TIDMCML
RNS Number : 7876P
CML Microsystems PLC
22 February 2021
CML Microsystems Plc
(the "Group")
Notice of General Meeting and Proposed Return of Capital to
Shareholders of 50 pence per Ordinary Share
On 5 February 2021, the Group announced that it had completed
the Disposal of Hyperstone, the Group's storage division, to
Swissbit, a specialist producer of industrial-grade data-storage
and embedded IoT solutions, for US$49 million in cash.
After giving due consideration to the ongoing needs of the
Group, the Board is pleased to propose the return of approximately
GBP8.28 million in aggregate to Shareholders and has chosen to
implement this as a return of capital through a bonus issue of a
new class of B shares, which the Company will redeem for cash in
order to return 50 pence per Ordinary Share to Shareholders.
The Group has today posted a circular incorporating a notice of
general meeting which sets out details of a proposed return of
capital to Shareholders ("Return of Capital"), convening a general
meeting of the Company to be held at Oval Park, Hatfield Road,
Langford, Maldon, Essex, CM9 6WG at 10.00 a.m. on 18 March 2021
.
The Return of Capital involves the capitalisation of amounts
standing to the credit of the Company's share premium account in
order to pay up in full the B Shares with a nominal value of 50
pence each, which will be allotted to Shareholders as a bonus
issue. To effect the Return of Capital:
-- Shareholders will be issued one B Share for each Ordinary
Share held by them at 6.00 p.m. on 18 March 2021 , being the Record
Time;
-- the Company intends to redeem each B Share for 50 pence and
then cancel each such B Share shortly following the issue of the B
Shares; and
-- payments in respect of the Return of Capital are expected to
be made on or around 26 March 2021.
The Return of Capital (including the creation and issue of the B
Shares) is subject to the approval of the Shareholders at the
General Meeting.
A copy of the Circular, containing more information in relation
to the Return of Capital, is available on the Company's website at
www.cmlmicroplc.com . The Circular should be read in its entirety,
but an extract from the Circular is set out below.
Terms defined in the Circular have the same meaning when used in
this announcement.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Latest time and date for receipt of Forms of Proxy and CREST proxy 10.00 a.m. on 16 March 2021
instructions
General Meeting 10.00 a.m. on 18 March 2021
Record Time 6.00 p.m. on 18 March 2021
Ordinary Shares marked as ex-rights Start of trading on 19 March 2021
B Shares issued based on Ordinary Shares held at the Record Time 8.00 a.m. on 19 March 2021
Expected Redemption Date 6.00 p.m. on 19 March 2021
Expected redemption and cancellation of B Shares 19 March 2021
Despatch of payments and CREST accounts credited in respect of proceeds, if 26 March 2021
B Shares redeemed
on 19 March 2021
___________________
Notes:
(1) If any of the above times or dates should change, the
revised times and/or dates will be notified to Shareholders by an
announcement through the Regulatory News Service of the London
Stock Exchange.
(2) References to time are to London time.
(3) All events in the above timetable following the holding of
the General Meeting are conditional on the passing of the
Resolution at such meeting.
Coronavirus (COVID-19) Update
In light of the COVID-19 pandemic and the restrictions imposed
by the UK government at the time of publication of the Notice of
the General Meeting, the Company will convene the General Meeting
with the minimum necessary quorum of two shareholders (members)
(which the Company will facilitate), and further members will not
be permitted to attend the General Meeting in person.
However, member participation remains important to us and we
would strongly encourage members to participate in the General
Meeting by voting by proxy. Further details are set out below and
within the Proxy Form.
The Company will include all valid proxy votes (whether
submitted electronically or in hard copy form) in its polls at the
General Meeting and the Chairman will call for a poll on each
resolution. The Company accordingly requests that members submit
their proxy votes in respect of the Resolution as set out in the
Notice of the General Meeting, electronically or by post in
advance, in accordance with the instructions set out in the Notice
of the General Meeting.
