Notice of GM

RNS Number : 8321S

IP Group PLC

08 November 2019

 

IP Group plc

('IP Group' or 'the Group' or 'the Company')

Notice of General Meeting

IP Group (LSE:IPO), the developer of intellectual property-based businesses, announces that later today the Company will post a notice of general  meeting ('General Meeting') to shareholders. The General Meeting will be held at 11am on 25 November 2019, at the offices of the Company at The Walbrook Building, 25 Walbrook, London EC4N 8AF.

The purpose of the General Meeting is to seek the approval of shareholders for the proposed Capital Reduction and to amend the articles of association of the Company in relation to the borrowing powers of the Company (the 'Article Amendment'). This is primarily being done to give the Company the flexibility to make future purchases of its own shares and/or to make future distributions of profits in cash or specie, although the Company has no immediate intention to do so. 

The Capital Reduction involves the cancellation of the amount of £584,955,054.58 standing to the credit of the Company's share premium account (the 'Share Premium Reduction') and the capitalisation of £372,600,000.00 being the entire amount standing to the credit of the Company's merger reserve by issuing B ordinary shares in the capital of the Company and thereafter to cancel such B ordinary shares (the 'Merger Reserve Reduction' and the Share Premium Reduction and the Merger Reserve Reduction together being the 'Capital Reduction').

The Capital Reduction, if approved by the Court and when it becomes effective, will have the effect of creating distributable reserves and provide the Company with the ability to make purchases of its own shares as permitted by the Companies Act 2006 and in accordance with the resolution passed at the last annual general meeting of the Company held in May 2019 (the '2019 AGM') and/or, subject to the financial performance of the Company and the Companies Act 2006, to make distributions of profits by way of dividend either in cash or in specie. The Capital Reduction would, after taking into consideration the existing negative retained earnings of -£67,488,617.00, create distributable reserves to the value of £890,066,437.58. Although IP Group has a positive profit and loss reserve at a Group level, it does not currently have distributable reserves at the Company level.

In seeking approval of the Capital Reduction, the directors of the Company (the 'Directors') are not indicating any commitment to buy back any Ordinary Shares or to make any distributions. The Directors will only exercise the authority to purchase the Company's shares if, in the light of market conditions prevailing at the time, they consider that the purchase of such shares can be expected to result in an increase in earnings or net assets per share and is in the best interests of the Company's shareholders (and other stakeholders) generally.

The authority to purchase the Company's shares given at the 2019 AGM is limited to a maximum of 105,914,459 Ordinary Shares, being approximately 10% of the Company's issued share capital as at 17 April 2019. A similar authority is requested at each annual general meeting of the Company.

The proposed Capital Reduction itself will not involve any distribution or repayment of capital or share premium by the Company and will not reduce the underlying net assets of the Company. Following the implementation of the Capital Reduction there will be no change to the Ordinary Shares in issue. No new share certificates will be issued as a result of the proposed Capital Reduction.

The proposed Capital Reduction is not expected to affect outstanding options and awards over the Company's shares granted under its share option schemes.

A copy of the circular containing the Notice of General Meeting will shortly be available on the Company's website at www.ipgroupplc.com/investor-relations.

Extracts from the circular are set out below and should be read in conjunction with the full text of the circular.

Defined terms used in this announcement have the same meaning as set out in the circular.

For further information please contact:

IP Group plc	[phone]
Alan Aubrey, Chief Executive Officer
Greg Smith, Chief Financial Officer
Liz Vaughan-Adams, Communications	[phone] [phone]
Charlotte Street Partners
Andrew Wilson	[phone]
David Gaffney	[phone]

Notes for editors

About IP Group

IP Group is a leading intellectual property commercialisation company which focuses on evolving great ideas, mainly from its partner universities, into world-changing businesses. The Group has pioneered a unique approach to developing these ideas and the resulting businesses by providing access to business building expertise, capital (through its 100%-owned FCA-authorised subsidiaries IP Capital and Parkwalk Advisors), networks, recruitment and business support. IP Group has a strong track record of success and its portfolio comprises holdings in early-stage to mature businesses across life sciences and technology. IP Group is listed on the Main Market of the London Stock Exchange under the code IPO.

For more information, please visit our website at www.ipgroupplc.com.

Extracts from the Circular

PROPOSED CAPITAL REDUCTION

Share Premium Reduction

The Companies Act 2006 requires that if a company issues shares at a premium to the nominal value of those shares, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums must be transferred to the company's share premium account. A share premium account can only be used in very limited circumstances. The Board is recommending that the amount of £584,955,054.58 standing to the credit of the Company's share premium account be cancelled. As at 7 November 2019, the amount standing to the credit of the Company's share premium account is £684,955,054.58, culminating in the total standing to the credit of the Company's share premium account following such cancellation being £100,000,000.00.

Merger Reserve Reduction

Under certain circumstances, such as where shares are issued in consideration for the acquisition of shares in another company, instead of creating share premium, an amount is credited to a merger reserve. As in the case of a share premium account, a merger reserve can only be used in very limited circumstances. It is therefore proposed to capitalise the entire sum standing to the credit of the Company's merger reserve being £372,600,000.00, by applying that sum in paying up in full new B ordinary shares in the capital of the Company (whereby the nominal value of such shares is equal to the sum that is obtained by dividing the number of such shares to be issued into £372,600,000.00) (the 'B Shares') and on the day prior to the day of the Court Hearing, allotting and issuing such shares by way of a bonus issue to the persons holding ordinary shares of £0.02 each in the capital of the Company (the 'Ordinary Shares') as at 6.00pm on such day, on the basis of 1 B Share for every 1 Ordinary Share held (the 'Bonus Issue').

