Notice of EGM and Cancellation of Admission to AIM
26 September 2009 - 1:43AM
UK Regulatory
TIDMTGT
RNS Number : 7127Z
Target Resources Plc
25 September 2009
25 September 2009
Target Resources Plc
("Target", or the "Company")
Notice of Extraordinary General Meeting and Cancellation of Admission to AIM
Target Resources plc (AIM: TGT) the alluvial diamond and gold mining company
operating in Sierra Leone, announces that a circular (detailed below) will today
be despatched to Shareholders convening an Extraordinary General Meeting to seek
Shareholder approval to cancel the admission of the Company's ordinary shares to
trading on AIM.
The Board has concluded that the costs and regulatory requirements associated
with retaining Target's AIM listing are a significant burden on the Company's
financial resources and outweigh the benefits gained from Admission.
The Extraordinary General Meeting will be held at Arbuthnot House, 20 Ropemaker
Street, London EC2Y 9AR commencing at 10.00 a.m. on Wednesday, 21 October 2009.
If approved it is expected that Cancellation will take effect from 7.00 a.m. on
29 October 2009.
Enquiries:
Target Resources plc 020 7258 2300
Dr Nissim Levy, Managing Director www.target-resources.co.uk
Nominated Adviser and Broker
Arbuthnot Securities 020 7012 2000
John Prior
Ed Burbidge
Introduction
The Company announces that it is seeking Shareholder approval to cancel the
admission of the Ordinary Shares to trading on AIM.
Recommendations
The Directors consider that the Resolution is in the best interests of the
Company and the Shareholders as a whole and is most likely to promote the
success of the Company for the benefit of the Shareholders as a whole.
Accordingly, your Directors unanimously recommend that Shareholders vote in
favour of the Resolution to be proposed at the EGM, as they have irrevocably
undertaken to do. Certain other Shareholders have conditionally undertaken to do
so in respect of their beneficial shareholdings, which in aggregate with the
Directors' irrevocable undertakings, amount to 64,938,951 Ordinary Shares,
representing approximately 52.59per cent. of the Ordinary Shares.
Background and Reasons for Cancellation of Admission
Owing to the steep fall in prices on the international diamond market in early
2009, and despite the Company's achieving its targeted throughput rates, Target
decided to suspend its diamond mining activities in March 2009 in order to
prevent further losses. Having looked at securing an alternative source of
income from a gold production operation on the Teye River following the
suspension of its diamond mining activities, the Company suspended further
investment in this operation in April 2009 so that the Company could operate on
a greatly reduced operations budget.
The Company stated in an operational update to the market in April 2009 that it
had sufficient current cash resources to cover its anticipated costs and
liabilities until the end of June 2009, at which time certain periodic payments
would fall due, the most significant being an interest payment to its principal
lender. In the absence of any significant increase in income, the Company would
therefore need to secure further funding.
On 8 July 2009, the Company announced a directors' loan facility of up to
$300,000, which along with the deferral of a number of periodic payments to its
principal lender, would ensure the Company has sufficient cash resources to
cover the Directors' estimate of the anticipated costs and liabilities of the
business to the end of October 2009.
Given the difficult financial position of the Company, the Board has reached the
conclusion that the costs and regulatory requirements associated with
maintaining admission to AIM are a significant burden on the Company's financial
resources and outweigh the benefits gained from Admission. The costs include
fees paid to the Company's nominated adviser, annual fees paid to London Stock
Exchange, costs relating to public announcements and certain fees and expenses
of professional advisers engaged to provide services relating to the Company's
Ordinary Shares being traded on AIM.
In addition to the overheads incurred by the Company as a result of its Ordinary
Shares being traded on AIM:
* the Company has seen limited trading volume in the Company's shares since its
Admission; and
* the Directors consider that given the Company's size and share price and the
current market conditions it would be difficult to raise additional funds on
AIM.
Furthermore, those directors of the Company who have granted it the loan
facility, and also Target's principal lender, whose collective support has
ensured that the Company can continue to meet its costs and liabilities, have
indicated that they will not continue to support the company should its Ordinary
Shares continue to trade on AIM. Shareholders should therefore be aware that
should the Cancellation of Admission not occur, the Company is unlikely to be
able to continue as a going concern and therefore the Company is likely to be
put into administration. In such circumstances it is highly unlikely that
Shareholders will receive any payments in respect of their holdings in the
Company.
Following the Cancellation of Admission (if approved by the Shareholders)
certain of the Directors and the Company's principal lender have indicated that
they will continue to support the Company, which the Directors believe will give
them an opportunity to secure a viable future for the Company.
After careful consideration, your Board have therefore concluded that it is in
the best interests of the Company and Shareholders for the Company's admission
to trading on AIM to be cancelled.
Effect of Cancellation of Admission
Shareholders should note that the Cancellation of Admission is likely to reduce
significantly the liquidity and marketability of the Ordinary Shares. Once the
Cancellation of Admission has taken effect, Shareholders will no longer be able
to effect transactions in the Ordinary Shares on market at the market price.
