TIDMAGU
RNS Number : 9367W
Angus & Ross PLC
05 August 2009
ANGUS & ROSS PLC
("Angus & Ross" or the "Company")
Notice of General Meeting
Notice of general meeting regarding inter alia the issue of a new B Share and
convertible loan notes to FBC Holdings S.à.r.l., approval for the waiver of the
requirement to make a general offer under Rule 9 of the City Code on Takeovers
and Mergers, amendment to the Company's articles of association and change of
name to Angel Mining plc
Key points
* Restructuring of a US$12.5 million loan;
* Notice of general meeting dispatched to approve, amongst other things, the
waiver of the requirement to make a general offer under Rule 9 of the City Code;
* Proposed appointment of Frank Chapman and Daniel Bordessa, as directors, subject
to the approval of certain resolutions; and
* Proposed change of name to Angel Mining plc.
The Company announces that it has today dispatched a notice to shareholders to
convene a general meeting of the Company at the offices of Davenport Lyons, 30
Old Burlington Street, London, W1S 3NL on 21 August 2009 at 10.00 a.m. (the
"General Meeting") to seek shareholder approval for a number of resolutions,
including approval of the waiver of the requirement to make a general offer
under Rule 9 of the City Code on Takeovers and Mergers (the "Code").
On 11 May 2009, the Company announced that it had agreed terms with Cyrus
Capital Partners, LP ("Cyrus Capital") for the restructuring of the Tranche A
loan of US$12.5million provided to the Company by Cyrus Capital as agent
excluding for the avoidance of doubt all amounts in respect of the additional
facility of US$1.25 million, details of which were announced on 1 July 2009 (the
"Cyrus Loan").
FBC Holdings S.à.r.l. ("FBC S.à.r.l.") (a wholly owned subsidiary of Cyrus
Opportunities Master Fund II, Ltd (the "Cyrus Fund") has conditionally agreed to
subscribe for US$12.5million of convertible loan notes (the "Loan Notes") in
exchange for the cancellation of the Cyrus Loan. The Loan Notes will be
convertible into new ordinary shares of 1 penny each in the Company ("Ordinary
Shares") at the option of the noteholders. A condition of the issue of the Loan
Notes is that FBC S.à.r.l. is also issued with a new B Share of GBP1 in the
Company, to have the rights set out in the articles of association of the
Company as proposed to be amended by resolution at the General Meeting (the "B
Share").
The issue of the B Share will result in FBC S.à.r.l. controlling more than 30
per cent. of the Company's enlarged issued voting share capital which, as Angus
& Ross is a company which is subject to the Code, would pursuant to Rule 9 of
the Code ordinarily result in FBC S.à.r.l. having to make an offer to acquire
all of the Ordinary Shares. However, as described in further detail below, the
Panel on Takeovers and Mergers (the "Panel") has granted a waiver of this
requirement subject to shareholder approval.
Background to and reasons for the Proposals
The Company announced its interim results on 28 November 2008 and stated that
its plan to raise US$60million of project finance to put the Black Angel Mine
into production had been delayed by the crisis in the financial markets. It was
recognised that the delay could prejudice the Company's ability to comply with
its obligations under the facility agreement entered into on 6 June 2007, to
repay the Cyrus Loan on 10 July 2010.
Cyrus Capital has funded the Company since 2007 and it has a clear understanding
of the Black Angel project and the mining potential for the Company that exists
in Greenland, as demonstrated by the Company's recently announced acquisition of
the assets, infrastructure, inventories and goodwill of the Nalunaq gold mine
for a consideration of US$1 million in cash. A further US$500,000 will be due
for payment by the later of 31 August 2009 or within 10 working days of
agreement to the acquisition by the Joint Committee of members of parliament of
the Greenland Home Rule Government and upon satisfactory transfer by Nalunaq
Gold Mine A/S to Angel Mining Gold A/S of the 16 million Danish Kroner BMP Mine
Closure Security Fund.
To take advantage of these opportunities the Company has streamlined and focused
its management and is seeking to strengthen its balance sheet.
