Notice of AGM and Proposed Delisting from AIM

RNS Number : 9833M

Real Good Food PLC

27 September 2021

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Real Good Food plc

("RGF" or "the Group")

Notice of Annual General Meeting and Proposed cancellation of admission of

Shares to trading on AIM

Real Good Food plc, (AIM: RGD) the diversified food business announces that the Company's Annual General Meeting ("AGM") will be held at 11.00 a.m. on the 20 October 20201and will be held at the offices of J F Renshaw Limited at Crown Street, Liverpool L8 7RF. The Notice of Annual General Meeting will be sent to shareholders later today and will be available on the Company's website www.realgoodfoodplc.com.

One of the resolutions being put to shareholders is in relation to the proposed cancellation of admission of the Company's Shares to trading on AIM. Contained within the notice of AGM are further details on the backgrounds to and reasons for the proposed Cancellation and a recommendation from the Directors that Shareholders vote in favour of the Cancellation Resolution. Extracts from Chairman's Letter from the Notice of AGM can be found in the appendix to this announcement.

Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as defined in the Notice of AGM.

Enquiries :

Real Good Food plc Mike Holt, Non-Executive Chairman Maribeth Keeling, Finance Director	Tel: [phone]
finnCap Limited (Nomad and Broker) Carl Holmes / James Thompson / Abigail Kelly (Corporate Finance)	Tel: [phone]
MHP Communications (Financial PR)  Reg Hoare / Katie Hunt	Tel: [phone] [e-mail]

APPENDIX

1.  Introduction

I am pleased to be writing to you with details of the business to be transacted at the Company's 2021 Annual General Meeting (the "AGM") which will be held at the offices of J F Renshaw Limited at Crown Street, Liverpool L8 7RF at 11.00 am on 20 October 2021.  The notice of AGM is set out on pages 12 to 15 and an explanation of the Resolutions proposed is set out on page 16 of this document.

In addition to the business customarily undertaken at an annual general meeting of the Company, and as announced on 21 September 2021, the Company intends to seek Shareholder approval for the cancellation of the admission of its Shares to trading on AIM with effect from 7.00 am on 18 November 2021.

In light of the on-going COVID-19 pandemic and that UK Government restrictions and guidelines as to public gatherings and social distancing can be altered at short notice, the Board strongly urges all Shareholders to register their votes in advance by appointing the chairman of the AGM as their proxy and giving him voting instructions. 

However, if you nonetheless plan to attend the AGM in person, we would ask that you email our Company Secretary, Maribeth Keeling, at [e-mail] b y 5.00 pm on 15 October 2021 to confirm that intention, giving details of your name and Investor Code (IVC).  We are asking Shareholders to do this so that we can seek to put in place any appropriate measures to comply with the then current UK Government restrictions and guidelines regarding public gatherings and social distancing (if any).  The health and safety of our Shareholders and colleagues is the Company's priority and we are committed to supporting UK Government's efforts in relation to the COVID-19 pandemic.

In the event that disruption to the AGM becomes unavoidable, we will announce any changes relating to the meeting (such as timing) as soon as practicably possible through the Company's website and/or a Regulatory Information Service.

2.  Background to and reasons for the Cancellation

The Board has for some time been assessing the advantages and disadvantages to the Company and its Shareholders in retaining its quotation on AIM.  The Board has now concluded and believes that seeking the Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Board has considered the following key factors (amongst others):

· the considerable cost, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM which, in the Directors' opinion, are  disproportionate to the benefits to the Company;

· the AIM quotation of the Shares does not offer investors the opportunity to trade in meaningful volumes per se or with frequency within an active market.  With low trading volumes, the Company's Share price can move up or down significantly following trades of small numbers of Shares; and

· due to the limited liquidity in the Shares and, in practical terms, a small free float and market capitalisation, continued admission to trading on AIM no longer sufficiently provides the Company with the advantages of providing access to capital.

3.  Cancellation process

Under the AIM Rules it is a requirement that, unless the London Stock Exchange otherwise agrees, the Cancellation must be conditional upon the consent of not less than 75 per cent. of votes cast by the Shareholders at a general meeting.  Accordingly, the Company is proposing the Cancellation Resolution at the AGM.  In addition, the Company is required to give a notice period of not less than 20 Business Days from the date on which notice of the intended Cancellation is notified via a Regulatory Information Service and is given to the London Stock Exchange.  Accordingly, on 16^th September 2021, the Company (through finnCap) notified the London Stock Exchange of the Company's intention, subject to the Cancellation Resolution being passed at the AGM, to cancel the admission of the Shares to trading on AIM with effect from 7.00 am on 18 November 2021.

