TIDMDYS
RNS Number : 5164J
Dyson Group PLC
31 March 2010
For immediate release
31 March 2010
Dyson Group plc
("Dyson" or "The Group")
PROPOSED CANCELLATION OF LISTING ON OFFICIAL LIST
1. Introduction
On 26 January 2010 the Company announced that significant progress had been made
in the ongoing negotiations with its banks and other key stakeholders towards
agreeing a solvent debt and capital restructuring of the Company (the
"Restructuring"). Further details of the current set of proposals to implement
the Restructuring (the "Proposals") are set out in paragraph 2 of this
announcement.
A key requirement of the restructuring proposals agreed in principle between the
Company, the Banks and the Pension Protection Fund ("PPF") is the cancellation
of admission of the Company's shares to the Official List and to trading on the
London Stock Exchange's main market for listed securities (the "Delisting"). It
is unlikely that the Company would, in any event, meet the qualifications for
continued participation on the Official List following completion of the
Restructuring. Accordingly, the Board has concluded that the Company should now
seek to implement the Restructuring as an unlisted company, which means that the
Company will not be required to comply with (or incur costs associated with
complying with) the requirements of the Listing Rules during the Restructuring.
Pursuant to the Listing Rules, the De-listing is conditional upon Shareholders'
approval being obtained. The Company has today published a circular to
Shareholders containing a Notice of Extraordinary General Meeting to be held at
11.00 a.m. on 26 April 2010 at Buchanan Communications, 6th Floor, Moorfields,
London, EC2Y 9AE for the purpose of considering and, if thought fit, approving
the De-listing. The Circular has been approved by the UK Listing Authority and
will today be posted to Shareholders. Copies of the Circular will shortly be
available for inspection at the UKLA's Document Viewing Facility, which is
situated at Financial Services Authority, 25 The North Colonnade, Canary Wharf,
London E14 5HS. In addition, the Circular will shortly be available to view on
the Company's website (www.dyson-group.com).
Accordingly, the Company is seeking Shareholders' approval for the Delisting,
though it is stressed that the Restructuring, to be carried out in due course,
will remain conditional upon further Shareholder approval and will be the
subject of a separate circular expected to be published shortly after the
effective date of the De-listing. However, to assist Shareholders to understand
the implications of the De-listing in the context of the proposed Restructuring,
details of the Proposals are also set out in both the Circular and in paragraph
2 of this announcement.
Shareholders should note that if the Resolution to approve the De-listing is
approved at the EGM the De-Listing is expected to take place at 8.00 a.m. on the
following business day, being 27 April 2010.
Contacts:
+---------------------------------+---------------------------------+
| Dyson Group plc | |
| Christopher Honeyborne, | Tel: 01439 771900 |
| Chairman | Tel: 0207 529 7820 |
| Julian Cooper, Interim CEO | |
+---------------------------------+---------------------------------+
| Buchanan Communications | Tel: 0207 466 5000 |
| Charles Ryland | |
| Catherine Breen | |
| | |
+---------------------------------+---------------------------------+
| KBC Peel Hunt Ltd | |
| Julian Blunt | Tel: 0207 418 8900 |
| Simon Brown | |
| | |
+---------------------------------+---------------------------------+
KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting for Dyson Group plc and no one else
in relation to the matters described in this announcement and in the Circular
and will not be responsible to anyone other than Dyson Group plc for providing
the protections offered to clients of KBC Peel Hunt Ltd nor for providing advice
in relation to the matters described in this announcement and in the Circular.
2. Proposed Restructuring
The Company has been in extensive discussions with its lending banks and has
considered a range of options to restructure its capital structure and reduce
net borrowings. This follows a lengthy period of negotiations that started in
early 2009. The Company has reached agreement in principle with the Banks which
involves the conversion to equity of a significant proportion of the Group's
existing bank borrowings and the provision of new secured debt facilities. The
proposals also envisage a compromise of the Dyson Group Pension Fund ("DGPF")
liabilities and the Company is in discussion with the trustees of the DGPF, the
PPF and the Pensions Regulator in that regard. The Board believes that the
Restructuring is required in order to maintain the support of the Banks and to
ensure that the Company's capital structure and financial position going forward
is materially strengthened.
