FXI Fusionex

TIDMFXI

RNS Number : 4383G

Fusionex International PLC

26 May 2017

FOR IMMEDIATE RELEASE 26 May 2017

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")

Fusionex International plc

("Fusionex" or the "Company")

Proposed cancellation of admission of the Company's ordinary shares to trading on AIM, posting of documents and extraordinary general meeting.

The Board of Fusionex today announces that the Company intends to seek the approval of the holders of ordinary shares of no par value in the capital of the Company (the "Shares") (the "Shareholders") to cancel the admission of the Shares to trading on AIM (the "Proposal" or the "Cancellation").

Hard copies of the following documents (collectively the "Documents") will be sent to Shareholders later today:

-- a circular (the "Circular") containing a notice of an extraordinary general meeting ("Extraordinary General Meeting") which will take place at Main Conference Room, Level 12, Tower A, Plaza 33, No.1, Jalan Kemajuan, Section 13, 46200 Petaling Jaya, Selangor, Malaysia on 15 June 2017 at 10:00am (BST) / 5:00pm (MYT) for the purpose of considering and, if thought fit, passing a resolution to approve the Cancellation; and

   --     a form of proxy for use by Shareholders at the Extraordinary General Meeting. 

Electronic copies of the Documents together with the Company's annual report and accounts for the year ended 30 September 2016 are available from the Company's website: www.fusionex-international.com in accordance with rules 20 and 26 of the AIM Rules for Companies (the "AIM Rules").

Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders given in general meeting. Under the AIM Rules, the Cancellation also requires a notice period of not less than 20 clear business days from the date on which notice of the intended Cancellation is notified via the Regulatory Information Service and is given to the London Stock Exchange.

The Extraordinary General Meeting is to be held for the purpose of considering, and if thought fit, passing the following resolution (the "Resolution"), to take effect as a resolution of the Company requiring 75 per cent. of the votes cast (in person or by proxy) to be in favour: THAT, the admission of the ordinary shares each of no par value in the capital of the Company to trading on AIM, a market operated by the London Stock Exchange Group plc, be cancelled and that the directors of the Company be authorised to take all steps which they consider to be necessary or desirable in order to effect such cancellation.

All of the Directors whose shareholdings in aggregate represent 41.93 per cent. of the issued ordinary share capital of the Company, have given irrevocable undertakings to vote in favour of the Resolution.

Subject to the passing of the Resolution at the proposed Extraordinary General Meeting on 15 June 2017, Cancellation will occur no earlier than five clear business days after the proposed Extraordinary General Meeting and it is therefore anticipated that trading in the Shares on AIM will cease at 16.30 (BST) on 26 June 2017, with Cancellation expected to take effect at 7:00 am (BST) on 27 June 2017. Any change to these dates will be notified by an announcement on the Regulatory Information Service.

Pursuant to Rule 41 of the AIM Rules, the Directors have notified the London Stock Exchange of the date of the proposed Cancellation.

The Circular sets out the following, further details of which can also be found below within this announcement:

   --           the background to the Proposal; 

-- why the Board has decided to proceed with the Proposal, subject to Shareholders' approval; and

-- why the Directors believe that the Proposal is in the best interests of the Company and Shareholders as a whole and why the Board recommends that Shareholders vote in favour of the Resolution at the forthcoming Extraordinary General Meeting.

In addition, the Directors wish to highlight that the Cancellation is being proposed because they consider it is a better alternative to the current AIM listing and it should not be misinterpreted as a sign of weakness in Fusionex's future trading prospects, which, the management believes, are positive both in the short and longer term.

Should Cancellation be approved by Shareholders at the Extraordinary General Meeting, the Company intends to put in place a matched bargain settlement facility which should facilitate Shareholders buying and selling Shares on a matched bargain basis following Cancellation. The Board is reviewing several matched bargain settlement facilities and the Company intends to make an announcement in respect of such a facility ahead of the date of Cancellation.

Background to, and reasons for, the Proposal

The Directors believe that, for the 15 months preceding the date of this document, the performance of the Company's share price has been disappointing. The Directors believe that the development of the business, in terms of general trading, strategic partnerships and underlying operational infrastructure, the growth potential of big data analytics, the Internet of Things and the strength of the Company's management team have not been adequately reflected in the value attributed by the public market to the Company's shares. The current trading value attributed to the Shares has led the Directors to question whether the current listing, is as attractive as it was at the time of the Company's admission to AIM in December 2012 and whether it remains in the best interests of the Company. The Directors believe the reasons for this under-valuation are multiple and complex, but specifically include a lack of liquidity, and in part, a lack of in-depth independent research into the Company. It is not possible to attribute this to one single factor however the Directors believe that the current political uncertainty in Europe is unhelpful, which makes the public markets in the United Kingdom less attractive for Fusionex than at the time of the IPO. These are factors beyond the control of Fusionex and its Board of Directors, which has led the Directors to decide on this course of action.

