Management Resource Solutions Regulatory News (MRS)

3 May 2019

Management Resource Solutions plc

("MRS" or the "Company")

Posting of Circular and Notice of General Meeting

Update on other matters

Management Resource Solutions Plc (AIM:MRS), a leading Maintenance, Fabrication, Civil and Earthworks company, today announces that it will hold a General Meeting of the Company at 3.00 p.m. (AEST) on 22 May 2019 at Level 11, 66 Eagle Street Brisbane, Australia.

Following the receipt of a requisition of general meeting, the Company has today posted to shareholders a circular containing a Notice of the General Meeting, where the ordinary resolutions put forward in the requisition of general meeting will be proposed.

A copy of the full Notice of General Meeting and circular to shareholders will be available on the Company's website. At the meeting, resolutions are to be proposed to remove John Zorbas and Timothy Jones as directors of the Company, to remove any directors appointed between 11 April 2019 and the date of the meeting and to appoint Nigel Burton, Trevor Brown and Daniel Smith as directors of the Company. 

The circular contains, inter alia, the following statements extracted from Paul Brenton's letter to shareholders:

Resolutions 2 and 3 - Removal of John Zorbas Timothy Jones as Directors

Mr Zorbas and Mr Jones have served the Company throughout my period of office. Throughout they have supported me in my efforts to return the Company to profitability and the benefit of their combined experience as business executives and company directors has been invaluable. As the latest sets of reported results have demonstrated, the strategy has borne fruit and continues to do so; the year on year results for 2017 and 2018 showed a dramatic swing from loss to profit and the half year figures to December 2018 showed that the upward trend is continuing. I do not believe that a wholesale reconstruction of the board will be helpful in my task of continuing this trend; indeed, I believe it will constitute a major disruption to progress. Crucially, as has been announced, I am in the final stages of completion of a re-financing package that will transform the Company's debt profile and generate significant savings in both interest cost and cashflow terms. Board stability is crucial to completion of this transaction and I believe that the changes proposed by the requisitioners of the general meeting would, if implemented, in all likelihood cause the incoming lender to withdraw.

Resolutions 4, 5 and 6 - Appointment of Nigel Burton, Trevor Brown and Daniel Smith as Directors

As I said above, for very good reasons I am vigorously opposed to the reconstruction of the board that has been proposed by the requisitioners of the general meeting and, specifically, to the reinstatement to the Board of Mr Burton and Mr Brown. Shareholders will recall that they were appointed as non-executive directors on 10 April 2017. Mr Brown served for a period of less than nine months, resigning on 31 December 2017 and Mr Burton served for a period of less than twelve months resigning on 31 March 2018. During their time in office, and despite their supposed non-executive status, Mr Brown charged fees of £102,953 (including compensation payment) and Mr Burton charged fees of £198,175 (including compensation payment). In my opinion, their renewed presence on the board would lead to instability amongst senior operational management.

Mr Burton holds, we believe, 6.5 million shares in MRS. Mr Brown held at least 8 million shares which we understand he has sold.

Mr Smith is a private investor in MRS who holds, we believe, approximately 7.5 million shares. The requisitioners have not given us any background information on his qualifications or career history and, as far as we are aware, he does not have public company experience at board level. We are therefore unable to assess his suitability as a candidate for the MRS board.

Our proposed board appointments as outlined above will result in a board, after Mr Zorbas' departure, consisting of two executive and three independent non-executive directors, one of whom will be appointed chairman in succession to Mr Zorbas. This composition will be in compliance with the guidelines of the QCA Corporate Governance Code and will represent an ideal balance of skills and experience to take the Company forward. I do not consider that the candidates proposed for appointment at the general meeting are suitable. I believe that Mr Brown and Mr Burton would, if appointed, prove disruptive and unsupportive, as they did during their previous tenure. As I said above, I know nothing of Mr Smith's qualities and so, without intending criticism, I am unable to recommend him as a director."

Update on other matters

Further to the announcement made on 15 April 2019, the Company can confirm that it is finalising the appointment of a firm to undertake an independent report on the bases and assumptions underlying the Company's valuation of Alerion Consulting Limited. As previously communicated, a further announcement will be made on the appointment of the firm engaged to undertake the independent work.

Additionally, the Company can confirm that the legal report that has been commissioned to address the merit of shareholder concerns regarding the relationship of certain shareholders and any potential conflicts of interest, is underway and in progress. As previously announced, the overall conclusions of the report will be communicated to shareholders in due course.

The Company has also requested its registrar to obtain information in respect of the holdings of its shareholders under the authority in Companies Act 2006 section 793.

ENDS

For further information:

About MRS

Management Resource Solutions plc (MRS), through its subsidiaries Bachmann Plant Hire 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 for the mining, civil engineering, construction and infrastructure industries.

Further information on the Company can be found at http://www.mrsplc.info