The proposed Restructuring comprises the following outline terms:
(a) The Company's banks, Lloyds TSB Bank plc ("Lloyds") and Svenska
Handelsbanken AB (publ) would impair their existing debt to GBP35 million in
return for shares in the Company and fixed and floating charge security from the
Group. Additional working capital facilities (on terms yet to be agreed) would
then be made available by the Banks to provide medium term headroom to meet
anticipated cash requirements. On completion of the proposed restructuring, the
Banks would own 51 per cent. of the enlarged issued equity share capital of the
Company.
(b) It is envisaged that Group liabilities in respect of the DGPF would be
reorganised under regulated apportionment agreements. As part of that
reorganisation, the DGPF would receive 33 per cent. of the enlarged issued
equity share capital of the Company and a new secured loan instrument to the
value of GBP6m. It is expected that the DGPF's interest in the enlarged issued
equity share capital of the Company following the Restructuring would be in the
form of a new class of shares which would essentially be non-voting.
(c) In addition to allotment to them of the new equity shares, the DGPF and the
Banks would be issued with GBP7.5 million of redeemable preferred shares in the
Company, split as to GBP2.5 million and GBP5 million respectively.
(d) The remaining equity in the enlarged issued share capital of the Company of
16 per cent. would be held as to 12 per cent. for existing holders of Ordinary
Shares with the remainder to be issued to an employee benefit trust.
(e) The Saffil Pension Scheme would be granted security in Saffil Limited to the
value of GBP1.75 million and arrangements for Saffil's ongoing funding
obligations will need to be agreed.
(f) If the Restructuring is implemented, the Banks, individually (in the case of
Lloyds) and together, would control in excess of 30 per cent. of the total
voting rights of the Company. In these circumstances such shareholders would
normally be obliged to make a general offer to all other shareholders pursuant
to Rule 9 of the City Code. The Company intends to apply to the Takeover Panel
to seek its agreement to a waiver of that obligation, subject to the formal
approval of Shareholders. The Restructuring will be conditional on such a waiver
being granted and on such Shareholders' approval.
The Proposals currently are in outline only and are subject to change as a
result of further negotiation with, inter alia, the Banks, the PPF and the
trustees of the Saffil Pension Scheme. Full details of the Proposals will be
set out in a circular to be sent to Shareholders in due course to convene a
further extraordinary general meeting of the Company for the purpose of
obtaining the relevant Shareholder approvals. The Proposals remain subject to
contract (and, in the case of each of the Banks, credit sanction), Takeover
Panel approval, Shareholder consent for both the De-listing and the
Restructuring, the formal clearance of the Pensions Regulator, the formal
approval of the PPF and various pension trustees and any other relevant
regulatory approvals.
3. Reasons for the proposed De-listing
The Company is currently dependent upon the ongoing support of the Banks to
continue to trade as a going concern. The Board has explored extensively all
potential means of addressing the Company's current financial situation and
concluded that the Restructuring represents the best potential outcome for
Shareholders in the circumstances. In order to effect the Restructuring, Dyson
is required to de-list from the Official List as a key requirement of the
restructuring proposals agreed in principle between the Company, the Banks and
the PPF and it is unlikely that the Company would, in any event, meet the
qualifications for continued participation on the Official List following
completion of the Restructuring. This is because it is currently envisaged that
the Restructuring would lead to the creation of a share capital structure which
is not suitable for a company listed on the Official List. In particular, new
classes of unlisted voting and non-voting equity share capital are likely to be
created as part of the Restructuring. In determining the timing of the
De-listing the Directors considered that it can be carried out at the current
time, or concurrent with the Restructuring when its detailed terms have been
agreed. The Board believes that implementing the Restructuring as an unlisted
company is the most efficient course of action due to the fact that the Company
will not be required to comply with (or incur costs associated with) the
requirements of the Listing Rules during the Restructuring. In particular, the
Company will not be required to comply with Listing Rule 9.5.12 as part of the
Restructuring, which would necessitate a working capital statement to be
included in the Shareholder circular. The Board has therefore concluded that the
De-listing should take place at the current time, ahead of the Restructuring.
