TIDMSECN
RNS Number : 4501Z
SEC Newgate S.p.A.
25 January 2022
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE AN OFFER FOR SALE OF ANY SECURITIES OR AN OFFER OR
INVITATION TO PURCHASE ANY SECURITIES IN ANY JURISDICTION OR A
SOLICITATION OF ANY VOTE OR APPROVAL.
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA,
CANADA, JAPAN OR IN ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE PERSONAL ADVICE
FOR THE PURPOSES OF THE CORPORATIONS ACT 2001 (CTH). THE COMPANY
DOES NOT HOLD AN AUSTRALIAN FINANCIAL SERVICES LICENCE AND IS NOT
LICENSED TO PROVIDE FINANCIAL PRODUCT ADVICE IN RELATION TO ITS
ORDINARY SHARES.
25 January 2022
SEC Newgate S.p.A. ("SEC Newgate" or the "Company")
Notice of General Meeting
Cancellation of admission of Ordinary Shares to trading on
AIM
Buy-back to purchase up to 9,168,882 Ordinary Shares
Further to the Company's announcement on 19 January 2022, SEC
Newgate (AIM:SECN), the insight-driven global strategic
communications group that works at the nexus of business, politics,
communities, markets and media, gives notice of a General Meeting
of the Company, to be held on 10 February 2022 at 11.00 a.m. (CET)
/ 10.00 a.m. (UK) ("General Meeting").
A circular (the "Circular") is being made available to
Shareholders today, including the Notice of General Meeting at
which resolutions will be proposed (i) to approve the cancellation
of admission to trading of the Ordinary Shares on AIM, and (ii) to
grant authority for Company to purchase Ordinary Shares in order to
implement the Buy-back. Subject to the passing of the Resolutions,
it is expected that the Buy-back will commence on 17 February 2022
and Delisting will occur on 7 March 2022.
Set out below is an extract from the Circular with details on
the resolutions to be voted on at the General Meeting and action to
be taken.
A copy of the Circular is available on the Company's website at
www.secnewgate.com.
Media Enquiries
Fiorenzo Tagliabue (Group CEO) Tel: +39 335 6008858
fiorenzo.tagliabue@secnewgate.com
Emma Kane (Deputy Group CEO, Tel: +44 (0) 7876 338339
CEO SEC Newgate UK) emma.kane@secnewgate.co.uk
Sergio Penna (Group CFO) sergio.penna@secnewgate.com
Arden Partners
(Nominated Adviser and Broker)
Richard Johnson, Ben Christie Tel: +44 (0) 20 7614 5900
Notes to Editors
-- SEC Newgate's focus is on achieving positive outcomes through
communications, advocacy, and research, helping clients clearly
demonstrate their purpose, value, and impact locally, nationally
and internationally.
-- Further information is available at the Group's website: www.secnewgate.com
-- Further information on SEC Newgate UK is available at: www.secnewgate.co.uk
Regulatory Disclaimers
This announcement is for information purposes only and does not
constitute an offer for sale of any securities or an offer or
invitation to purchase any securities in any jurisdiction or a
solicitation of any vote or approval.
Arden Partners plc, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting
exclusively as nominated adviser and broker to the Company in
connection with the Buy-back and will not be acting for any other
person or otherwise be responsible to any person for providing the
protections afforded to clients of Arden Partners plc or for
advising any other person in respect of the Buy-back or any
transaction, matter or arrangement referred to in this
announcement. Arden Partners plc's responsibilities as the
Company's nominated adviser and broker are owed solely to London
Stock Exchange and are not owed to the Company or to any Director
or to any other person in respect of his decision to acquire shares
in the Company in reliance on any part of this announcement.
Cautionary Statement
This announcement may contain certain forward-looking
statements, including with respect to the SEC Newgate's current
targets, expectations and projections about future performance,
anticipated events or trends and other matters that are not
historical facts. These forward-looking statements, which sometimes
use words such as "aim", "anticipate", "believe", "intend", "plan",
"estimate", "expect" and words of similar meaning, include all
matters that are not historical facts and reflect the directors'
beliefs and expectations, made in good faith and based on the
information available to them at the time of the announcement. Such
statements involve a number of risks, uncertainties and assumptions
that could cause actual results and performance to differ
materially from any expected future results or performance
expressed or implied by the forward-looking statement and should be
treated with caution. Any forward-looking statements made in this
announcement by or on behalf of SEC Newgate speak only as of the
date they are made. Except as required by applicable law or
regulation, SEC Newgate expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in its expectations with regard thereto or any
changes in events, conditions, or circumstances on which any such
statement is based.
Expected Timetable of Principal Events
2022
Latest date for receipt of voting instructions 1 February 2022
from CDI Holders
Latest date for receipt of proxy form from Shareholders 9 February 2022
holding shares in certificated form
General Meeting 10 February 2022 at
11:00 a.m.
Commencement of Buy-back 17 February 2022
End of Buy-back through on-market purchases 2 March 2022
Cancellation of admission of Ordinary Shares to 7 March 2022
trading on AIM (Delisting)
Commencement of Buy-back through off-market facility 8 March 2022
End of Buy-back Period(3) 18 May 2022
Notes:
1. Each of the above times and/or dates is subject to change at
the absolute discretion of the Company and Arden Partners. If any
of the above times and/or dates should change, the revised times
and/or dates will be announced through a Regulatory Information
Service.
2. References to times in this timetable are to CET time unless otherwise stated.
3. The Company reserves the right to extend the Buy-back
following the end of the Buy-back Period.
Introduction and summary
On 19 January 2022, the Company announced its intention to seek
shareholder approval for the cancellation of the Company's Ordinary
Shares to trading on AIM.
