Notice of General Meeting and Waiver of Rule 9

RNS Number : 5357I

Cambria Africa PLC

26 March 2015

 

26 March 2015

Cambria Africa plc
("Cambria" or the "Company")

Proposed Waiver of Rule 9 of the Takeover Code

Notice of General Meeting

Further to the announcement by the Company on 18 February 2015, Cambria has posted to shareholders a notice of general meeting ("General Meeting") of the Company to be held at 9am on 13 April 2015 at 1 Berkeley Street, Mayfair, London, along with a circular (the "Circular"), in connection with the intention to raise £909,500 by way of a conditional subscription ("Subscription") to new ordinary shares in the Company ("Ordinary Shares") and a proposed waiver of Rule 9 of the Takeover Code.  Extracts from the letter from the Chairman contained in the Circular are set out below, which includes the background to and reasons for the Subscription. A copy of the Circular will be available for download from the Company's website, www.cambriaafrica.com.

In order to facilitate the Subscription, shareholder approval is required of a number of resolutions to be proposed at the General Meeting. At the General Meeting, the following resolutions (the "Resolutions") will be proposed:

Resolution 1 - grant a waiver of Rule 9 of the Takeover Code

Resolution 2 - grant of authority to allot shares for cash, disapplying statutory pre-emption rights

In addition, it is proposed that on completion of the Subscription, Messrs. Paul Turner, Itai Mazaiwana and Fred Jones will resign from the Board and Ventures Africa Limited ("VAL") shall be entitled to nominate 3 additional Directors, subject to due diligence compliance for directors of an AIM listed company. VAL has nominated Mr. Santosh K. Gujadhur as its first nominated Director. On Completion, the Board will consist of Mr. Perkins (non-executive Chairman), Mr. Wisman (CEO) and Mr. Gujadhur (non-executive Director).

Contacts
Cambria Africa Plc	www.cambriaafrica.com
Ian Perkins	[phone]
Edzo Wisman	[phone]
WH Ireland Limited	www.wh-ireland.co.uk
James Joyce / Mark Leonard	[phone]
Peterhouse Corporate Finance Limited	www.pcorpfin.com
Charles Goodfellow / Duncan Vasey	[phone]
FTI Consulting	www.fticonsulting.com
Edward Westropp / Adam Cubbage	[phone]

EXPECTED TIMETABLE OF PRINCIPALEVENTS AND KEY STATISTICS

Date of this Announcement	26 March 2015
Time and date of the Extraordinary General Meeting	9 a.m. 13 April 2015
Issue of Subscription Shares	13 April 2015
Ordinary Shares in issue at the date of this Announcement	104,655,162
Subscription shares	107,000,000
Number of New Ordinary Shares in issue following the Subscription	211,655,162
Percentage of the enlarged issued share capital of the Company represented by the Subscription Shares	50.55%

Notes:

All references to time in this announcement are to London time. Each of the times and dates in this announcement may be subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified to shareholders by announcement through a regulatory information service.

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

"AIM"                                                                   the AIM market operated by London Stock Exchange

"AIM Rules"                                                       the AIM Rules for Companies published by London Stock Exchange

"Announcement"                                            this announcement

"Articles"                                                            the Articles of Association of the Company

"Allotment"                                                       the allotment of the Subscription Shares to VAL

"Board"                                                               the board of directors of the Company, comprising Ian Perkins, Paul Turner, Edzo Wisman, Fred Jones and Itai Mazaiwana

"Circular"                                                            the circular dated 26 March 2015 for the EGM, sent to Shareholders

"City Code"                                                        the City Code on Takeovers and Mergers

"Company" or "Cambria"                             Cambria Africa PLC, a company registered in the Isle of Man with company number 001773V

"Completion"                                                    completion of the terms of the Share Subscription Agreement

"Directors" or "Board"                                   the directors of the Company

"Form of Proxy"                                               the form of proxy enclosed with the Circular for use by Shareholders in connection with the Extraordinary General Meeting

"Encyclia Logistics"                                         Encyclia Logistics Limited, a company registered in Mauritius with company number 123381

"Extraordinary General Meeting"            the extraordinary general meeting of the convened by

or "EGM"                                                             the relevant notice set out in the end of this announcement

