APQ Apq Global Limited

APQ Global Limited

("APQ Global" or the "Company")

Publication of Circular, Notice of EGM & CULS Meeting

APQ Global Limited, a company incorporated in Guernsey, announces that it has today published a circular ("Circular") to shareholders and holders of 3.5 per cent. convertible loan stock 2024 (the "CULS") including the notice of extraordinary general meeting (the "EGM") and notice of a meeting for the holders of the CULS (the "CULS Meeting") to be held at the Company's registered office, 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP, Channel Islands at 10.30 a.m. and 10.35 a.m.  (or as soon thereafter as the preceding EGM concludes or is adjourned) respectively on 31 March 2025.

APQ Global Limited is seeking:

(a)         the approval of shareholders and CULS holders for the cancellation of admission of the ordinary shares of no par value (the "Ordinary Shares") to trading on AIM (the "Cancellation"); and

(b)         the approval of the CULS holders for amendments to the Trust Deed constituting the CULS (the "Trust Deed Amendments") to facilitate Cancellation and for the deferral of the settlement date from 31 March 2025 to 31 December 2025 (the "Deferred Settlement Date"). In consideration of CULS holders approving the proposed deferral of the full payment of the outstanding CULS redemption proceeds, the interest rate applying to the outstanding CULS will be increased from 6.0 per cent. to 10.0 per cent. for the period from 31 March 2025 to 31 December 2025.

The Circular and the notice of EGM and CULS Meeting will shortly be available to view on the Company's website: https://www.apqglobal.com/.

Defined terms used in this announcement shall, unless the context otherwise requires, have the same meanings as set out in the Circular.

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Notes to Editors

APQ Global Limited

 APQ Global (ticker: APQ LN) is an investment company incorporated in Guernsey. The Company focuses its investment activities globally (in Asia, Latin America, Eastern Europe, the Middle East, Africa and the Channel Islands, particularly). The objective of the Company is to steadily grow its earnings to seek to deliver attractive returns and capital growth through a combination of building growing businesses as well as earning revenue from income generating operating activities in capital markets^1. APQ Global run a well-diversified and liquid portfolio, take strategic stakes in selected businesses and plan to take operational control of companies through the acquisition of minority and majority stakes in companies with a focus on emerging markets. For more information, please visit apqglobal.com.

1 Where we refer to revenue from income generating operating activities this relates to the revenue of our investee companies.

LETTER FROM THE CHAIRMAN OF APQ CONTAINED WITHIN THE CIRCULAR

1.   Introduction

APQ Global Limited is seeking:

(a)          the approval of Shareholders and CULS Holders for the cancellation of admission of the Ordinary Shares to trading on AIM (the "Cancellation"); and

(b)          the approval of holders of the Company's 3.5 per cent. convertible unsecured loan stock 2024 (the "CULS") for amendments to the Trust Deed constituting the CULS (the "Trust Deed Amendments").

The purpose of the Circular is to convene the Extraordinary General Meeting and the CULS Meeting at which the Resolutions relating to the Proposals will be proposed, and to explain why the Board believes the approval of the Proposals is in the best interests of the Company and for the benefit of the Shareholders and the CULS Holders.

2.   Background to and reasons for the Cancellation of AIM admission

Following a prolonged period of weak share price performance and low liquidity in the Ordinary Shares and with a focus on reducing the Company's cost base, the Directors have conducted a review of the benefits and drawbacks to the Company retaining the admission of its Ordinary Shares to trading on AIM. In light of this, the Company has also obtained feedback from its Shareholders and CULS Holders and believes the proposed Cancellation to be in the best interests of the Company, its Shareholders and the CULS Holders as a whole.

In reaching this conclusion, the Directors have considered the following key factors:

·    Cost of holding an AIM admission: The considerable cost associated with maintaining the admission of the Ordinary Shares on AIM (such as nominated adviser and broker fees, London Stock Exchange fees and the costs associated with being a quoted company in having perceived higher levels of corporate governance and audit scope) are, in the Directors' opinion, disproportionately high, relative to the benefits.

·    Regulatory and time burden related to AIM admission: The Directors further believe that the considerable amount of management time and regulatory burden associated with maintaining the Company's admission to trading on AIM are, in the Directors' opinion, disproportionate to the benefits to the Company. In particular, as the Ordinary Shares are also admitted to trading on the Official List of The International Stock Exchange ("TISE") this has resulted in a duplication of the amount of management time and the regulatory burden that is required. Accordingly, the Directors believe that the proposed Cancellation is the prudent solution. The Cancellation would produce time savings which could be better utilised for the benefit of the Company and value creation for its shareholders. However, shareholders would continue to benefit from the transparency resulting from the continued TISE admission which is substantially similar to that associated with an admission to AIM.