Upon the Cancellation becoming effective finnCap will cease to act as nominated adviser to the Company and the Company will no longer be required to comply with the AIM Rules.

The Directors are aware that certain Shareholders may be unable or unwilling to hold Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their Shares in the market prior to the Cancellation becoming effective.

4.  Principal effects of the Cancellation

The Board considers the principal effects of the Cancellation will be:

· there will no longer be a public market mechanism for Shareholders to trade in the Shares and no price will be publicly quoted for the Shares;

· the Shares will remain freely transferable and the Company intends to implement a Matched Bargain Facility in order to give Shareholders an opportunity to conduct transactions in the Shares following Cancellation (see paragraph 6 for further details).  The Shares may, however, be more difficult to trade compared to shares of companies trading via the public markets although the Directors note that the existing liquidity in the Shares on AIM is also in their belief very limited;

· it is possible that, following publication of this document, the liquidity and marketability of the Shares may be reduced and the value of such shares may be consequently adversely affected, although, as previously stated, the Directors note that the existing liquidity in the Shares on AIM is also in their belief very limited;

· it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

· whilst the Company's CREST facility will remain in place following the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Shares will remain transferable, they may cease to be transferable through CREST;

· the AIM Rules will no longer apply to the Company and, accordingly, Shareholders will no longer be afforded the protections given by the AIM Rules.  In particular, the Company will not be bound to:

-  make any public announcements of material events, or to announce interim or final results;

-  comply with any of the corporate governance practices applicable to AIM companies;

-  announce substantial transactions and related party transactions;

-  comply with the requirement to obtain Shareholder approval for reverse takeovers and fundamental changes in the Company's business; or

-  comply with AIM Rule 26, obliging the Company to publish prescribed information on its website;

· the relationship agreement entered into between, amongst others, (i) the Company, (ii) finnCap  and (iii) each of the Principal Shareholders will terminate automatically on the Cancellation becoming effective.  That agreement contains, amongst other things, certain undertakings regarding the appointment and removal of directors of the Company and the Company's business being carried on independently of the Principal Shareholders;

· the Company will cease to retain an AIM nominated adviser and a broker;

· as an unlisted and non-traded company, the Company will be subject to less stringent accounting disclosure requirements;

· the Company would no longer be subject to UK MAR regulating inside information and other matters;

· the Company will no longer publicly disclose any change in major shareholdings in the Company under the DTRs;

· as from the date of the Cancellation, stamp duty will be due on transfers of shares and agreements to transfer shares unless a relevant exemption or relief applies; and

· the Cancellation might have either positive or negative taxation consequences for Shareholders.  For those Shareholders that hold Shares through an ISA, see paragraph 5.  Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately.

These considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.  Shareholders should be aware that if the Cancellation takes effect, they will at that time cease to hold Shares in a company whose shares are admitted to trading on AIM and the matters set out above will automatically apply to the Company from the date of the Cancellation.

After the Cancellation, the Company will continue to comply with the applicable statutory requirements of a company incorporated in England and Wales, including the Companies Act and its articles of association.  In addition, the requirements of the Takeover Code will continue to apply as set out therein.

5.  Shares held through an ISA account

The Shares will cease to be eligible to be held within an ISA upon the Cancellation taking effect.  An ISA manager will have to either sell Shares held in a Shareholder's ISA or transfer them to the Shareholder to be held outside an ISA, within 30 calendar days of the Cancellation.

When the title of an investment in an ISA is transferred from an ISA manager to an investor, the investor is deemed to have sold the investment for a market value sum and immediately reacquired it for the same amount.  Any notional gain on the deemed sale is exempt from charge.  Any future capital gains or losses are calculated by reference to the value of the shares when they left the ISA.  This is the combined effect of regulations 22 and 34 of the Individual Savings Account Regulations 1998.  It is not, however, clear how this general tax treatment applies when shares are transferred out of an ISA after a delisting or cancellation from trading on AIM.

This summary is for general information purposes only.  It is not intended to constitute tax or other advice and should not be relied on or treated as a substitute for specific advice relevant to a Shareholder's specific circumstances.  Shareholders should consult their own professional advisers as soon as possible.

6.  Matched Bargain Facility

The Directors are aware that certain Shareholders may be unable or unwilling to hold Shares in an unquoted company with no means of conducting transactions in Shares if the Cancellation is approved and becomes effective. Although, as previously stated, the Directors note that the existing liquidity in the Shares on AIM is also in their belief very limited.

