Placing and Notice of General Meeting

RNS Number : 7581P

Transense Technologies PLC

31 May 2018

 

Transense Technologies plc

("Transense", the "Company" or the "Group")

Placing

Notice of General Meeting and Share Reorganisation

Transense Technologies plc, the provider of sensor systems for the transportation and industrial markets, is pleased to announce that it has conditionally raised gross proceeds of £1.0 million by way of a Placing, subject to approval by its Shareholders at a General Meeting, of up to 2,500,000 Ordinary Shares at the Issue Price of 40p per Ordinary Share with institutional and other investors.

The Company is raising funds for the Group's trade, including marketing, further research and development and working capital for its Translogik business. Graham Storey, CEO of Transense, commented: "The Group continues to pursue and is encouraged by opportunities for its Translogik and SAWSense divisions and we are very pleased by the support shown by investors in this fundraise for the future development of our business."

The Company has generally sought to give all shareholders the opportunity to participate in previous fundraises by way of an offer for subscription. However, on this occasion the fundraise has been conducted with the intention of minimising the associated costs, both direct and in terms of limited management time. Taking that into account the Company has reluctantly decided not to make an offer for subscription to the shareholders on this occasion.

The new Ordinary Shares have been placed subject to, inter alia, shareholder approval at the General Meeting and subject to admission to trading on AIM. Application will be made to the London Stock Exchange for admission of all 12,048,948 Ordinary Shares, including the 2,500,000 Placing Shares, to trading on AIM and it is expected that Admission will occur at 8:00 a.m. on 22 June 2018.

As a matter of English law, the Company is unable to issue the Placing Shares at an issue price which is below the shares' nominal value (which is currently 50 pence per share). Accordingly, the Board is proposing a Share Reorganisation whereby the entire existing share capital, consisting of 9,548,948 Ordinary Shares of 50 pence nominal value each, are sub-divided into 9,548,948 Ordinary Shares of 10 pence nominal value each and 9,548,948 Deferred Shares of 40 pence nominal value each. The Share Reorganisation will allow the Company to implement the Placing at the Issue Price.

General Meeting

A Circular and Notice convening the General Meeting, to be held at the offices of finnCap Ltd, 60 New Broad Street, London EC2M 1JJ at 2.00 p.m. on 21 June 2018, will be sent to shareholders today and will shortly be available from the Company's website at www.transense.co.uk. The General Meeting has been convened to consider and if thought fit approve the Special Resolution set out in the Circular and Notice.

The Directors believe the Placing to be the most appropriate way to provide the capital necessary to meet the Company's future requirements. The Directors consider that the Placing will promote the success of the Company for the benefit of its members as a whole. Should the Placing not proceed for any reason, the Company would need to find alternative funding else face future uncertainty. Accordingly, the Directors unanimously recommend and strongly urge Shareholders to vote in favour of the Special Resolution at the General Meeting as they intend to do in respect of their own beneficial holdings of 192,785 Ordinary Shares representing approximately 2.02 per cent. of the Existing Ordinary Shares in issue as at the last practicable date before publication of this announcement.

Extracts from the Circular are set out below, to provide details of the Placing and Share Reorganisation, to explain the background to and the reasons for why the Directors recommend that Shareholders vote in favour of the Special Resolution to be proposed at the General Meeting. Details of the Expected Timetable of Principal Events and the Key Statistics are also set out below.

Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as defined in the Circular containing notice of the General Meeting.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For further information, please visit www.transense.co.uk or contact:

Transense Technologies plc

Graham Storey, Chief Executive                                                                             Tel: [phone]

finnCap (Nomad and Broker)                                                                                  Tel: [phone]

Ed Frisby, Giles Rolls (Corporate Finance)

Abigail Wayne, Camille Gochez (Corporate Broking)

About Transense Technologies

Based in Oxfordshire, UK, Transense has developed patent-protected sensor systems and supporting technology for use in a variety of diverse high growth markets. Transense's Surface Acoustic Wave (SAW), wireless, battery-less, sensor systems offer significant advantages over legacy wireless sensor systems. Transense is targeting the transport and mining industries, and the global torque, temperature and pressure sensing markets, via its trading divisions, Translogik and SAWSense.