Members should submit their votes via proxy as early as possible
(and by no later than 10.00 a.m. on 16 March 2021), and members are
requested to appoint the Chairman as their proxy. If a member
appoints someone else as their proxy, that proxy will not be able
to attend the General Meeting in person or cast the member's
vote.
CML Microsystems Plc www.cmlmicroplc.com
Chris Gurry, Group Managing Director Tel: +44 (0) 1621 875 500
Nigel Clark, Group Chairman & Financial
Director
Shore Capital Tel: +44 (0) 20 7408 4090
Edward Mansfield
James Thomas
Fiona Conroy - Corporate Broking
SP Angel Corporate Finance LLP Tel: +44 (0) 203 463 2260
Jeff Keating
Alma PR Tel: +44 (0) 20 3405 0205
Josh Royston
Caroline Forde
Robyn Fisher
About CML Microsystems PLC
CML develops mixed-signal, RF and microwave semiconductors for
global communications markets. The Group utilises a combination of
outsourced manufacturing and in-house testing with trading
operations in the UK, Asia and USA. CML targets sub-segments within
Communication markets with strong growth profiles and high barriers
to entry. It has secured a diverse, blue chip customer base,
including some of the world's leading commercial and industrial
product manufacturers.
The spread of its customers and diversity of the product range
largely protects the business from the cyclicality usually
associated with the semiconductor industry. Growth in its end
markets is being driven by factors such as the appetite for data to
be transmitted faster and more securely, the upgrading of telecoms
infrastructure around the world and the growing prevalence of
private commercial wireless networks for voice and/or data
communications linked to the industrial internet of things
(IIoT).
The Group is cash-generative, has no debt and is dividend
paying.
Key points from the Circular are set out below:
LETTER FROM THE CHAIRMAN OF CML
1. Introduction
Introduction
On 5 February 2021, the Company announced that it had completed
the Disposal of Hyperstone, the Group's storage division, to
Swissbit, a specialist producer of industrial-grade data-storage
and embedded IoT solutions, for US$49 million in cash.
The Disposal reflects a strategic decision to refocus the Group
exclusively on the larger global Communications market which the
Board believes represents a high growth sector. The Disposal
enables CML to direct all its efforts on capturing the exciting
opportunities that exist and leverage its standing as a key
supplier to many of the world's tier one original equipment
manufacturers.
The sale of Hyperstone has resulted in a net cash injection of
circa. GBP33m into the Group which, when added to the net cash
balance sheet position that existed prior to the Disposal, leaves
the business strongly placed to achieve its future growth
objectives.
After giving due consideration to the ongoing needs of the
Group, including the legal obligations to its pension fund, organic
investment needs and the retention of capital to execute future
acquisitions within the Communications sector, the Board believes
it appropriate to arrange a return of capital to Shareholders.
From the proceeds of the Disposal, the Board proposes to return
approximately GBP8.28 million in aggregate to Shareholders and has
chosen to implement this as a return of capital through the issue
of a new class of shares ("B Shares") which the Company will redeem
for cash in order to return 50 pence per Ordinary Share to
Shareholders (the "B Share Scheme").
The B Share Scheme is intended to enable all Shareholders to
participate equally in the return and to provide capital treatment
for most UK tax resident Shareholders. Redemption is expected to
occur on or around 19 March 2021.
The purpose of the Circular is to provide Shareholders with
further information relating to the B Share Scheme and to give
notice of the General Meeting at which a Resolution will be
considered and, if thought fit, passed to allow the B Share Scheme
to take place. The Circular also explains why the Board considers
the Resolution to be proposed to be in the best interests of the
Company and the Shareholders as a whole. Accordingly, the Board
recommends the Shareholders vote in favour of the Resolution to be
proposed at the General Meeting in order that the B Share Scheme
can proceed.
2. The B Share Scheme
Under the terms of the B Share Scheme and assuming the
Resolution is passed at the General Meeting, each Shareholder will
receive one B Share for each Ordinary Share held at the Record
Time. The return paid to Shareholders on the subsequent redemption
of each B Share will be 50 pence, giving a cash return of 50 pence
per Ordinary Share held at the Record Time.