The Company continues to work with Cyrus Capital and in order to avoid the
Company becoming insolvent, the Company and Cyrus Capital have agreed terms to
refinance the Cyrus Loan. As announced on 11 May 2009, the Company has executed
a loan note instrument (the "Loan Note Instrument") and FBC S.à.r.l. has agreed
to subscribe for Loan Notes in exchange for the cancellation of the Cyrus Loan
and warrants to subscribe for up to 37,500,000 Ordinary Shares at 20p per share
("Warrants"). A condition of the issue of the Loan Notes is that FBC S.à.r.l. is
issued with the B Share. The issue of the B Share, the issue of the Loan Notes
and the subscription by FBC S.à.r.l. for them are conditional, inter alia, on
shareholders approving certain resolutions.
The board believes that the cancellation of the Cyrus Loan and its replacement
by the Loan Notes together with the proceeds of the placing announced on 27
April 2009, will give the Company financial stability and enable it to seek
further funding of at least US$60million in order to put the Black Angel Mine
and the Nalunaq gold mine into production.
details of The loan NOTES AND B SHARE
Cyrus Capital and FBC S.à.r.l. have conditionally agreed that FBC S.à.r.l. will
subscribe for Loan Notes in exchange for the cancellation of the Cyrus Loan and
the Warrants.
Interest - The Loan Notes will be issued in amounts of US$1,000 and will not
carry interest.
Conversion - The Loan Notes are convertible at any time by the noteholders into
Ordinary Shares at the rate of 46,182.05 Ordinary Shares in respect of each
US$1,000 of Loan Notes converted, subject to adjustment in the event of (i) a
subdivision or further consolidation of share capital or (ii) a dividend. If any
fractions of an Ordinary Share fall to be allotted on conversion, the Ordinary
Shares representing such fractions will not be allotted to the relevant
converting noteholder but will be aggregated and sold and the net proceeds of
sale will be distributed pro rata among the persons entitled thereto. The
number of Ordinary Shares to be issued on conversion of each US$1,000 Loan Note
was based on a calculation that converted the US$12.5 million loan and notional
interest at 7.5% p.a. to 31 December 2012 into sterling at the then prevailing
exchange rate of 1.415, and then converting it into Ordinary Shares at 2p.
Redemption - The Loan Notes are redeemable on 31 December 2012 and may not be
redeemed earlier except if the proceeds of any placings of shares, rights issue
or issue of convertible loan notes exceed, in aggregate, US$5million. In such
instance, the noteholders may require 50 per cent. of the proceeds in excess of
US$5million to be applied by the Company to redeem the Loan Notes. The Loan
Notes may also, at the option of the noteholders, be redeemed early if
Shareholders accept an offer resulting in a change of control of the Company.
If the Loan Notes are redeemed prior to 31 December 2012, they will be redeemed
for an amount equal to 105 per cent. of the par value of such Loan Notes.
Security - The Loan Notes will have the benefit of the same security as the
Cyrus Loan until the Company secures bank funding necessary to put the Black
Angel Mine into production in an amount and on terms satisfactory to FBC
S.à.r.l. at which time Cyrus Capital will release its security.
The existing security consists of a fixed and floating charge granted by the
Company and its subsidiary, Black Angel Mining Limited, over all of their
respective present and future assets but the Company is also obliged to procure
the execution of share charges to be granted by Black Angel Mining Limited over
all of the issued share capital in its subsidiaries, (i) Black Angel Mining A/S,
the Greenlandic company that owns the mining licence issued by the Greenland
Bureau of Minerals and Petroleum ("BMP") in respect of the Black Angel Mine and
(ii) Angel Mining (Gold) A/S, which owns all of the assets relating to the
Nalunaq gold mine. Both share charges are currently being settled and will only
become effective once they have been approved by the BMP, which is not expected
to occur until the third quarter of this year.