Transense's shares are admitted to trading on AIM, a market operated by the London Stock Exchange (AIM: TRT).

www.transense.co.uk

The following text is extracted from the Circular:

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

	2018
Announcement of the Placing	31 May
Date of publication of this document	31 May
Last date and time for receipt of Forms of Proxy	2.00 p.m. on 19 June
General Meeting	2.00 p.m. on 21 June
Share Reorganisation effective	6.00 p.m. on 21 June
Admission and commencement of dealings in Placing Shares (and Ordinary Shares (post Share Reorganisation)) on AIM	8.00 a.m. on 22 June
CREST accounts credited with Placing Shares in uncertificated form	8.00 a.m. on 22 June
Definitive share certificates in respect of Placing Shares in certificated form despatched	No later than 6 July

Key statistics

Issue Price	40 pence
Number of existing Ordinary Shares in issue at the date of this document	9,548,948
Aggregate number of Placing Shares	2,500,000
Market capitalisation of the Company on Admission at the Issue Price	£4.8 million
Number of Placing Shares as a percentage of the share capital in issue immediately following Admission1	20.7 per cent.
Gross proceeds of the Placing	£1 million

Notes:

1 This figure assumes that no Options are exercised prior to Admission.

DEFINITIONS

"Act"		Companies Act 2006
"Admission"		the admission of the Placing Shares to trading on AIM having become effective in accordance with the AIM Rules
"AIM"		a market operated by London Stock Exchange plc
"AIM Rules"		AIM Rules for Companies published by the London Stock Exchange (as amended or reissued from time to time)
"Articles"		the articles of association of the Company (as amended from time to time)
"Board" or "Directors"		the board of directors of the Company, as at the date of this document, whose names are set out on page 8 of this document
"Business Day"		any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business
"City Code"		City Code on Takeover and Mergers
"Company" or "Transense"		Transense Technologies plc
"CREST'		the relevant system (as defined in the Uncertified Securities Regulations 2001 (S.I. 2001/3755)) for the paperless settlement of trades and the holding of uncertificated securities, operated by Euroclear UK & Ireland Limited, in accordance with the same regulations
"CREST Regulations"		the Uncertificated Securities Regulations 2001 (S.I. 2001/3755), as amended from time to time
"Deferred Shares"		deferred shares of 40 pence each in the capital of the Company following the passing of the Special Resolution
"Effective Time"		6.00 p.m. on 21 June 2018 (or, if the General Meeting is adjourned, 6.00 p.m. on the date of the adjourned General Meeting)
"Engagement Letter"		the engagement letter dated on or around the date of this document between the Company and finnCap relating to the Placing
"Excluded Territories"		any jurisdiction except the United Kingdom
"Existing Ordinary Shares"		the 9,548,948 Ordinary Shares in issue at the date of this document
"finnCap"		finnCap Limited, nominated adviser and broker to the Company, and any of its affiliates
"Form of Proxy"		the form of proxy for use by Shareholders at the General Meeting
"FSMA"		the Financial Services and Markets Act 2000 (as amended)
"General Meeting"		the general meeting of the Company, convened for 2.00 p.m. on 21 June 2018, and any adjournment thereof, notice of which is set out in the Notice, which will consider the Special Resolution
"Group"		Transense and its subsidiaries
"HMRC"		Her Majesty's Revenue & Customs
"Issue Price"		40 pence per Placing Share
"London Stock Exchange"		London Stock Exchange plc
"Notice"		the notice of General Meeting set out at the end of this document
"Official List"		the list of all securities that have been approved by the UKLA for trading on a UK regulated market
"Options"		options to subscribe for Ordinary Shares granted by the Company
"Ordinary Shares"		ordinary shares in the capital of the Company having a nominal value of 50 pence each prior to the Share Reorganisation becoming effective and having a nominal value of 10 pence upon the Share Reorganisation becoming effective;
"Placee"		a subscriber for Placing Shares under the Placing
"Placing"		the conditional placing of the Placing Shares by finnCap with certain institutional and other investors at the Issue Price
"Placing Shares"		the 2,500,000 new Ordinary Shares to be issued pursuant to the Placing
"Prospectus Rules"		the Prospectus Rules published by the FCA (as amended or reissued from time to time)
"Share Reorganisation"		the share reorganisation proposed to be effected by the Special Resolution in the Notice
"Shareholder(s)"		holder(s) of Ordinary Shares from time to time
"Special Resolution"		the special resolution to be proposed at the General Meeting, details of which are set out in the Notice
"UK" or "United Kingdom"		the United Kingdom of Great Britain and Northern Ireland
"UKLA"		the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA
"uncertificated" or "in uncertificated form"		an Ordinary Share recorded on a company's share register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
"United States" or "U.S."		the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia

A reference to "£" is to pound sterling, being the lawful currency of the UK.

A reference to "€" is to the Euro, being the official currency of 19 of the 28 member states of the European Union.

