RM2.L Regulatory News (RM2)

18 December 2019

RM2 International S.A.("RM2" or the "Company")

Cancellation from trading on AIM and Notice of EGM

RM2 today announces a proposal to cancel the admission of the Company's ordinary shares to trading on AIM in accordance with Rule 41 of the AIM Rules for Companies ("Cancellation").

A circular including a Notice of General Meeting will today be posted to Shareholders (the "Circular") to convene the necessary general meeting of the Company (the "General Meeting") to approve the Cancellation. The General Meeting is to be held at 5 Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 3 p.m. GMT / 4 p.m. CET on 15 January 2020. A copy of the Circular and Notice of General Meeting will also be available to view shortly on the Company's website.

Richard Cashin, the Company's largest shareholder, has provided the Company with an irrevocable undertaking to vote in favour of the Resolutions to be proposed at the General Meeting in respect of the beneficial holdings totaling 234,756,357 Ordinary Shares, representing approximately 67.2 per cent of the Ordinary Shares in issue conditional on the continued recommendation of the Directors.

All of the Directors have also indicated that they are supportive of the proposed Cancellation. Among the Directors, they are interested in 12.8 per cent., in aggregate, of the Ordinary Shares in issue. Accordingly, it is anticipated that the Cancellation will be approved at the General Meeting, and would take effect at 7.00 a.m. GMT on Monday 20 January 2020. Until such point, the Ordinary Shares will remain admitted to trading on AIM, albeit trading is currently suspended.

An extract of selected parts of the Circular is copied out below along with an indicative timetable of principal events related to the Cancellation process. The definitions that apply throughout this announcement can be found at the end of this announcement.

For further information:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

Notes to Editors

RM2 International S.A. specialises in smart pallet development, manufacture, supply and management to establish a leading presence in global pallet supply and improve the supply chain of manufacturing and distribution businesses through the effective and efficient use and management of composite pallets. It is quoted on the AIM market of the London Stock Exchange under the symbol RM2.L. For further information, please visit www.rm2.com.

Introduction

The Board announced earlier today that it is seeking approval for the cancellation of admission of the Company's Ordinary Shares to trading on AIM. The purpose of the Circular is to provide Shareholders with details of the Board's proposal and to convene the General Meeting at which the Resolutions to approve the Cancellation will be proposed. The General Meeting is to be held at 5 Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 3 p.m. GMT / 4 p.m. CET on 15 January 2020. The Notice of General Meeting containing the full text of the Resolutions is set out at the end of this document. Subject to the Resolutions being passed at the General Meeting, it is anticipated that the Cancellation will become effective at 7 a.m. GMT / 8 a.m. CET on 20 January 2020.

This report sets out the reasons why the Board considers the Cancellation to be in the best interests of the Company and its Shareholders as a whole and why the Directors are therefore unanimously recommending that you vote in favour of the Resolutions.

1. Background to and reasons for Cancellation

As stated in the Company's recent announcements, the Company is working on finalising certain significant contracts, rescheduling certain supplier debts and has been seeking additional funding for the Company in order to continue its operations. This process has taken longer than expected and whilst the Board remains hopeful for the Company's prospects, Shareholders should be aware that there is no guarantee that the significant contracts will be concluded or that any offer of funding will be on acceptable terms to the Company, or be forthcoming at all, in which case, the Company may not be in a position to continue its operations and the Directors may be forced to convene an EGM for early Q1 2020 to vote on the dissolution of the Company. In the interim, the Company has implemented and continues to implement cash conservation measures. Due to a change of intermediaries, the staged deployment of pallets in Mexico announced in July will commence in January 2020, ramping up to at least 100,000 pallets. The Company's cash balance at the end of November 2019 was US$1.6 million, and it is still the Board's expectation that the final US$1 million cash due from Richard Cashin (pursuant to the Company's 23 July 2019 announcement) will be received by the end of December 2019.  

As the Group was unable to finalise the 2018 AFS and publish them prior to 30 June 2019, as required by Rule 19 of the AIM Rules, dealings in the Company's Ordinary Shares were suspended from trading on AIM with effect from 7.30 a.m. on Monday 1 July 2019. Prior to the Suspension, trading in the Company's Ordinary Shares was extremely thin and small volumes of trades led to large fluctuations in the value of the share price.

Moreover, in excess of 90% of the Company's current issued share capital is held by the Company's three largest external shareholders, together with its directors and management, resulting in a limited free float and liquidity in the Ordinary Shares and with the consequence that the AIM listing of the Ordinary Shares does not, in itself, offer investors the opportunity to trade in meaningful volumes or with frequency within an active market.

In addition, the expense, management time and legal and regulatory burden associated with maintaining the Company's admission to trading on AIM are, in the Directors' opinion, materially disproportionate to the benefits to the Company in its current position, and Cancellation will enable the Company to further reduce its administrative costs.