Following cancellation, therefore, Shareholders will have to effect any further
transactions in the Ordinary Shares off market at a price to be agreed between
the relevant parties. However, while there can be no guarantee of any
Shareholders being able to purchase or sell any Ordinary Shares, any Shareholder
seeking to do so should contact the Company Secretary in writing at 16th Floor,
Marble Arch Tower, 55 Bryanston Street, London W1H 7AA. Dealings in the Ordinary
Shares following the Cancellation of Admission will continue to be eligible for
settlement through CREST in uncertificated form.
The Company will continue to post information about the Company on its website
(www.target-resources.co.uk) and will continue to send its Annual Report and
Accounts to shareholders and to hold general meetings in accordance with the
applicable statutory requirements and the Company's articles. Shareholders
should note that the Company will remain subject to the provisions of the City
Code on Takeovers and Mergers.
Options
As at 24 September 2009, the latest practicable date prior to publication of
this document, the Company had granted options over 10,170,434 Ordinary Shares
which remain outstanding and have not been exercised. Apart from 2,778 options
with an exercise price of 1p, all of the options are "under water", that is to
say their exercise prices are above the current market value of the Ordinary
Shares.
The proposed Cancellation of Admission will not affect the status of these
options, which can be exercised in accordance with their terms following the
proposed Cancellation of Admission.
EGM - Resolution
Under the AIM Rules for Companies, it is a requirement that any Cancellation of
Admission must be approved by not less than 75 per cent. of votes cast by
Shareholders in general meeting. Accordingly the notice of EGM set out at the
end of the shareholder circular contains a special resolution:
(i) to approve the application to London Stock Exchange for cancellation
of admission of the Ordinary Shares to trading on AIM; and
(ii) to approve such cancellation.
The EGM will be held at Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR
commencing at 10.00 a.m. on 21 October 2009. If approved it is expected that the
Cancellation of Admission will take effect from 7.00 a.m. on 29 October 2009.
Irrevocable Undertakings
The proposed Cancellation of Admission is conditional, inter alia, upon the
Shareholders passing the Resolution at the EGM. The Directors have irrevocably
undertaken to vote in favour of the Resolution in respect of 21,844,801 Ordinary
Shares, representing, in aggregate, approximately 17.69 per cent. of the
Company's issued share capital, and certain other Shareholders have
conditionally undertaken to vote in favour of the Resolution in respect of
43,094,150 Ordinary Shares, representing, in aggregate, approximately 34.90 per
cent. of the Company's issued share capital. Therefore, the Company has received
in aggregate undertakings to vote in favour of the Resolution in respect of
64,938,951 Ordinary Shares, representing 52.59 per cent. of the Ordinary Shares.
DEFINITIONS
The following definitions apply throughout this document unless the context
requires otherwise:
+--------------------------------+--------------------------------------------------+
| "Admission" | admission of the Ordinary Shares to trading on |
| | AIM, effective from 12 July 2006 |
+--------------------------------+--------------------------------------------------+
| "AIM" | the market of that name operated by London Stock |
| | Exchange |
+--------------------------------+--------------------------------------------------+
| "AIM Rules for Companies" | the rules for companies applying for admission |
| | to and whose securities are traded on AIM and |
| | published by London Stock Exchange as amended |
| | from time to time |
+--------------------------------+--------------------------------------------------+
| "Cancellation of Admission" | the cancellation of Admission, subject to the |
| | passing of a resolution at the EGM |
+--------------------------------+--------------------------------------------------+
| "Company" or "Target" | Target Resources Plc |
+--------------------------------+--------------------------------------------------+
| "CREST" | the relevant system (as defined in the |
| | Uncertificated Securities Regulations 2001) |
| | operated by Euroclear UK & Ireland Limited which |
| | facilitates the transfer of title to shares in |
| | uncertificated form |
+--------------------------------+--------------------------------------------------+
| "Directors" or "the Board" | the directors of the Company whose names are set |
| | out on page 5 of this document |
+--------------------------------+--------------------------------------------------+
| "EGM" | the extraordinary general meeting of the Company |
| | convened for 10.00 a.m. on 21 October 2009, |
| | notice of which is set out at the end of this |
| | document |
+--------------------------------+--------------------------------------------------+
| "London Stock Exchange" | London Stock Exchange plc |
+--------------------------------+--------------------------------------------------+
| "Ordinary Shares" | the ordinary shares of 1 pence in the capital of |
| | the Company |
+--------------------------------+--------------------------------------------------+
| "Resolution" | the resolution to be proposed at the EGM as set |
| | out in the notice at the end of this document |
+--------------------------------+--------------------------------------------------+
| "Shareholders" | holders of Ordinary Shares |
+--------------------------------+--------------------------------------------------+
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
NOEBUGDCIXDGGCU
Target Resources (LSE:TGT)
Historical Stock Chart
From May 2024 to Jun 2024
Target Resources (LSE:TGT)
Historical Stock Chart
From Jun 2023 to Jun 2024