In addition to the above, the Directors also believe that the costs of remaining listed on AIM could be better spent within the business. The cost involved with being a compliant Company from a regulatory perspective and with maintaining the Company's admission to trading are, in the Directors' opinion, disproportionate to the current benefits to the Company.

The Directors therefore believe that the Cancellation will, accordingly, reduce the Company's recurring administrative costs, allowing the funds currently spent on such expenses to be better spent in running and growing the business in a private capacity.

After careful consideration of the matters laid out above, the Directors have therefore concluded that the commercial disadvantages of maintaining the admission to trading on AIM of the Shares at this time in the Company's development outweigh the potential benefits, and that it is therefore no longer in the Company's or its Shareholders' best interests to maintain the admission to trading on AIM of the Shares.

Cancellation of admission of ordinary shares to trading on AIM

Cancellation

The AIM Rules require (i) the cancellation of admission to trading on AIM to be approved by not less than 75%of Shareholders given in general meeting, and (ii) a notice period to be given to the London Stock Exchange of not less than 20 clear business days from the date on which notice of the intended Cancellation is notified via the Regulatory Information Service. Pursuant to Rule 41 of the AIM Rules, the Directors have notified the London Stock Exchange of the date of the Cancellation.

Subject to the passing of the Resolution at the Extraordinary General Meeting on 15 June 2017, Cancellation will occur no earlier than five clear business days after the Extraordinary General Meeting and it is therefore anticipated that trading in the Shares on AIM will cease at 16:30 (BST) on 26 June 2017, with Cancellation expected to take effect at 7.00 a.m. (BST) on 27 June 2017.

Trading in the Shares after Cancellation

Whilst the Directors believe that the Cancellation is in the interests of the Company and the Shareholders as a whole, they recognise that the Cancellation will make it more difficult for Shareholders to buy and sell Shares should they wish to do so. Following the Cancellation, although the Shares will remain transferable subject to and in accordance with the Articles of Association, the Shares will no longer be tradable on AIM.

Accordingly, the Board intends, following the Cancellation, to put in place a matched bargain settlement facility (the "Proposed Facility") which should facilitate Shareholders buying and selling Shares on a matched bargain basis following Cancellation. Shareholders or persons wishing to acquire or sell Shares will be able to do so via the Proposed Facility. In the event that matched bargain settlement facility provider is able to match that order with an opposite sell or buy instruction, the matched bargain settlement facility provider would contact both parties to effect the order. The Board is reviewing several matched bargain settlement facilities and the Company intends to make an announcement in respect of such a facility ahead of the date of Cancellation.

The Board's choice of matched bargain settlement facility provider will determine whether the Company's existing CREST facility will remain in place following Cancellation and therefore whether Shareholders will be able to elect to hold their Shares in dematerialised form. If the Company's CREST facility is ceased, Shareholders who hold their Shares through CREST will be issued share certificates in respect of their Shares. The Board will use reasonable endeavours to enable Shareholders to continue to be able to hold their Shares through CREST, but there can be no assurance that a CREST facility will continue to be available following Cancellation.

Following the implementation of the Proposed Facility, the Board intends to monitor its popularity amongst Shareholders and will review it at regular intervals to consider whether it remains cost effective.

Effects of Cancellation on Shareholders

Market for the Shares

The principal effect of the proposed Cancellation is that there would no longer be a formal market mechanism enabling Shareholders to trade their Shares on AIM or any other recognised market or trading exchange. The underlying liquidity in the Shares is low and, in the opinion of the Directors, is likely to remain that way for the foreseeable future. As described above, the Company intends to, shortly following Cancellation, put in place the Proposed Facility to serve as a limited platform for Shareholders and other persons to seek to buy or sell Shares. However, the Proposed Facility is likely to offer a substantially lesser degree of liquidity and potentially less attractive share prices than are currently available via the Company's quotation on AIM.

Taxation

Shareholders who are in any doubt about their tax position should consult with their own independent professional adviser as soon as possible.

Loss of shareholder protections

Shareholders should also be aware that the Company will no longer be bound by the AIM Rules following Cancellation. As a consequence, investors will not be able to benefit from certain of the protections provided by the AIM Rules. For example, the Company will no longer be required to announce material events, interim or final results or transactions (including related party transactions) and certain previously prescribed corporate governance procedures may not be adhered to by the Company in the future. Shareholders' approval will also not be required for reverse takeovers and/or fundamental changes in the Company's business. Following the Cancellation, the relationship agreement entered into at the time of the Company's admission to AIM in December 2012 and disclosed in the Company's admission document at that time, will terminate. The Company will no longer be bound to comply with the corporate governance requirements applicable to UK-quoted companies and the Company would also no longer be required to have a nominated adviser, nor be required to retain a broker.