It also announced that it had entered into financing
arrangements and certain related agreements with Three Hills
Capital Partners S.A., acting as general partner of the Three Hills
Capital Solutions III fund to provide EUR49 million funding for the
future strategy and growth of SEC Newgate and its subsidiaries
(inclusive of the Buy-back financing) conditional upon the
Delisting (the "Transaction"). In addition, the Company has entered
into agreements to restructure the Inveready convertible bonds,
Retro Grand convertible loan and Hawk discounted capital bond.
The Transaction is conditional upon Delisting. Delisting is
expected to occur on or around 7 March 2022, with completion of the
Transaction to follow thereafter.
In addition, the Company proposes to provide Shareholders with
an opportunity to realise all or some of their investment in the
Company. Subject to the approval of the Resolutions to be proposed
at the General Meeting, SEC Newgate will establish a share purchase
plan to buy back Ordinary Shares for a period of 90 days. Under the
Buy-back SEC Newgate will instruct Arden Partners to make, in the
period before Delisting, on-market purchases of the Company's
Ordinary Shares at a fixed price of 111.32p per share. Following
Delisting, the Buy-back shall continue through a matched bargain
facility or a similar facility to be implemented by the Company.
Further details of the Buy-back are set out in this Circular. The
Company reserves the right to extend the Buy-back following the end
of the Buy-back Period.
The Company requires authority from Shareholders for Delisting
and to purchase Ordinary Shares pursuant to the Buy-back and this
is being sought at the General Meeting to be held at 11:00 a.m.
(CET) on 10 February 2022.
Minority Shareholders are not obliged to sell any or all of
their Ordinary Shares in the Buy-back if they do not wish to do so.
However, Minority Shareholders should be aware that if the
Resolutions are approved by the requisite majority and they do not
sell their Ordinary Shares pursuant to the Buy-back (or otherwise)
prior to the Delisting they will not receive cash for their
Ordinary Shares prior to the Delisting and the admission of the
Ordinary Shares to trading on AIM will be cancelled. Accordingly,
they will hold their Ordinary Shares in an unlisted company. While,
following Delisting, the Buy-back will continue until the end of
the Buy-back Period and Ordinary Shares will remain freely
transferable, it is likely that the liquidity and marketability of
the Ordinary Shares will, in the future, be constrained and the
value of the Ordinary Shares may be adversely affected as a
consequence.
Shareholders should note that irrevocable commitments have been
received for 76.57% of SEC Existing Ordinary Shares to contribute
their Ordinary Shares into NewCo, a private vehicle to be
incorporated, and to vote in favour of the Delisting.
Should any Minority Shareholders remain in the corporate capital
of SEC after completion of the Delisting, the Buy-back will
continue post-Delisting (for an overall period of 90 days) as
further described in this Circular.
Any Ordinary Shares purchased by the Company pursuant to the
Buy-back will either be cancelled or retained in Treasury and
eventually disposed of in accordance with the resolution that will
be taken by the shareholders' meeting. The Board is making no
recommendation to Shareholders in relation to Buy-back. The Board
is unanimously recommending Shareholders to vote in favour of the
Resolutions to be proposed at the General Meeting, as the Directors
intend to do in respect of their own beneficial holdings of
Ordinary Shares.
The purpose of this document is, amongst other things, to
provide you with information about the background to and the
reasons for the proposed Delisting and return of capital pursuant
to the Buy-back, certain action to be taken by Shareholders and why
the Directors unanimously recommend that you vote in favour of the
Resolutions to be proposed at the General Meeting, notice of which
is set out at the end of this document.
Background, Proposals and Future Strategy
Following the merger of SEC S.p.A. with Porta Communications Plc
in September 2019 to create SEC Newgate, a primary objective of the
Group has been to establish a strong presence in the United States
and Latin America, to complement the Group's continuing acquisition
strategy and organic growth momentum in strategic areas of the
world, in particular in Europe and Asia Pacific.
The US comprises the world's largest market for the
communications industry, where many major global players are
head-quartered or maintain a robust business base. A strong
presence in the United States would allow SEC Newgate to provide a
consistent and seamless service in the corporate and institutional
domains along the Washington-New York-London-Brussels-Hong
Kong-Beijing axis.
In order to pursue this strategic ambition, the Company has
entered into a "Framework and Contribution Agreement" with THCP, a
European mid-market private equity investment firm, to provide the
capital and resources to, inter alia, pursue potential acquisitions
in these key markets.
The Transaction is conditional upon, inter alia, the Delisting,
further details of which are set out below.
Pursuant to the Transaction: (i) certain SEC Newgate
shareholders comprising, in aggregate, 76.57% of the Existing
Ordinary Shares have irrevocably committed to vote in favour of the
Delisting and to contribute their Ordinary Shares to a
newly-incorporated private vehicle ("NewCo") to be established by
an affiliate of THCP and (ii) THCP has undertaken, inter alia, to
provide certain agreed funding to SEC Newgate and NewCo.
Shareholders comprising the balance of 23.43% Ordinary Shares
will not be able to contribute their Ordinary Shares into NewCo. In
order to provide an exit opportunity for those Shareholders, should
they so wish, the Company will, subject to the passing of the
Resolutions, implement a programme to buy back such shares at a
fixed price of 111.32p, representing a premium of 29% to the SEC
Newgate share price of 86.5p at the close of trading on 18 January
2022, being the last practicable date prior to the date of the
announcement of the Transaction on 19 January 2022. The Buy-back
will be funded through the SEC Bond for an amount of EUR12.5
million provided by THCP.
Shareholders' attention is drawn to Part 2 of this document,
containing further details of the Buy-back and its terms and
conditions, including the relevant duration.
In connection with the Transaction there may be restructuring of
the shareholdings of SEC Newgate's non-wholly owned
subsidiaries.
Framework and Contribution Agreement
On 18 January 2022, the Framework and Contribution Agreement was
entered into between the Company, Fiorenzo Tagliabue, Retro Grand
Limited ("Retro Grand"), Hawk Investments Limited ("Hawk"), THCP
and an affiliate of THCP, TH Ambrogio S.r.l. ("TH Ambrogio").
