Kada Technology Holdings De-listing and Board Change (4685B)
04 March 2014 - 10:00PM
UK Regulatory
TIDMKADA
RNS Number : 4685B
Kada Technology Holdings
04 March 2014
Kada Technology Holdings Limited
("Kada" or the "Company")
De-listing and Board Change
1. Introduction
The Company announces that it will today be publishing a
circular to Shareholders' (the "Circular") seeking approval to
cancel the Admission of its Ordinary Shares to trading on AIM.
The Circular will be available on the Company's website shortly
at www.kada-ir.com. Terms defined in the Circular have the same
meaning in this announcement.
The Company also announces that George Dexter has resigned as
director of the Company with immediate effect.
2. The Delisting
Having recently undertaken a review of both the advantages (such
as ability to raise new funds on AIM and the Company's enhanced
profile as a listed Company) and disadvantages (such as cost and
management time) of maintaining Admission of the Ordinary Shares to
trading on AIM, the Directors have concluded that it is no longer
in the best interests of the Company or its Shareholders to
maintain the Admission.
As stated in our trading update on 14 February 2014, the Company
finds itself in a difficult trading position as debt facilities
have become more restricted meaning working capital is at a
premium. This has materially affected the Company's ability to
write new business. The management believe that the cost and
management time involved in maintaining a listing are not helpful
to the Company in its current situation. In addition, the Board
feel there is little prospect of raising funds in the UK given its
current situation and the lack of interest in smaller Chinese
businesses at this time. The Directors have concluded that the
costs of the Company's admission to AIM outweigh the benefits.
Pursuant to AIM Rule 41, the Delisting can only be effected by
the Company after securing a resolution of Shareholders in a
general meeting passed by a requisite majority, being not less than
75 per cent. of the votes cast by Shareholders (in person or by
proxy). Under the AIM Rules, the Delisting can only take place
after the expiry of a period of twenty Business Days from the date
on which notice of the Delisting is given. In addition, a period of
at least five Business Days following the Shareholder approval of
the Delisting is required before the Delisting may be put into
effect.
The Company has notified the London Stock Exchange of the proposed Delisting. In the event that
Shareholders approve the Resolution approving the Delisting, it
is anticipated that the trading in the Ordinary Shares on AIM will
cease at close of business on 3 April 2014 with the Delisting
taking effect at 7am on 4 April 2014.
3. Effect of Delisting
The principal effect of the Delisting is that cancellation in
the trading of the Ordinary Shares on AIM would be to substantially
reduce the liquidity and marketability of Shares. In addition,
there would be no public stock market in the UK on which
Shareholders can trade their Ordinary Shares, and the Company would
no longer be required to comply with the AIM Rules. The Company's
CREST facility will be cancelled and, although the Ordinary Shares
will remain transferable, they will cease to be transferable
through CREST. Instead, Shareholders who hold Ordinary Shares in
CREST will receive share certificates.
Immediately following the Delisting, there will be no formal
trading facility for dealings to take place in Ordinary Shares and
no price for them will be publicly quoted. It is not the Board's
intention to implement any form of dealing facility to enable
trades in the Ordinary Shares to occur.
4. Current Trading
The Company issued its unaudited interim financial statements
for the period ended 30 June 2013 on 30 September 2013.
The Company issued a further trading update on 14 February 2014
which highlighted the challenges in the Solutions Package business
and margin pressure in the Electronic Components business. Working
capital has continued to be an issue for the business and the Group
has felt the force of an increasingly difficult debt market in
China during the final months of 2013 and the beginning of 2014.
Each of KADA's major lenders has sought to re-negotiate its lending
terms with the Company. This is a similar situation to those being
experienced by a number of our competitors. This uncertainty over
the Company's future availability of debt has materially affected
the Company's results in 2013 and its ability to write new business
in 2014. The lack of working capital has in turn affected the
Company's ability to roll out new products such as the media kiosk
project that it had hoped would be a major source of new revenue
and higher margins during 2014.
In the short term the Company continues to focus on cash
collection and re-negotiating its debt facilities. This will
materially affect the Company's profitability during the first six
months of 2014 and potentially beyond.
5. General Meeting
The Circular contains Notice convening the General Meeting of
the Company to be held at 3pm on 27 March 2014 at the offices of
Proton Invest Holdings Ltd., 7 Floor, 10 Block Shenzhen Software
Park Keji Middle 2nd Road, Nanshan District, Shenzhen, Guangdong,
P.R. China 518000 at which the Resolution will be put to
Shareholders.
6. Expected Timetable of Principal Events
Despatch of the Circular to Shareholders 4 March 2014
Latest time and date for receipt of Forms of Direction / Proxies
6 p.m. on 18 March 2014
General Meeting 3 p.m. on 27 March 2014
Last day of dealings in Ordinary Shares on AIM 3 April 2014
Delisting takes effect 7 a.m. on 4 April 2014
All of the times referred to refer to London time.
Dates set against events that are expected to occur after the
expected date of the General Meeting
assume that the General Meeting is not adjourned and that the
Resolution is passed at the General Meeting.
All of these times and dates are subject to change at the
Company's discretion. In the event of any
change, the revised times and dates will be notified to
Shareholders by an announcement through a
Regulatory Information Service.
- Ends -
For further information:
Kada Technology Holdings Limited
Paul He Xuebo, Chief Executive Officer Tel: +852 2342 8836
Ivor Shrago, Chairman www.kada-ir.com
finnCap Limited
Geoff Nash / Christopher Raggett Tel: +44 (0) 20 7220
0500
www.finncap.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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