The Company expects to redeem the B Shares on or around 19 March
2021 and for the proceeds to be paid to Shareholders approximately
one week after the Redemption Date.
The B Shares will be a newly-created class of share and will not
be transferable, save in the very limited circumstances set out in
paragraph (G) of Part III of the Circular. The B Shares will not be
admitted to the Official List, the London Stock Exchange's main
market for listed securities or listed or admitted to trading on
any other recognised investment exchange. The B Shares will be
cancelled on redemption. Part II of the Circular sets out further
details of the B Share Scheme and Part III of the Circular sets out
the rights and restrictions attaching to the B Shares.
This structure should result in the majority of UK taxpayers
receiving their cash proceeds on redemption of the B Shares as
capital for taxation purposes. Part IV of the Circular sets out a
summary of the potential tax consequences in the UK. Shareholders
who are subject to taxation in a jurisdiction other than the UK or
who are in any doubt as to their tax position should consult an
appropriate independent and authorised professional adviser.
The return of capital under the B Share Scheme is separate from
and will not affect the Company's dividend policy. Any future
interim or final dividends declared by the Company will be in
addition to the return of capital under the B Share Scheme.
3. Taxation
A guide to certain UK tax consequences of the B Share Scheme
under current UK law and HM Revenue & Customs' practice is set
out in Part IV of the Circular.
The tax consequences of the B Scheme may vary for Overseas
Shareholders. Shareholders who are subject to taxation in a
jurisdiction other than the UK or who are in any doubt as to their
tax position should consult an appropriate independent and
authorised professional adviser.
4. General Meeting
The return of capital by way of the B Share Scheme requires the
approval of Shareholders to the Resolution to be proposed at the
General Meeting. Accordingly, there is set out at the end of the
Circular a notice of the General Meeting to be held at 10.00 a.m.
on 18 March 2021 at Oval Park, Hatfield Road, Langford, Maldon,
Essex, CM9 6WG.
Further details of the Resolution to be proposed at the General
Meeting can be found at paragraph 8 of Part II of the Circular.
5. Action to be taken
Enclosed with the Circular is a Form of Proxy for use by
Shareholders in connection with the General Meeting. Shareholders
should complete and return the Form of Proxy in accordance with the
instructions printed on it as soon as possible and in any event so
that it may be received by the Company's Registrars, Neville
Registers Limited, Neville House, Steelpark Road, Halesowen, West
Midlands B62 8HD, by no later than 10.00 a.m. on 16 March 2021.
Alternatively, holders of Ordinary Shares may appoint a proxy
electronically through the CREST electronic proxy appointment
service, by using the procedures described in the CREST manual and
logging on to the following website: www.euroclear.com/CREST .
Electronic proxy appointments must be received by no later than
10.00 a.m. on 16 March 2021. Further details of the electronic
appointment methods are found in the notes to the notice of the
General Meeting set out at the end of the Circular.
In light of the COVID-19 pandemic and the restrictions imposed
by the UK government at the time of publication of the Notice of
the General Meeting, the Company will convene the General Meeting
with the minimum necessary quorum of two shareholders (members)
(which the Company will facilitate), and further members will not
be permitted to attend the General Meeting in person. However,
member participation remains important to us and we would therefore
strongly encourage members to participate in the General Meeting by
voting by proxy.
6. Recommendation
The Board considers the B Share Scheme and the passing of the
Resolution to be proposed at the General Meeting to be in the best
interests of the Company and the Shareholders as a whole.
Accordingly, the Board unanimously recommends that Shareholders
vote in favour of the Resolution to be proposed at the General
Meeting, as each director intends to do in respect of his own
beneficial holdings.
Yours faithfully
Nigel Clark (Group Chairman and Finance Director)
PART II
DETAILS OF THE B SHARE SCHEME
1. B Share Scheme
The B Share Scheme is the way in which the Company proposes to
effect the return of capital to Shareholders. This will involve the
allotment and issue of bonus B Shares to Shareholders and the
subsequent redemption of the B Shares by the Company.
The exact aggregate amount to be returned under the B Share
Scheme will depend on the number of Ordinary Shares in issue at the
Record Time. Based on the number of Ordinary Shares in issue as at
close of business on 19 February 2021 (being the last practicable
date prior to publication of the Circular), the aggregate amount to
be returned under the B Share Scheme is approximately GBP8.28
million, or 50 pence per Ordinary Share.
2. Conditions to the implementation of the B Share Scheme
The B Share Scheme is conditional on approval by Shareholders of
the Resolution to be proposed at the General Meeting and if this
condition is not satisfied the B Share Scheme will not take
effect.
3. Allotment, issue and redemption of B Shares
Each Shareholder will receive one B Share for each Ordinary
Share held at the Record Time.
The Company will have the right to redeem each B Share for 50
pence without any further action from the holder of such B Share.
The Company intends to redeem and then cancel each such B Share
shortly following the issue of the B Shares.
The rights and restrictions attached to the B Shares are more
fully set out in Part III of the Circular.
It is proposed that the Company will capitalise a sum of
approximately GBP8.28 million standing to the credit of the
Company's share premium account in order to pay up in full the B
Shares with a nominal value of 50 pence each.
The exact number of B Shares to be issued will be equal to the
number of Ordinary Shares in issue at the Record Time (excluding
those held in treasury by the Company). As at close of business on
19 February 2021 (being the last practicable date prior to
publication of the Circular) there were 17,190,152 Ordinary Shares
in issue of which 638,467 were held in treasury by the Company,
representing approximately 3.71 per cent of the Ordinary Share
capital in issue as at 19 February 2021.
The B Shares will not be admitted to listing on the Official
List or admitted to trading on the London Stock Exchange's main
market for listed securities, nor will they be listed or admitted
to trading on any other recognised investment exchange. The B
Shares will not be transferable, save in the very limited
circumstances set out in paragraph (G) of Part III of the
Circular.
No share certificates will be issued in respect of the B
Shares.
The return of capital under the B Share Scheme is separate from
and will not affect the Company's dividend policy. Any future
interim or final dividends declared by the Company will be in
addition to the return of capital under the B Share Scheme.
4. Overseas Shareholders
Shareholders who are not resident in the United Kingdom or who
are citizens, residents or nationals of other countries should
consult their professional advisers to ascertain whether the issue,
holding, redemption or disposal of the B Shares will be subject to
any restrictions or require compliance with any formalities imposed
by the laws or regulations of, or any body or authority located in,
the jurisdiction in which they are resident or to which they are
subject. In particular, it is the responsibility of any Overseas
Shareholder to satisfy itself as to full observance of the laws of
each relevant jurisdiction in connection with the B Share Scheme,
including the obtaining of any government, exchange control or
other consents which may be required, or the compliance with other
necessary formalities needing to be observed and the payment of any
issue, transfer or other taxes or duties in such jurisdiction.
The distribution of the Circular in certain jurisdictions may be
restricted by law. Persons into whose possession the Circular comes
should inform themselves about and observe any such restrictions.
Neither the Circular nor any other document issued or to be issued
by or on behalf of the Company in connection with the B Share
Scheme constitutes an invitation, offer or other action on the part
of the Company in any jurisdiction in which such invitation, offer
or other action is unlawful.
5. CML Microsystems Plc Employee Share Schemes
Under the Group Employee Share Schemes, the Company has granted
options over Ordinary Shares at varying exercise prices and with
varying vesting dates. Participants under the Group Employee Share
Schemes are not the beneficial owners of Ordinary Shares under
those schemes (save where options are exercised before the Record
Time) and so will not participate in the B Share Scheme, other than
in their separate capacity as Shareholders (if applicable). Where a
participant under the Group Employee Share Scheme has exercised an
option before the Record Time, the participant will receive the B
Shares in the same way as other Shareholders.