The purpose of the Framework and Contribution Agreement is to
govern the terms and conditions of the Transaction, including,
among other things, the Delisting, Buy-back, Contribution and
issuance of the SEC Bond and the NewCo Bond. It also governs the
relationship between the parties as direct shareholders of NewCo
and indirect shareholders of SEC Newgate, following completion of
the Transaction.
Pursuant to the terms of the Framework and Contribution
Agreement, completion of the Transaction is conditional upon the
Delisting having become effective, the relevant parties having duly
complied with their obligations under the Framework and
Contribution Agreement and no event having occurred triggering a
mandatory prepayment event or an event of default under the SEC
Bond.
The Framework and Contribution Agreement provides that:
(A) a shareholders' meeting of SEC Newgate shall be called to
approve (i) the Delisting pursuant to article 13 of the SEC
Newgate's by-laws and the AIM Rules, requiring the approval of 75%
of the shareholders present and voting at the meeting; (ii)
authority to purchase Ordinary Shares pursuant to Article 2357 et
seq. of the Italian Civil Code in order to facilitate the
Buy-back;
(B) if the Delisting is approved at the General Meeting, the
Buy-back will be launched pursuant to which SEC Newgate will carry
out a buy-back of a maximum of 9,168,882 Ordinary Shares (inclusive
of the Inveready Shares, as detailed further below), allowing all
Shareholders who are not participating in the Contribution to sell
their Ordinary Shares. The Buy-back will be available for 90 days
from launch;
(C) the Buy-back will be funded through the issuance of a bond
of EUR12.5 million, to be issued by SEC Newgate and subscribed and
paid for by THCP ("SEC Bond"). Any unused amount of the SEC Bond as
of the end date of the Buy-back Period (the "Unused Amount of the
SEC Bond") to be applied to redeem a corresponding amount of the
SEC Bond;
(D) Retro Grand undertakes to convert the Retro Grand Convertible Loan;
(E) following the completion of the Delisting:
(i) Fiorenzo Tagliabue and Retro Grand together with certain
existing management and key shareholders of SEC Newgate
("Contributing Shareholders") will contribute their Ordinary Shares
("Contribution") into a newly incorporated vehicle ("NewCo") wholly
owned by TH Ambrogio. As a result of the Contribution, 28% of the
corporate capital of NewCo shall remain with TH Ambrogio while the
remaining 72% stake will be held, pro quota, by the Contributing
Shareholders;
(ii) NewCo will issue a bond for an amount of Euro 36.5 million
(as possibly increased by an amount corresponding to any Unused
Amount of the SEC Bond) ("NewCo Bond") that will be entirely
subscribed and paid for by THCP and NewCo will use the proceeds of
such bond (a) partly, to subscribe and pay for a corporate capital
increase of SEC Newgate; and (b) partly, to grant to SEC Newgate a
shareholder loan. The proceeds of the capital increase and the
shareholder loan will be used by SEC Newgate to pursue its M&A
strategy. The share structure of SEC Newgate and the percentage
dilution of the shareholders as a result of the capital increase
will be disclosed in the documentation to be provided by the SEC
Newgate pursuant to article 2441 of the Italian Civil Code;
(F) a management incentive package ("MIP") for key managers
shall be put in place following completion of the Transaction.
NewCo Bond and SEC Bond
The SEC Bond proceeds will be used to fund the Buy-back and will
bear (i) simple interest at the rate of 3.0% p.a. payable in cash
semi-annually, (ii) simple interest at the rate of 5.0% p.a.
payable at maturity, and (iii) an arrangement fee; with a maturity
date of 6 years from the issuance.
Any unused amount of the SEC Bond as of the end date of the
Buy-back Period (i.e., 90 days) will be applied to redeem a
corresponding amount of the SEC Bond.
SEC Newgate may repay the SEC Bond at any time without penalties
(subject to a non-call provision, i.e., in case of prepayment
during the first 3 years, interest will be due up to the expiration
of the third year).
The NewCo Bond terms and conditions are substantially identical
to those of the SEC Bond.
Directors' and certain other shareholders' intentions regarding
the Transaction and voting at the General Meeting
As set out above, the Contributing Shareholders have irrevocably
committed to contribute their Ordinary Shares into NewCo,
comprising in aggregate 18,920,355 Ordinary Shares, being 76.57% of
the Existing Ordinary Shares, as set out in the table below.
Furthermore, the Contributing Shareholders have irrevocably
committed to vote in favour of the Resolutions to be proposed at
the General Meeting to be convened to implement the
Transaction.
Shareholder Number of Ordinary Percentage of
Shares Existing Ordinary
Shares
Fiorenzo Tagliabue
("FT") Director 8,092,515 32.75%
----------- ------------------- -------------------
Spouse of
Silvia Mazzucca FT 647,000 2.62%
----------- ------------------- -------------------
John Robert Foley Director 64,015 0.26%
----------- ------------------- -------------------
Emma Kane Director 574,271 2.32%
----------- ------------------- -------------------
Bryan Tyson Director 51,241 0.21%
----------- ------------------- -------------------
Mark Glover Director 110,702 0.45%
----------- ------------------- -------------------
Andrea Cornelli Director 100,000 0.40%
----------- ------------------- -------------------
Retro Grand Limited 6,085,183 24.63%
------------------- -------------------
Hawk Investments
Ltd 846,698 3.34%
------------------- -------------------
Other Shareholders 2,348,730 9.50%
------------------- -------------------
(1) Retro Grand Limited holding as of the date of this document.
At the closing of the Transaction, Retro Grand Limited will also
contribute into NewCo the 344,953 new Ordinary Shares resulting
from the conversion of the Loan, as set out further below.
