TIDMSJH
RNS Number : 1234C
St James House PLC
06 February 2020
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
6 February 2020
ST. JAMES HOUSE PLC
("SJH", the "Group" or the "Company")
Notice of General Meeting and Capitalisation of Liabilities
Further to the announcement of 31 January 2020, the Board of
Directors of the Company (the "Board") is pleased to announce it
has today published a circular to shareholders with accompanying
notice of general meeting. The material elements of the Circular
and the definitions used in both the Circular and in this
announcement can be found below.
The GM will be held at 12.00 midday on 28 February 2020 at the
office of Allenby Capital Limited, 5 St. Helens' Place, London EC3A
6AB. A copy of the Circular has been posted to all Shareholders and
can be viewed on the Company's website at
https://sjhplc.com/regulatory-news/aim-26-rule/.
For further information, contact:
St. James House PLC
Roger Matthews
Website www.sjhplc.com 020 3655 5000
Allenby Capital Limited
(Nomad, Financial Adviser & Broker)
John Depasquale / Nick Harriss 020 3328 5656
Letter from the Chairman
1. Introduction
The General Meeting is being convened for the purpose of asking
Shareholders to consider and, if thought fit, to pass the
Resolutions. The Notice can be found in Part II of this
document.
Full details of the Resolutions are provided within this
document.
2. Background to the Proposals
Following the Company's change of name, approved at the general
meeting held on 4 March 2019, and the Board changes that took place
during 2019, the Company has been working on a substantial
turnaround of the business.
The announcement of 31 January 2020 outlined the binding
agreement with AIS for their subscription for 1,666,667 Ordinary
Shares at the Transaction Price to raise a total of GBP500,000. AIS
have expressed their interest in the further development of the
Group's existing payment services and lottery management
businesses, as well as complementary acquisitions. AIS have agreed
in principle to provide additional debt finance in the future on
commercial terms for the right opportunities.
The Subscription will significantly strengthen the Group's
working capital position, which as previously disclosed, has been
significantly constrained. However, to improve the working capital
position further, liabilities totalling GBP237,500 are to be
capitalised through the issue of the Capitalisation Shares and Fee
Shares, both at the Transaction Price, and both with the agreement
of AIS.
While the share issuance authorities granted at the AGM are
sufficient for the Capitalisation Shares and a reduced Subscription
amount of GBP445,620 (in order to keep AIS' holding at below 30 per
cent of the Company's voting rights), the Proposals seek to grant
additional share issuance authorities in order to facilitate the
full amount of the Subscription, the issue of the Fee Shares and to
provide flexibility to make further issues of Ordinary Shares where
the Board believe it to be in the best interest of the Company.
Resolutions 2 and 3 seek shareholder approval to increase the share
issuance authorities, detailed further in section 3 below. These
increased share issue authorities will also cover the options over
504,164 Ordinary Shares, exercisable at the Transaction Price at
any date up to 31 January 2025 that will be granted to AIS subject
to the completion of the Subscription.
On 23 May 2019, the Company announced the acquisition of
Another, which has subsequently become the core element of the
Group's payment services business, and as outlined in the Company's
recent trading statement (30 January 2020), is progressing in a
promising manner. However, the other element of the Group's payment
services business, MAO, which was established in early 2018 has
failed to develop as the Board at the time had hoped, and in
particular it became apparent that much of the business was of the
"non-conforming" type of customer that was prevalent in the Emex
business that had been sold to MDC in July 2018. The Group has
recently established a new subsidiary, St. Daniel House Ltd, which
is now approved as an EMD Agent by the Financial Conduct Authority.
The Board has therefore decided to transfer any conforming business
to Another and St. Daniel House Ltd and sell MAO to MDC for
GBP1.00. The consideration for the purchase of Emex by MDC (see
announcement dated 12 July 2018) was a GBP2m loan note secured on
the assets of MDC and to be repaid by a sinking fund from the
cashflow generated by those assets; MAO will become part of this
structure. The Board believes the majority of MAO's business has
become a distraction of management time and better fits with MDC's
business. While the consideration is nominal, the sale of MAO will
have a modest positive impact on both the trading performance and
balance sheet of the Group and should accelerate progress on
repayment under the sinking fund. Resolution 4 seeks Shareholder
approval for the Disposal.