The Company will continue to be bound by applicable provisions of Jersey law, which is in certain respects different from the laws of other relevant jurisdictions with which Shareholders may be familiar (including the United Kingdom), and its Articles of Association following completion of the Cancellation. The Circular does not contain a full summary of the applicable provisions of Jersey law, its differences with the laws of other relevant jurisdictions or of the provisions of the Articles of Association.

The Directors intend to keep Shareholders informed of the Company's progress from time to time and remain committed to high standards of corporate governance. Accordingly, following Cancellation, the Directors intend to:

-- hold an annual general meeting and, when required, other general meetings, in accordance with applicable statutory requirements and the Articles of Association;

-- make available to all Shareholders an annual report and the Company's annual financial statements;

-- comply with all public filing requirements under the Act, including the filing of the Company's accounts with the Jersey Financial Services Commission within the applicable period;

-- maintain an 'investors' section on the Company's website at www.fusionex-international.com providing information on any significant events or developments in which Shareholders may be interested. Shareholders should, however, be aware that there will be no obligation on the Company to update this section of the website as is presently required under the AIM Rules and other currently applicable regulation; and

-- comply with corporate governance standards appropriate for a company with the number of Shareholders it has.

Takeover Code

The City Code on Takeovers and Mergers (the "Takeover Code") currently applies to the Company and as such the Shareholders benefit from a number of protections contained in the Takeover Code. Following Cancellation, the Company's Shares will no longer be admitted to trading on a relevant public market and the Company's place of central management and control will not be in the United Kingdom, the Channel Islands or the Isle of Man. Pursuant to paragraphs 3(a)(i) and (ii) to the Introduction to the Takeover Code, the Company will accordingly no longer be subject to the Takeover Code.

Shareholders should note that, if the Cancellation becomes effective, they will not receive the protections afforded by the Takeover Code in the event that there is a subsequent offer to acquire their Shares.

Brief details of the Takeover Code and the protections given by the Takeover Code are described below.

Before giving your consent to the Cancellation, you may want to take independent professional advice from an appropriate financial, legal or other professional adviser in relation to the effects of the Cancellation on you as a Shareholder.

The Takeover Code

The Takeover Code is issued and administered by the Panel on Takeovers and Mergers of the United Kingdom (the "Panel"). The Company is presently a company to which the Takeover Code applies and its Shareholders are accordingly entitled to the protections afforded by the Takeover Code.

The Takeover Code and the Panel operate principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror. The Takeover Code also provides an orderly framework within which takeovers are conducted. In addition, it is designed to promote, in conjunction with other regulatory regimes, the integrity of the financial markets.

The General Principles and Rules of the Takeover Code

The Takeover Code is based upon a number of general principles (the "General Principles") which are essentially statements of standards of commercial behaviour. The General Principles apply to all transactions with which the Takeover Code is concerned. They are expressed in broad general terms and the Takeover Code does not define the precise extent of, or the limitations on, their application. They are applied by the Panel in accordance with their spirit to achieve their underlying purpose.

In addition to the General Principles, the Takeover Code contains a series of rules (the "Rules"), of which some are effectively expansions of the General Principles and examples of their application and others are provisions governing specific aspects of takeover procedure. Although most of the Rules are expressed in more detailed language than the General Principles, they are not framed in technical language and, like the General Principles, are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter. The Panel may derogate or grant a waiver to a person from the application of a Rule in certain circumstances.

Giving up the protection of the Takeover Code

Shareholders will be giving up certain important protections upon Cancellation. Your attention is drawn in particular to the following protections under the Takeover Code:

(i) all holders of Shares must be afforded equivalent treatment and, moreover, if a person acquires 30 per cent. or more of the shares in the Company (other than in the context of a voluntary offer to all Shareholders) such person would be required to make a mandatory offer to all of the other Shareholders;

(ii) the holders of Shares must have sufficient time and information to enable them to reach a properly informed decision on any bid; where it advises the holders of Shares, the Board must give its views on the effects of implementation of the bid on employment, conditions of employment and the locations of the Company's place of business;

(iii) the Board would be required to act in the interests of the Company as a whole and must not deny any holders of Shares the opportunity to decide on the merits of a bid for the Company; and

(iv) if a bid for the Company were to be made, the Board would be required to obtain competent independent advice as to whether the financial terms of any offer (including any alternative offers) are fair and reasonable and the substance of such advice must be made known to Shareholders.

The Jersey framework for takeovers following Cancellation

Certain brief details of the Jersey legal framework for takeovers, which following Cancellation

will continue to be applicable to the Company, alongside other relevant provisions of the

Articles of Association, as appropriate, are described below.