Inveready Bond, Retro Grand Loan and Hawk Bond variation
agreements
On 18 January 2022, Inveready Convertible Finance I, F.C.R.,
Inveready Convertible Finance Capital Scr Sa (jointly "Inveready"),
the Company and Newgate Communications Limited, entered into an
agreement ("Inveready Agreement") pursuant to which the conversion
terms of the 3.5% Bonds 2020-2027 issued on 4 March 2020 and
convertible into Ordinary Shares ("Inveready Bonds"), have been
amended. Subject to (i) the Board of Directors of the SEC Newgate
approving the final terms of the Transaction; and (ii) the
Shareholders general meeting of SEC Newgate having approved the (A)
the Delisting and (B) the Buy-back, upon conversion of the
Inveready Bonds the Company's shall issue, in aggregate, 3,378,315
new Ordinary Shares ("Inveready Shares"). Furthermore, SEC Newgate
has irrevocably and unconditionally agreed to buy back from
Inveready all 3,378,315 new Ordinary Shares issued upon conversion
of the Inveready Bonds at an aggregate purchase price of Euro
4,500,000 (representing a price of 111.32p per Ordinary Share). The
Inveready Shares shall be issued and bought back immediately
following the Delisting. Failure by the Company to deliver the
Inveready Shares, perform its obligations under the Inveready
Agreement or pay the purchase price for the Inveready Shares each
constitute an event of default under the terms of the Inveready
Agreement. If an event of default occurs under the Inveready
Agreement, then the Company shall be required to pay Inveready the
amount of Euro 4,500,000 or of Euro 6,000,000 (in case of the
failure to pay the purchase price after conversion by the closing
date). Upon payment of such amount the Bonds shall be finally
cancelled.
On 18 January 2022, UKFH (previously known as Porta
Communication Plc) ("UKFH"), the Company and Retro Grand Limited
("Retro Grand") entered into a deed of variation ("Retro Grand
Variation") in relation to the conversion terms of the Convertible
Loan Agreement Undertaking dated 11 June 2019 ("Loan") pursuant to
which they have agreed that (i) conditional on and immediately
following completion of the Transaction, UKFH will transfer its
rights, obligations and liabilities to the Company and the Company
will assume the same ("Transfer"), including the debt due from UKFH
to Retro Grand pursuant to the Loan with UKFH's full release
effective against Retro Grand and following such transfer, Retro
Grand will release UKFH from all of its obligations under the Loan;
and (ii) conditional on and simultaneously with completion of the
Transaction and the Transfer, the conversion of the residual amount
of the capital due on the Loan, being GBP383,600.73 into 344,593
new Ordinary Shares (representing a conversion price of
111.32p).
On 18 January 2022, UKFH and Hawk Investments Holding Limited
entered into a deed of variation and waiver ("Hawk Variation")
relating to the Discounted Capital Bond dated 3 August 2017 ("Hawk
Bond") pursuant to which they have agreed among other things, (i)
to extend the redemption date referred to in the Hawk Bond from 14
April 2023 to 23 April 2026 and (ii) to ensure that the Company
will pay to Hawk Investments Holding Limited an arrangement fee in
respect of the variation of the Hawk Bond in an amount equivalent
to 1 per cent. of the outstanding amount of the Hawk Bond, which
will be paid by 31 March 2022.
Related Party Transactions
Fiorenzo Tagliabue is a director of SEC Newgate and substantial
shareholder. Morton PTC Limited, as the trustee of the Edward
Morton Family Trust, is the legal owner of Retro Grand (a
substantial shareholder of the Company), and as the trustee of the
Morton Family Trust, is the legal owner of Hawk. As a result, the
entering into the Framework and Contribution Agreement and the
contribution of Ordinary Shares into NewCo by those related parties
constitute related party transactions pursuant to Rule 13 of the
AIM Rules. In addition, the Retro Grand Variation and Hawk
Variation constitute related party transactions pursuant to Rule 13
of the AIM Rules.
John Foley, Emma Kane, Brian Tyson, Mark Glover and Andrea
Cornelli (each, SEC Newgate directors) and Silvia Mazzucca (spouse
of Fiorenzo Tagliabue) are related parties under the AIM Rules. As
a result, the commitments for the contribution of SEC shares into
NewCo by those related parties constitute related party
transactions pursuant to Rule 13 of the AIM Rules.
Accordingly, the independent Directors of the Company (being
David Mathewson, Paola Bruni, Luigi Roth, Sergio Penna and Tom
Parker), having consulted with the Company's Nominated Adviser,
Arden Partners, consider that the terms of these transactions are
fair and reasonable in so far as the Company's shareholders are
concerned.
Current Trading
The Company expects a strong performance for the year ended 31
December 2021, significantly ahead of budget forecasts, with over
EUR1m of EBITDA delivered during November alone.
Unaudited consolidated results (pre-minority interests) for the
11 months to November 2021 showed revenue of EUR78.6m, EBITDA of
EUR10.6m and a PBT of EUR5.8m. In the same period, organic
consolidated results (excluding acquisitions) showed revenues of
EUR68.1m, EBITDA of EUR9.7m and PBT of EUR5.0m.
All major business segments have continued to deliver strong
performances over the last two quarters.
At the end of 2021 the transfer of shares from Twister Group to
SEC Newgate was completed and SEC Newgate will therefore
consolidate the figures for SEC Newgate ME, based in Dubai, from 1
January 2022.
Particular new business achievements include securing a
three-year project funded by the EU aimed at promoting Italian food
abroad; the project covers 11 countries and is worth about EUR5m
over its term. The Company believes this project creates a solid
track record ahead of future EU-funded tenders and highlights the
increasing trend in cross selling and intercompany business which
accounted for over EUR300k of profit in the last quarter, with
further significant prospects in the pipeline.
Delisting and Buy-back
a.) Reasons for Delisting
The Company believes that the Transaction and, consequently, the
Delisting is the most appropriate means to achieve the Group's
strategy and has taken the following into consideration.