·    Current challenges regarding liquidity: The Directors believe that the current levels of liquidity in trading of the Ordinary Shares on AIM do not, in itself, offer investors the opportunity to trade in meaningful volumes or with the frequency afforded by an active market in addition to an admission to TISE.

Following careful consideration of all relevant factors and in light of the above, the Directors believe that it is in the best interests of the Company, the Shareholders and the CULS Holders, taken as a whole, to seek the proposed Cancellation at the earliest opportunity.

The Company intends to maintain its TISE listing following Cancellation to trading in its Ordinary Shares on AIM. Therefore, shareholders in the Company will continue to be able to effect transactions in the Company's Ordinary Shares on TISE following Cancellation and the Company therefore believes that it is not necessary to make arrangements for a liquidity mechanism such as a matched bargain facility to assist Shareholders to trade in the Ordinary Shares.

The CULS will also continue to be admitted to trading on the London Stock Exchange's International Securities Market. As the CULS are no longer convertible (as explained below) the Ordinary Shares are no longer required to be admitted to AIM or another suitable market pursuant to the rules of the International Securities Market.

3.   Background to and reasons for the Trust Deed Amendments

The CULS were issued in 2017 and 2018. The Maturity Date of the CULS in accordance with the Trust Deed was 30 September 2024, on which the Company had covenanted to repay the outstanding CULS at par value, plus accrued interest. At a meeting of the CULS Holders held on 30 September 2024, the CULS Holders approved the deferral of the full payment of the CULS redemption proceeds to 31 March 2025. Accordingly, the Company now has a £27.7 million payment obligation to satisfy the full redemption amount of the Company's outstanding CULS on 31 March 2025 (the "CULS Obligation").

Pursuant to the Trust Deed, the Maturity Date of 30 September 2024 was not deferred or extended and has therefore now passed. This was the last date at which holders of CULS were able to convert into Ordinary Shares and therefore the CULS are no longer capable of being converted into Ordinary Shares.

As discussed in circulars issued by the Company dated 6 September 2024 and 14 February 2025, the Board had been confident that the Company would have sufficient resources to satisfy the CULS Obligation, particularly in view of the revenue generated by the Group's Delphos business. However, on 7 February 2025 the Company announced an update on its financial and trading position and the challenges that it is facing. In particular, the new US Administration has created a very challenging environment for Delphos.

The Company is therefore seeking approval from CULS Holders for the deferral of the settlement date from 31 March 2025 to 31 December 2025 (the "Deferred Settlement Date", as set out in the terms of CULS Resolution 2 below). The Board is confident that the extension of this settlement deadline will allow the Company sufficient time to refinance the CULS, raise equity finance and/or generate sufficient cash reserves to make full repayment of the outstanding CULS prior to 31 December 2025. The Company will make such payment as soon as reasonably practicable.

In consideration of CULS Holders approving the proposed deferral of the full payment of CULS redemption proceeds, the Company is offering an economic benefit to CULS Holders. The interest rate applying to the outstanding CULS will be increased from 6.0 per cent. (previously increased from 3.5 per cent.) to 10.0 per cent. for the period from the 31 March 2025 to the Deferred Settlement Date (the "Additional Interest"), such Additional Interest to be rolled up and payable on the Deferred Settlement Date instead of being payable quarterly.

The amendments to the Trust Deed are summarised in paragraph 5 below and are set out in full in the text of CULS Resolution 2 set out in the CULS Notice at the end of the Circular.

The Company will also be giving certain undertakings to CULS Holders in view of the proposed Trust Deed Amendments which are summarised in paragraph 6 below.

The Board believes that the Proposals set out in the Circular are in the interests of CULS Holders as they should ensure that the full amount due and owing to the CULS Holders will still be paid in full, with an uplift in the final amount due. The Board firmly believes that the payment can be made in full by 31 December 2025 and is seeking CULS Holders' support while it is in the process of refinancing negotiations and building the business of the Company, so as not to endanger the prospects of the Company by liquidating promising assets.

