Origo Partners PLC Company Update, Directorate and Adviser Changes (5401L)
20 April 2018 - 4:00PM
UK Regulatory
TIDMOPP TIDMOPPP
RNS Number : 5401L
Origo Partners PLC
20 April 2018
20 April 2018
Origo Partners plc
("Origo" or the "Company")
New Advisory Agreement, Posting of Circular, Directorate
Changes,
Review of Asset Carrying Values, Appointment of Nominated
Advisor and Broker
Class Meeting of Redeemable Preference Shares
New Advisory Agreement
Origo's Board of Directors has renegotiated the 2014 Asset
Realisation Support Agreement with the Company's investment
consultant Origo Advisers Limited ("OAL") and, subject to approval
of the Company's preference shareholders, has replaced the 2014
agreement with a new agreement effective 1 January 2018 (the "New
ARA").
The New ARA waives OAL's entitlement to a fixed fee of US$1
million for 2018 and any future fixed fees in return for an ongoing
fee of 8 per cent. of all cash returned to shareholders with a hold
back of 25 per cent. of that amount until all Origo's assets are
sold. Board approval is required for any asset sales to ensure
realizations are at appropriate prices considering market
conditions. The Company can terminate the New ARA without penalty
on 90 days' notice following an initial 90-day grace period.
The Company will continue to fund OAL's operating costs incurred
in connection with Origo including a modest office share
arrangement in Beijing and limited personnel costs. Origo will also
pay OAL the remaining money contractually due under the 2014
agreement for the period ending 31 December 2017, which amounts to
approximately US$700,000.
The New ARA will shortly be available on the Company's website
(www.origoplc.com). The agreement is subject to the approval of the
holders of the Company's Redeemable Preference shares at a class
meeting to be convened for 8 May 2018. A circular will be posted to
the Company's Redeemable Preference shareholders providing details
of the New ARA and containing a notice convening a class meeting of
the holders of the Company's Redeemable Preference shares to be
held at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP at
10 a.m. on 8 May 2018.
The class meeting is being convened to approve the terms of the
New ARA in accordance with the Company's articles of association. A
copy of the circular will be available on the Company's website
(www.origoplc.com) shortly.
Origo's directors consider, having consulted with its nominated
adviser, that the terms of the New ARA are fair and reasonable
insofar as its shareholders are concerned.
John Chapman, Chairman of Origo commented:
The New ARA represents a major step forward in reducing the
Company's expenses, shoring up its finances, and incentivizing
future asset realizations. The New ARA substantially reduces the
Company's fixed costs by eliminating the quarterly fixed advisory
fee and replacing it with a compensation structure that is entirely
incentive-based. By eliminating the Company's largest fixed expense
and settling the interest-bearing debt owed to the advisor, the new
advisory agreement will place the Company on a firmer financial
footing. By remunerating the investment consultant entirely on a
percentage of cash returned to shareholders, rather than on
formulaic accounting metrics unrelated to shareholder objectives,
the Board has endeavored to align the advisor's interests directly
with shareholders' interests. The new incentive structure is
designed to promote more expeditious asset sales and returns of
capital as well as to provide the Advisor with incentives to reduce
expenses further, so additional cash can be returned to
shareholders. The Board recognizes the investment consultant's
cooperation in working with the Board to renegotiate the 2014
Agreement and agreeing to waive its rights under the 2014 contract
to an additional US$1 million fixed fee.
Directorate Changes
Niklas Ponnert has stepped down from the Board with immediate
effect. Mr. Ponnert's will continue to direct the Company's
realisation strategy as a principal of OAL. OAL will also continue
as the Company's investment consultant.
The Board thanks Niklas for his contributions to the Board and
will continue to work with Niklas as OAL monetizes assets at
appropriate prices, so cash can be returned to shareholders.
The Board of Directors is also pleased to announce the
appointment of John Chapman as the Company's Chairman.
Portfolio Review and Asset Valuations
The Company's Board of Directors has undertaken a comprehensive
review of the Company's portfolio and has made several trips to
Beijing to analyze the portfolio and meet with Company's investment
advisor and investee companies. The Board is currently of the view
that expected realisation amounts will be significantly less than
the Company's last reported net asset value. The Board expects to
update shareholders in the Company's 2017 Annual Report, which
should be released before the end of June in accordance with the
AIM rules.
Change of Nominated Advisor
The Company has appointed Arden Partners plc as its nominated
advisor and broker with immediate effect.
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Ends
For further information about Origo please visit
www.origoplc.com or contact:
Origo Partners plc IOMA House
Mr. John Chapman Hope Street
Chairman Douglas
Isle of Man IM1 1AP
Nominated Adviser and Broker
Arden Partners plc
Chris Hardie
Ben Cryer +44 (0)20 7614 5900
This information is provided by RNS
The company news service from the London Stock Exchange
END
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