1. The Group requires additional financial resources in order to
pursue its strategic and growth ambitions to grow in certain
strategic areas of the world, primarily in the United States -
where it launched a successful start-up in July 2020. SEC Newgate
believes that its presence in the US should be more significant in
order to become a recognised international player - and also in
other strategic markets, for example Latin America.
2. The Board considers that the Company would not be able to
raise sufficient funds on the capital markets, in order to support
the envisaged growth.
3. The Transaction would provide certainty of financial resources to the Group.
4. The Directors believe that the market has not been able to
properly appreciate the value created since the merger of SEC
S.p.A. and Porta Communications Group Plc in September 2019, which
created a more profitable business and a significant international
footprint and platform to tackle new opportunities.
5. Trading volumes in the Ordinary Shares on AIM have been low.
As a consequence, Shareholders often have difficulty trading their
Ordinary Shares and trading can negatively impact the SEC Newgate
share price.
6. As an Italian-incorporated company, the Company expends
significant time and costs in order to be compliant with a dual
system of UK regulations, legal provisions, and the Italian
unlisted companies' rules. The Delisting enables the Company to
refocus these resources and costs into the business.
b.) Effect of Delisting
The principal effects of the Delisting will be that:
-- Shareholders will no longer be able to buy and sell Ordinary
Shares (or CDIs representing Ordinary Shares) through a public
stock market, further reducing the liquidity in the Ordinary
Shares;
-- the Company will no longer be required to announce material
events, final or interim results;
-- the Company will no longer be required to comply with many of
the corporate governance requirements applicable to companies
traded on AIM;
-- the Company will no longer be subject to the Disclosure,
Guidance and Transparency Rules and will therefore no longer be
required to disclose major shareholdings in the Company;
-- the Company will no longer be subject to the AIM Rules, with
the consequence that Ordinary Shareholders will no longer be
afforded the protections given by the AIM Rules. Such protections
include a requirement to obtain shareholder approval for reverse
takeovers and fundamental changes in the Company's business and to
announce, inter alia, certain substantial and/ or related party
transactions; and
-- the Delisting may have either positive or negative taxation
consequences for Shareholders. Shareholders who are in any doubt
about their tax position should consult their own professional
independent adviser immediately.
c.) Delisting Process
Under the AIM Rules, the Delisting can only be effected by the
Company after securing a special resolution of Shareholders in a
general meeting and the expiry of a period of 20 clear Business
Days from the date on which notice of the Delisting is given to the
London Stock Exchange. In addition, a period of at least 5 clear
Business Days following Shareholders' approval of the Delisting is
required before the Delisting may become effective. At the General
Meeting Shareholder approval will be sought for (amongst other
matters) the Delisting. The resolution approving the Delisting will
be conditional upon the approval of a resolution approving the
Buy-back.
Assuming that the Resolutions are approved, it is expected that
the Delisting will take place on or around 7 March 2022.
d.) Share Purchase Plan
Subject to the approval of the resolutions to be proposed at the
General Meeting, SEC Newgate will establish a share purchase plan
to buy back Ordinary Shares for a period of 90 days. The resolution
approving the Buy-back will be conditional upon the approval of a
resolution approving the Delisting.
Under the Buy-back SEC Newgate will instruct Arden Partners to
make, in the period before Delisting, on-market purchases of the
Company's Ordinary Shares up to an aggregate amount of 5,790,567
(such figure excludes the 3,378,315 new SEC Ordinary Shares to be
issued post-Delisting and purchased by the Company pursuant to the
Inveready Agreement) at a fixed price of 111.32p per share.
Notwithstanding the price and daily volume restrictions set out in
the Commission Delegated Regulation (EU) 2016/1052, the Company
will make purchases outside of these price and volume restrictions
at the Buy-back Price due to the limited liquidity in trading of
the Company's Ordinary Shares.
Should any Minority Shareholders remain in the corporate capital
of the Company after completion of the Delisting, the Buy-back will
continue post-Delisting (for an overall period of 90 days) as
indicated under paragraph e) below.
Further details of the Buy-back and its terms and conditions,
including the relevant duration, are set out in Part 2 of this
document.
The Company reserves the right to extend the Buy-back following
the end of the Buy-back Period.
e.) Ordinary Share dealing following Delisting
Following the Delisting, there will be no market facility for
dealing in the Ordinary Shares, no price will be publicly quoted
for the Ordinary Shares and the transfer of Ordinary Shares will be
subject to the provisions of the Bylaws. The Buy-back will continue
post-Delisting, as set out below, by means of a matched bargain
facility or a similar facility to be implemented by the Company,
who will communicate the Buy-back offer to the remaining Minority
Shareholders post-Delisting. The Company is evaluating with Monte
Titoli, Equiniti, and Euroclear/CREST the appropriate way to inform
its shareholders about the Buy-back following Delisting and give
them the opportunity to participate in the Buy-back.
f.) Corporate Governance
Following completion of the Delisting, the Company does not
intend to continue to comply with the QCA Corporate Governance
Code.
The Company will continue to hold annual general meetings. The
Company will also adopt new bylaws that are suitable for a private
company whose shares are not traded on a public market.
Buy-back and non-Contributing Shareholders
Subject to the approval of the Resolutions to be proposed at the
General Meeting, the Company will implement a Buy-back, to provide
the opportunity for the non-Contributing Shareholders to sell all,
some or none of their Ordinary Shares at a fixed price of 111.32p
per Ordinary Share (being a premium of 29% on the closing price of
SEC Newgate Ordinary Shares on 18 January 2022), depending on their
own liquidity requirements and their view on the prospects of the
Company going forward. The Contributing Shareholders have
undertaken not to sell their Ordinary Shares in the Buy-back.
The Buy-back will be made available, in the first instance
through on-market share repurchases and, following Delisting,
through a matched bargain facility or a similar facility to be
implemented by SEC Newgate, for an overall period of 90 days. The
Company reserves the right to extend the Buy-back following the end
of the Buy-back Period. Further details of the Buy-back and its
terms and conditions, including the relevant duration, are set out
in Part 2 of this document.
