Proposed Cancellation of trading on AIM

RNS Number : 9283C

Cambria Africa PLC

23 January 2015

 





Cambria Africa Plc

("Cambria" or the "Company")

Proposed Cancellation of trading on AIM

Cambria Africa Plc announces that it will today be sending a circular to Shareholders together with a notice convening a General Meeting of the Company ("General Meeting") to seek Shareholders' approval to cancel the admission of the Company's ordinary shares of 0.01 pence each ("Shares") to trading on AIM ("Cancellation" or "Delisting").

Introduction

The directors have recently undertaken a review of the benefit of the Shares continuing to be traded on AIM. Having completed this review, which included consultation with the Company's advisers and its major shareholders, your Directors have agreed that it is in the best interest of the Company and its Shareholders as a whole if the admission of the Shares to trading on AIM is cancelled. Pursuant to Rule 41 of the AIM Rules, the Directors have notified the London Stock Exchange of the date of the proposed Cancellation.

To enable Shareholders to buy and sell Shares, the Board intends to facilitate a dealing arrangement expected to be in place shortly after the date of Cancellation to enable Shareholders to trade the Ordinary Shares. Further information is provided below.

The AIM Rules provide that Cancellation be conditional upon the approval of the resolution regarding Delisting (the "Resolution") by not less than 75 per cent of the votes cast, whether in person or by proxy, by shareholders in a general meeting.

The purpose of this announcement is to explain why the Directors consider the proposal to be in the best interests of the Company and its Shareholders as a whole and to recommend that you vote in favour of the Resolution required to implement the proposal at the General Meeting scheduled to take place at 9.00 a.m. on 18 February 2015, notice of which is enclosed at the end of the shareholder circular.

Expected Timetable of Events
Publication date of the shareholder circular and notice provided to the London Stock Exchange to cancel the Admission	23 January 2015
Latest time and date for receipt of Form of Proxy	9 a.m. 16 February 2015
General Meeting to be held	9 a.m. 18 February 2015
Expected last day for dealings in Ordinary Shares on AIM	26 February 2015
Expected time and date that admission of Ordinary Shares to trading on AIM will be cancelled	with effect from 7.00 a.m. on  27 February 2015

Background and reasons for the proposed Cancellation

Cambria was set up in 2007 to allow investors to benefit from the expected significant improvement of the Zimbabwean economy. The anticipated improvement was short lived with Zimbabwe only experiencing above average growth rates in the years 2009 and 2010. With the deteriorating political environment, the country's growth slowed significantly, adversely affecting the performance of the Company's investments and consequently the financial performance of the Company. Beginning 2010, the Company began an exercise to streamline its investment portfolio, reducing the number of investments, and growing their scale.  Subsequently, from 2012 onwards, the Company pursued a regionalization strategy, shifting the focus from being exclusively Zimbabwe to include neighbouring countries such as Zambia and Malawi, with positive results being reflected in the improved financial performance of the Company, albeit at a slow pace. 

Notwithstanding the initiatives to improve the Company performance, and following careful consideration, the Directors have concluded that it is no longer in the best interests of the Company or its Shareholders for Cambria to maintain the Admission or to remain a public limited company. In reaching this conclusion, the Directors considered the following factors:

·      with the sale of the Leopard Rock Hotel at a price well below expectations, the total assets of the Company were significantly reduced and the significant professional fees associated with the Admission (such as legal, accounting, London Stock Exchange and nominated adviser costs) became wholly disproportionate;

·      the equally disproportionate amount of senior management time spent in ensuring compliance with the AIM Rules and related regulatory requirements, including reporting, disclosure and corporate governance requirements;

·      the Admission no longer serves a useful function for the Company in terms of providing access to capital or enabling the Ordinary Shares to be used to effect acquisitions, although the Directors acknowledge the benefit to Shareholders of having a public market in the Ordinary Shares; and

·      the lack of liquidity in trading of the Ordinary Shares. It should be noted that the trading volume in the Shares on AIM has remained low at an average of approximately 3,500,000 Shares per month (3.34 per cent of Shares in issue) over the last twelve months.

As a result of the Cancellation, the Company would benefit from substantial cost savings. The Directors estimate the explicit cost savings which will be achieved following the Cancellation will total approximately £250,000 per annum.

The Directors believe that as a result of the Cancellation, Cambria would be better placed to focus on its orderly exit from the Company's remaining portfolio investments, including pursuing the claims against Lonrho currently in the English High Courts, and subsequent return of cash to shareholders. In this context, the Directors believe that greater shareholder value will ultimately be derived by operating the Company's business off-market.

Strategy following the proposed Cancellation

There have been no changes in the portfolio in terms of acquisitions or disposals since the Trading Update issued on 23 October 2014.