"Independent Shareholders"                    Shareholders, independent of the transactions referred to in this Announcement

"Issued Share Capital"                                  104,655,162 Ordinary Shares in issue at the date of this Announcement

"London Stock Exchange"                            London Stock Exchange PLC

"Long Stop Date"                                             15 June 2015                                 

"Lonzim Holdings"                                          Lonzim Holdings Limited, a company registered in the Isle of Man with company number 002080V

"Lonzim Hotels"                                              Lonzim Hotels Limited, a company registered in the Isle of Man with company number 003776V

"NOMAD"                                                           the Company's nominated adviser, being WH Ireland

"Notice of EGM"                                              the notice of Extraordinary General Meeting which is set out on page 18 of the Circular

"Ordinary Shares" or "Shares"                   ordinary shares of 0.01 pence (£0.0001) each in the share capital of the Company

"Panel"                                                                the Panel on Takeovers and Mergers

"Peterhouse"                                                    Peterhouse Corporate Finance Limited

"Record Date"                                                   close of business on 25 March 2015

"Resolutions"                                                    the resolutions set out in the Notice of                EGM or any one of them, as the case may be

"S. Shasha and Associates"                         S. Shasha and Associates (Private) Limited, a company registered in Zimbabwe with company number 3232/1995 

"Shasha & Associates USA"                        Mr. Samir Shasha's sole proprietorship headquartered in Chicago, Illinois.

"Shareholders"                                                 the holders of the Shares in the Company at the Record Date

"Subscription"                                                  the subscription for the Subscription Shares by VAL pursuant to the Subscription Agreement

"Subscription Agreement"                          the agreement dated 15 February 2015 entered into between VAL and the Company, details of which are set out in paragraph 4(i) of Part II of the Circular

"Subscription Price"                                       0.85 pence per New Ordinary Share

"Subscription Shares"                                    107,000,000 new Ordinary Shares to be subscribed by VAL pursuant to the Subscription Agreement

"VAL"                                                                    Ventures Africa Limited a company registered in theIsle of Man with Company Number 011652V

"Waiver"                                                             the waiver granted by the Panel, conditional upon the approval by the Independent Shareholders of the Whitewash Resolution, of any obligation which would otherwise be imposed on VAL under Rule 9 of the City Code as a result of the issue of the Subscription Shares

"WH Ireland"                                                     WH Ireland Limited

"Whitewash Resolution"                             the ordinary resolution of Shareholders approving the Waiver set out as Resolution 1 in the Notice of EGM

LETTER FROM THE CHAIRMAN OF THE COMPANY

Dear Shareholder

Introduction

The Company announced on 16 February 2015 that it no longer intends to seek Shareholders' approval to cancel the admission of the Company's Shares to trading on AIM. The announcement followed the signing of the Subscription Agreement with VAL.

The purpose of this announcement is to provide further background on the Subscription and VAL and explain why the Directors consider the passing of the Resolutions, upon which the Subscription is conditional, to be in the best interests of the Company and its Shareholders as a whole.

The Subscription is conditional upon the passing of the Resolutions, further details of which are set out below.

Subscription

Under the terms of the Subscription Agreement, VAL agreed to subscribe for the Subscription Shares at the Subscription Price, conditional, inter alia, upon:

·     the granting of the Waiver by the Panel of the obligation for VAL to make a general offer for the Company that would otherwise arise under Rule 9 of the City Code as a result of the Subscription (subject to Independent Shareholder approval);

·     the approval byIndependent Shareholders at the EGM of the Whitewash Resolution;

·     the Shareholders voting to dis-apply pre-emption rights to enable the Allotment to complete; and

·    the Board resolving to accept the resignations of Messrs Paul Turner, Itai Mazaiwana and Fred Jones as Directors with effect from Completion and the right of VAL to nominate, and for the Board to appoint, up to 3 additional Directors with effect from Completion subject in each case to such person satisfying the NOMAD's standard due diligence enquiries for directors of an AIM listed company.

In the event that such conditions are not satisfied, or waived by VAL where capable of waiver, or become incapable of fulfilment, before the Long Stop Date, the Subscription Agreement will terminate.