The Buy-back is to be financed by the SEC Bond and Ordinary
Shares repurchased by the Company under the Buy-back may be
cancelled or retained in Treasury and eventually disposed of in
accordance with the resolution that will be taken by the
shareholders' meeting.
Shareholders should be aware that if the Resolutions are
approved by the requisite majority and Delisting occurs, in the
event they retain a holding in Ordinary Shares at Delisting, they
will hold their Ordinary Shares in an unlisted company. While the
Ordinary Shares will remain freely transferable, it is likely that
the liquidity and marketability of the Ordinary Shares will, in the
future, be constrained and the value of the Ordinary Shares may be
adversely affected as a consequence.
Takeover Code
The Takeover Code does not apply to the Company but the
Company's Bylaws do contain mandatory bid requirements. The
mandatory takeover provisions contained in the Company's Bylaws
will not be triggered by the Transaction as the Contribution will
occur following Delisting.
After the Delisting the Company's Bylaw provisions on mandatory
takeover will cease to have effect and consequently the new SEC
Newgate Bylaws will not provide any protection to minority
Shareholders with respect to the execution of the Transaction.
General Meeting
A notice convening a General Meeting of the Company, which is to
be held at 11:00 a.m. (CET) on 10 February 2022 is set out at the
end of this document. The Company requires Shareholder approval (i)
for the Delisting; and (ii) to purchase Ordinary Shares pursuant to
Article 2357 et seq. of the Italian Civil Code to implement the
Buy-back.
Delisting approval
Resolution 1 is to approve the Delisting back, and is
conditional on the passing of resolution 2. In accordance with the
AIM Rules, resolution 1 requires the approval of 75% of the
Shareholders present and voting at the meeting.
Buy-back Approval
Resolution 2 is to approve the purchase of Ordinary Shares to
implement the Buy-back, and is conditional on the passing of
resolution 1. From an Italian law compliance perspective, it should
be noted that, pursuant to the provisions of Articles 2357 and
2357-ter of the Italian Civil Code, the Buy-back of Ordinary Shares
must be authorised by the Shareholders' Meeting, which shall
determine the terms and conditions of the purchase, indicating in
particular the maximum number of shares to be purchased, the
duration (not exceeding eighteen months) for which the
authorisation is granted, the minimum consideration and the maximum
consideration. Resolutions of the General Meeting are valid, in
first and second call, if approved by more than 50% of the
Shareholders present and voting at the meeting.
Terms and condition of the purchase
Article 2357 of the Italian Civil Code states that the company
may not purchase its own Ordinary Shares except within the limits
of the distributable profits and available reserves resulting from
the last duly approved balance sheet (which amount to EUR485,027.65
and to EUR19,810,879 on 31 December 2020). Only fully paid-up
shares may be purchased.
The request for authorisation to buy back and dispose of its own
Ordinary Shares is intended to enable the Company to carry out the
Buy-back. Any Ordinary Shares purchased by the Company pursuant to
the Buy-back will then be either cancelled or retained in Treasury
and eventually disposed of in accordance with the resolution that
will be taken by the shareholders' meeting.
Maximum number of Ordinary Shares to be purchased and
duration
A maximum number of 9,168,882 Ordinary Shares may be bought back
pursuant to the authorisation granted pursuant to the
Resolution.
The authorisation to buy back Company's own Ordinary Shares is
requested for a period of 18 months starting from the date of the
shareholders' meeting resolution approving the proposal, in line
with Italian laws. However the current intention of the Company is
for the Buy-back to last no longer than 90 days. The Company may
proceed with the Buy-back transactions in one or more tranches and
at any time, to an extent and at a time freely determined in
compliance with applicable regulations, as deemed appropriate by
the Company.
Minimum and maximum consideration
The unit price for each individual Buy-back transaction must be
equal to 111.32 pence per Ordinary Share. After the Buy-back Period
the Company may decide to make purchases at different offer prices
where the maximum offer price will be no more than 111.32 pence per
Ordinary Share.
Methods by which purchases and sales will be made
The Buy-back will be made according to the methods identified
from time to time by the Board of Directors, which may make
purchases using any of the methods permitted by current
regulations.
The Board of Directors, with reference to the disposal (sale) of
own Ordinary Shares purchased on the basis of the Resolution or in
any case in the Company's portfolio, proposes that they may be
carried out pursuant to Article 2357-ter of the Italian Civil Code,
at any time, in whole or in part, according to any of the methods
permitted by current regulations, to be identified, from time to
time, at the discretion of the Board of Directors.
Taxation
Shareholders who are in any doubt as to their tax position in
respect of the Delisting and the Buy-back should consult an
appropriate professional adviser.
Overseas Shareholders
It is the responsibility of all Overseas Shareholders to satisfy
themselves as to the observance of any legal requirements in their
jurisdiction, including, without limitation, any relevant
requirements in relation to the ability of such holders to
participate in the Buy-back.
Action to be taken
General Meeting
Notice of a General Meeting of SEC Newgate S.p.A., to be held at
11.00 a.m. (CET) on 10 February 2022, is set out at the end of this
document. Shareholders with voting rights have the right to attend
the Shareholders' Meeting. Pursuant to article 83-sexies of
Legislative Decree no. 58/98, the entitlement to participate in the
Shareholders' Meeting and to vote is subject to the receipt by the
Company of the notice issued by an authorised intermediary in
accordance with current legislation. Therefore, we invite the
Shareholders holding CDIs, representing SEC Newgate S.p.A. ordinary
shares, listed on AIM to contact the intermediary where the
abovementioned CDIs are deposited (the "CDI Intermediary" ). The
Company must receive voting instructions from the CDI Intermediary
by no later than 1 February 2022, being the end of the seventh
trading day prior to the date set for the Shareholders' Meeting on
first call. However, the right of CDI Holders to attend and vote
remains unaffected if the communications are received by the
Company from the CDI Intermediary after the aforesaid deadline,
provided that they are received before the beginning of the
proceedings of the shareholders' meeting of the first call.