4. Update on trading and operational restructuring
The Group is executing an operational restructuring plan, whereby a number of
its non-core businesses and properties are to be sold or closed. This
restructuring has progressed well, with (as previously announced) the completion
of the sale of the Kiln Furniture business in Stoke and the Precision Ceramics
business in Dewsbury to management buyout teams and the completion of contracts
to sell a number of agricultural properties taking place during the last three
months. This operational restructuring process is expected to be substantially
complete by April 2010 at which point the Group will be primarily focused on the
Saffil business and a number of investment properties with a substantially
reduced cost base and a much simplified business structure.
The Saffil business has benefited from the recovery in global automotive markets
in recent months and has been awarded significant new Ecoflex business which is
expected to lead to further growth during 2010 and 2011. Saffil sales revenue in
the three months to 31 December 2009 showed an increase of 18 per cent. on the
previous quarter and an increase of 35 per cent. on the same period in 2008. The
Saffil business headcount has been reduced by 38 per cent. over the 15 months to
31 December 2009 which together with other cost management actions across the
business has resulted in overhead reductions of 21 per cent. comparing the 12
months to 31 December 2009 with the previous 12 month period.
Notwithstanding continued margin pressure within the industry, the above factors
have led to significant improvements in profitability and cash generation in the
Saffil business and give cause for optimism on the future prospects for this
business.
5. Update on Company accounts and suspension of trading
The Company has been suspended from the Official List and from trading on the
London Stock Exchange's main market for listed securities since 31 July 2009
because Dyson has not been in a position to publish its audited accounts for the
year to 31 March 2009 as a result of the ongoing dialogue with the Banks.
On 30 October 2009, the Company announced that it had changed its accounting
reference date from 31 March to 30 September. Accordingly, the 12 month
accounting period which would have ended on 31 March 2009 has been extended to
an 18 month accounting period ended on 30 September 2009.
On 26 January 2010, the Company stated that it was anticipated that it would be
in a position to publish the audited accounts for the 18 month period to 30
September 2009 during April 2010, subject to agreeing the detailed terms of the
Restructuring. This is still the Company's intention. However, as
theRestructuring proposals would not be implemented until after the De-listing
has occurred, publication of such accounts will not cause the Ordinary Shares to
recommence trading on the London Stock Exchange's main market for listed
securities.
6. Extraordinary General Meeting
Under the Listing Rules, the De-listing can only be effected by the Company
after the passing of a special resolution by Shareholders in general meeting.
Accordingly, Shareholders will find set out at the end of the Circular a Notice
of Extraordinary General Meeting which has been convened for 11.00 a.m. on 26
April 2010 at Buchanan Communications, 6th Floor, Moorfields, London, EC2Y 9AE
for the purpose of considering and, if thought fit, approving the De-listing.
The Resolution will be proposed, in accordance with the Listing Rules, as a
special resolution (and will require a vote in favour of not less than 75 per
cent. of the votes cast in person or by proxy at the EGM). Voting on the
Resolution will be on a show of hands, unless a poll is demanded in accordance
with the articles of association of the Company.
7. Matters to be taken into account in considering the De-listing
Conditional upon the Resolution being approved at the EGM, the Company will
apply for the De-listing. In light of the fact that the Company's Ordinary
Shares are suspended from trading and will continue to be suspended until
De-listing is effected, assuming the Resolution is passed by Shareholders,
Delisting is expected to take place on the business day immediately following
the EGM, being 27 April 2010, with effect from 8.00 a.m.
