite 1400, Los Angeles, California 90069, USA on 19 August 2019 at 10:00 am PDT. The full text of the Resolutions is set out in that notice.

Resolution 1 is a resolution to cancel the admission of the Company's ordinary shares of £0.01 each to trading on AIM and to authorise the directors of the Company to execute all documents and take all necessary or desirable actions in order to effect such cancellation.

Resolution 2 is a resolution to re-register the Company as a private company under the name FFI Holdings Limited, and to adopt the New Articles as the new articles of association of the Company (in replacement of the Existing Articles) in connection with Re-registration.

8. Action to be taken

Shareholders will find enclosed with this document a Notice of Availability regarding the appointment of a proxy. Proxy votes should be completed in accordance with the instructions set out in the notes to the Notice of Availability as soon as possible and in any event not later than 15 August 2019 at 10:00 am PDT. The completion and return of a form of proxy, electronic filing or CREST Proxy Instruction will not preclude you from attending and voting in person at the General Meeting or any adjournment thereof, if you so wish and are so entitled. If the proxy vote is not completed by 10:00 am PDT on 15 August 2019, your vote will not count.

9. Recommendation

The Directors consider the Cancellation, Re-registration and the adoption of the New Articles to be in the best interests of the Company and its Shareholders as a whole and, accordingly, unanimously recommend Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do in respect of their beneficial holdings amounting, in aggregate, to 11,372,488 Ordinary Shares of the Company, representing approximately 7.22% per cent. of the existing issued ordinary share capital of the Company.

DEFINITIONS

The following shall apply throughout this document unless the context otherwise requires:

"600" means 600 Partners LLC, a limited liability company incorporated and registered in Delaware with registered number 6269759;

"777" means 777 Partners LLC, a limited liability company incorporated and registered in Delaware with registered number 5752556;

"777 Group" means together, 777 and 600, and their subsidiaries;

 "Act" the Companies Act 2006;

"AIM" AIM, the market of that name operated by the London Stock Exchange;

"AIM Rules" the "AIM Rules for Companies" published by the London Stock Exchange from time to time;

"Announcement" the announcement dated 2 July 2019 in relation to the Offer;

"Board" the board of directors of the Company, as set out on page 5;

"Business Day" a day, not being a public holiday, Saturday or Sunday on which clearing banks in London are open for business;

"Cancellation" the proposed cancellation of admission to trading on AIM of the Ordinary Shares;

"Company" or "FFI" FFI Holdings PLC;

"Concert Party Agreement" the agreement between entered into between the members of the Lumiere Concert Party on 2 July 2019

"Directors" the directors of the Company (each being a "Director");

"Existing Articles" the articles of association of the Company in force at the date of this document;

"Form of Acceptance" the forms of acceptance and authority relating to the Offer which will accompany the Offer Document;

"General Meeting" the general meeting of the Company convened for 10:00 am PDT on 19 August 2019, notice of which is set out at the end of this document (including any adjournment of such meeting);

"Golden Sun" means Golden Sun Emerging Fund Limited, a company incorporated and registered in the Bahamas with registered number 160927;

"Group" the Company and its subsidiary undertakings (as defined in the Act);

"Independent FFI Directors" being Julian Bartlett and Simon Ingram;

 "JDT" means JDT Holdings LLC, a company incorporated and registered in Florida with registered number 65-1180707;

"London Stock Exchange" London Stock Exchange plc;

"Lumiere" Lumiere Acquisitions Company LLC;

"Lumiere Concert Party" means, together, Lumiere, Golden Sun, JDT, James Terlizzi, the Trattner Trust, Antony Mitchell, Timothy Trankina and Stephen Argent (who for the purposes of the Takeover Code are considered to be acting in concert);

"New Articles" the articles of association to be adopted with effect from Re-registration (in replacement of the Existing Articles) conditional upon the passing of Resolution 1 at the General Meeting to reflect the change of status of the Company to a private limited company, the key terms of which are set out in Part 4;

"Notice of Availability" the individual notice of availability enclosed with this document in connection with the General Meeting;

"Notice of General Meeting" the notice of General Meeting set out at the end of this document;

"Offer" the recommended mandatory cash offer by Lumiere, a direct, wholly-owned subsidiary of the 777 Group, for the entire issued and to be issued ordinary share capital of the Company;

"Offer Document" the formal document enclosed with this document setting out the full terms of the Offer;

"Ordinary Shares" the ordinary shares of £0.01 each in the capital of the Company;

"Panel" the Takeover Panel;

"Registrar" or "Link" Link Asset Services of 34 Beckenham Road, Beckenham, Kent BR3 4TU;

"Register" the register of members of the Company;

"Re-registration" the proposed re-registration of the Company as a private limited company under the Act;

"Resolutions" the resolutions to be proposed at the General Meeting as set out in the Notice of General Meeting and Resolution shall mean any one of them;

"Shareholders" the holders of Ordinary Shares and "Shareholder" shall mean any one of them;

"Takeover Code" the City Code on Takeovers and Mergers;

"The Trattner Trust" means the Trattner Family Trust; and

"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland.