TIDMKUBC
RNS Number : 9000U
Kubera Cross-Border Fund Limited
27 November 2019
27 November 2019
Kubera Cross-Border Fund Limited
(the "Company")
NOTICE OF EXTRAORDINARY GENERAL MEETING
The Company announces that an Extraordinary General Meeting
("EGM") of the Company will be held at 10.00 a.m. on 12 December
2019 at IOMA House, Hope Street, Douglas, Isle of Man IM1 1AP to
consider the proposed cancellation of Admission of the Shares to
Trading on AIM.
Copies of the EGM Circular and the associated Form of Proxy have
been sent to shareholders. The full text of the Chairman's letter
contained in the EGM Circular is given below.
The Notice of EGM and the associated Form of Proxy will be
available on the Company's website at:
www.kuberacrossborderfund.com
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.
For more information, contact:
Grant Thornton UK LLP (Nominated Adviser) Philip Secrett/ Jamie
Barklem/ Niall McDonald
Tel.: +44 (0) 20 7383 5100
Email: p hilip.j.secrett@uk.gt.com
Numis Securities Limited (Broker)
David Benda, Managing Director
Tel.: +44 (0) 20 7260 1275
Email: d .benda@numis.com
FIM Capital Limited (Administrator, Registrar &
Secretary)
Philip Scales, Director
Tel.: +44 (0) 1624 681250
Email: p scales@fim.co.im
LETTER FROM THE CHAIRMAN
Dear Shareholder
Proposed Cancellation of Admission of the Shares to Trading on
AIM, Changes to the Board, Reduction of Operating Costs and Notice
of Extraordinary General Meeting
1. INTRODUCTION
The Company announced on 26 September 2019 that the Directors
were evaluating a range of cost-reduction measures, including the
Cancellation of admission of its shares trading on AIM. Following
consultation with Shareholders on the matter, the Directors have
concluded that it is in the best interests of the Company and its
Shareholders to cancel the admission of the Shares to trading on
AIM.
Pursuant to Rule 41 of the AIM Rules, the Cancellation is
conditional on the approval of not less than 75 per cent. of the
votes cast by Shareholders (whether present in person or by proxy)
at the EGM,
notice of which is set out in Part 2 of this document.
If the Resolution is approved at the EGM, it is expected that
the Cancellation will become effective at 7.00 a.m. on 30 December
2019.
The purpose of this document is to seek Shareholders' approval
of the Resolution; to provide you with the information on the
background and reasons for the Cancellation; to explain the
principal effects of the Cancellation; the Directors' strategy for
the Company should the Cancellation become effective, and why the
Directors unanimously consider the Cancellation and the associated
proposals contained in this document to be in the best interests of
the Company and its Shareholders as a whole.
2. REASONS FOR THE CANCELLATION
The Directors have conducted a review of the benefits and
drawbacks to the Company and its Shareholders of retaining the
admission of the Shares to trading on AIM and believe that the
Cancellation is in the best interests of the Company and its
Shareholders as a whole. In reaching this conclusion, the Directors
have considered the following key factors:
-- The current investment objective and policy of the Company is
to realise its investments in an orderly fashion and return the net
proceeds to Shareholders. The Board remains committed to achieving
this objective and will continue to do so should the Cancellation
become effective. The Company has only two remaining investments
which the Board considers to have material value, further details
of which are set out in paragraph 3.
-- The considerable cost, management time and the legal and
regulatory requirements associated with maintaining the admission
of the Shares to trading on AIM are, in the Directors' opinion, now
disproportionate to the benefits to the Company and not conducive
to maximising distributions to Shareholders. The Directors are
cognisant of the level of the Company's operating costs relative to
the progress being made with regard to completing the receipt of
the remaining realisation proceeds from the disposals of
investments. In addition to seeking the Cancellation, which will
deliver direct cost reductions for the Company from ceasing the
obligation to pay admission related fees, additional reductions in
operating costs are expected, which are set out in paragraph 4. The
Board estimates that the reduction in operating costs following the
Cancellation and the other changes will amount to, in aggregate,
approximately USD 170,000 annually.
3. THE COMPANY AND ITS REMAINING INVESTMENTS
The Company was incorporated as an exempted company with limited
liability in the Cayman Islands in 2006 and whose Shares were
admitted to trading on AIM on 27 December 2006. The Company's
investment objective was to seek to achieve returns by making
capital investments through the Group in India-centric cross-border
businesses.
On 17 January 2013, Shareholders voted to amend the Fund's
investment objective and policy such that the Company makes no new
investments and becomes a realisation vehicle, whose objective is
to realise its investments in an orderly fashion and return the net
proceeds to Shareholders.
During the first five years of the Fund's life, investments were
made in nine companies, deploying USD 129.50 million of the Fund's
capital. To date, eight investments have been sold, liquidated or
written off and USD 61.45 million has been distributed to
Shareholders.
