Item 5.07 Submission of Matters to a Vote of Security
Holders.
On June 23, 2016, Garnero Group Acquisition Company (the “
GGAC
”) held an extraordinary
general meeting of shareholders (the “
Meeting
”). At the Meeting, the GGAC shareholders considered the following
proposals: (i) a proposal (the “
Extension Proposal
”) to amend GGAC’s amended and restated memorandum
and articles of association to extend the date by which GGAC has to consummate a business combination (the “
Extension
”)
to July 22, 2016 (the “
Extension Amendment
”), and (ii) a proposal (the “
Conversion Proposal
”)
to amend GGAC’s amended and restated memorandum and articles of association to allow the holders of ordinary shares issued
in GGAC’s initial public offering (the “
Public Shares
”) to elect to convert their public shares into
their pro rata portion of the funds held in the trust account established at the time of the IPO (the “
Trust Account
”)
if the Extension is implemented, such conversion of shares to be accomplished by means of a repurchase under Cayman Islands law
(the “
Conversion Amendment
”). Approval of each proposal required a special resolution of shareholders (a resolution
passed by a majority of at least two-thirds of members who, being entitled to do so, vote at the extraordinary general meeting).
The purpose of the Extension is to allow GGAC additional time to complete its previously disclosed business combination with Q1
Comercial de Roupas S.A. (“
Grupo Colombo
”), a leading apparel retailer in Brazil.
A final tabulation of votes cast for
and against each proposal, as well as the number of abstentions and broker non-votes with respect to each proposal, is set forth
below:
For
|
|
Against
|
|
Abstentions
|
|
Broker Non-Votes
|
16,467,116
|
|
1,721,039
|
|
70,000
|
|
0
|
|
(ii)
|
Conversion Proposal:
|
For
|
|
Against
|
|
Abstentions
|
|
Broker Non-Votes
|
18,258,155
|
|
0
|
|
0
|
|
0
|
Based on the foregoing votes, each of the
proposals was approved by the GGAC shareholders. In addition, GGAC had net tangible assets of more than $5,000,001 following the
approval of the proposals, after taking into account payments to the holders of Public Shares who duly exercised their conversion
rights as described below. Accordingly, GGAC was authorized to proceed with the Extension Amendment and the Conversion Amendment.
GGAC will promptly file with the Registrar of Companies in the Cayman Islands a copy of the shareholder resolutions effectuating
the Extension Amendment and the Conversion Amendment (the “
Charter Amendment Resolutions
”).
In connection with the Extension, holders
of 12,373,127 of the Public Shares duly exercised their right to convert such shares into a pro rata portion of the funds held
in the Trust Account. GGAC will distribute approximately $124,349,930 from the Trust Account to such holders in payment of the
aggregate conversion amount (or approximately $10.05 per share). As a result, approximately $20,118,824 will remain in the trust
account. After the conversions, 6,229,686 GGAC ordinary shares will remain outstanding (including 2,001,873 Public Shares). The
conversions will not affect the number of GGAC rights and warrants outstanding. Accordingly, 14,375,000 GGAC rights, each of which
entitles the holder to automatically receive one-tenth
of a GGAC ordinary share upon consummation of a business combination,
and 14,375,000 GGAC warrants, each of which entitles the holder to purchase one-half of a GGAC ordinary share commencing upon consummation
of a business combination, will remain outstanding.
In addition, on June 24, 2016, the Company
entered into Amendment No. 1 (the “
IMTA Amendment
”) to the Investment Management Trust Agreement, dated as of
June 25, 2014 (as amended, the “
Trust Agreement
”), by and between the Company and Continental Stock Transfer
& Trust Company. The IMTA Amendment extends the termination date set forth in the Trust Agreement to reflect the Extension
and permits the withdrawal of funds from the Trust Account to pay the holders of Public Shares who duly exercised their conversion
rights as described above.
The foregoing summaries of the Charter
Amendment Resolutions and the IMTA Amendment are qualified in their entirety by reference to the full text of the documents, copies
of which are attached as exhibits hereto and are incorporated by reference herein.
Additional Information
EarlyBirdCapital, Inc. (“
EBC
”),
the managing underwriter of GGAC’S initial public offering consummated in July 2014, is assisting GGAC in these efforts,
for which EBC will receive a fee of $4,600,000 if the business combination is successfully consummated. GGAC, its directors and
executive officers and EBC may be deemed to be participants in the solicitation of proxies for the extraordinary general meeting
of GGAC shareholders to be held to approve the business combination with Grupo Colombo.
Shareholders of GGAC and other interested
persons are advised to read GGAC’S definitive proxy statement in connection with GGAC’S solicitation of proxies for
the extraordinary general meeting, including any supplements or amendments thereto, because the proxy statement will contain important
information. Such persons can also read GGAC’S final prospectus, dated June 25, 2014, and GGAC’S annual report on Form
10-K for the period ended June 30, 2015, for a description of the security holdings of GGAC’S officers and directors and
of EBC and their respective interests in the successful consummation of the business combination. The definitive proxy statement
was mailed to shareholders of record as of March 28, 2016. Shareholders also may obtain a copy of the definitive proxy statement,
including any supplements or amendments thereto, without charge, by directing a request to: GGAC, Av Brig. Faria Lima, 1485-19
Andar, Brasilinvest Plaza CEP 01452-002, Sao Paulo, Brazil, Attn: Secretary, or email: jmriva@garnerogroup.com. The definitive
proxy statement, including any supplements or amendments thereto, and the final prospectus and annual report on Form 10-K can also
be obtained, without charge, at the securities and exchange commission’s internet site (http://www.sec.gov).
This report and the exhibit hereto are
not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the
proposed transaction. This report and the exhibit hereto shall not constitute an offer to sell or a solicitation of an offer to
buy the securities of GGAC or the company, nor shall there be any sale of any such securities in any state or jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state
or jurisdiction.