In deciding whether or not to vote in favour of the Resolution, Shareholders
should take into consideration, inter alia, the following:
· The Company is currently dependent upon the ongoing support of the Banks
to continue to trade as a going concern. The Board has explored extensively all
potential means of addressing the Company's current financial situation and
concluded that the Restructuring represents the best potential outcome for
Shareholders in the circumstances. In order to effect the Restructuring, Dyson
is required to de-list from the Official List as a key requirement of the
restructuring proposals agreed in principle between the Company, the Banks and
the PPF and it is unlikely that the Company would, in any event, meet the
qualifications for continued participation on the Official List following
completion of the Restructuring. This is because it is currently envisaged that
the Restructuring would lead to the creation of a share capital structure which
is not suitable for a company listed on the Official List. In particular, new
classes of unlisted voting and non-voting equity share capital are likely to be
created as part of the Restructuring. In determining the timing of the
De-listing the Directors considered that it can be carried out at the current
time, or concurrent with the Restructuring when its detailed terms have been
agreed. The Board believes that implementing the Restructuring as an unlisted
company is the most efficient course of action due to the fact that the Company
will not be required to comply with (or incur costs associated with) the
requirements of the Listing Rules during the Restructuring. In particular, the
Company will not be required to comply with Listing Rule 9.5.12 as part of the
Restructuring, which would necessitate a working capital statement to be
included in the Shareholder circular. The Board has therefore concluded that the
De-listing should take place at the current time, ahead of the Restructuring.
· The Board also believes that if Shareholders do not pass the Resolution
it is very unlikely that the Restructuring will subsequently be able to proceed.
Having already extensively explored all potential alternative means of
addressing the Company's current financial situation, the Board believes that
failure to pass the Resolution would almost inevitably lead the Directors to
consider that there is no reasonable prospect of the wider solvent restructuring
process proceeding any further. This is because de-listing is a key requirement
of the restructuring proposals agreed in principle between the Company,
the Banks and the PPF. The Directors believe that if the Resolution is not
passed there would be no prospect of reaching agreement with the Company's
stakeholders on an alternative solvent restructuring proposal not involving the
de-listing of the Company. In this eventuality, the Directors would then be
obliged as a matter of urgency pursuant to applicable insolvency law to take
every step to minimise the potential loss to the Group's creditors. Under these
circumstances the Group would enter into administration or some other form of
insolvency procedure. This outcome would, in the Board's view, result
in Shareholders receiving no value for their current shareholdings. Whilst the
Directors expect that such a course of events would be likely to take place in a
matter of weeks following the Resolution not being approved, and could commence
as early as May 2010, in the interim period any creditor could potentially
initiate insolvency proceedings against the Group themselves.
· If the De-listing occurs, thereafter there will be no public market for
the Ordinary Shares and the opportunity for Shareholders to realise their
investment in the Company will be more limited. However, the Board considers
that it is in the interest of the Company that the De-listing proceeds so that
the Company is able to implement the Restructuring, given the Group's current
financial position. If the De-listing occurs the Company intends to investigate
the possibility of providing a matched bargain facility to allow Shareholders a
limited opportunity to trade the Ordinary Shares.
· The Proposals currently are in outline only and are subject to change as
a result of further negotiation with, inter alia, the Banks, the PPF and the
trustees of the Saffil Pension Scheme. Full details of the Proposals will be set
out in a circular to be sent to Shareholders in due course to convene a further
extraordinary general meeting of the Company for the purpose of obtaining the
relevant Shareholder approvals. The Proposals remain subject to contract (and,
in the case of the Banks, credit sanction), Takeover Panel approval, Shareholder
consent for both the De-listing and the Restructuring, the formal clearance of
the Pensions Regulator, the formal approval of the PPF and various pension
trustees and any other relevant regulatory approvals.
