This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
8 August 2024
HERMES
PACIFIC INVESTMENTS PLC
("Hermes"
or the "Company")
Proposed cancellation of
admission to trading on AIM of the Ordinary
Shares
and
Notice of General
Meeting
Hermes Pacific Investments plc (AIM:
HPAC) announces that it has today posted a circular together with
the respective notice convening a General Metting to seek approval
of its shareholders for the proposed cancellation of its ordinary
shares to trading on AIM ("Cancellation"), together with the form
Form of Proxy.
The General Meeting will be held at
First Floor, 1 Chancery Lane, London WC2A 1LF on 2 September 2024
at noon.
Background to and reasons for the
Cancellation
The Company became an investing
company in 2012 adopting an investing policy of making investments
in the financial services sector with a focus on South East Asia.
Having made a few small investments, the Company was unable to find
other investments that met its investment criteria. Therefore, in
December 2021, the Company changed its investment policy to focus
primarily on the property sector. In May 2022 the Company acquired
a residential property in Westcliff-on-Sea. During 2022 and 2023
interest rates increased significantly making property investments
less attractive relative to holding cash and therefore since then
the Company has made no further investments.
In light of this, the Board reviewed
its current status and future options including the benefits and
drawbacks to the Company retaining its admission on AIM. The Board
has concluded that the Cancellation is in the best interests of the
Company and its Shareholders as a whole. In reaching this
conclusion, the Board has considered the following key
factors:
· the
permanent cost savings to be achieved by the
Cancellation;
· the
Directors do not believe that the Company's share price
reflects the underlying value of the company's assets. As at
7 August 2024 the Company's share price was 52.5 pence per share
compared with an underlying net asset value of 147 pence per share
as at 30 September 2023;
· the
free float of the Company is only 20.95 per cent. and trading
volumes in respect of the Shares are very low and this illiquidity
prevents Shareholders from trading in meaningful volumes or with
any frequency;
· the
Company has not utilised its admission on AIM to raise fresh
capital or issue paper consideration to fund acquisitions since
2013;
· the
management time and the legal and regulatory burden associated with
maintaining the Company's admission to trading on AIM is, in the
Directors' opinion, disproportionate to the benefits to the
Company; and
· the
Directors believe that Admission significantly inhibits flexibility
of the business
Effect of the Cancellation on Shareholders
The principal effects that the
Cancellation would have on Shareholders are as follows:
•
there will not be a formal market mechanism enabling the
Shareholders to trade Ordinary Shares;
•
while the Ordinary Shares will remain freely transferable, it is
possible that the liquidity and marketability of the Ordinary
Shares will, in the future, be more constrained than at present and
the value of such Ordinary Shares may be adversely affected as a
consequence;
•
in the absence of a formal market, it may be more difficult for
Shareholders to determine the market value of their investment in
the Company at any given time;
•
the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply and the Company will no longer be subject to the
Market Abuse Regulation regulating inside information or the
Disclosure and Transparency Rules and so will therefore no longer
be required to disclose significant shareholdings in the
Company;
•
Shareholders will no longer be afforded the protections given by
the AIM Rules, such as the requirement to be notified of certain
events, AIM Rule 26 (requirement to provide certain information on
the Company's website), and the requirement that the Company seek
Shareholder approval for certain corporate actions, where
applicable, including substantial transactions, reverse takeovers,
related party transactions and fundamental changes in the Company's
business;
•
the levels of transparency and corporate governance within the
Company may not be as stringent as for a company quoted on
AIM;
•
WH Ireland will cease to be the Company's nominated adviser and the
Company will cease to have a broker;
•
whilst the Company's CREST facility will remain in place
immediately post the Cancellation, the Company's CREST facility may
be cancelled in the future. Although the Ordinary Shares will
remain transferable, they may cease to be transferable through
CREST. In this instance, Shareholders who hold Ordinary Shares in
CREST will receive share certificates;
•
stamp duty will be payable on transfers of Ordinary Shares as the
Ordinary Shares will no longer be traded on AIM; and
•
the Cancellation may have personal taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
Shareholders should also note that
the Takeover Code may continue to apply to the Company following
the Cancellation for a period of ten years, provided the Company
continues to have its place of central management and control in
the UK, Channel Islands or Isle of Man. However, in the event that,
subsequent to the Cancellation further Board changes result in the
Company's place of central management and control being outside the
UK, Channel Islands or Isle of Man, then the Company may not be
subject to the Takeover Code. Shareholders should also note that
the Panel has recently issued a public consultation regarding
possible changes to the Takeover Code which, if adopted, would
amongst other things shorten the period during which the Takeover
Code potentially continues to apply to a company following its
delisting. If these rule changes are adopted in the form and
broadly in the timescale proposed, the Company would cease to be
subject to the Takeover Code three years after the date of
implementation of such changes.
The Company will continue to be
bound by its Articles and the Companies Act (each of which requires
shareholder approval for certain matters) following the
Cancellation.
The above considerations are not
exhaustive, and Shareholders should seek their own independent
advice when assessing the likely impact of the Cancellation on
them.
Following the Cancellation becoming
effective, the Board intends to provide certain facilities and
services to Shareholders, including:
•
holding general meetings in accordance with the applicable
statutory requirements; and
•
providing access to and/ or provide copies of the Company's audited
accounts in accordance with the applicable statutory
requirements.
Shareholders should be aware that if
the Cancellation takes effect, they will at that time cease to hold
Shares in a Company whose shares are admitted to trading on AIM and
the matters set out above will automatically apply to the Company
from the date of the Cancellation.
Shareholders who are in any doubt
about their taxation position should consult their own
independent professional adviser.
Process for the Cancellation
In accordance with Rule 41 of the
AIM Rules, the Company has notified the London Stock Exchange of
its intention to cancel Admission subject to Shareholders' approval
and giving 20 Business Days' notice. In addition, a period of at
least five clear Business Days following Shareholders' approval of
the Resolution is required before the Cancellation may become
effective. Under the AIM Rules, it is a requirement that the
Cancellation is approved by the requisite majority of Shareholders
voting at the General Meeting (being not less than 75 per cent. of
the votes cast, whether in person or by proxy). Accordingly, the
Resolution seeks Shareholders' approval of the Cancellation.
Subject to the Resolution being passed, it is anticipated that
trading in the Ordinary Shares on AIM will cease at the close of
business on 9 September 2024 with the Cancellation taking effect at
7.00 a.m. on the following business day, 10 September
2024.
Ordinary Share dealing following the
Cancellation
If a Shareholder retains their
Ordinary Shares following the Cancellation, although the Ordinary
Shares will remain freely transferable, they will no longer be
tradeable on AIM. The Board is aware that following the
Cancellation (should the Resolution be approved by Shareholders at
the General Meeting) liquidity in, and marketability of, the
Ordinary Shares will be very limited and holdings of Ordinary
Shares will be difficult to value and to trade. Therefore, whilst
there will be no formal dealing facility, Shareholders seeking to
buy or sell Ordinary Shares can contact the Company Secretary, who
will seek to facilitate contact between potential buyers and
sellers of Ordinary Shares. Shareholders should also be aware that
the arrangements set out above could be withdrawn at a later
date.
Current trading and prospects
There have been no further material
developments since the Company announced its interim results for
the six months ended 30 September 2023, on 15 December 2023. At
that time, the Company reported revenues of £14,000, a gain in the
period of £9,000 and net assets of £3,441,000.
A copy of the circular convening the
general meeting on 2 September 2024, the Notice of General Meeting,
the Form of Proxy and the Form of Instruction will be available on
the Company's website at
www.hermespacificinvestments.com/.