Acquisitions

A Jersey public limited company may be acquired in a number of ways, including by means of a "scheme of arrangement" between the company and its shareholders, by means of a takeover offer or by means of a statutory merger.

Scheme of arrangement

A "scheme of arrangement" is a statutory procedure under the Companies (Jersey) Law 1991 (as amended) (the "Act") pursuant to which the Royal Court of Jersey may approve a compromise or arrangement between a Jersey company and its shareholders or a class of them. In a "scheme of arrangement," a company would make an initial application to the Royal Court of Jersey to convene a meeting or meetings of its shareholders at which a majority in number of shareholders representing 3/4ths of the voting rights of the shareholders present and voting either in person or by proxy at the meeting must agree to the compromise or arrangement. If the relevant proportion of shareholders so agree, the company will return to the Royal Court of Jersey to request the court to sanction the arrangement. Upon such a scheme of arrangement being so sanctioned by the Royal Court of Jersey and becoming effective in accordance with its terms and the Act, it will bind the company and such shareholders.

Takeover offer

In addition to the compulsory purchase provisions contained in the Articles of Association, Articles 116 to 124A of the Act set out the provisions dealing with takeover offers of Jersey companies and details certain "squeeze out" provisions. Under the Act, if, following a takeover offer (which is defined as "an offer to acquire all the shares, or all the shares of any class or classes, in a company (other than shares which at the date of the offer are already held by the offeror), being an offer on terms which are the same in relation to all the shares to which the offer relates"), an offeror has acquired or contracted to acquire not less than nine-tenths in number of the shares of a no par value company to which the offer relates, the offeror may give notice, in accordance with the Act to the holders of those shares to which the offer relates which the offeror has not acquired or contracted to acquire, that it desires to acquire those shares.

Subject to the provisions of the Act, upon service of the notice by the offeror, it shall become entitled and be bound to acquire the shares. A minority shareholder also has a right, pursuant to the Act, to be bought out by an offeror. Where a notice is given under the Act to the holder of any shares, the Royal Court of Jersey may, on an application made by the shareholder within 6 weeks from the date on which the notice was given, order that the offeror shall not be entitled and bound to acquire the shares or specify terms of acquisition different from those of the offer.

The Act permits a scheme of arrangement or takeover offer to be made relating only to a particular class or classes of a company's shares.

Mergers

The Act permits two or more companies (at least one of which must be a company incorporated in Jersey) to merge to form one successor company (which may be one of the merging companies or a new company). In the case of a company incorporated in Jersey, any such merger is subject to the approval of its board of directors, and to approval by special resolution of the company (and, where applicable, by special resolution if each class of shares where there is more than one class of shares in issue), in addition to certain other substantive and procedural requirements.

Further Information

Current trading and prospects

The Company released its Annual Report for the year ended 30 September 2016 on 16 March 2017. In the following months since the financial year end 2016 and the issuance of the Annual Report, the share price of the Company continues to disappoint, despite the Company's strong performance. The Company remains committed to the statements set out in the Annual Report and will be continuing the strategies and prospects set out therein to push towards strengthening the Company's future.

The Company is in a strong position in its areas of focus. Its business prospects remain positive and the Company continues to secure wins and contracts; with the Company's current customer base and foothold poised to increase even further as a result of these wins.

Future strategy of the Company

Following the completion of this exercise, the Board intends to continue with the direction and strategies set out in its Annual Report by capitalizing opportunities and continuing on its course towards quality and innovative investments.

Irrevocable undertakings

The Company has received irrevocable undertakings to vote in favour of the Resolution at the proposed Extraordinary General Meeting from all of the Directors in respect of their respective holdings of, in aggregate, 22,809,966 Shares, representing approximately 41.93 per cent. of the total current issued ordinary share capital of the Company.

The aforesaid irrevocable undertakings will lapse if the Extraordinary General Meeting is not held or the Resolution is not put to Shareholders or in the event that the Resolution is not passed.

Recommendation

The Board considers the Resolution as set out in the Notice of Extraordinary General Meeting to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Resolution. The Directors intend to vote their own beneficial holdings in favour of the Resolution, which, in aggregate, amounts to 22,809,966 Shares, representing approximately 41.93 per cent. of the issued ordinary share capital of the Company as at the date of this document.

-ENDS-

For further details:

Fusionex

 
 Ivan Teh, Chief Executive Officer 
  Yuen Choong Lai, Chief Financial Officer 
  Darren Hopkins, Director of Investor 
  Relations & Corporate Development           +603 77115200 
 Stifel 
  Fred Walsh, Neil Shah, Ben Maddison, 
  Rajpal Padam                                020 7710 7600 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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May 26, 2017 12:30 ET (16:30 GMT)