27 Jan 2017 11:40
27 January 2017
Management Resource Solutions plc
Response to General Meeting requisition by Pershing Nominees
And Notice of General Meeting
Management Resource Solutions plc ("MRS" or "the Company") announced on 6 January 2017 the receipt of a requisition of a general meeting from Pershing Nominees, signed by Santina Morffew, the wife of the Company's former CEO, Paul Morffew. Pershing Nominees holds Ordinary Shares on behalf of SCOPN Pty Ltd, a company controlled by Paul Morffew and Santina Morffew ("SCOPN").
The Company has today published a circular to Shareholders ("Circular") convening the requisitioned General Meeting and containing a letter from the Chairman stating that the Directors DO NOT believe that the resolutions being proposed are in the best interests of the Company and Shareholders and that the Board recommends voting AGAINST all resolutions.
In the circular, details are set out of the valid resolutions proposed by SCOPN on behalf of Paul and Santina Morffew, biographical information of Nigel Burton and Trevor Brown, the two directors proposed by SCOPN, is presented and further details of Mr Morffew's activities prior to his termination as chief executive officer and a director of MRS are provided.
Shareholders are encouraged to read the circular in full, but the directors wish to draw their attention to the following:
· The Board had become aware that Mr Morffew provided one of the Company's finance providers with whom the Company has A$15.2m of facilities, with falsified information. The falsified accounts provided by Mr Morffew to the Company's finance provider showed a group net profit of A$3.9m for the year ended 30 June 2016. The actual loss for the period is expected to be in the order of A$6 million. In light of this, and based on their ongoing discussions with the Group's finance providers, the Directors believe that there is a significant risk of the Group's existing banking facilities being modified or withdrawn in the event that Mr Morffew regains influence over the composition of the Board.
· As such, and given Mr Morffew's motivation to reassert control over the business, the Board believes that it would not be appropriate to appoint any directors proposed by Mr Morffew and thus urge Shareholders to VOTE AGAINST RESOLUTIONS 1 AND 2.
· Resolution 3, to require all Directors to resign at every general meeting and annual general meeting of the Company, is designed, in the Board's opinion, to allow Mr Morffew to continue his campaign to purge the Board and reassert his influence. This would not be in the best interests of Shareholders as a whole and the Directors recommend that Shareholders VOTE AGAINST RESOLUTION 3.
· Resolution 4 is connected to Resolution 3 and thus the Directors recommend Shareholders VOTE AGAINST RESOLUTION 4.
· For the above stated reasons and more, the Board of Directors of Management Resource Solutions unanimously recommends that Shareholders VOTE AGAINST the Pershing Nominees resolutions as they intend to do in respect of their own shareholdings - and urges all Shareholders to vote as every vote counts.
The general meeting will take place on 24 February 2017. A copy of the Circular will be available on the Company's website, www.mrsplc.net shortly.
Murray d'Almedia, Chairman of MRS commented:
"Following his dismissal, the former CEO, Paul Morffew, has undertaken a campaign to stifle the Directors' ability to put the business back on an even keel and correct the catalogue of errors, misjudgements and inappropriate behaviour which put the business under such severe pressure.
"Following the decisive and swift action taken by the Board in triaging the losses attributable to the consulting business by closing it down and the strengthening of the balance sheet and capital position, our businesses, Bachmann and MRSSG, are now trading profitably, and the outlook for 2017 is good. However, should any of the resolutions at the General Meeting be passed, all that good work will be put under serious risk. I strongly urge shareholders to protect the integrity of their business and secure its future by voting against all of the proposed resolutions."
For further information:
Management Resource Solutions PLC c/o FTI +44 (0)20 3727 1000
Murray d'Almeida, Chairman
Joe Clayton, Chief Executive
Northland Capital Partners Limited +44 (0)20 3861 6625
(Nominated Adviser and Joint Broker)
William Vandyk
Gerry Beaney
Peterhouse Corporate Finance Limited +44 (0)20 7469 0932
(Joint Broker)
Charles Goodfellow
Lucy Williams
FTI Consulting +44 (0)20 3727 1000
Edward Westropp
Kim Camilleri
Management Resource Solutions (MRS), through its subsidiaries Bachmann and MRS Services Group, offers plant hire, equipment repair, refurbishment and fabrication, mine rehabilitation, earthmoving, road construction and other support services to a wide base of private and public sector clients in Australia. MRS caters predominately to mining, civil engineering, construction and infrastructure industries.