Publication of Circular

RNS Number : 8767W

Distribution Finance Cap. Hldgs PLC

21 August 2020

 

21 August 2020

For Immediate Release

Distribution Finance Capital Holdings plc
("DFC", "DF Capital" or the "Company" or together with its subsidiaries the "DFC Group")

UPDATE ON SHARE CAPITAL REORGANISATION AND PUBLICATION OF CIRCULAR

Introduction

Further to the announcement of earlier today, the Company is pleased to announce that it has now entered into Buy-back Agreements and Subscription Agreements with the EBT and Watrium.

Completion of the Buy-Backs and Subscription is conditional on Shareholder approval and Admission. A Circular convening a General Meeting to consider the necessary Resolutions will be posted to Shareholders  later today. A copy of the Circular will shortly be available on the Company's website https://www.dfcapital-investors.com/ . The General Meeting is scheduled to take place at 10.00 a.m. on 8 September 2020 and the Buy-Backs and Subscription are expected to complete at 8.00 a.m. on 9 September 2020.

The effect of the Buy-backs and Subscription together with the steps announced earlier today is that all loans (other than loans that DFC Limited has made to Intertrust Employee Benefit Trustee Limited, in its capacity as trustee of the Distribution Finance Capital Employee Benefit Trust (the "EBT")) that have directly or indirectly funded the acquisition of Ordinary Shares by employees will be repaid and all Ordinary Shares that have been directly or indirectly funded will be cancelled and an equivalent number of new Ordinary Shares (the Subscription Shares) will be issued.

Details of the reorganisation steps are set out below.

The Reorganisation Steps

Step 1: the Company and DFC Limited have agreed with certain employees and Gavin Morris (being a Director of the Company) that they shall repay loans (together with accrued interest) of, in aggregate, £394,123.29 from the proceeds of the sale of 1,023,882 of their Ordinary Shares (of which Gavin Morris has agreed to sell 85,407 Ordinary Shares) to Watrium. These loans were entered into before the IPO of the Company and related to either the acquisition of shares in DFC Limited or funding of tax arising from such acquisitions.

Step 2: Watrium has agreed to acquire a further 919,611 Ordinary Shares from certain employees, former employees and Gavin Morris (of which Gavin Morris has agreed to sell 116,202 Ordinary Shares) and as consideration for the acquisition Watrium has agreed to transfer an equivalent number of Ordinary Shares to them.

Steps 1 and 2 are expected to complete on Wednesday 26 August 2020 and are not conditional on the approval of the Resolutions.

Step 3: Watrium and the EBT have agreed, subject to approval of the Resolutions and conditional on Admission, to sell the Watrium Buy-back Shares (being the 1,943,493 Ordinary Shares acquired by Watrium in steps 1 and 2) and the EBT Buy-back Shares (being 2,963,283 Ordinary Shares) to the Company in each case at a price of 1 pence per Ordinary Share and an aggregate consideration of £49,067.76 on the terms and subject to the conditions of the Buy-back Agreements. The Watrium Buy-back Shares and the EBT Buy-back Shares will be cancelled immediately following Admission.

Step 4: Watrium and the EBT have agreed, conditional on Admission, to subscribe for the Subscription Shares in each case at a price of 1 pence per Ordinary Share and an aggregate consideration of £49,067.76 so that they are issued with a number of new Ordinary Shares that is equal to the number of existing Ordinary Shares that they sell to the Company at Step 3.

Steps 3 and 4 are inter-conditional, and therefore there are no circumstances where the Buy-back would complete without the Subscription Shares being issued. If any of the Resolutions are not passed by the requisite majority at the General Meeting, neither of Steps 3 and 4 will take place.

Application will be made for the Subscription Shares to be admitted to trading on AIM. It is expected that Admission will become effective on 9 September 2020. The Subscription Shares will, when issued, rank pari passu in all respects with the Ordinary Shares in issue at that time, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission.

The Buy-backs and the Subscription will both complete on Admission and therefore the issued share capital of the Company will be the same before and after Admission.

DFC Limited has also agreed to reorganise its share capital by cancelling its existing share capital and using the reserve arising, to pay up new shares.  

General Meeting

A Circular convening the General Meeting will be posted to Shareholders later today. The General Meeting will be held at 187 Worlds End Lane, Orpington BR6 6AT on 8 September 2020 at 10.00 a.m.. The following resolutions will be proposed at the General Meeting:

· an ordinary resolution to grant the Directors' authority to allot the 4,906,776 Subscription Shares (being equal to the number of Buy-back Shares) at 1 pence per Subscription Share, the proceeds of which will enable the Company to fund the Buy-backs out of a fresh issue of shares;

· in line with best corporate governance, special resolutions to approve (i) the terms of the EBT Buy-back Agreement; and (ii) the terms of the Watrium Buy-back Agreement; and

· a special resolution to authorise the Directors to allot the Subscription Shares on a non pre-emptive basis.