The B Shares will not be admitted to trading on the main market of London Stock Exchange plc or any other market. No share certificates will be issued in respect of the B Shares. The B Shares will have extremely limited rights; in particular, the B Shares will carry no rights to participate in the profits of the Company and no rights to participate in the Company's assets, save on a winding up. The B Shares will be transferable, but no market will exist in them and it is anticipated that the Court will confirm their cancellation the day after they are issued.

Shareholder Approval

Your approval is being sought to carry out the Capital Reduction pursuant to the special resolutions (Resolutions 1 and 2) set out in the Notice of General Meeting.

Court Approval

In addition to the approval by the shareholders, the proposed Capital Reduction requires the confirmation of the Court. Accordingly, following approval of the proposed Capital Reduction by shareholders, an application will be made to the Court in order to confirm and approve the proposed Capital Reduction. In seeking such approval, the Court may require protection for the creditors (including contingent creditors) of the Company whose debts remain outstanding on the relevant date, except in the case of creditors which have consented to the proposed Capital Reduction. Any such creditor protection may include seeking the consent of the Company's creditors to the proposed Capital Reduction or the provision by the Company to the Court of an undertaking to deposit a sum of money into a blocked account created for the purpose of discharging, in due course, any amounts owing to the non-consenting creditors of the Company. The Company currently owes no more than £26,400,199.65 to its creditors, consisting of the EIB finance facility, general trade creditors and accruals and, pursuant to the acquisition of Parkwalk Advisors Ltd in 2016, deferred consideration obligations. It also has contingent liabilities under a parent company guarantee given in respect of IP2IPO Limited's lease of the Group's Walbrook Building offices.

It is anticipated that the initial directions hearing in relation to the proposed Capital Reduction will take place on 5 December 2019, with the final hearing by the Court to confirm the proposed Capital Reduction ('Court Hearing') taking place on 17 December 2019 and the proposed Capital Reduction becoming effective on the following day, following the necessary registration of, amongst other things, the order of the Court confirming the proposed Capital Reduction (the 'Court Order') at Companies House.

The Board reserves the right to abandon or to discontinue (in whole or in part) the application to the Court in the event that the Board considers that the terms on which the proposed Capital Reduction would be (or would be likely to be) confirmed by the Court would not be in the best interests of the Company and/or the shareholders as a whole. The Board have undertaken a thorough and extensive review of the Company's liabilities (including contingent liabilities) and considers that the Company will be able to satisfy the Court that, as at the date on which the Court Order relating to the proposed Capital Reduction and the statement of capital in respect of the proposed Capital Reduction have both been registered by the Registrar of Companies at Companies House and the proposed Capital Reduction therefore becomes effective, the Company's creditors will either have consented to the proposed Capital Reduction or be sufficiently protected.

ARTICLE AMENDMENT

After obtaining legal advice, the Board is proposing that the borrowing provisions of the Articles are amended to bring them in line with current market practice, by reducing the existing limit on the Company's borrowing from four times the Company's adjusted capital and reserves to two times. An additional change is also being made to the definition of Adjusted Capital and Reserves in the Articles, to bring it in line with the Company's current accounting practices. The detail of these changes is set out in Resolution 3. Your approval is therefore being sought to approve these changes.

GENERAL MEETING

We are holding the General Meeting at the Company's offices at The Walbrook Building, 25 Walbrook, London EC4N 8AF at 11am on 25 November 2019.

In order to better reflect the views of all shareholders a poll will be held in relation to each Resolution.

The Resolutions will each be proposed as a special resolution. This means that, for these resolutions to be passed on a poll, members representing not less than 75% of the total voting rights of the members voting (in person or by proxy) must vote in favour of the Resolutions.

ACTION TO BE TAKEN

If you would like to vote on the Resolutions but cannot come to the General Meeting, please fill in the proxy form sent to you with the circular and return it, together with the power of attorney or other authority (if any) under which it is signed, to our registrars, Link Asset Services, by hand only to Link Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, as soon as possible. They must receive it by no later than 11am on 21 November 2019. Alternatively, you may vote electronically via our registrars' website at www.signalshares.com. In order for you to be able to vote in this way, you will need your Investor Code which is printed on your share certificate.

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST messages must be received by the issuer's agent (CREST ID No. RA10) by no later than 11am on 21 November 2019.

DOCUMENTS AVAILABLE FOR INSPECTION

The Articles (showing the Article Amendment) will be available for inspection at the offices of the Company at The Walbrook Building, 25 Walbrook, London EC4N 8AF on any weekday (Saturdays, Sundays and public holidays excluded) from the date of the circular until the close of the General Meeting, and will also be available at the place of the General Meeting for at least 15 minutes before and during the meeting.

RECOMMENDATION

The Board considers that the Resolutions to be put to the General Meeting are in the best interests of the Company and its shareholders as a whole.  The Directors will be voting in favour of them in respect of their own shareholdings and unanimously recommend that you do so as well.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Date of publication of the circular	8 November 2019
Latest time and date for receipt of completed proxy forms	11am on 21 November 2019
General Meeting	11am on 25 November 2019
Time and date of the Bonus Issue*	6pm on 16 December 2019
Court Hearing to confirm Capital Reduction*	17 December 2019
Registration of Court Order and effective date of Capital Reduction**	18 December 2019

If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement to any of the services approved by London Stock Exchange plc for the distribution of the announcements and included within the list maintained on the website of London Stock Exchange plc (known as a Regulatory Information Service).

* This date is subject to any changes which may be imposed by the Court.

** This date will depend on, amongst other things, the date on which the Court confirms the proposed Capital Reduction.

 

END

 

 

NOGLLFIFLILTIIA