The Directors are aware that, should the Cancellation be approved by Shareholders and becomes effective, it would make it more difficult to buy and sell Shares in the Company following the Cancellation.  Therefore, the Company intends to implement a Matched Bargain Facility shortly after the Cancellation to assist Shareholders with conducting transactions in the Shares.

Should the Cancellation become effective, details of the Matched Bargain Facility, which the Directors expect to be run through JP Jenkins, will be made available to Shareholders on the Company's website. Under the Matched Bargain Facility, Shareholders or persons wishing to acquire or dispose of Ordinary Shares will be able to leave an indication with J P Jenkins, through their stockbroker (J P Jenkins is unable to deal directly with members of the public), of the number of Ordinary Shares that they are prepared to buy or sell at an agreed price.  In the event that J P Jenkins is able to match that order with an opposite sell or buy instruction, they would contact both parties and then effect the bargain. 

Shareholders will continue to be able to hold their Shares in uncertificated form (that is, in CREST) and should check with their existing stockbroker whether they are willing or able to conduct transactions in unquoted shares.

          7.  Recent financial performance

On 21 September 2021, the Company released its final results for the year ended 31 March 2021 which contained an outlook statement reflecting the recent financial performance of the Group which is reproduced below:

"Since year-end, the Group has seen a pick-up in revenues across every sector. After five months of trading, revenues are 33% up on the same period last year and, more importantly, 1.3% ahead of the first five months of FY20. FY22 year-to-date EBITDA is a profit, trading ahead of FY21 EBITDA and FY20 EBITDA; this is particularly pleasing given the short-term challenges and increased costs of logistics due to driver shortages and limited availability of shipping containers.

Prospects for the remainder of the year are good and the Board is confident of reporting further progress. It is also encouraging to note that the business is being recognised for its innovation and quality of new products."

        8.  Future communication with Shareholders

The Directors wish to continue to engage with all Shareholders and enable effective ongoing communication. Should the Cancellation become effective, biannual webinars will be held by the Executive Chairman to discuss the Company's strategy and performance.

           9.  Corporate Governance

Over the last three years, the Board has been refreshed and significant improvements have been made in relation to corporate governance. The Directors are fully committed to ensuring that good governance continues in order to best serve the interests of the Company and all of its Shareholders.

          10.  Action to be taken in relation to the AGM

A Shareholder may appoint one or more proxies to exercise all or any of their rights to vote at the AGM.  A proxy need not be a member of the Company but must attend the meeting in person for the member's vote to be counted.  If a Shareholder appoints more than one proxy, each proxy must be appointed to exercise the rights attached to a different Share or Shares held by the Shareholder.  If a Shareholder wishes to appoint more than one proxy, they may do so at www.signalshares.com . In light of the on-going COVID-19 pandemic and that UK Government restrictions and guidelines as to public gatherings and social distancing can be altered at short notice, the Board strongly urges all Shareholders to register their votes in advance by appointing the chairman of the AGM as their proxy and giving him voting instructions. 

To be effective, the proxy vote must be submitted at www.signalshares.com so as to have been received by the Company's Registrars, Link Group, not less than 48 hours (excluding weekends and public holidays in England) before the time appointed for the meeting or any adjournment of it.  By registering on the Signal shares portal at www.signalshares.com , you can manage your shareholding, including: (i) cast your vote; (ii) change your dividend payment instruction; (iii) update your address; and (iv) select your communication preference.

If a paper Form of Proxy is requested from the Company's Registrars, it should be completed and returned to Link Group, PXS1, Central Square, 29 Wellington Street, Leeds LS1 4DL to be received not less than 48 hours (excluding weekends and public holidays in England) before the time appointed for the meeting or any adjournment of it.  Any power of attorney or other authority under which a Form of Proxy is submitted must be returned to the Company's Registrars, Link Group, at PXS1, Central Square, 29 Wellington Street, Leeds LS1 4DL. 

11.  Intention of Principal Shareholders

The Principal Shareholders have each confirmed their intention to vote in favour of the Resolutions in respect of their own beneficial shareholdings in the Company being, in aggregate, 50,659,581 Shares representing 50.9% per cent. of the total voting rights of the Company.

12.  Recommendation

The Directors consider that all resolutions to be put to the AGM are in the best interests of the Company and the Shareholders as a whole and are most likely to promote the success of the Company for the benefit of its Shareholders as a whole.  Accordingly, the Directors unanimously recommend that Shareholders vote in favour of all the proposed resolutions, as the Directors intend to do in respect of their own beneficial shareholdings in the Company.

Yours sincerely

Mike Holt

Executive Chairman

 

END

 

 

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