Notice of Meeting and Adoptio

RNS Number : 0629W

Zest Group PLC

12 November 2010

 

12 November 2010

Zest Group plc

('Zest' or 'Company')

Posting of Shareholder Circular and Notice of General Meeting

Proposed Adoption of an Investing Policy

Proposed Change of Company Name to Rare Earth Minerals Plc

The Company announces that it has, today, posted a circular to its shareholders ("Circular") setting out details of a proposed change in its strategy and an adoption of an investing policy in accordance with the AIM Rules for Companies, a proposed name change and a notice of a general meeting. Copies of the Circular are available from the Company's website, www.zestmusic.com. The General Meeting is to be held at Suite 3B, Princes House, 38 Jermyn Street, London, SW1Y 6DN on 29 November 2010 at 11am.

Background

The Company was formed to build a music business by acquiring new artists together with their music publishing rights and acquiring recording and publishing companies. The Company has made progress in developing its business objectives as set out in its Admission Document. However, in the six months to 31 March 2010 the Company reported a loss before taxation of £194,000 and further reported that it was reliant on external funding. The Directors have therefore come to the conclusion that whilst Zest's existing business may be able to deliver some value (and will be retained) it does not form the basis of a sustainable business for a publicly traded company. Accordingly, the Directors believe that it is in the Company's interests to adopt a new strategy for the development of the Company as an investing company and to take advantage of opportunities outside of the music industry.

Proposed Adoption of an Investing Policy

The Company's proposed investing policy, which is subject to shareholder approval, is to acquire a diverse portfolio of direct and indirect interests in exploration and producing rare earth minerals and/or metals projects and assets . In light of the nature of the assets and projects which will be the focus of the Investing Policy the Company will consider investment opportunities anywhere in the world.

The Directors have considerable experience investing, both in structuring and executing deals and in raising funds. The Directors will use this experience to identify and investigate investment opportunities, and to negotiate acquisitions. Wherever necessary the Company will engage suitably qualified technical personnel to carry out specialist due diligence prior to making an acquisition or an investment. For the acquisitions which they expect the Company to make, the Directors may adopt earn-out structures, with specific performance targets being set for the sellers of the businesses acquired, and with suitable metrics applied.

The Company may invest by way of outright acquisition or by the acquisition of assets, including the intellectual property, of a relevant business, partnerships or joint venture arrangements. Such investments may result in the Company acquiring the whole or part of a company or project (which in the case of an investment in a company may be private or listed on a stock exchange, and which may be pre-revenue), and such investments may constitute a minority stake in the company or project in question. The Company's investments may take the form of equity, joint venture, debt, convertible instruments, licence rights, or other financial instruments as the Directors deem appropriate.

The Company will be both an active and a passive investor depending on the nature of the individual investments in its portfolio. The Company intends to be a long-term investor and the Directors will place no minimum or maximum limit on the length of time that any investment may be held.

There is no limit on the number of projects into which the Company may invest, nor the proportion of the Company's gross assets that any investment may represent at any time and the Company will consider possible opportunities anywhere in the world.

The Directors may offer new ordinary shares in the Company by way of consideration as well as cash, thereby helping to preserve the Company's cash for working capital and as a reserve against unforeseen contingencies including by way of example, and without limit, delays in collecting accounts receivable, unexpected changes in the economic environment and unforeseen operational problems. The Company may in appropriate circumstances, issue debt securities or otherwise borrow money to complete an investment. There are no borrowing limits in the Articles of Association of the Company. The Directors do not intend to acquire any cross-holdings in other corporate entities that have an interest in the Ordinary Shares.

There are no restrictions in the type of investment that the Company might make nor on the type of opportunity that may be considered.

As an investing company, Zest will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its investing policy on or before the date falling twelve months from the adoption of the new investing policy, failing which, the Company's ordinary shares would then be suspended from trading on AIM. In the event the Company's ordinary shares are so suspended and the Company fails to obtain shareholders' consent to renew such policy, the admission to trading on AIM of the Company's ordinary shares would be cancelled six months from the date of suspension and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.

Proposed Name Change

Conditional upon the adoption of the proposed investing policy, it is proposed to change the Company's name to Rare Earth Minerals Plc. 

For further enquiries:

Zest Group Plc

David Lenigas

[phone]

W.H. Ireland

James Joyce

[phone]

 

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