· The Proposals are not legally binding and are subject to further
negotiation. It is possible that following the De-listing either or both of the
Banks or any other party to the negotiations will exercise their right not to
proceed with the Restructuring or that the parties to the negotiations will fail
to reach agreement. In either such case, the Restructuring would not occur even
though De-listing will have already occurred. In this eventuality, having
already extensively explored all potential alternative means of addressing the
Company's current financial situation, it is almost inevitable that the Group
would have no option but to enter into administration or some other form of
insolvency procedure. Whilst the Directors expect that such a course of events
would be likely to take place in a matter of weeks following such an
eventuality, in the interim period any creditor could potentially initiate
insolvency proceedings against the Group themselves. However, given the reasons
described earlier in this paragraph 7 the Board believes that it is in the best
interests of Shareholders as a whole for the Company to be de-listed at the
current time.
· Following De-listing, the regulatory regime which applies solely to
companies whose shares are admitted to the Official List and to trading on the
London Stock Exchange's main market for listed securities, comprised within the
Listing Rules, will no longer apply. The Listing Rules require, inter alia, that
a company which is subject to them seek the approval of its shareholders for
various transactions including acquisitions or disposals above a particular
magnitude and transactions between a company and related parties. These
provisions will cease to apply following De-listing.
· Following De-listing, the Company will remain subject to the provisions
of the City Code on the basis set out in those provisions.
· Following De-listing, the Company will no longer be required to comply
with the disclosure regime for companies whose shares are admitted to the
Official List contained within the Listing Rules and the Disclosure and
Transparency Rules.
· Following De-listing, the Company will continue to post its annual report
and accounts to Shareholders.
· The Board has determined that it would be appropriate for the current
Directors to remain in place following the De-listing in order to progress the
Restructuring. The matter of Board composition following the Restructuring will
be reviewed by the Board in due course and it is anticipated that further
details would be provided to Shareholders at the time their approval is sought
in relation to the Restructuring.
8. Importance of the Shareholder vote
The Board believes that if Shareholders do not pass the Resolution it is very
unlikely that the Restructuring will subsequently be able to proceed. Having
already extensively explored all potential alternative means of addressing the
Company's current financial situation, the Board believes that failure to pass
the Resolution would almost inevitably lead the Directors to consider that there
is no reasonable prospect of the wider solvent restructuring process proceeding
any further. This is because de-listing is a key requirement of the
restructuring proposals agreed in principle between the Company, the Banks and
the PPF. The Directors believe that if the Resolution is not passed there would
be no prospect of reaching agreement with the Company's stakeholders on an
alternative solvent restructuring proposal not involving the de-listing of the
Company. In this eventuality, the Directors would then be obliged as a matter of
urgency pursuant to applicableinsolvency law to take every step to minimise the
potential loss to the Group's creditors. Under these circumstances the Group
would enter into administration or some other form of insolvency procedure. This
outcome would, in the Board's view, result in Shareholders receiving no value
for their current shareholdings. Whilst the Directors expect that such a course
of events would be likely to take place in a matter of weeks following the
Resolution not being approved, and could commence as early as May 2010, in the
interim period any creditor could potentially initiate insolvency proceedings
against the Group themselves.
The Proposals are not legally binding and are subject to further negotiation. It
is possible that following the De-listing either or both of the Banks or any
other party to the negotiations will exercise their right not to proceed with
the Restructuring or that the parties to the negotiations will fail to reach
agreement. In either such case, the Restructuring would not occur even though
De-listing will have already occurred. In this eventuality, having already
extensively explored all potential alternative means of addressing the Company's
current financial situation, it is almost inevitable that the Group would have
no option but to enter into administration or some other form of insolvency
procedure. Whilst the Directors expect that such a course of events would be
likely to take place in a matter of weeks following such an eventuality, in the
interim period any creditor could potentially initiate insolvency proceedings
against the Group themselves. However, given the reasons described in this
announcement the Board believes that it is in the best interests of Shareholders
as a whole for the Company to be de-listed at the current time.
9. Recommendation
The Board considers the De-listing to be in the best interests of the Company
and Shareholders as a whole. Accordingly, the Board unanimously recommends that
Shareholders vote in favour of the Resolution approving the De-listing at the
Extraordinary General Meeting as the Director who is also a Shareholder intends
to do in respect of his own shareholding totalling 1,422,420 Ordinary Shares
representing approximately 4.3 per cent. of the Company's issued share capital
as at the date of this announcement.
