TIDMSECN
RNS Number : 9742Y
SEC Newgate S.p.A.
19 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, AUSTRALIA OR IN ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
19 January 2022
SEC Newgate S.p.A. ("SEC Newgate" or the "Company")
Proposed cancellation of admission to trading on AIM
and
EUR49 million Financing Agreement with Three Hills Capital
Partners to finance the future strategy and growth of the Group
SEC Newgate (AIM:SECN), the insight-driven global strategic
communications group that works at the nexus of business, politics,
communities, markets and media, announces its intention to seek
shareholder approval for the cancellation of the Company's ordinary
shares ("Ordinary Shares") to trading on AIM ("Delisting").
Furthermore, the Company announces that it has 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 ("THCP") to provide EUR49 million
funding for the future strategy and growth of SEC Newgate and its
subsidiaries the "Group") conditional upon the Delisting (the
"Transaction").
Summary highlights
-- Framework and Contribution Agreement entered into with THCP,
a leading pan-European structured capital provider, to provide the
capital and resources to, inter alia, pursue potential acquisitions
in the key markets of the United States and Latin America
-- Irrevocable commitments for 76.57% of SEC Existing Ordinary
Shares to contribute their SEC Newgate Ordinary Shares into NewCo,
a newly-incorporated private vehicle, and to vote in favour of the
Delisting
-- Restructuring of Inveready convertible bonds, Retro Grand
convertible loan and Hawk discounted capital bond
-- Minority shareholders to be offered exit opportunity at
111.32p per Ordinary Share ("Buy-back Price") via a share
repurchase plan ("Buy-back")
-- Equity and debt financing up to a total EUR49 million (inclusive of the Buy-back financing)
-- Transaction conditional upon Delisting
-- General Meeting to be convened to approve the Delisting and
authorise SEC Newgate to repurchase Ordinary Shares pursuant to the
Buy-back
-- Delisting expected to occur late February/beginning of March
2022, with completion of the Transaction to follow thereafter
Commenting on the announcement, Fiorenzo Tagliabue, Group Chief
Executive, said:
"This is a transformational milestone in the history of our
Group. In September 2019 we embarked on a three-year strategic
plan. It began with the merger that created SEC Newgate. Since
then, we have achieved so much across our footprint of 38 offices
across 5 continents. This next step will provide the investment
needed to realise our ambitions and provide the flexibility to make
more entrepreneurial decisions, and to access to the capital we
need to invest in our business and people.
A circular ("Circular") will be sent to Shareholders shortly
with details of the Transaction, the proposed Delisting and the
Buy-back, and convening a General Meeting to seek Shareholder
approval for the Delisting and authorities to implement the
Buy-back.
In this announcement, references to Ordinary Shares shall mean
Ordinary Shares and/or CREST Depositary Interests ("CDIs"), and
references to Shareholders shall mean holders of Ordinary Shares
and/or holders of CDIs, as relevant and in context.
Unless defined to the contrary, defined terms shall have the
meaning as set out in the Definitions sections at the end of this
announcement.
Media Enquiries
Fiorenzo Tagliabue (Group CEO) Tel: +39 335 6008858
tagliabue@secrp.com
Emma Kane (Deputy Group CEO, Tel: +44 (0) 7876 338339
CEO SEC Newgate UK) emma.kane@secnewgate.co.uk
Sergio Penna (Group CFO) penna@secrp.com
Arden Partners
(Nominated Adviser and Broker)
Richard Johnson, Ben Christie Tel: +44 (0) 20 7614 5900
Market Abuse Regulation (MAR) Disclosure
The information contained in this announcement was deemed by the
Company, prior to announcement, to constitute inside information as
stipulated under Article 7 of the Market Abuse Regulations (EU) No
596/2014, which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. With the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
The person responsible for making this announcement on behalf of
SEC Newgate is Fiorenzo Tagliabue.
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.
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 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 this
announcement. The Buy-back will be funded through the SEC Bond with
financing of EUR12.5 million provided by THCP. Further details are
set out below.
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. 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;
(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;
(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
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. 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
announcement. 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 SEC 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 EUR 5.0m.
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 been 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.
The Company will shortly be convening a General Meeting at which
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
repurchase of Ordinary Shares which is necessary to enable the
Company's to implement the Buy-back.
Assuming that the Resolutions are approved, it is expected that
the Delisting will take place in late February / early 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.
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 excluding the SEC shares to be issued 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. Further details of the Buy-back and its
terms and conditions, including the relevant duration, will be
disclosed before the commencement of the Buy-back.
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
indicated under paragraph e) below.
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 facility to be
implemented by the Company, who will communicate the Buy-back offer
to the minority shareholders post-Delisting.
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 facility to be implemented by SEC Newgate, for an overall
period of 90 days. Further details of the Buy-back will be set out
in the Notice of General Meeting to be sent to Shareholders.
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.
Eligible 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 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 of the execution of the Transaction.
General Meeting
The Company requires Shareholder approval for (i) the Delisting
and (ii) to purchase Ordinary Shares pursuant to Article 2357 et
seq. of the Italian Civil Code to implement the Buy-back.
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.
A notice convening a General Meeting of the Company at which
Resolutions will be proposed to authorise the Delisting and for the
Company to make the repurchase of Ordinary Shares which is
necessary to implement the Buy-back, will be sent to Shareholders
shortly.
DEFINITIONS
The following definitions apply throughout this announcement
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
"Bylaws" the bylaws of the Company, as amended from
time to time
"CDIs" CREST depositary interests issued by CREST
Depository Limited in respect of Ordinary Shares
"Circular" the circular to be sent to Shareholders with
details of the Transaction, the proposed Delisting
and the Buy-back, and convening a General Meeting
to seek Shareholder approval for the Delisting
and authorities to implement the Buy-back
"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
"CREST" the relevant system (as defined in the CREST
Regulations) in respect of which Euroclear
is the operator (as defined in those regulations)
"Delisting" the cancellation of admission of the Ordinary
Shares to trading on AIM
"Directors" or "Board" the directors of the Company, or any duly authorised
committee thereof
"Existing Ordinary the 24,710,922 Ordinary Shares in issue at
Shares" the date of this announcement, 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.
"General Meeting" the general meeting of the Company to be convened
in due course
"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
"London Stock Exchange" London Stock Exchange plc
"NewCo" a newly-incorporated private vehicle into which
Fiorenzo Tagliabue, Retro Grand, Hawk and certain
SEC Newgate shareholders will contribute their
SEC Newgate's shares.
"Notice of General the notice convening the General Meeting to
Meeting" be set out in the Circular
"Ordinary Shares" ordinary shares of the Company
"Register" the register of members of the Company
"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 resolutions 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
"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
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(END) Dow Jones Newswires
January 19, 2022 06:28 ET (11:28 GMT)
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