Resolution 1 seeks shareholder approval to bring the Articles in
line with the latest model articles of association of a UK public
limited company, with the addition of the Company's existing
deferred shares.
3. Share Capital, Issue of Ordinary Shares and Related Party Transactions
At the AGM, Shareholders approved the following resolutions:
Ordinary Resolution
THAT, in accordance with section 551 of the Act, the Directors
be generally and unconditionally authorised to exercise all the
powers of the Company to allot equity securities (as defined by
section 560 of the Act), up to an aggregate nominal amount of
GBP20,000 provided that this authority shall, unless renewed,
varied or revoked by the Company, expire on the fifth anniversary
of its passing save that the Company may, before such expiry, make
offers or agreements which would all might require equity
securities to be allotted and the Directors may allot equity
securities in pursuance of such offer or agreement notwithstanding
that the authority conferred by this Resolution has expired. This
Resolution revokes and replaces all unexercised authorities
previously granted to the Directors to allot equity securities but
without prejudice to any allotment of shares or grant of rights
already made, offered or agreed to be made pursuant to such
authorities.
Special Resolution
THAT, subject to the passing of Resolution 6 (above), the
Directors be generally and unconditionally authorised and granted
the power to allot equity securities (as defined by section 560 of
the Act) for cash, either pursuant to the authority conferred by
Resolution 6 or by way of sale of treasury shares, as if section
561(1) of the Act did not apply to any such allotment, provided
that this power shall be limited to the allotment of equity
securities up to an aggregate nominal value of GBP20,000.The power
granted by this resolution shall expire on the first anniversary of
its passing or, if earlier 31 December 2020, unless renewed varied
or revoked by the Company prior to or on such date, save that the
Company may, before such expiry, make offers or agreements which
would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities in pursuance
of any such offer or agreement notwithstanding that the power
conferred by this Resolution has expired. This Resolution revokes
and replaces all unexercised powers and authorities previously
granted to the directors to allot equity securities as if section
561(1) of the Act 2006 did not apply, but without prejudice to any
allotment of equity securities already made or agreed to be made
pursuant to such authorities
The Board proposes to replace the above resolutions passed at
the AGM with similar authorities, which adjust the aggregate
nominal amount to GBP40,000 for both Resolutions to facilitate the
share issues outlined in section 2 above. This is laid out in
Resolution 2 and Resolution 3 in the Notice.
The Board yesterday resolved to issue the Capitalisation Shares,
in settlement of amounts owed totalling GBP110,000, however the
Board does not propose to issue the Capitalisation Shares until
after the GM, however the issue of the Capitalisation Shares is not
dependent on the passing of Resolutions 2 and 3 at the GM.
The Board yesterday also resolved, subject to approval at the GM
of Resolutions 2 and 3, to issue the Fee Shares, in settlement of
amounts owed totalling GBP127,500. The Fee Shares consist of the
following elements:
1. 16,667 Ordinary Shares at a price of 30 pence per share in
settlement of director fees totalling GBP5,000 for Arno Rudolf, a
director of the Company, in relation to his contracted services as
a non-executive director of the Company.
2. 41,667 Ordinary Shares at a price of 30 pence per share in
settlement of director fees totalling GBP12,500 for Roger Matthews,
a director of the Company, in relation to his contracted services
as a non-executive Chairman of the Company.
3. 13,333 Ordinary Shares at a price of 30 pence per share in
settlement of director fees totalling GBP4,000 for Jacques Leuba, a
director of the Company, in relation to his contracted services as
a non-executive director of the Company.
4. 16,667 Ordinary Shares at a price of 30 pence per share in
settlement of director fees totalling GBP5,000 for Graeme Paton, a
director of the Company, in relation to his contracted services as
a chief executive director of the Company.