LETTER FROM THE CHAIRMAN

Transense Technologies plc

(Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 1885075)

Directors:                                                                                                                                                Registered Office:

D M Ford (Chairman)                                                                                                                               1 Landscape Close 

H G D Storey (Chief Executive Officer)                                                                                                    Weston-on-the-Green

M Segal (Finance Director)                                                                                                                                                                      Bicester

N Rogers (Non-Executive Deputy Chairman)                                                                                                         Oxfordshire

R J Westhead (Non-Executive Director)                                                                                                                               OX25 3SZ

31 May 2018

To the Shareholders and, for information only, to holders of Options

Dear Shareholder,

PLACING OF 2,500,000 NEW ORDINARY SHARES AT A PRICE OF 40 PENCE PER SHARE TO RAISE APPROXIMATELY £1 MILLION

SHARE REORGANISATION

NOTICE OF GENERAL MEETING

1.             Introduction

The Company today announced a conditional placing with certain institutional and other investors, to raise approximately £1 million before expenses through the issue of 2,500,000 new Ordinary Shares at the Issue Price (referred to in this document as, the "Placing Shares").

The Issue Price is at a discount of approximately 9.1 per cent. to the closing middle market price of 44 pence per existing Ordinary Share on 30 May 2018 (being the last practicable date before publication of this document).

The purpose of this document is to provide you with details of the Placing, to explain the background to and the reasons for the Placing and why the Directors recommend that Shareholders vote in favour of the Special Resolution to be proposed at the General Meeting. As the Placing Price is below the nominal value of the Company's Existing Ordinary Shares, the Company needs to effect the Share Reorganisation to effect the Placing, and further details of the Share Reorganisation are set out in paragraph 4 below.

The Placing and Share Reorganisation are each conditional, inter alia, on the passing of the Special Resolution by Shareholders at the General Meeting, notice of which is set out at the end of this document. If the Special Resolution is passed, the Admission of the Placing Shares to trading on AIM is expected to occur at 8.00 a.m. on 22 June 2018.

2.             Background to and reasons for the Placing

The Directors believe that it is prudent for the Company to seek further capital at this time to fund the Group's trade. The use of proceeds of the Placing are set out in paragraph 5 below.

The Directors believe the Placing to be the most appropriate way to provide the capital necessary to meet the Company's future requirements. As at 30 April 2018, the Company held cash and cash equivalents of approximately £804,000 (unaudited), and had no bank borrowings.

The Company has generally sought to give all Shareholders the opportunity to participate in previous fundraises by way of an offer for subscription. However, on this occasion the fundraise has been conducted with the intention of minimising the associated costs, both direct and in terms of limited management time. Taking that into account the Company has reluctantly decided not to make an offer for subscription to the Shareholders on this occasion.

3.            Details of the Placing

3.1           Placing

The Company has conditionally raised approximately £1 million before expenses through the Placing. Application will be made to the London Stock Exchange for the Ordinary Shares, including the Placing Shares, to be admitted to trading on AIM and it is expected that Admission will become effective and that dealings in the Ordinary Shares, including the Placing Shares, will commence on AIM at 8.00 a.m. on 22 June 2018. Assuming no Options are exercised prior to Admission, the Placing Shares will represent approximately 20.7% of the ordinary share capital of the Company in issue immediately following Admission.

3.2          Engagement Letter

Pursuant to the terms of the Engagement Letter, finnCap, as nominated adviser and broker to the Company, has conditionally procured Placees for the Placing Shares at the Issue Price. The Engagement Letter is conditional, amongst other things, upon the Special Resolution being duly passed at the General Meeting and Admission becoming effective on or before 8.00 a.m. on 31 July 2018. The Engagement Letter contains provisions entitling finnCap to terminate the Engagement Letter at any time prior to Admission in certain circumstances. The Placing has not been underwritten.

3.3          General

All Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Ordinary Shares in issue from time to time, including the right to receive all dividends and other distributions declared on or after the date on which they are issued.

For details as to the expected date and times by which certain events (e.g. Admission, the crediting of CREST accounts and the dispatch of share certificates) are expected to happen in relation to the Placing Shares and the Share Reorganisation, please refer to the information on page 4 (Expected Timetable of Principal Events) of this document.

4.            Share Reorganisation

The nominal value of the Ordinary Shares is currently 50 pence per share. As a matter of English law, the Company is unable to issue the Placing Shares at an issue price which is below their nominal value. It is therefore proposed to sub-divide the entire existing share capital, both issued and to be issued, consisting of 9,548,948 Ordinary Shares of 50 pence nominal value each, into 9,548,948 Ordinary Shares of 10 pence nominal value each and 9,548,948 Deferred Shares of 40 pence nominal value each, thus enabling the Company lawfully to implement the Placing at the Issue Price.