4.   Process for, and principal effects of, the Cancellation

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their Ordinary Shares in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of Cancellation. Additionally, the Cancellation will not take effect until at least five clear Business Days have passed following the passing of the Resolution at the EGM (which is conditional on the passing of the Resolutions at the CULS Meeting). If the Resolutions are passed at the EGM and CULS Meeting, the last day of trading in Ordinary Shares on AIM will be 7 April 2025 and the Cancellation will take effect at 7.00 a.m. on 8 April 2025.

The principal effects of the Cancellation will be that:

·    there will be no formal market mechanism enabling the Shareholders to trade Ordinary Shares through AIM which may significantly reduce the liquidity and marketability of the Ordinary Shares;

·    while the Ordinary Shares will remain freely transferrable and are expected to remain listed on TISE, it is possible that the liquidity and marketability of the Ordinary Shares will, in the future, be even more constrained than at present and the value of such Ordinary Shares may be adversely affected as a consequence;

·    the regulatory and financial reporting obligations, as well as disclosure and corporate governance requirements applicable to companies whose shares are admitted to trading on AIM, would no longer apply;

·    Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events and the separate requirement to seek approval from Shareholders for certain other corporate events;

·    the Cancellation may have taxation or other commercial consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser; 

·    Singer Capital Markets would cease to be the Company's Nominated Adviser and Broker; and

·    in the absence of a quote on AIM, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time.

Shareholders should note that the Takeover Code will continue to apply to the Company following the Cancellation due to the listing of the Ordinary Shares on TISE. The Company will also continue to be bound by the Articles (which require 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.

The Company currently intends to continue to provide certain facilities and services to Shareholders that they currently enjoy as shareholders of an AIM company. The Company will:

·    continue to maintain the listing of the Ordinary Shares on TISE;

·    continue to communicate information about the Company (including annual accounts) to its Shareholders;

·    continue to hold annual general meetings;

·    continue, for at least 12 months following the Cancellation, to maintain its corporate website https://www.apqglobal.com and to post updates on the website from time to time, although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under the AIM Rules or to update the website as required by the AIM Rules;

·    continue to maintain the Company's CREST facility; and

·    continue to maintain a Board structure with at least one independent non-executive director.

Whether or not Shareholders seek to sell their Ordinary Shares in light of the proposed Cancellation is a matter for individual Shareholders and will depend on their personal circumstances. The Directors make no recommendation in this respect and any Shareholders who are in any doubt as to what they should do are advised to seek their own independent advice from a professional.

5.   Proposed Amendments to the Trust Deed

If CULS Resolution 2 to be proposed at the CULS Meeting is passed, the Trust Deed will be amended as follows.

·    The payment obligations of the Company on 31 March 2025 in respect of the redemption of the CULS will be deferred. At present the Company is required to pay aggregate redemption proceeds, together with accrued interest, to the Trustee on 31 March 2025, for onward payment to the CULS Holders. The Company proposes a Deferred Settlement Date (being the date on which such proceeds will be paid to the Trustee) of no later than 31 December 2025. The Deferred Settlement Date may be any date from 31 March 2025 to 31 December 2025 inclusive, at the discretion of the Company. The Company will give advance notice of the intended Deferred Settlement Date to CULS Holders.

·    The interest rate applying to the outstanding CULS will be increased from 6.0 per cent. to 10.0 per cent. for the period from 31 March 2025 to, but excluding, the Deferred Settlement Date.

·    The Additional Interest will be payable on the Deferred Settlement Date instead of being payable quarterly.

·    The redemption premium introduced in September 2024 will cease with effect from 31 March 2025, although accrued entitlements to the redemption premium will be paid on the Deferred Settlement Date.

6.   Company's undertakings to CULS Holders

Conditional on the approval of the Resolutions at the Extraordinary General Meeting and the CULS Meeting, the Company hereby undertakes to the CULS Holders that, prior to the Deferred Settlement Date:

·    The Company shall not make any further investments beyond what is reasonably required to support the existing operations of the Group, as determined by the Board.

·    The Company shall not incur any Financial Indebtedness which ranks prior to the CULS unless such Financial Indebtedness is incurred for the purpose of satisfying the CULS Obligation and/or paying the Additional Interest.

·    The Company shall apply any cash reserves in excess of a rolling amount of US$5,000,000 (to be held for working capital purposes) towards the reduction of the CULS liability. This may be by any, or a combination, of ad hoc purchases of CULS, one or more tender offers for CULS or redeeming the CULS, as determined by the Board.

7.   Process for Cancellation

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 at an Extraordinary General Meeting. Accordingly, the EGM Notice contains a special resolution to approve the Cancellation.