5. 210,000 Ordinary Shares at a price of 30 pence per share in
settlement of invoices for consultancy fees totalling GBP63,000 in
respect of services provided by John Botros, a subsidiary director
of the Company, in relation to his contracted services, to be
issued to First Hartford Trust, a family trust where Mr Botros'
wife is a beneficiary.
6. 76,666 Ordinary Shares at a price of 30 pence per share in
settlement of invoices for consultancy fees totalling GBP23,000
from PEP Contracting Limited, a company controlled by Dan Pym, a
subsidiary director of the Company, in relation to his contracted
services.
7. 50,000 Ordinary Shares at a price of 30 pence per share in
settlement of invoices for director and consultancy fees totalling
GBP15,000 from RT Associates, a partnership controlled by Lord Tim
Razzall, a former director of the Company, in relation to his
contracted services as Chairman of the Company at the time.
(Collectively, the "Fee Shares")
The Board believes that the issue of the Fee Shares will be
significantly positive for the Company's working capital position.
The Fee Shares will not be issued unless both Resolutions 2 and 3
are approved by Shareholders at the GM.
The issue of the Fee Shares are related party transactions under
the AIM Rules for Companies. Kathryn Cox, the Senior Independent
Non-Executive Director, considers, having consulted with Allenby
Capital, the Company's nominated adviser, that the terms of the
transactions are fair and reasonable insofar as its Shareholders
are concerned. It is anticipated that following the GM, an
application will be made for the Capitalisation Shares, the Fee
Shares and the Subscription Shares to be admitted to trading on AIM
with effect from 6 March 2020.
4. The Disposal
The Board proposes to dispose of MAO to MDC for the reasons
outlined above. The disposal of MAO does not constitute a
"fundamental change of business" under Rule 15 of the AIM Rules for
Companies. However, as MAO will in future form part on the
contractual relationship between MDC and the Company that were
established as part of the disposal of Emex (see announcement dated
12 July 2018), which did require Shareholder approval, the Board
believe it is appropriate for Shareholders to also approve the
Disposal. Resolution 4 is to approve the Disposal.
MAO made a loss of GBP148,365 in the year to 31 January 2019.
Since the acquisition of Another, new business has been
increasingly directed to Another, with no revenues generated by MAO
in approximately six months, and as stated above, any remaining
clients where the Group wishes to retain a relationship, will be
transferred to other Group companies. MAO had a negative net asset
position of GBP148,365 as at 31 January 2019 (the first year of
trading, and hence corresponds with the loss). As MAO continued to
make losses during the financial year to 31 January 2020, the
Disposal will have a modest positive impact on both the trading
performance and balance sheet of the Group.
MDC is owned by John Botros, a director of certain Group
subsidiaries and, with persons closely associated (as defined under
the Market Abuse Regulation), a substantial shareholder (as defined
by the AIM Rules for Companies) of the Company. The Transaction
therefore constitutes a related party transaction under the AIM
Rules for Companies. The Board consider, having consulted with
Allenby Capital Limited, the Company's nominated adviser, that the
terms of the transaction are fair and reasonable insofar as its
shareholders are concerned.
5. Change of Articles
The Company was incorporated in 2002, subsequent which there has
been significant changes to UK Company Law. The Board has concluded
that the Company's Articles are rather out of date and, having had
many piecemeal changes over time, could be improved. They therefore
propose to adopt new Articles in accordance with the model articles
of association provided by Companies House for a UK public limited
company, adjusted for the existing deferred shares of the Company.
A copy of the proposed new Articles can be viewed on the Company's
website alongside this document.
