Proposed Cancellation of Listing on AIM
09 4월 2009 - 3:00PM
UK Regulatory
TIDMNFND
RNS Number : 3978Q
Newfound N.V.
09 April 2009
9 April 2009
Newfound N.V.
("Newfound" or the "Company")
Proposed cancellation of admission of the Company's Ordinary Shares to trading
on AIM, Notices of Extraordinary Class Meeting and Extraordinary General Meeting
and update on current financial and trading position
Newfound announces that it will today be posting a circular to shareholders (the
"Circular") concerning the proposed cancellation of the admission of the
Company's ordinary shares to trading on AIM (the "Delisting") and convening an
Extraordinary Class Meeting of ordinary shareholders to approve the Delisting
(the "ECM").
The Board has, following consultation with certain major shareholders,
determined that the interests of all shareholders will be best served by the
Delisting.
The Delisting is subject to the passing of the resolution to be proposed at the
ECM by not less than 75 per cent. of votes cast by ordinary shareholders. As at
the time of this announcement, the Company has received irrevocable undertakings
to vote in favour of the Resolution in respect of approximately 74 per cent. of
the ordinary shares in issue.
The Company's articles of association and Dutch law require the Company to
convene an Extraordinary General Meeting of the Company ("EGM") as the Company's
net asset value has fallen below 50 per cent of its paid up share capital. The
Board believes that the net asset value of the Company was negative as at 31
December 2008. The purpose of the EGM is to provide shareholders with an
opportunity to discuss the reduction in the Company's net asset position.
However, the Company is not required to propose any specific resolution for
shareholders to approve at this meeting. All shareholders may attend the EGM.
Current financial and trading position
At the time of IPO, the Company's business model was focused on developing its
three resorts, Humber Valley in Canada, Pinney's Estates in Nevis and Ocean's
Edge in St. Kitts, together with seeking new resort opportunities. Since then,
the Company has experienced a number of challenges in the implementation of its
original business model which have led to its operational and financial
performance being significantly below its expectations at the time of IPO. The
credit crisis, the consequential reduction in demand for properties and
significant withdrawal of debt from the market have exacerbated these
challenges.
During 2008, a number of changes were made to address these issues, including
the appointment of a new Chief Executive Officer and management team and the
implementation of an operational restructuring for the Company and its
subsidiary undertakings (the "Group"). The financial circumstances of the Group
also triggered an in-depth review of the costs of the business and efforts have
focused upon the conservation of working capital.
Following a review of the operations at Humber Valley, the Board concluded that
the resort was not economically viable and following protracted efforts to find
alternative solutions, the Company announced on 8 December 2008 that Humber
Valley had filed for bankruptcy. This action has had no impact on the projects
at St. Kitts and Nevis.
The Company continues to develop the projects at Pinney's Estates in Nevis and
Ocean's Edge in St. Kitts. Satisfactory progress is being made with the
development and sale of properties at Ocean's Edge. The masterplanning work on
Nevis is complete and a hotel operator for the site has entered a period of
exclusivity with the Company. The project is now ready to move into its
pre-development work stage with a view to starting on site in early 2010 subject
to project finance being available.
The decision to put Humber Valley Resort Corporation into liquidation stopped
the drain on the Company's resources. The Board has taken the view to write down
the assets of Humber Valley Resort Corporation which represents a non cash item
of c. US$18 million for the year to 31 December 2008. As a result the Directors
believe that the net asset value of the Company will be negative at 31 December
2008.
The closure of Humber Valley Resort Corporation means that the Company's 40 per
cent. interest in the Ocean's Edge project is currently its only remaining
income generating asset. However, the income from the development does not cover
the Nevis pre-project costs and the administration costs being incurred
elsewhere in the Group.
In order to reduce the Company's cost base, in March 2009 Jayne McGivern
resigned as Chief Executive Officer to become a non-executive director.
Negotiations are well advanced to put in place arrangements for Jayne McGivern
and other members of the Group's development team to provide management services
to the Group by way of a third party management contract.
In order to continue with the development of its project at Nevis and for future
projects, the Company needs to raise further capital. It will also need to raise
capital within the next 4 to 6 months to meet ongoing administration costs.
Unless new finance can be found for the Group over the coming months, there is a
risk that the Company will exhaust its cash resources, in which case it will
need to cease operations.
The Group is currently in compliance with its banking covenants following a net
asset waiver which was agreed with Agilo Limited until September 2009. A new Net
Asset Value to Aggregate Financial Indebtedness ratio has been agreed with Agilo
Limited which will apply after September 2009.
Background to and reasons for the proposed Delisting
One of the primary reasons for the Company's admission to AIM in September 2006
was the intention to use the equity market to fund the development of its three
existing resorts and seek new resort opportunities. However, the Board believes
that a public equity fundraising at the current time is not feasible due to the
current equity market conditions and the weakened valuation of the ordinary
shares.