Following the Cancellation the Company will continue to work to maximise the value of its existing assets and to seek an orderly exit from the Company's existing portfolio of investments and return cash to its shareholders.

The Directors also intend to keep Shareholders informed of the Company's financial and operational performance through periodic updates via the Company's website, www.cambriaafrica.com.

Effect of Cancellation

The principal effect of the proposed Cancellation is that there would no longer be a formal market mechanism enabling Shareholders to trade their Shares on AIM or any other recognised market or trading exchange.

Shareholders should also be aware that the Company will no longer be bound by the AIM Rules and that, as a consequence, certain previously prescribed corporate governance procedures may not be adhered to in the future and the Company will no longer be required to announce material events or transactions. However, following Cancellation, the Directors:

·      will hold an Annual General Meeting and, when required, other General meetings, in accordance with the applicable statutory requirements and the articles of association of the Company; and

·      intend to maintain an "investors" section on the Company's website at www.cambriaafrica.com  providing information on any significant events or developments in which Shareholders may be interested.

It is possible that the Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax advisor or other professional adviser.

The Takeover Code

Although the Company is incorporated in the Isle of Man, the place of central management and control of the Company is currently located outside the UK, the Channel Islands or the Isle of Man ("Code Jurisdictions"). Accordingly, once the Company's shares are no longer admitted to trading on AIM, the Company will not be subject to the Takeover Code and Shareholders will not be afforded protections afforded by the Takeover Code which are designed to regulate the way in which takeovers are conducted in the UK.

In particular, the Takeover Panel will not have the authority to monitor compliance with the provisions of the Takeover Code nor impose sanctions in respect of any breach of such provisions.

In particular, certain protections under the Code will be no longer available once the delisting is effective,   including Rule 9 of the Takeover Code that states that when: (i) any person acquires an 'interest in shares' (as defined in the Code) which (taken together with shares in which he is already interested or in which persons 'acting in concert' with him are interested (as defined in the Code)) carry 30 per cent. or more of the voting rights of a company that is subject to the Code; or (ii) any person who, together with persons acting in concert with him is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of a company, but does not hold shares carrying more than 50 per cent. of the voting rights of the company subject to the Code, and such person, or any persons acting in concert with him, acquires an interest in any other shares which increases the percentage of the shares carrying voting rights in which he is interested, then in either case, that person together with persons acting in concert with him, is normally required to make a general offer in cash, at the highest price paid by him, or any persons acting in concert with him, for any interest in shares in the Company during the 12 months prior to the announcement of the Offer, for all the remaining equity share capital of the Company.

If circumstances change, the Company will consult with the Takeover Panel to ascertain whether this will affect the central place of management of the Company. If the Takeover Panel determines that, as a result of such changes, the place of central management and control of the Company is located in a Code Jurisdiction, then the Takeover Code will become applicable to the Company and shareholders will be informed at that time.

Trading in the Ordinary Shares after Cancellation

Immediately following the Cancellation, there will be no market facility for dealing in the Ordinary Shares and no price will be publically quoted. As a result the Board recognises that the Cancellation will make it more difficult for the Shareholders to buy and sell Ordinary Shares should they want to do so. In view of this and in order to assist Shareholders, the Board intends to facilitate a dealing arrangement expected to be in place shortly after the date of Cancellation to enable Shareholders to trade the Ordinary Shares. Once the facility has been arranged, details will be sent to all Shareholders and also made available to Shareholders via the Company's website www.cambriaafrica.com.

General Meeting

A notice of General Meeting will be sent to shareholders today convening the meeting to be held at 1 Berkeley Street, Mayfair, London; on 18 February 2015, commencing at 9.00 a.m. at which the Resolution will be put to Shareholders. Subject to the passing of the Resolution, the Delisting of the Shares from trading on AIM will take effect from 27 February 2015 and the final day upon which they will be able to be traded on AIM will be 26 February 2015.

A copy of the delisting circular and the GM notice will be available on the Company's website at www.cambriaafrica.com.

Action to be taken

A Form of Proxy for use in connection with the General Meeting is enclosed with the shareholder circular sent today. Whether or not you intend to be present at the GM in person, it is important that you duly complete, execute and return the Form of Proxy, by hand or by post, to the Company's agent, 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, a completed Form of Proxy must be executed in accordance with the instructions printed thereon and returned as soon as possible and, in any event, so as to be received by the Company's agent not later than 9.00 a.m. on 16 February 2015. Completion and return of a Form of Proxy will not prevent you from attending and voting at the GM in person should you wish to do so.

Recommendation

For the reasons set out above in the section entitled "Background and reasons for the proposed Cancellation", the Directors believe that the Proposals are fair and reasonable and are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends Shareholders to vote in favour of the Resolution to be proposed as they intend to do in respect of their own beneficial holdings.

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]

 

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