As at 30 September 2019, the net assets of the Fund amounted to
USD 12.50 million. The Company continues to hold two investments
with material value (excluding investments written down to nil as
at 30 September 2019):
-- Synergies Castings Limited ("SCL")
At 30 September 2019, the Company held a 35.42 per cent. equity
interest in SCL and loans, which together had a fair value of USD
7.84 million.
Kubera Cross Border Fund (Mauritius) Limited ("Kubera
Mauritius") entered into a share purchase and loan assignment
agreement in 2017 with a private buyer for the disposal of its
entire equity and debt interests in SCL. The consideration is
payable to Kubera Mauritius in four tranches, the first two of
which have been received. The Board understands that the buyer is
in the process of raising funds to satisfy the remaining two
tranches of consideration and the Board continues to work with the
buyer to complete the sale of Kubera Mauritius' remaining interest
in SCL as soon as practicable.
-- NeoPath Limited ("Neopath")
Kubera Mauritius sold its equity interest in a payment
processing business in 2010. The acquirer deducted withholding tax
of INR 748.36 million (equivalent to USD 10.59 million at 30
September 2019), which was deposited with the Indian tax authority
and is held through Neopath, of which 46.95 per cent., or USD 4.52
million, is ultimately attributable to Kubera Mauritius.
In accordance with the relevant provisions of the
India-Mauritius Double Taxation Avoidance Convention, NeoPath is in
the process of claiming a refund of the Indian withholding tax. In
the opinion of Neopath's Indian tax counsel, the entire amount of
INR 748.36 million is fully recoverable. The timing of the
finalisation and receipt of the tax refund remains uncertain. At 30
September 2019, the fair value of the receivable was USD 4.15
million.
Although the timing of the receipt of the remaining disposal
proceeds is outside the control of the Company, the Directors
believe that the net proceeds to be distributed to Shareholders in
due course will be maximized by continuing the current strategies
to accelerate the receipt of the remaining disposal proceeds and
reducing the operating costs following the Cancellation.
4. Reduction in Operating Costs following THE Cancellation
As the number of investments and the Fund's net assets have
declined, the Board has gradually reduced the Group's operating
costs. At 30 September 2019, the Company held cash net of
liabilities of USD 0.50 million; and investments with an estimated
net asset value of USD 11.99 million.
Conditional on the Cancellation becoming effective, the Company
will benefit from direct cost reductions as there will be no
further obligation to pay admission related fees, including
nominated adviser and broker fees.
Conditional on the Cancellation becoming effective, additional
operating cost reductions are expected from:
-- Reduction of and changes to the composition of the Board.
Conditional on the Cancellation becoming effective, each of Martin
Adams and Michael Tyler has expressed his intention to resign (a)
as a Director; and (b) from each of the boards of the Company's
subsidiaries. They will be replaced on the Board by a senior
executive of the Administrator, Graham Smith, who has agreed to
become a Director. Graham Smith is a graduate of Cambridge
University, a chartered accountant and is FIM's chief executive
officer. He has over thirty-five years' financial management
experience, predominantly in the life assurance and investment fund
sectors. The Board will then comprise two unremunerated Directors:
Ramanan Raghavendran and Graham Smith, neither of whom are
considered to be independent.
-- Simplified oversight and out-of-pocket expenses. It is the
intention that the Company will no longer produce and publish a
quarterly NAV; quarterly newsletters; or half-yearly reports and
financial statements. Annual financial statements and information
on significant events and developments relating to the Company will
be available to all Shareholders through the Fund's website and can
be sent electronically to Shareholders if they provide their email
address to FIM at enquiries@fim.co.im. Corporate documents will no
longer be available to Shareholders in printed form. Accordingly,
there will be a reduction in the fees charged by the Administrator
and other third party administrative service providers in Mauritius
and India.
The Board estimates that the aggregate reduction in operating
costs following the Cancellation will amount to approximately USD
170,000 annually.
5. PRINCIPAL EFFECTS OF THE CANCELLATION
The principal effects of the Cancellation include:
-- There will be no formal market mechanism enabling the
Shareholders to trade Shares and no other recognised market or
trading facility is intended to be put in place to facilitate the
trading of the Shares.
-- While the Shares will remain freely transferrable, it is
likely that the liquidity and marketability of the Shares will, in
the future, be significantly reduced and the secondary market value
of the Shares may be adversely affected as a consequence.
-- In the absence of a formal market and quote, it will be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time. There is no guarantee
that Shareholders will be able to realise their investment
following the Cancellation; of the future value of the Company's
remaining investments; or of the price at which Shares may be
bought or sold.