6. The Board, Management and Major Shareholdings
Subject to the passing of the Resolutions at the GM, the
completion of the Subscription and the issue of the Capitalisation
Shares and the Fee Shares, the Shareholdings of the Board, other
Persons Discharging Managerial Responsibilities (as defined in the
Market Abuse Regulation) and Significant Shareholders (as defined
in the AIM Rules for Companies) will change as follows (the
"Changes"), to the best of the Company's knowledge:
Shareholder Number of Number of Percentage Percentage
Ordinary Shares Ordinary of Ordinary of Ordinary
Currently Shares Post Shares Currently Shares Held
Held the Changes Held Post the
Changes
AIS 0 1,666,667 0% 29.90%
----------------- ------------- ------------------ -------------
Empire Global Management
Limited 500,000 500,000 16.05% 8.97%
----------------- ------------- ------------------ -------------
J M Malone (1) 248,972 458,972 7.99% 8.23%
----------------- ------------- ------------------ -------------
Phil Jackson (2) 172,317 415,650 5.53% 7.46%
----------------- ------------- ------------------ -------------
John Botros (3) 300,000 300,000 9.63% 5.38%
----------------- ------------- ------------------ -------------
James Rose (4) 298,921 298,921 9.59% 5.36%
----------------- ------------- ------------------ -------------
Graeme Paton * 25,000 41,667 0.80% 0.75%
----------------- ------------- ------------------ -------------
Roger Matthews * 0 41,667 0% 0.75%
----------------- ------------- ------------------ -------------
Arno Rudolf * 0 16,667 0% 0.30%
----------------- ------------- ------------------ -------------
Jacques Leuba * 0 13,333 0% 0.24%
----------------- ------------- ------------------ -------------
1. J M Malone is Mr Botros' wife. Includes 160,000 Ordinary
Shares held by Bluedale Corporate Limited, a company controlled by
Ms Malone and 42,736 Ordinary Shares held in trust by Ms Malone for
the adult children of her and Mr Botros. Post Change, it also
includes 210,000 Ordinary Shares held by First Hartford Trust, a
trust of which Ms Malone and the aforementioned adult children are
all beneficiaries.
2. Includes Ordinary Shares held by Moorhen Limited, a company
controlled by Mr Jackson and 33,333 Ordinary Shares, Post Changes,
to be held by Tilly Beazley, Mr Jackson's wife.
3. Includes 100,000 Ordinary Shares held by MDC Nominees
Limited, a company controlled by Mr Botros. Mr Botros is a
subsidiary director of the Group.
4. Includes Ordinary Shares held by Management Express Limited,
a company controlled by Mr Rose. Mr Rose is a subsidiary director
of the Group.
* Directors of the Company
7. Action to be taken
The Form of Proxy for use in connection with the General Meeting
is enclosed with this document. Whether or not you intend to be
present at the General Meeting, you are requested to complete, sign
and return the Form of Proxy and AGM Form of Proxy in accordance
with the instructions printed thereon to the Company's Registrars,
as soon as possible and, in any event, not later than 12.00 midday
on 26 February 2020, being 48 hours before the time of the General
Meeting. The completion and return of a Form of Proxy will not
preclude you from attending the General Meeting and voting in
person should you subsequently wish to do so.
8. Recommendation
The Directors consider that the Proposals are in the best
interests of the Company and its Shareholders as a whole.
Accordingly, the Directors unanimously recommend that Shareholders
vote in favour of the Resolutions to be proposed at the GM.
The Board, Andrew Flitcroft (company secretary), John Botros
(subsidiary director), James Rose (subsidiary director), Phil
Jackson (senior manager) and certain other shareholders have given
irrevocable undertakings that they and persons closely associated
(as defined in the Market Abuse Regulation) with them will vote in
favour of the Resolutions. These irrevocable undertakings represent
a total 1,243,849 Ordinary Shares, equivalent to 39.92 per cent. of
the issued Ordinary Shares.