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. In accordance with AIM Rule 41, the Directors have notified the London Stock Exchange of the Company's intention, subject to the Resolutions being passed at the Extraordinary General Meeting and the CULS Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 8 April 2025. If the Cancellation becomes effective, Singer Capital Markets will cease to be nominated adviser of the Company and the Company will no longer be required to comply with the AIM Rules. 

8.   Extraordinary General Meeting

In order to implement the Cancellation, the Board requires Shareholders to approve the Resolution to be proposed at the EGM which has been convened for 10.30 a.m. on 31 March 2025, to be held at the Company's registered office, 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP Channel Islands. The EGM Notice is set out at the end of the Circular.

The majority required for the passing of the EGM Resolution, which is conditional on the passing of CULS Resolution 1 and CULS Resolution 2, is not less than 75 per cent. of the persons voting in person or by proxy upon a show of hands or, if a poll is duly demanded, not less than 75 per cent. of the votes given on such poll, where every Shareholder who is present in person or by proxy has one vote for each Ordinary Share held.

The quorum for the Extraordinary General Meeting is one or more members present in person or by proxy and holding five per cent. or more of the voting rights available at such meeting.

9.   Action to be taken by Shareholders

You will find enclosed with the Circular a Form of Proxy for use at the Extraordinary General Meeting. Regardless of whether you intend to attend the Extraordinary General Meeting in person, it is important that you complete and sign the enclosed Form of Proxy in accordance with the instructions printed on it and return it to the Company Secretary, Beauvoir Limited, either by email at richard.bray@beauvoirgroup.com or by registered post to Beauvoir Limited, Attention to: Richard Bray, 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP, Channel Islands as soon as possible and, in any event, so as to be received not later than 10.30 a.m. on 27 March 2025.

The completion and return of a Form of Proxy will not preclude you from attending the Extraordinary General Meeting and voting in person if you wish to do so.

10. Meeting of the CULS Holders

In order to implement amendments to the Trust Deed, the Board requires CULS Holders to approve the Resolution to be proposed at the Meeting of the CULS Holders which has been convened for 10.35 a.m. on 31 March 2025 (or as soon thereafter as the Extraordinary General Meeting shall have concluded or been adjourned), to be held at the Company's registered office, 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP Channel Islands. The Notice of the Meeting is set out at the end of the Circular.

The majority required for the passing of CULS Resolution 1, which is conditional on the passing of CULS Resolution 2 and the EGM Resolution, is not less than 75 per cent. of the persons voting in person or by proxy upon a show of hands or, if a poll is duly demanded, not less than 75 per cent. of the votes given on such poll, where every CULS Holder who is present in person or by proxy has one vote in respect of each £5,000 in nominal amount of CULS held.

The majority required for the passing of CULS Resolution 2, which is conditional on the passing of CULS Resolution 1 and the EGM Resolution, is not less than 75 per cent. of the persons voting in person or by proxy upon a show of hands or, if a poll is duly demanded, not less than 75 per cent. of the votes given on such poll, where every CULS Holder who is present in person or by proxy has one vote in respect of each £5,000 in nominal amount of CULS held.

The quorum for the Meeting is CULS Holders present in person or by proxy or (in the case of a CULS Holder which is a corporation) by its duly authorised representative and holding or representing in the aggregate a clear majority in nominal amount of the CULS for the time being outstanding.

EACH OF THE RESOLUTIONS ARE INTER-CONDITIONAL. IF ANY OF THE RESOLUTIONS ARE NOT PASSED, NONE OF THE PROPOSALS WILL BE IMPLEMENTED.

11. Action to be taken by CULS Holders

You will find enclosed with the Circular a Form of Proxy for use at the Meeting. Regardless of whether you intend to attend the Meeting in person, it is important that you complete and sign the enclosed Form of Proxy in accordance with the instructions printed on it and return it to the Company Secretary, Beauvoir Limited, either by email at richard.bray@beauvoirgroup.com or by registered post to Beauvoir Limited, Attention to: Richard Bray, 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP, Channel Islands as soon as possible and, in any event, so as to be received not later than 10.35 a.m. on 28 March 2025.

The completion and return of a Form of Proxy will not preclude you from attending the CULS Meeting and voting in person if you wish to do so.

12. Recommendation

The Board believes that approval of the Resolutions relating to the Cancellation and Trust Deed Amendments is in the best interests of the Company, the Shareholders and the CULS Holders and unanimously recommends that you vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting and CULS Meeting.