After careful consideration of the matters set forth above, the Board has concluded that it is in the best interests of the Company and its shareholders to cancel admission of the Company's Ordinary Shares to trading on AIM.

1.1 Effect of Cancellation

The principal effects of Cancellation will be:

·; As the Group was unable to finalise the 2018 AFS and publish them prior to 30 June 2019, as required by Rule 19 of the AIM Rules, dealings in the Company's Ordinary Shares were suspended from trading on AIM with effect from 7.30 a.m. on Monday 1 July 2019. The Company does not believe it will be able to publish its 2018 AFS prior to the expected Cancellation of the Shares and consequently, Suspension will not be lifted prior to the expected Cancellation.

·; Once the Cancellation has taken place, there will no longer be a formal market mechanism for Shareholders to trade in the Ordinary Shares and no price will be publicly quoted for the Ordinary Shares. Subject to the Company continuing as a going concern in early Q1 2020, the Company will endeavour to set up a facility to provide Shareholders with a platform to buy and sell their Ordinary Shares 'off market' although this will be more difficult than trading 'on market'. Absent an off market sale, the only other opportunity for Shareholders to sell their Ordinary Shares would arise upon a sale of all of the issued share capital of the Company to a third party. It may therefore be more difficult for Shareholders to realise value from their Ordinary Shares than when the Company had its Ordinary Shares admitted to trading on AIM admission and, where a buyer is identified, it will be difficult to place a fair value on any such sale.

·; It is likely that, following publication of this document, the liquidity and marketability of the Ordinary Shares will continue to be very limited and the value of such shares may be consequently adversely affected.

·; Following Cancellation, the AIM Rules will no longer apply to the Company and levels of corporate governance and transparency will no longer be governed by those rules. Luxembourg corporate law will continue to be applicable to the Company and its Ordinary Shares.

·; 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 Company's business, including certain acquisitions and disposals.

·; The Company will cease to have an independent financial and nominated adviser and broker.

The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

The Company anticipates it will:

·; Continue to provide operational updates when the Company deems it to be appropriate.

·; Publish its annual results at the earliest opportunity.

1.2 Cancellation Process

Rule 41 of the AIM Rules requires an AIM company that wishes to cancel admission of its securities to trading on AIM to notify such intended cancellation to Shareholders and separately to inform the London Stock Exchange of its preferred cancellation date. Rule 41 also requires that, unless the London Stock Exchange otherwise agrees, the Cancellation must be conditional upon the consent of not less than 75 per cent. of votes cast by the Shareholders present in a general meeting.

Subject to the Resolutions approving the Cancellation being passed by the requisite majority at the General Meeting, it is anticipated that Cancellation will take effect at 7:00 am UK time on 20 January 2020.

Upon the Cancellation becoming effective, Strand Hanson Limited will cease to be nominated and financial adviser and broker to the Company and the Company will no longer be required to comply with the rules and corporate governance requirements to which companies admitted to trading on AIM are subject, including the AIM Rules.

2. Irrevocable undertakings to vote in favour of the Resolutions

Richard Cashin has provided the Company with an irrevocable undertaking to vote in favour of the Resolutions to be proposed at the General Meeting in respect of the beneficial holdings totaling 234,756,357 Ordinary Shares, representing approximately 67.2 per cent of the Ordinary Shares in issue conditional on the continued recommendation of the Directors.

All of the Directors have also indicated that they are supportive of the proposed Cancellation. Among the Directors, they are interested in 12.8 per cent., in aggregate, of the Ordinary Shares in issue.

3. General Meeting

There is set out at the end of this document a notice convening a General Meeting, to be held at 5 Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 3 p.m. GMT / 4 p.m. CET on 15 January 2020.

The business to be conducted at the General Meeting is set out in the Notice of General Meeting and will consist solely of the Resolutions.

For the Resolutions to be validly adopted, at least 75 per cent. of the votes validly cast by Shareholders present or represented at the General Meeting must be cast in favour, and with a quorum of at least 50 per cent of the current Ordinary Shares.

As noted above, Richard Cashin, the Company's 67.2 per cent. shareholder, has provided the Company with an irrevocable undertaking to vote in favour of the Resolutions. The Directors all intend to vote in favour of the Resolutions. Accordingly, it is anticipated that the Cancellation will be approved at the General Meeting.

4. Board Recommendation

For the reasons set forth above, the Directors consider the Cancellation to be in the best interests of the Company and Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do in respect of their own beneficial shareholdings of 37,038,400 Ordinary Shares in aggregate (representing approximately 12.8 per cent of the Ordinary Shares in issue).

Expected Timetable of Key Events

Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified by announcement by the Company on a regulatory information service.

Definitions

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

All references in this document to "£", "pence" or "p" are to the lawful currency of the United Kingdom, all references to "US$" or "$" are to the lawful currency of the United States.