DEFINITIONS
The following definitions apply throughout this document unless
the context otherwise requires:
"Act" the Companies Act 2006;
"AGM" the annual general meeting of the Company
for the year to 31 January 2019 held on
31 July 2019;
"AIM" the AIM Market, a market operated by the
London Stock Exchange;
"AIM Rules" together, the rules published by the London
Stock Exchange governing the admission
to, and the operation of, AIM, consisting
of the AIM Rules for Companies (including
the guidance notes thereto) and the AIM
Rules for Nominated Advisers, published
by the London Stock Exchange from time-to-time;
"AIS" Auxilum Investere SJ Ltd, a company incorporated
in England & Wales with registration number
12401199, controlled by Michael and Linda
Peters
"Allenby Capital" Allenby Capital Limited, the Company's
financial adviser, nominated adviser and
broker, authorised by the Financial Conduct
Authority with registration number 489795;
"Another" the Group's payment services business and
the trading name of Market Access Limited,
(previously Another Ops Limited), a wholly
owned subsidiary of the Company;
"Articles" the articles of association of the Company
for the time being;
"Board" the collective body of the Directors of
the Company from time to time;
"Capitalisation Shares" the 366,667 Ordinary Shares being issued
in settlement of certain liabilities, as
detailed in Part I of this document;
"Circular" or "this this document, including the Notice in
document" Part II and the Form of Proxy;
"Company" or "SJH" St. James House PLC, incorporated and registered
in England & Wales under the Companies
Act 1985, registered number 04458947 and
having its registered office at Gainsborough
House, 59-60 Thames Street, Windsor, Berkshire,
SL4 1TX;
"CREST" the relevant system for paperless settlement
of share transfers and the holding of shares
in uncertificated form, which is administered
by Euroclear UK & Ireland Limited;
"Directors" the directors of the Company as at the
date of this document whose names are set
out on in Part II of this document;
"Disposal" the disposal of MAO, as detailed in Part
I of this document;
"Emex" the subsidiaries sold to MDC Nominees Limited,
as detailed in the general meeting circular
dated 12 July 2018;
"Fee Shares" the 425,000 Ordinary Shares being issued
to certain members of the Board, a former
director and subsidiary directors, to settle
outstanding liabilities, as detailed in
Part I of this document;
"Form of Proxy" the form of proxy for use by the Shareholders
in connection with the General Meeting
which accompanies this document;
"General Meeting" the General Meeting of the Ordinary Shareholders
or "GM" of the Company to be held at 12.00 midday
on 28 February 2020 at the offices of Allenby
Capital, 5 St. Helen's Place, London, EC3A
6AB and including any adjournment or postponement
thereof;
"Group" the Company together with its subsidiaries,
both directly and indirectly owned;
"London Stock Exchange" London Stock Exchange plc;
"MAO" Market Access Ops Limited, the Company's
wholly owned subsidiary;
"MDC" MDC Nominees Limited, a company incorporated
in England & Wales with registration number
09606912;
"Memorandum" the memorandum of association of the Company
for the time being;
"Notice" the notice of the General Meeting, which
is set out at Part II of this document;
"Ordinary Shares" ordinary shares of GBP0.01 each in the
capital of the Company;
"PPS" Prize Provision Services Limited, the Company's
wholly owned subsidiary, approved as an
External Lottery Manager by the Gambling
Commission;
"Proposals" together, the proposals for: 1) amend the
Articles; 2) to grant the Directors authority
to allot shares; 3) dis-apply pre-emption
rights; and 4) the Disposal;
"Registrars" SLC Registrars, Elder House, St Georges
Business Park, Brooklands Road, Weybridge,
Surrey, KT13 0TS, the Company's registrar;
"Resolutions" the resolutions to approve the Proposals,
which are set out in the Notice in Part
II of this document;
"Shareholder(s)" holder(s) of the Ordinary Shares;
"Subscription" the binding agreement for the subscription
for 1,666,667 Ordinary Shares by AIS at
the Transaction Price;
"Subscription Shares" the 1,666,667 Ordinary Shares to be issued
to AIS under the Subscription, subject
to completion of the Subscription;
"Transaction Price" 30 pence per Ordinary Share;
"United Kingdom" or the United Kingdom of Great Britain and
"UK" Northern Ireland; and
"Uncertificated" or recorded on the register of Ordinary Shares
"in Uncertificated as being held in uncertificated form in
Form" CREST, entitlement to which by virtue of
the CREST Regulations, may be transferred
by means of CREST.
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END
MSCFLFEDFFIEIII
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