On Completion, VAL will be interested in 107,000,000 Ordinary Shares representing 50.55% of the enlarged share capital of the Company.

Further details of the Subscription Agreement are set out in paragraph 4(i) of Part II of the Circular. There are no further arrangements made by the Company in connection with, or dependent on, the Subscription Agreement.

Waiver of the obligation to make a mandatory offer under Rule 9 of the City Code

Under Rule 9 of the City Code, any person who acquires an interest (as such term is defined in the City Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30%or more of the voting rights in a company which issubject to the City Code, is normally required to make a general offer to all of the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30% of the voting rights but does not hold shares carrying more than 50% of the voting rights of such a company, a general offer will normally be required if any further interest in shares are acquired by any such person.  These limits apply to the entire concert party as well as the total beneficial holdings of individual members. Such an offer would have to be made in cash at a price not less than the highest price paid by him, or by any member of the group of persons acting in concert with him, for any interest in shares in the company during the 12 months prior to theannouncement of the offer.

Under Rule 37 of the City Code, any increase inthe percentage holding of a shareholder which results from a company buying back itsown shares will also be treated as an acquisition for the purpose of Rule 9 of the City Code. A shareholder will, in such circumstances, incur an obligation to make a mandatory offer unless theconsent of the Panel to a waiver of such an obligation is obtained.

You should note that if the Subscription completes, VAL will hold 50.55% of the voting rights of the Company. 
In these circumstances, VAL would be permitted to make further purchases of Ordinary Shares without 
incurring an obligation under Rule 9 to make a general offer to all holders of Ordinary Shares.

The Panel has agreed, subject to the Whitewash Resolution being passed by Independent Shareholders, towaive the requirement under Rule 9 of the City Code for VAL to make a mandatory offer for the entire issued ordinary share capital of the Company as would otherwise be required.

The Whitewash Resolution issubject to the approval of Independent Shareholders on a poll where each Independent Shareholder will be entitled to onevote for each Ordinary Share held.

The Directors believe that it is in the best interests of the Company that the Whitewash Resolution be passed.

Waiver of Pre-emption Rights

To enable the Subscription Shares to be issued to VAL, it will be necessary for Shareholders to waive their pre-emption rights on new share issues that would otherwise apply.

Included within the Resolutions is a resolution to dis-apply pre-emption rights for the Allotment pursuant to article 4 of the Articles.

About VAL

VAL is an Isle of Man limited liability company formed in October 2014 as an investment vehicle to acquire assets in southern Africa, 100% beneficially owned by Mr. Samir Shasha. Mr. Shasha has extensive experience in owning and managing companies in southern Africa including Zimbabwe. Further details of VAL (and Mr. Shasha) are set out in paragraph 3 of Part II of the Circular.

Mr. Shasha's investments have included, amongst others, the ownership and operation of Freightliner Truck and Case International distributorships, as well as Zimbabwe Online, Zimbabwe's largest internet service provider, which was subsequently sold to Liquid Telecom, an Econet Wireless subsidiary, in 2012.

Mr. Samir Shasha and the Company both have offices in Harare and for this reason they became known to each other. In October 2014, VAL acquired Lonzim Hotels from Cambria (further details are set out in paragraph 4(ii) of Part II of the Circular).

Neither VAL nor its concert parties currently hold any Shares in the Company.

Intentions of VAL

The Company's investment objective is to provide Shareholders with long term capital appreciation through the investment of its capital in Zimbabwe, countries surrounding Zimbabwe, as well as the remainder of Sub-Saharan Africa, with a bias towards Southern and Eastern Africa, which is aligned to the investment objective of VAL.

The Company's investments include:

·    Payserv Africa Limited, which provides EDI switching services (Paynet), 'payslip' processing (Autopay), and payroll based microfinance loan processing (Tradanet) in Zimbabwe and, more recently, in Zambia.

·    Millchem Holdings Limited, which is a value-added chemicals distributor with leading market positions in Zimbabwe. It recently established a presence in Zambia and Malawi.

VAL intends that, following theissue of the Subscription Shares, the investment strategy of the Company will be continued in the same manner as at present, except for the proposed changes to the Board.