B Share- Upon the subscription for the Loan Notes becoming unconditional, the B
Share will be allotted to FBC S.à.r.l.. The B Share may only be transferred to
an associate of FBC S.à.r.l. or Cyrus Capital and will, until the Loan Notes are
converted or transferred, carry such number of votes at general meetings of the
Company as FBC S.à.r.l. or Cyrus Capital and any of their associates would be
entitled to if the Loan Notes held by them at the time of the general meeting
had converted into Ordinary Shares in accordance with the terms of the Loan Note
Instrument. If any Loan Notes are transferred to a party, other than an
associate of FBC S.à.r.l. or Cyrus Capital, the number of voting rights attached
to the B Share will reduce pro rata. The maximum number of voting rights to be
held by FBC S.à.r.l. on issue of the B Share, subject to the adjustment
provisions contained in the Loan Note Instrument, will be 577,275,625
representing 70.01 per cent. of the voting rights of the Company at the date of
this announcement. If all the Loan Notes held by FBC S.à.r.l. or Cyrus Capital
and its associates were converted or transferred, no votes would attach to the B
Share. The B Share carries no entitlement to dividends or a return of capital.
General - The Loan Note Instrument contains negative covenants from the Company
relating to, inter alia, the creation of any debt which is senior to or ranks
pari passu with the Loan Notes, the issue of any preferred shares or other
securities with preferred rights to Ordinary Shares, entering into material
contracts and declaring dividends. The Loan Note Instrument also contains
warranties and indemnities from the Company in favour of FBC S.à.r.l.
Until the Loan Notes have been repaid in full or converted, the Company must
ensure that at all times, no less than three directors have been approved in
writing by the noteholders holding a majority of the Loan Notes, the holders of
a majority of the Loan Notes can send an observer to board meetings of the
Company and the number of directors does not exceed six.
The noteholders have a right to match future financing terms that the Company
may agree with third parties.
The Loan Notes are transferable in amounts and multiples of US$1,000.
THE
CITY CODE ON TAKEOVERS & MERGERS
The proposed issue by the Company of the Loan Notes and the B Share to FBC
S.à.r.l. gives rise to certain considerations under the Code. Brief details of
the Panel, the Code and the protections they afford to shareholders are
described below.
The Code is issued and administered by the Panel. The Code applies to all
takeover and merger transactions, however effected, where the offeror company
is, inter alia, a listed or unlisted public company with its place of central
management in the United Kingdom. The Company is such a company and its
shareholders are entitled to the protections afforded by the Code.
Under Rule 9 of the Code, any person who acquires an interest (as defined in the
Code) in shares which, taken together with shares in which he is already
interested and in which persons acting in concert with him are interested, carry
30 per cent. or more of the voting rights of a company which is subject to the
Code, is normally required to make a general offer to all the remaining
shareholders to acquire their shares.
Similarly, when any person, together with persons acting in concert with him, is
interested in shares which, in aggregate, carry not less than 30 per cent. of
the voting rights of the company but does not hold shares carrying more than 50
per cent. of such voting rights, a general offer will normally be required if
any further interests in shares are acquired by any such person, or any person
acting in concert with him.
An offer under Rule 9 must be made in cash and at the highest price paid by the
person required to make the offer, or any person acting in concert with him, for
any interest in shares of the company during the 12 months prior to the
announcement of the offer.
On issue of the B Share, FBC S.à.r.l. will be interested in 577,275,625 voting
rights of the Company representing approximately 70.01 per cent. of the
Company's enlarged issued voting share capital.
The Panel has agreed to waive the obligation to make a general offer that would
otherwise arise as a result of the issue of the B Share, subject to the approval
of independent shareholders. Accordingly, a resolution to approve the waiver is
being proposed at the General Meeting and will be taken on a poll of independent
shareholders.
Following the issue of the B Share, FBC S.à.r.l. will hold more than 50 per
cent. of the Company's issued voting share capital and may accordingly increase
its interests in shares without incurring any obligation under Rule 9 to make a
general offer.
Other than the appointment of Daniel Bordessa to the board, FBC S.à.r.l. and
Cyrus Capital have confirmed that they are not currently proposing any further
changes to the board and have further confirmed that it is their current
intention that, following any increase in FBC S.à.r.l's. shareholding as a
result of the proposals, the business of the Company would be allowed to
continue in substantially the same manner as at present with no major strategic
changes and that the existing employment rights, including the pension rights,
of all employees of the Company and the existing locations of the Company's main
business in Greenland would be maintained. FBC S.à.r.l. and Cyrus Capital have
further confirmed that there is no current intention to re-deploy the Company's
fixed assets.