Pursuant to Article 106, paragraph 2, of D. L. no. 18 of March
17, 2020 on "Measures to strengthen the National Health Service and
economic support for families, workers and businesses related to
the epidemiological emergency from COVID-19", converted with
amendments into Law no. 27 of April 24, 2020, whose effectiveness
has been last extended by Decree-Law no. 228 of December 20, 2021
(the "Decree" ), the Shareholders' Meeting will be held exclusively
by means of telecommunications that will ensure the identification
of participants, their participation and the exercise of voting
rights, without in any case the need for the chairman and the
secretary taking the minutes to be in the same place. Voting
procedures by correspondence or electronic means are not envisaged.
The Company will provide the shareholders' entitled to attend the
Shareholders' Meeting and exercise their voting rights with
appropriate instructions to allow access to the meeting after
identifying the participants. Those entitled to participate in the
Shareholders' Meeting and exercise their voting rights must send a
request to the address secrp@legalmail.it enclosing the
aforementioned documentation certifying their entitlement to
participate in the Shareholders' Meeting and exercise their voting
rights pursuant to Article 83-sexies of Legislative Decree no.
58/98, with an Identification Document (in case of a legal entity,
copies of the documentation proving the powers of representation to
be attached). To facilitate the verification activities, the
Company recommends that the documentation should be sent promptly
and in any case by 9 February 2022. The Company may ask for further
documentation for the purpose of identifying shareholders entitled
to take part in the shareholders' meeting and exercise voting
rights.
VOTING BY PROXY
Those entitled to vote may appoint a representative in the
Shareholders' Meeting by providing a written proxy, in accordance
with the laws and regulations in force. To this end, a proxy form
is available on the website www.secnewgate.com (section
"Investors"/ in RECENT SHAREHOLDER COMMUNICATIONS) or at the
Company's registered office. The proxy must be notified to the
Company, by 9 February 2022 and in sufficient time to enable it to
collect the proxies, by sending it by registered mail to the
Company's registered office, via Ferrante Aporti 8, 20125 Milan, or
by sending it to the certified mail address secrp@legalmail.it. It
is necessary that the original proxy form is sent to the
Company.
The terms and conditions of the participation at the
Shareholders' Meeting described in this Circular and the Notice of
General Meeting may be subject to changes and/or additions in
relation to the COVID-19 (CoronaVirus) health emergency measures.
Any change and/or addition to the information contained in this
notice of call will be made available through the website
www.secnewgate.com (section "Investors" / in Shareholders'
Meetings) and in the other ways required by law or regulation.
Recommendation
The Directors unanimously recommend Shareholders to vote in
favour of the Resolutions to be proposed at the General Meeting as
they intend to do so in respect of their beneficial holdings
amounting, in aggregate, to 9,639,744 Existing Ordinary Shares,
representing approximately 39.01 per cent. of the existing issued
ordinary share capital of the Company as at 24 January 2022 (being
the last practicable date prior to the publication of this
document).
The Directors make no recommendations to Shareholders in
relation to participation in the Buy-back.
If you are in doubt about what action to take or need advice in
relation to the Buy-back, you should consult an independent
financial adviser, authorised under the Financial Services and
Markets Act 2000, without delay.
Yours faithfully
John Foley
Non-Executive Chairman
PART 2
FURTHER INFORMATION ON THE SHARE PURCHASE PLAN
The Board intends to return up to GBP10.4million to Minority
Shareholders via a share purchase plan. The Board has considered a
number of methods for returning value to Minority Shareholders and
concluded that the share purchase plan, to be implemented through
the Buy-back, would be the most appropriate method.
Subject to the approval of the resolutions to be proposed at the
General Meeting, SEC Newgate will buy-back Ordinary Shares for a
period of 90 days. The maximum number of shares that may be
repurchased under the share purchase plan is 9,168,882 Ordinary
Shares (inclusive of the Inveready Shares, as detailed in Part 1 of
this document), allowing all Minority Shareholders, who are not
participating in the Contribution, to sell their Ordinary Shares.
The Buy-back will be carried out at a fixed price of 111.32p per
Ordinary Share.
The Buy-back will take place in two stages:
1. In the Buy-back period before Delisting
SEC Newgate will instruct Arden Partners, the Company's broker,
to make on-market purchases of the Company's Ordinary Shares up to
an aggregate amount of 5,790,567 (such figure excluding the
3,378,315 new SEC Ordinary Shares to be issued post-Delisting and
purchased by the Company pursuant to the Inveready Agreement) at a
fixed price of 111.32p per share. The programme will be
independently managed by Arden, which will make trading decisions
independently and without the influence of the Company.
Notwithstanding the price and daily volume restrictions set out
in the Commission Delegated Regulation (EU) 2016/1052, purchases by
the Company are likely to be made outside of these price and volume
restrictions at the Buy-back Price due to the limited liquidity in
trading of the Company's Ordinary Shares. Share purchases will take
place in open market transactions and may be made from time to time
depending on market conditions, share price, trading volume and
other factors.
Shareholders wishing to sell Ordinary Shares or CDIs in the
on-market Buy-back should contact their broker or financial
intermediary.
The Company will announce any market repurchases prior to
Delisting no later than 7.30 a.m. on the business day following the
day on which the repurchase occurred.
2. In the Buy-back period following Delisting
Should any Minority Shareholders remain in the corporate capital
of the Company after completion of the Delisting, the Buy-back will
continue post-Delisting (for an overall Buy-back Period of 90 days)
by means of a matched bargain facility or a similar facility to be
implemented by the Company, who will communicate the Buy-back offer
to the remaining Minority Shareholders post-Delisting. The Company
is evaluating with Monte Titoli, Equiniti and Euroclear/CREST the
appropriate solutions to inform its shareholders about the Buy-back
following Delisting and give them the opportunity to participate in
the Buy-back.