The Board believes that other funding options, including debt financing for
ongoing resort development as well as equity funding to further proceed with the
operational restructuring of the Group, are more likely to materialise if the
Company ceases to be traded on any securities exchange. The Company is currently
reviewing several opportunities which are only available to it if the Delisting
occurs. Shareholders should note that there can be no certainty that any of
these sources of funding will actually be realised.
The Board also believes that the ongoing high costs and regulatory requirements
of maintaining the admission of the Company's ordinary shares to trading on AIM
can no longer be justified in relation to the Company. The Board anticipates
that the Company will make meaningful annual savings as a result of the
Delisting. The Board believes that these funds can be better deployed for
shareholders by continued investment in the growth and development of the
business.
As a consequence of the above factors, the Board has concluded that, following
consultation with certain major shareholders, the interests of the Company and
the shareholders are not being best served by the continued admission of the
Company's ordinary shares on AIM.
Strategy following the Delisting
The Company will continue to work to generate the best value for its existing
assets. The management's current priority is the conservation of cash and the
monitoring of the Company's cost base. It is critical that additional equity is
raised and this will also be the priority of the management team.
As referred to above, it is likely that following the Delisting a new third
party management contract will be entered into with an entity headed by Jayne
McGivern and involving other members of the Group's development team. The
intention is that this new agreement has a cost remuneration structure suitable
for the Company's ongoing activities.
Delisting administration and treatment of depositary interests
Subject to the ordinary shareholders approving and adopting the Resolution, it
is anticipated that trading in the ordinary shares on AIM will cease at close of
business on 12 May, with cancellation on AIM taking effect at 7 a.m. on 13 May
2009.
The arrangements concerning the depositary interests representing ordinary
shares will remain unchanged and they will continue to be enabled in CREST
following the Delisting.
Upon the Delisting becoming effective, Collins Stewart Europe Limited will cease
to be nominated adviser and broker to the Company and the Company will no longer
be required to comply with the AIM Rules.
How shareholders will be able to effect share transactions following Delisting
While the Board has determined that the interests of all shareholders will be
best served by the Delisting, it recognises that the Delisting may make it
harder for shareholders to sell or buy ordinary shares should they so wish.
Accordingly, the Board intends to investigate the possibility of introducing a
share dealing facility under which shareholders will be able to buy or sell
shares in the Company.
ECM and EGM
The ECM and EGM are to be held at Schiphol Airport Meeting Centre, 8th Floor,
Havenmeesterweg 27, 1118 CB Schiphol Airport, The Netherlands at 12 noon and
12.10 p.m. (Central European Time) respectively on 5 May 2009.
Expected Timetable
An expected timetable of key events for the Delisting is set out below:
Circular (and form of proxy, form of direction or form of instruction if
applicable)
posted to shareholders 9 April 2009
Latest time and date for receipt of forms of direction (1), (2) 12.00 noon on 1
May 2009
Latest time and date for receipt of forms of instruction (1), (2)12.00 noon on 2
May 2009
Latest time and date for receipt of forms of proxy (1), (2)12.00 noon on 3 May
2009
ECM (1), (2)
12.00 noon on 5 May 2009
EGM (1), (2) 12.10 p.m. on 5 May 2009, or
as soon thereafter as the
Extraordinary Class
Meeting has concluded
Last day of dealings in ordinary shares on AIM (3) 12 May 2009
Cancellation of the admission of the ordinary shares to trading on AIM (3)8.00
a.m. on 13 May 2009
Notes:
1. Each of the times and dates above is subject to change. If any of the
above times and/or dates change, the revised times and/or
dates will be notified to shareholders by announcement on a Regulatory
Information Service.
2. Central European Time.
3.British Summer Time.
Further information may be found at the Company's website, www.newfoundnv.com,
where a copy of the Circular will shortly be available.
Enquiries:
+------------------------------------------------------+-----------------+
| Newfound N.V. | 020 7470 2438 |
+------------------------------------------------------+-----------------+
| John Morgan | |
+------------------------------------------------------+-----------------+
| Stephen Bentley | |
+------------------------------------------------------+-----------------+
| | |
+------------------------------------------------------+-----------------+
| Collins Stewart Europe Limited | 020 7523 8350 |
+------------------------------------------------------+-----------------+
| Adrian Hadden | |
+------------------------------------------------------+-----------------+
| | |
+------------------------------------------------------+-----------------+
| Citigate Dewe Rogerson | 020 7638 9571 |
+------------------------------------------------------+-----------------+
| George Cazenove | |
+------------------------------------------------------+-----------------+
| Nicola Smith | |
+------------------------------------------------------+-----------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Newfound (LSE:NFND)
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