PROPOSED DIRECTORS
Subject to the passing of certain resolutions at the General Meeting, the
following directors will be appointed to the board of the Company. A further
announcement will be made confirming their appointment, as required.
Francis (Frank) David Sherston Chapman, proposed Non-executive Chairman, aged
59. Frank is currently chief executive officer of London Capital Group plc, the
AIM-quoted trading services company, having joined the board of that company in
October 2003 and was appointed managing director in May 2004. He has over 30
years' experience in the London derivative and FX markets, having previously
been a director or managing director of a number of companies including London
Investment Trust, Baring Securities, Deutsche Morgan Grenfell and Amerex
Petroleum. Frank was previously a non-executive director of Angus & Ross but
stepped down from the board in June 2008 to progress his other business
interests.
Frank is currently a director of the following companies:
Capital Enquiries Ltd
Capital Forex Ltd
Capital Global Derivatives Ltd
Capital Investment Management Ltd
Capital Spreads Limited
London Capital Group Holdings plc
London Capital Group Limited
Tradex Enterprises Limited
He was previously a director of Angus & Ross having stepped down on 4 June,
2008.
Frank currently holds 1,000,000 Ordinary Shares, representing 0.40 per cent. of
the current issued share capital of the Company.
Daniel John Bordessa BCom, MBA, proposed Non-executive Director, aged 36.Daniel
is a Managing Director at Cyrus Capital Partners Europe LLP ("CCPE") where he is
responsible for identifying and managing European and North American
investments. Prior to joining CCPE, he was an Executive Director at the
international investment bank Lazard where he was responsible for advising
companies in relation to financial restructurings and mergers & acquisitions.
In addition, Daniel has experience in Canada in investment banking and advisory
services.
Daniel is currently a director or partner of the following companies:
Cyrus Capital Partners Limited
Ingenious Film Partners LLP
Ingenious Film Partners 2 LLP
Melford International Terminals, Inc.
TAD Holdings AS
There is no further information required to be disclosed pursuant to the AIM
Rules for Companies.
warrants
Cyrus Capital (as agent for the holders of the Warrants) has agreed that the
Warrants will be cancelled upon completion of the subscription for Loan Notes by
FBC S.à.r.l..
increase in share capital, CREATION OF B SHARE AND AMENDMENT
TO ARTICLES
Resolutions will be proposed at the General Meeting to increase the share
capital of the Company from GBP10,000,000 to GBP20,000,001 by the creation of
1,000,000,000 new Ordinary Shares and the B Share and to amend the Company's
articles of association to set out the rights attaching to the B Share.
No application will be made for the B Share to be admitted to trading on AIM.
change of name
The Company proposes to change its name to Angel Mining plc to reflect its
transition from exploration to mining. A resolution to effect the change of name
will be proposed at the General Meeting.
SECTION 80 AUTHORITY AND SECTION 89 DISAPPLICATION
On 27 April 2009, the Company announced the completion of a GBP5million standby
equity distribution agreement with YA Global Master SPV Limited ("SEDA"). In
order to issue all of the new equity in accordance with the terms of the SEDA,
the Company will seek authority for the Directors to allot shares under the SEDA
and for the statutory pre-emption rights to be disapplied in respect of such
allotment.
The Company is also seeking a general authority to allot Ordinary Shares and a
disapplication of pre-emption rights above those granted at the annual general
meeting of the Company held on 17 October 2008. These authorities will give the
Directors flexibility to issue shares in appropriate circumstances.
GENERAL MEETING
At the General Meeting the following resolutions (the "Resolutions") will be
proposed to:
1. approve the issue of the Loan Notes, grant the Directors authority under
section 80 of the Companies Act 1985 (the "Act") to allot relevant securities
upon conversion of the Loan Notes and disapply the statutory pre-emption rights
in relation thereto;
2. increase the share capital of the Company by the creation of 1,000,000,000
new Ordinary Shares and the B Share;
3. approve the waiver by the Panel of any requirement for FBC S.à.r.l. and/or
Cyrus Capital to make a general offer under Rule 9 of the Code which would
otherwise arise as a result of the issue of the B Share;
4. grant the Directors general authority to allot Ordinary Shares pursuant to
section 80 of the Act;
5. approve a limited disapplication of the statutory pre-emption rights;
6. grant the Directors authority under section 80 of the Act and disapply the
statutory pre-emption rights in relation to allotments of Ordinary Shares
pursuant to the SEDA;
7. change the name of the Company to Angel Mining plc; and
8. amend the articles of association of the Company to set out the rights
attaching to the B Share.