The Resolutions will be proposed as ordinary and special resolutions.  Ordinary resolutions require the approval of a simple majority of Shareholders who attend and vote at the General Meeting, whether in person or by proxy, and special resolutions require the approval of at least 75 per cent. of Shareholders who attend and vote at the General Meeting, whether in person or by proxy.

In line with best corporate governance, the vote will be conducted on a poll.  In accordance with the 2006 Act:

· the EBT will not be permitted to vote its 2,963,283 Ordinary Shares which are the subject of the EBT Buy-back Agreement on the resolution to approve the EBT Buy-back Agreement; and

· Watrium will not be permitted to vote its 1,943,493 Ordinary Shares which are the subject of the Watrium Buy-back Agreement on the resolution to approve the Watrium Buy-back Agreement, but it will be entitled to vote its remaining Ordinary Shares on such resolution.

The Company has consulted with its major Shareholders and anticipates that they will support the Resolutions at the General Meeting.

In light of the COVID-19 pandemic and in response to the UK Government's current guidance regarding social distancing and the prohibition of public gatherings, the General Meeting will take place as a closed meeting and Shareholders will not be able to attend in person. Shareholders and guests who travel to the meeting will be refused entry. Shareholders are therefore encouraged to appoint the Chairman as their proxy.  Details of the action to be taken to appoint proxies will be set out in the Circular and the accompanying Form of Proxy.

Despite these exceptional circumstances, the Board is keen to maintain engagement with Shareholders. In order to facilitate this, if you are a Shareholder and would like to ask the Board a question on the formal business of the General Meeting, please email your question to the Company Secretary, Sarah Clark at [e-mail] by 10.00 a.m. on 4 September 2020. Responses will be made via return of email or published on our website at www.dfcapital-investors.com as deemed appropriate by the Board.

Enquiries:

Distribution Finance Capital Holdings plc
Carl D'Ammassa - Chief Executive Officer	[phone]
Kam Bansil - Head of Investor Relations	[phone]
http://www.dfcapital-investors.com
Macquarie Capital (Europe) Limited (NOMAD and broker)
Alex Reynolds	[phone]
Jonny Allison
Blue Pool Communications (Financial PR)
Nick Lord	[phone]

DEFINITIONS

Defined terms used in this announcement shall have the meanings set out below:

2006 Act	the Companies Act 2006, as amended
Admission	admission of the Subscription Shares to trading on AIM becoming effective in accordance with the AIM Rules
AIM	the AIM market operated by the London Stock Exchange
AIM Rules	the AIM Rules for Companies, as published by the London Stock Exchange from time to time
Board or Directors	the directors of the Company as at the date of this announcement
Buy-backs	the EBT Buy-back and the Watrium Buy-back
Buy-back Agreements	the EBT Buy-back Agreement and the Watrium Buy-back Agreement
Circular	the circular to be posted to Shareholders which will include the notice convening the General Meeting at which the Resolutions will be proposed
Company	Distribution Finance Capital Holdings plc, a company incorporated and registered in England and Wales under number 11911574
DFC Limited	Distribution Finance Capital Limited, a company incorporated and registered in England and Wales under number 10198535
EBT	Intertrust Employee Benefit Trustee Limited, in its capacity as trustee of the Distribution Finance Capital Employee Benefit Trust
EBT Buy-back	the purchase by the Company of 2,963,283 Ordinary Shares held by the EBT pursuant to the terms of the EBT Buy-back Agreement
EBT Buy-back Agreement	the conditional agreement dated 21 August 2020 between the Company and the EBT pursuant to which the Company will purchase 2,963,283 Ordinary Shares from the EBT
EBT Subscription Agreement	the conditional agreement dated 21 August 2020 between the Company and the EBT pursuant to which the EBT will subscribe for 2,963,283 Ordinary Shares
General Meeting	the general meeting of the Company to be convened for 8 September 2020, notice of which will be included in the Circular
Ordinary Shares	ordinary shares of £0.01 each in the capital of the Company
PRA	the Prudential Regulation Authority, the financial services regulator in the United Kingdom
Resolutions	the ordinary and special resolutions to be proposed at the General Meeting to approve the Buy-backs and the Subscription
Shareholders	holders of Ordinary Shares
Subscription	the conditional subscription by the EBT and Watrium for the Subscription Shares
Subscription Agreements	the EBT Subscription Agreement and the Watrium Subscription Agreement
Subscription Shares	the 2,963,283 new Ordinary Shares to be allotted to the EBT and the 1,943,493 new Ordinary Shares to be allotted to Watrium conditional on Admission
Watrium	Watrium AS, a significant shareholder of the Company
Watrium Buy-back	the purchase by the Company of 1,943,493 Ordinary Shares held by Watrium pursuant to the terms of the Watrium Buy-back Agreement
Watrium Buy-back Agreement	the conditional agreement dated 21 August 2020 between the Company and Watrium pursuant to which the Company will purchase 1,943,493 Ordinary Shares from Watrium
Watrium Subscription Agreement	the conditional agreement dated 21 August 2020 between the Company and Watrium pursuant to which Watrium will subscribe for 1,943,493 Ordinary Shares

 

END

 

 

CIRSEFFIFESSEDA