-- The regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply to the Company. Shareholders will no longer be
afforded the protections provided by the AIM Rules and the Market
Abuse Regulation, such as the requirement to be notified of certain
events, or to vote on certain substantial transactions. In
particular, the Company will not be bound to make any public
announcements of material events, or to announce financial results,
although, following the Cancellation, the Company will continue to
maintain its website, through which it will make available certain
information, as set out in paragraph 4.
-- In order to reduce the operating costs as a private company,
following the Cancellation, the Company will no longer produce and
publish a quarterly NAV; quarterly newsletters or half-yearly
reports and financial statements. Shareholders should be aware that
in voting in favour of the Resolution they will also, in effect, be
voting in favour of this policy.
-- The levels of transparency and corporate governance will not
be equivalent to those for a company quoted on AIM.
-- The Company will cease to have an independent nominated adviser and broker.
-- The Company will cease to have any independent Directors.
-- Whilst the Company's CREST facility will remain in place
immediately following the Cancellation, the Company's CREST
facility may, if the Board so determines, be cancelled in the
future in order to save the associated costs. Although under such
circumstances the Shares will remain transferable, they will cease
to be transferable through CREST. In this instance, Shareholders
who hold Shares in CREST will receive share certificates.
-- The Cancellation may have taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
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 Directors are aware that certain Shareholders may be unable
or unwilling to hold Shares following the Cancellation. Such
Shareholders should consider selling their Shares in the market
prior to the Cancellation.
6. TRANSACTIONS IN THE SHARES FOLLOWING THE CANCELLATION
The Board is aware that following the Cancellation, it will be
more difficult for Shareholders to buy and sell Shares.
FIM will make arrangements to provide a Matched Bargain
Facility, to assist Shareholders to trade in the Shares, to be put
in place following the Cancellation. Under the Matched Bargain
Facility, Shareholders wishing to acquire or dispose of Shares will
be able to leave an indication with FIM through their stockbroker
(FIM is unable to deal directly with members of the public), of the
number of Shares that they are prepared to buy or sell at an agreed
price. In the event that sell and buy instructions can be matched,
FIM will contact both parties (via their stockbrokers) who can then
effect the bargain. Where necessary in order to comply with
regulatory requirements in the Cayman Islands and/ or the Isle of
Man, FIM will conduct anti-money laundering checks, in respect of
which an administration charge may be levied by FIM on the buyer
and/or seller as appropriate (in either case via their
stockbroker).
Shareholders should note that there can be no guarantee that
orders for the disposal or acquisition of Shares will be capable of
being matched using the Matched Bargain Facility which will be
provided at the sole discretion of FIM. The Board is not making any
recommendation as to whether or not Shareholders should buy or sell
Shares and the Company will not act as an intermediary in relation
to the provision of the Matched Bargain Facility. Once the Matched
Bargain Facility has been put in place, details will be made
available to Shareholders on the Company's website
(www.kuberacrossborderfund.com). This is expected to be available
following the Cancellation.
If Shareholders wish to buy or sell Shares on AIM they must do
so prior to the Cancellation. If Shareholders approve the
Cancellation, it is expected that the last day of dealings in the
Shares on AIM will be 27 December 2019 and that the effective date
of the Cancellation will be 30 December 2019. The Board is not
making any recommendation as to whether or not Shareholders should
buy or sell Shares.
7. STRATEGY AND CORPORATE GOVERNANCE SHOULD THE CANCELLATION BECOME EFFECTIVE
Following the cancellation, the Company will continue to
implement the Fund's investment objective and policy such that the
Company makes no new investments and completes the receipt of the
remaining realisation proceeds from the disposals of its
investments as soon as practicable and returns the net proceeds to
Shareholders.
Following the Cancellation, the Company will continue to
maintain its website http://www.kuberacrossborderfund.com through
which it will make annual financial statements available to all
Shareholders and provide information on significant events and
developments relating to the Company. However, there will be no
obligation on the Company to include all of the information
required by AIM Rule 26 or to update the website as required by the
AIM Rules. Following the Cancellation, the Board intends that
access to the website will be password protected.
Shareholders who wish to access the Company's website, as well
as those who wish to receive electronic copies of annual financial
statements and information on significant events and developments
relating to the Company, following the Cancellation becoming
effective, should inform FIM at enquiries@fim.co.im.
Following the Cancellation becoming effective, the Company will
remain (and will comply with all regulatory requirements to remain)
registered as an exempted Company in the Cayman Islands and will
also remain subject to the provisions of the Articles, pursuant to
which Shareholder approval is required for certain matters. FIM, as
an independent company, regulated by the Isle of Man Financial
Services Authority and the UK Financial Conduct Authority will
continue to provide oversight of the Company to ensure that the
Company maintains appropriate corporate governance standards.