As at close of business on 19 February 2021 (being the last
practicable date prior to publication of the Circular), the total
number of unvested options under the Group Employee Share Schemes
was 556,457. In aggregate, these outstanding options represented
approximately 3.23 per cent of the issued Ordinary Shares of the
Company.
6. Dealings and despatch of documents
The B Share Scheme will be carried out by reference to holdings
of Ordinary Shares on the Company's register of members as at the
Record Time.
No share certificates will be issued by the Company in respect
of B Shares.
All cheques will be sent by post, at the risk of the
Shareholder(s) entitled thereto, to the registered address of the
relevant Shareholder (or, in the case of joint Shareholders, to the
address of the joint Shareholder whose name stands first in the
register of members in respect of such joint shareholding).
7. General Meeting
The General Meeting will be held at Oval Park, Hatfield Road,
Langford, Maldon, Essex, CM9 6WG at 10.00 a.m. on 18 March 2021. A
notice convening the General Meeting is set out at the end of the
Circular.
Shareholders will find enclosed with the Circular a Form of
Proxy for use at the General Meeting. Shareholders holding shares
in CREST may appoint a proxy through a CREST Proxy Instruction.
Further details on proxy appointments and the action to be taken
are set out in the Notice of General Meeting at the end of the
Circular.
8. Summary of the Resolution to be proposed at the General Meeting
The Resolution will be proposed at the General Meeting as a
special resolution, the passing of which requires at least 75 per
cent of the votes cast (whether in person or by proxy) to be in
favour.
A summary of the Resolution is set out below:
(a) To adopt new Articles of Association
The Resolution proposes the adoption of new Articles of
Association in order to implement the B Share Scheme. The only
changes made by the new Articles of Association will be:
-- To remove the Company's memorandum of association.
Under the Act, with effect from 1 October 2009, the objects
clause and all other provisions which are contained in a company's
memorandum are deemed to be contained in the company's articles of
association. The Companies Act 2006 also states that, unless a
company's articles provide otherwise, the company's objects are
unrestricted. This removes the need for companies to have objects
clauses. For this reason, the Company is proposing to remove its
objects clause, together with all other provisions of its
memorandum which, by virtue of the Companies Act 2006, would
otherwise be treated as forming part of the Articles of
Association. One of the effects of this will be to remove the
statement currently in the Company's memorandum regarding limited
liability, so the new Articles of Association therefore also
contain an express statement regarding the limited liability of
Shareholders.
The Act also abolished the requirement for a company to have an
authorised share capital, and the Articles of Association reflect
this. Directors will still be limited as to the number of shares
they can at any time allot because allotment authority continues to
be required under the Act, save in respect of employees' share
schemes or shares issued for non-cash consideration.
-- To delete certain historic provisions that refer to the old Companies Act 1985:
o The Act abolished the requirement for a company to have an
authorised share capital and the new Articles of Association
reflect this, by deleting Article 3. Directors will still be
limited as to the number of shares they can at any time allot
because allotment authority continues to be required under the
Companies Act 2006, save in respect of employee share schemes.
o Article 6 of the existing Articles of Association refers to
provisions of the Companies Act 1985 that have since been
superseded by the Act. Article 6 merely states the law as set out
in the Act and it will therefore be deleted in the new Articles of
Association.
-- To insert into the Articles of Association the rights and
restrictions attaching to the B Shares, as a new Article 7, as set
out in Part III of the Circular.
The proposed new Articles of Association are available on the
Company's website at www.cmlmicroplc.com .
(b) To approve the B Share Scheme
The Resolution proposes to authorise the Board to:
(i) capitalise a sum not exceeding GBP8.6 million, standing to
the credit of the Company's share premium account, to pay up in
full the B Shares; and
(ii) allot and issue B Shares up to an aggregate nominal amount
of GBP8.6 million, on the basis of one B Share for each Ordinary
Share (excluding Ordinary Shares held by the Company in treasury)
held at the Record Time. This authority granted to the Directors
will expire at the end of the next annual general meeting of the
Company.
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