In particular, VAL has confirmed that it has no current intention to change the Company's current plans with respect to:

·     the continued employment of the employees and management of the Company or its subsidiaries, including any material change in conditions of employment;

·     its strategic plans for the Company, or their likely repercussions on employment or the locations of the Company's places of business;

·     employer contributions into any pension scheme(s), the accrual of benefits for existing members, or the admission of new members;

·     the redeployment of the fixed assets of the Company; or

·     maintenance of the Company's listing on AIM.

Cambria's business and prospects

As outlined in the Circular published on 23 January 2015, Cambria activities have been constrained by a number of factors which are expected to be addressed by the investment of VAL in the Company. In particular, slower than anticipated growth of the Zimbabwean economy and the sale of the Leopard Rock Hotel at a price well below expectations.

The proceeds of the placement will be used to provide working capital for the Company's existing investments, primarily Payserv Africa Limited and Millchem Holdings Limited, which will benefit from further investment to sustain growth.

The Company is temporarily suspended from trading on AIM , pending the publication of its Annual Accounts for the year ending 31 August 2014. The Annual Accounts have not yet been prepared as the Company had intended to de-list from AIM. The Company's interim financial report for 2014 and Annual Accounts for the year ending 31 August 2013, are available for inspection on the Company's website, www.cambriaafrica.com/investors/financial-reports.

Proposed Board changes

As detailed above, the Subscription Agreement provided for certain changes to theBoard to take place on or from Completion.

As a result, on Completion, Messrs. Paul Turner, Itai Mazaiwana andFred Jones will resign fromthe Board and VAL shall be entitled to nominate 3 additional Directors, subject to due diligence compliance for directors of an AIM listed company. VAL has nominated Mr. Santosh K. Gujadhur as its first nominated Director. The Company takes this opportunity to thank Messrs. Paul Turner, Itai Mazaiwana and Fred Jones who havemade a valuable contribution to the Company during a difficult time. On Completion, the Board will consist of Mr. Perkins (non-executive Chairman), Mr. Wisman (CEO) and Mr. Gujadhur (non-executive Director). Mr.Gujadhur's appointment is subject to satisfying the NOMAD's standard due diligence enquiries for directors of an AIM listed company.

Trading in the Subscription Shares

The Company is temporarily suspended from trading on AIM, pending the publication of its Annual Accounts for the year ending 31 August 2014, which is unlikely to occur before the end of May 2015. Once the Company's suspension has been lifted, and subject to Completion, an application will be made for the admission of the Subscription Shares to trading on AIM.   

Extraordinary General Meeting

You will find set out on page 18 of the Circular a notice convening the EGM for 9.00 a.m. on 13 April 2015 (or such later time). TheWhitewash Resolution will bedecided by means of a poll.

Action to be taken

A form of proxy for use in connection with the EGM is enclosed. Whether or not youintend to attend the EGM, it is important, particularly inview of the fact that the Whitewash Resolution to be put to themeeting will be determined by apoll, that you duly complete, execute and return the enclosed Form of Proxy, by hand or by post, to the Company's registrars, Capita Registrars (Isle of Man) Limited, Clinch's House, Lord Street, Douglas, Isle of Man, IM99 1RZ, in accordance with the instructions printed thereon. To be valid, the completed form of proxy must be returned as soon as possible and, in any event, so as to arrive 
no later than 9.00 a.m. on 9 April 2015.

Completion and return of a Form of Proxy will not prevent Shareholders from attending and voting at theExtraordinary General Meeting in person should they wish to do so and so long as they are not otherwise prevented from so doing.

Further information

Your attention is drawn toPart II of the Circular which contains further information relating to VAL and Cambria.

Recommendation

The Directors, who have been so advised by Peterhouse, consider that the Waiver and the issue of the Subscription Shares are fair and reasonable and are in the best interests of the Company and 
Shareholders as a whole. In advising the Directors,Peterhouse has taken into account the Directors' 

commercial assessments.

Accordingly, the Board unanimously recommends Shareholders to vote in favour of the Resolutions to be proposed as they intend to do in respect of their own beneficial holdings which equates to 2.8% of the Issued Share Capital of the Company.

Yours faithfully,

IAN PERKINS

Non-executive Chairman

 

END

 

 

MSCLIFFTVDIRFIE