DEFINITIONS
The following definitions apply throughout this announcement, unless the context
requires otherwise:
+-----------------+---------------------------------------------------+
| "Banks" | Lloyds TSB Bank plc and Svenska Handelsbanken AB |
| | (publ) |
| | |
+-----------------+---------------------------------------------------+
| "Board" or | Dyson's board of directors from time to time |
| "Directors" | |
| | |
+-----------------+---------------------------------------------------+
| "Circular" | the circular to Shareholders relating to the |
| | proposed De-listing |
| | |
+-----------------+---------------------------------------------------+
| "City Code" | the City Code on Takeovers and Mergers, as |
| | amended from time to time |
| | |
+-----------------+---------------------------------------------------+
| "De-listing" | the cancellation of the admission of the Ordinary |
| | Shares to the Official List and to trading on the |
| | London Stock Exchange's main market for listed |
| | securities |
| | |
+-----------------+---------------------------------------------------+
| "Disclosure | The Disclosure and Transparency Rules of the |
| and | Financial Services Authority |
| Transparency | |
| Rules" | |
| | |
+-----------------+---------------------------------------------------+
| "Dyson" or | Dyson Group plc |
| the | |
| "Company" | |
| | |
+-----------------+---------------------------------------------------+
| "Extraordinary | the extraordinary general meeting of Dyson to be |
| General | held at Buchanan Communications, 6th Floor, |
| Meeting" or | Moorfields, London, EC2Y 9AE at 11.00 a.m. on |
| "EGM" | 26 April 2010 to approve the De-listing |
| | |
+-----------------+---------------------------------------------------+
| "FSMA" | The Financial Services and Markets Act 2000, as |
| | amended from time to time |
| | |
+-----------------+---------------------------------------------------+
| "Group" | Dyson and its subsidiaries from time to time |
| | |
+-----------------+---------------------------------------------------+
| "Listing | the listing rules made by the UKLA under Part VI |
| Rules" | of FSMA, as amended from time to time |
| | |
+-----------------+---------------------------------------------------+
| "London | London Stock Exchange plc |
| Stock | |
| Exchange" | |
| | |
+-----------------+---------------------------------------------------+
| "Notice of | the notice of the EGM which appears at the end of |
| Extraordinary | the Circular |
| General | |
| Meeting" | |
| | |
+-----------------+---------------------------------------------------+
| "Official | the Official List of the UKLA |
| List" | |
+-----------------+---------------------------------------------------+
| "Ordinary | ordinary shares of 25p each in the capital of the |
| Shares" | Company |
| | |
+-----------------+---------------------------------------------------+
| "PPF" | the Pension Protection Fund |
| | |
+-----------------+---------------------------------------------------+
| "Proposals" | has the meaning given in paragraph 1 of this |
| | announcement, the details of which are set out in |
| | paragraph 2 of this announcement |
| | |
+-----------------+---------------------------------------------------+
| "Restructuring" | has the meaning given in paragraph 1 of this |
| | announcement, the details of the Proposals for |
| | which are set out in paragraph 2 of this |
| | announcement |
| | |
+-----------------+---------------------------------------------------+
| "Resolution" | the special resolution to be proposed at the EGM |
| | to obtain approval of Shareholders for the |
| | De-listing as set out in the Notice of |
| | Extraordinary General Meeting |
| | |
+-----------------+---------------------------------------------------+
| "Shareholders" | holders of Ordinary Shares |
| | |
+-----------------+---------------------------------------------------+
| "Takeover | the Panel on Takeovers and Mergers |
| Panel" | |
+-----------------+---------------------------------------------------+
| "UKLA" or | the Financial Services Authority in its capacity |
| the "UK | as the competent authority for the purposes of |
| Listing | Part VI of FSMA |
| Authority" | |
+-----------------+---------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLLFLLVLILVII
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