Last checked at 18 Jan 2012 14:45
India Hospitality Corp.
("IHC" or the "Company")
PROPOSED CANCELLATION OF THE ADMISSION OF THE COMPANY'S SHARES TO TRADING ON AIM
INTRODUCTION
The Company announces that it intends to seek a cancellation of the admission of its ordinary shares (the "Shares") to trading on AIM.
BACKGROUND TO AND REASONS FOR THE PROPOSED DELISTING
The Shares have been admitted to trading on AIM since 1 August 2006. The principal reason for seeking admission of the Shares to trading on AIM had been to provide IHC with an increased ability to access capital in order to fund its acquisition strategy. On 19 December 2011 the Company announced that it had received notification from gateGroup Investments Singapore Pte Ltd of its intention to exercise its call option to acquire the remaining 26% of the shares in Skygourmet Catering Private Limited held by the Company's wholly owned subsidiary, IHC Mauritius. Following this, the directors of the Company (the "Directors") have undertaken a review of the advantages and disadvantages of maintaining a listing and have concluded that admission of the Shares to trading on AIM should be cancelled (the "Delisting"). In particular, the Directors noted that:
- given historical trading activity in the Shares, the Directors do not believe that admission to trading on AIM provides the opportunity to investors to trade in meaningful volumes;
- the ability of the Company to effect a significant acquisition quickly will be compromised by the requirement under the AIM Rules to produce a re-admission document and to seek shareholder approval for a reverse takeover (as defined under the AIM Rules);
- the trading price of the Shares and prevailing market conditions suggest that there is no prospect of raising additional capital on AIM at a valuation that will be acceptable to existing investors; and
- in light of the above, the ongoing expense and management time involved in maintaining the admission of the Shares are not justifiable.
FUTURE STRATEGY
Following its divestment of SkyGourmet, the Company is now focused around building its future in the food services industry. Going forward, IHC intends to pursue its mission of building a leading food company that drives the affordability and availability of great tasting products by leveraging the best combination of knowledge, skills, ingredients and assets across the globe. The Company intends to continue to exploit the emerging market opportunity offered by the rapidly growing Indian economy both organically and through acquisitions in this sector both in India and internationally.
PRINCIPAL EFFECTS OF THE DELISTING
The principal effects of the Delisting will include:
- no price will be publicly quoted for the Shares;
- the Shares will no longer be transferable through CREST. The depositary interest facility will be cancelled in due course, following which share certificates will be issued to Shareholders who hold depositary interests on the date of cancellation; and
- the Company will not be subject to the AIM Rules for Companies and, accordingly, shareholders will no longer benefit from the protections afforded by them. Such protections include the requirement to be notified of certain events including substantial transactions and transactions with related parties and to obtain shareholder approval for reverse takeovers.
Although it will not be possible to trade the Shares through AIM following the Delisting, the Company is investigating the possibility of introducing a mechanism by which shareholders might be able to trade their shares, possibly through a form of matched bargain facility. Details of any such mechanism will be notified in due course.
The Delisting might have a positive or a negative taxation consequence for shareholders. Shareholders are advised to seek their own professional independent advice if they are in any doubt about their tax position.
The Directors intend to continue to comply with the Company's statutory requirements and those under its articles of association, in particular as to the holding of annual general meetings and the provision of copies of annual accounts.
PROCESS FOR DELISTING
The Company has notified the London Stock Exchange of the intention to cancel the admission of the Shares to trading on AIM, subject to the approval of the Company's shareholders. Pursuant to Rule 41 of the Aim Rules for Companies, the cancellation of admission to trading of a company's shares must be approved by not less than 75% of the votes cast by its shareholders in general meeting.
EXTRAORDINARY GENERAL MEETING ("EGM")
The Company will shortly issue a shareholder circular convening the EGM to be held on 5 March 2012 in New York for the purposes of considering and, if thought fit approving, the Delisting (the "Resolution"). Subject to approval of the Resolution by the requisite majority, it is anticipated that trading of the Shares on AIM will cease at the close of business on 12 March 2012 with the Delisting taking effect at 7.00 a.m. on 13 March 2012.
For further information contact:
India Hospitality Corp.
Rajesh Mittal
rmittal@ihcor.com
www.indiahospitalitycorp.com
Nominated Adviser: Grant Thornton Corporate Finance
Colin Aaronson, Salmaan Khawaja
+44 20 7383 5100
Broker: Execution Noble & Company Ltd
James Bromhead
+44 20 7456 9191
Media Contact: Mutual Public Relations Ltd.
Harsh Wardhan
+91 11 4362 0700
About India Hospitality Corp.
The Company is present in the hotel & restaurant segments, through its India-based subsidiary Wah Restaurants Private Limited (formerly Mars Restaurants Private Limited) which operates 58 patisseries under the "Birdy's" brand and a hotel in India.
This information is provided by RNS
The company news service from the London Stock Exchange
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