Resolutions 1, 5, 6, 7 and 8 will be proposed as special resolutions of the
Company, requiring 75 per cent. of the votes cast on such resolutions to be in
favour, and Resolutions 2, 3 and 4 will be proposed as ordinary resolutions of
the Company, each requiring a majority of the votes cast on such resolutions to
be in favour.
Resolution 3 will be taken as a poll.
IRREVOCABLE UNDERTAKING TO APPROVE THE PROPOSALS
The board of the Company has received an irrevocable undertaking to vote in
favour of the Resolutions from RAB Special Situations (Master) Fund Limited,
which holds 55,047,595 Ordinary Shares, representing approximately 22.26 per
cent. of the current issued share capital.
RELATED PARTY
Due to the Warrants held by Cyrus Capital as agent, Cyrus Capital is considered
a related party under the AIM Rules for Companies. The directors of the Company
consider, having consulted with WH Ireland Limited, the Company's Nominated
Adviser, that the terms of the transaction are fair and reasonable insofar as
its shareholders are concerned.
CONSOLIDATION OF ORDINARY SHARES
As part of the restructuring of the Company, the board of directors were
considering a share consolidation on the basis of one new ordinary share with a
par value of 10p for every ten existing Ordinary Shares (the "Consolidation").
However, the Directors have decided not to proceed with the Consolidation at
this stage.
SHAREHOLDER CIRCULAR
A circular convening the General Meeting has been dispatched to shareholders.
Copies are available on the Company's website, www.angusandross.com.
Chief Executive Officer, Nicholas Hall, comments:
"The various resolutions being considered at this General Meeting represent an
important new start for the Company. The support of Cyrus Capital has enabled us
to avoid the threat of receivership and to acquire the assets of the Nalunaq
gold mine, providing all shareholders with a real prospect of seeing their
investment in Angus & Ross progressively increase in value. We still await the
formal approval of the Greenlandic and Danish Governments' Joint Committee, for
the acquisition, which we are hoping to receive shortly.
I am delighted that our board will be strengthened by the appointments of Dan
Bordessa as a non-executive director and Frank Chapman as non-executive
chairman. I have worked closely with Dan, over the last few months, to create
the opportunity that we now have and we both agree that the Company has an
excellent opportunity to develop a variety of mining opportunities in Greenland.
We have worked with Frank before, in his previous capacity as a non-executive
director of the Company, and I am particularly delighted that he has agreed to
rejoin us as Chairman. We believe he will be most effective in this role and in
addition he brings great insight into metal commodity markets.
We have decided to mark this new start for the Company by proposing that we
change our name to Angel Mining plc. Our new name is taken from our flagship
project, the Black Angel mine and it emphasises that we are now a 'mining'
company. We will shortly unveil our new website which we hope will be a more
effective window on the world for us as we will use it to keep shareholders
better informed with regular progress reports on operational sites together with
other essential data.
Preparatory work is currently underway at both Nalunaq and the Black Angel and
in recent months we have seen commodity prices rise well above our forecast cash
cost of production. We anticipate that Nalunaq will be in production before the
end of 2009 and we plan to be mining the Black Angel in late 2010."
For further information please contact:
+----------------------------------------------------------+---------------------------+
| Angus & Ross | 07931 709 053 |
| plc | |
| Nicholas | 0161 832 2174 |
| Hall, Chief | 0207 936 5200 |
| Executive | |
| | 0207 562 3366 |
| WH Ireland | |
| Limited | |
| (Nominated | |
| Adviser) | |
| Adrian Kirk | |
| | |
| Fox-Davies | |
| Capital | |
| (Broker) | |
| Jason | |
| Bahnsen | |
| Bishopsgate | |
| Communications | |
| Limited | |
| Nick Rome | |
+----------------------------------------------------------+---------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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