Additionally, in 2018, the Company adopted, pursuant to AIM Rule
26, the Quoted Companies Alliance Code (the "QCA Code"). Although
the Company will no longer be subject to the AIM rules following
the Cancellation, the Board intends to take appropriate measures to
ensure that the Company complies with the QCA Code to the extent
practicable and commensurate with the size and operations of a
private company. Further details will be contained on the
website.
The Directors have considered various options in relation to the
ongoing management of the Company and its remaining investments
should the Cancellation become effective and believe that the
structure and arrangements set out in this document will maximise
the net proceeds to be distributed to Shareholders in due
course.
8. Effect on the Company should the Cancellation not beCOME EFFECTIVE
If the Resolution is not approved at the EGM and the
Cancellation does not become effective, the admission of the Shares
to trading on AIM will be maintained and the Company's investment
objective and strategy will remain unchanged. However, the Company
will then be unable to deliver the reduction in operating costs set
out in paragraph 4.
9. Process for THE Cancellation
Under the AIM Rules, it is a requirement that the Resolution
proposing the Cancellation must be approved by not less than 75 per
cent. of votes cast by its shareholders given in a general meeting.
Accordingly, the Notice of Extraordinary General Meeting to be held
at IOMA House, Hope Street, Douglas, Isle of Man IM1 1AP at 10:00
a.m. on 12 December 2019 is set out in Part 2 of this document.
Furthermore, Rule 41 of the AIM Rules requires any AIM company
that wishes the London Stock Exchange to cancel the admission of
its shares to trading on AIM to notify shareholders and to
separately inform the London Stock Exchange of its preferred
cancellation date at least 20 business days prior to such date.
Additionally, the Cancellation will not take effect until at least
5 clear business days have passed following the approval of the
Resolution.
In accordance with AIM Rule 41, the Company (via its Nominated
Adviser) has notified the London Stock Exchange of the Company's
intention, conditional on the Resolution being approved at the EGM,
to cancel the Company's admission of the Shares to trading on AIM
at 7.00 a.m. on 30 December 2019. If the Resolution is approved,
the Cancellation will become effective at 7.00 a.m. on 30 December
2019. After the Cancellation becomes effective, the appointment of
the Nominated Adviser will cease and the Company will no longer be
required to comply with the AIM Rules.
10. Extraordinary General Meeting
The EGM will be held at 10.00 a.m. on 12 December 2019 at IOMA
House, Hope Street, Douglas, Isle of Man IM1 1AP, British Isles.
The Notice of the EGM is provided in Part 2 of this document.
The Resolution will be an extraordinary resolution requiring at
least 75 per cent. of the voting rights cast at the EGM to be in
favour of the Resolution that the admission of the Shares to
trading on AIM be cancelled.
11. Action to be Taken
A Form of Proxy for use at the EGM is provided with this
document. Whether or not you propose to attend the EGM in person,
you are requested to complete and sign the Form of Proxy as soon as
possible and in any event no later than 10.00 a.m. on 10 December
2019 and send the completed and signed form to the Company's
registrars at IOMA House, Hope Street, Douglas, Isle of Man IM1
1AP.
Completion and return of a Form of Proxy will not prevent you
from voting in person at the EGM should you so wish.
12. Recommendation
The Directors consider the Cancellation and the reduction in
operating costs resulting from the changes described in this
document to be in the best interests of the Company and
Shareholders as a whole and therefore unanimously recommend that
Shareholders vote in favour of the Resolution, as the Chairman
intends to do in respect of his own beneficial holdings of Shares
amounting, in aggregate, to 150,000 Shares (representing
approximately 0.14 per cent. of the Shares in issue at the date of
this document).
DEFINITIONS
Administrator or FIM FIM Capital Limited
AIM Rules the AIM rules for companies whose
securities are admitted to trading
on AIM as published by the London
Stock Exchange from time to time
Articles the articles of association of
the Company
Board the board of Directors
Cancellation the proposed cancellation of
admission of the Shares to trading
on AIM, currently intended to
take place at 7.00 a.m. on 30
December 2019
Company or Fund Kubera Cross-Border Fund Limited
CREST the operator of an electronic
settlement system that is used
to settle the Company's shares
Director a director of the Company
EGM the extraordinary general meeting
of the Company convened for 10.00
am on 12 December 2019
Form of Proxy the form of proxy for use in
connection with the EGM
Group the Company and its subsidiaries
London Stock Exchange London Stock Exchange plc
Matched Bargain Facility the Matched bargain trading facility
to be put in place following
the Cancellation, conditional
on the passing of the Resolution
as described in paragraph 6
Nominated Adviser Grant Thornton UK LLP
Resolution the resolution to be proposed
at the EGM
RIS Regulatory Information Service
Shareholders holders of Shares
Shares ordinary shares of USD 0.01 in
the capital of the Company
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
NOGPGGBUGUPBGQM
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November 27, 2019 11:21 ET (16:21 GMT)
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