The Company reserves the right to extend the Buy-back following
the end of the Buy-back.
The Company will provide further details to Shareholders
regarding the structure of the post-delisting Buy-back and the
means to participate in such Buy-back following the Delisting.
Any Ordinary Shares acquired by the Company pursuant to the
Buy-back shall either be cancelled or retained in Treasury and
eventually disposed of in accordance with the resolution that will
be taken by the shareholders' meeting.
The authority under the Buy-back Resolution will remain in force
for 18 months after the date of the shareholders meeting
resolution. After the Buy-back Period the Company may decide to
make purchases at different offer prices where the maximum offer
price will be no more than 111.32 pence per Ordinary Share.
Matched Bargain Facility
After the end of the Buy-back Period the Company intends to make
arrangements for a Matched Bargain Facility or similar facility to
assist Shareholders to trade Ordinary Shares. The Matched Bargain
Facility will be administered directly by the Company. Under the
Matched Bargain Facility, Shareholders or persons wishing to
acquire or dispose of Ordinary Shares will be able to leave an
indication with the Company of the number of Ordinary Shares that
they are prepared to buy or sell at an agreed price. In the event
that the Company is able to match that order with an opposite sell
or buy instruction, they would contact both parties to arrange the
trade. Should the Company put in place the Matched Bargain
Facility, details will be made available to Shareholders on the
Company's website at www.secnewgate.com. However, in carrying out
such activities, the Company will take no responsibility to match
up Shareholders wishing to sell and purchase Ordinary Shares, and
no responsibility in respect of the time frame in which
introductions or communications (if any) are made or as to the
price at which any trades might take place.
Definitions
The following definitions apply throughout this document unless
the context otherwise requires:
"AIM" the AIM Market operated by the London Stock
Exchange
"AIM Rules" the AIM Rules for Companies published by the
London Stock Exchange from time to time
"Arden Partners" Arden Partners plc, the Company's nominated
adviser and broker
"Buy-back" purchase by the Company, pursuant to a share
purchase plan, of up to 9,168,882 Ordinary
Shares at 111.32p per Ordinary Share
"Buy-back Period" 90 days period from the commencement of the
Buy-back
"Buy-back Price" 111.32p per Ordinary Share
"Bylaws" the bylaws of the Company, as amended from
time to time
"CDI Holders" the holder(s) of CDIs from time to time and
"CDI Holder" means any one of them
"CDIs" CREST depositary interests issued by CREST
Depository Limited in respect of Ordinary Shares
"Company" or "SEC SEC Newgate S.p.A., a company incorporated
Newgate" under the laws of Italy and registered in Italy
with registered number 09628510159
"Contributing Shareholders" certain existing management and key shareholders
of SEC Newgate holding, in aggregate, 76.57%
of the Existing Ordinary Shares
"CREST" the relevant system (as defined in the CREST
Regulations) in respect of which Euroclear
is the operator (as defined in those regulations)
"CREST Regulations" the Uncertificated Securities Regulations 2001
(S.I. 2001 No. 3755)
"CTA 2010" the Corporation Tax Act 2010, as amended
"Delisting" the cancellation of admission of the Ordinary
Shares to trading on AIM
"Directors" or "Board" the directors of the Company whose names are
set out on page 5 of this document, or any
duly authorised committee thereof
"Euroclear" Euroclear UK & Ireland Limited, the operator
of CREST
"Existing Ordinary the 24,710,922 Ordinary Shares in issue at
Shares" the date of this document, all of which are
admitted to trading on AIM
"FCA" the UK Financial Conduct Authority
"Framework and Contribution the framework and contribution agreement that
Agreement" contains the terms and conditions of the Transaction
signed on 18 January 2022 by and between THCP,
TH Ambrogio, Fiorenzo Tagliabue, Retro Grand,
Hawk and the Company
"FSMA" the Financial Services and Markets Act 2000
(as amended)
"General Meeting" the general meeting of the Company to be held
at 11.00 a.m. (CET) / 10:00 a.m. (UK) on 10
February 2022, notice of which is set out at
the end of this document
"Group" the Company, its subsidiaries and its subsidiary
undertakings
"Hawk" Hawk Investment Holdings Limited
"Independent Directors" Paola Bruno, Luigi Ferdinando Roth, David Mathewson,
Sergio Penna and Tom Parker
"TA 2007" the Income Tax Act 2007, as amended
"London Stock Exchange" London Stock Exchange plc
"Minority Shareholders" holders of Ordinary Shares excluding the Contributing
Shareholders
"NewCo" a newly-incorporated private vehicle into which
the Contributing Shareholders will contribute
their SEC Newgate's shares
"Notice of General the notice convening the General Meeting which
Meeting" is set out at the end of this document
"Ordinary Shares" ordinary shares in the capital of the Company
"Overseas Shareholder" a Shareholder who is resident in, or a citizen
of, a jurisdiction outside the UK
"Regulatory Information a service approved by the FCA for the distribution
Service" to the public of regulatory announcements and
included within the list maintained on the
FCA's website
"Resolutions" the resolution set out in the Notice of General
Meeting
"Retro Grand" Retro Grand Limited
"Shareholders" holders of Ordinary Shares or CDIs
"Takeover Code" The City Code on Takeovers and Mergers
"TH Ambrogio" TH Ambrogio S.r.l.
"THCP" Three Hills Capital Partners S.A., acting as
general partner of the Three Hills Capital
Solutions III fund
"Transaction" has the meaning given to it in Part 1
"UK" the United Kingdom of Great Britain and Northern
Ireland
"US" or "United the United States of America, each State thereof,
States" its territories and possessions (including
the District of Columbia) and all other areas
subject to its jurisdiction
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END
NOGSEUFALEESEIF
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