Each Ordinary Share resulting from the Share Reorganisation will have the same rights (including voting and dividend rights and rights on a return of capital) as each Existing Ordinary Share except that they will have a nominal value of 10 pence each.

The Deferred Shares will, as their name suggests, have very limited rights which are deferred to the Ordinary Shares and will effectively carry no value as a result. Accordingly, the holders of the Deferred Shares will not be entitled to receive notice of, attend or vote at general meetings of the Company, nor be entitled to receive any dividends or any payment on a return of capital until at least £10,000,000 has been paid on each Ordinary Share. No application will be made for the Deferred Shares to be admitted to trading on AIM.

The Company will also be given power to arrange for all the Deferred Shares to be transferred to a custodian or to be purchased for nominal consideration only without the prior sanction of the holders of the Deferred Shares. No share certificates for the Deferred Shares will be issued. 

EMI options will be amended such that the options subsist over only Ordinary Shares of 10 pence each and not over Deferred Shares of 40 pence each. Since such amendments are envisaged in the option documents and the variation of share capital is not a disqualifying event under the EMI Code (as the value of the options is not affected and the Company remains a qualifying company for EMI purposes) all EMI Options should retain their tax benefits without needing to be re-granted. Unapproved options, including the exercise price, will be unaffected by the Share Reorganisation save that the Ordinary Shares to be issued on the exercise of such options will have a nominal value of 10 pence rather than 50 pence following the Share Reorganisation.

No new certificates for the Existing Ordinary Shares will be dispatched if the Share Reorganisation becomes effective.

A request will be made to the London Stock Exchange to reflect on AIM the sub-division of the Existing Ordinary Shares into Ordinary Shares of 10 pence each.  Each Existing Ordinary Share standing to the credit of a CREST account will be sub-divided into one Ordinary Share of 10 pence each and one Deferred Share of 40 pence each at 6.00  p.m. on 21 June 2018.

Following the Share Reorganisation, the ISIN code for the Ordinary Shares will remain unchanged. 

Taxation

The sub-division of the Existing Ordinary Shares into Ordinary Shares of 10 pence nominal value each and Deferred Shares of 40 pence nominal value each as part of the Share Reorganisation should be treated as a reorganisation for the purposes of taxation of chargeable gains. Consequently Shareholders should not be treated as making a disposal of all or part of their Existing Ordinary Shares on acquiring their new holding. Instead, the Ordinary Shares and the Deferred Shares (taken as a single asset) should be treated as the same asset as the Existing Ordinary Shares, in addition to being treated as acquired at the same time, and for the same consideration as the Existing Ordinary Shares.

To calculate the gain or loss arising to Shareholders on subsequent disposal of their Ordinary Shares and Deferred Shares, it will be necessary to apportion the base cost of their Existing Ordinary Shares between their Ordinary Shares and Deferred Shares by reference to the shares' respective values on the first day on which the Ordinary Shares are listed.  It is anticipated that the Deferred Shares should have a nil market value on that date, and therefore the entire base cost of the Existing Ordinary Shares should be attributed to the Ordinary Shares.

The purchase by a custodian of all of the Deferred Shares for a nominal consideration will result in Shareholders making a disposal for tax purposes. Any such gain or loss arising on such disposal will be calculated by reference to the difference between (i) the proceeds received by the Shareholder and (ii) the part of the Shareholder's original base cost in their Existing Ordinary Shares which was apportioned to the Deferred Shares, as described above.

Since it is anticipated that the Deferred Shares will have nominal market value, it is anticipated that only nominal gains should arise on any disposal of Deferred Shares.

The above summary is intended as a general guide only to the application of current United Kingdom tax legislation and what is understood to be current HMRC practice (which may not be binding on HMRC), which may be subject to change. It does not constitute tax advice. It may not apply to certain classes of Shareholder. The comments relate only to Shareholders who are resident in the United Kingdom for tax purposes (except where otherwise stated) and who hold their Existing Ordinary Shares, Ordinary Shares and Deferred Shares beneficially as investments (and not as securities to be realised in the course of a trade). They do not apply to dealers in securities. Any person who is in any doubt as to his tax position or who is subject to tax in a jurisdiction other than the United Kingdom is strongly recommended to consult his professional tax adviser immediately.

5.            Use of Proceeds

The Company is raising funds for the Group's trade, including marketing, further research and development and working capital for its Translogik business.

6.            Shareholder Approval

For the Placing and the Share Reorganisation to proceed, Shareholder approval by way of the Special Resolution is required to:

(a)            effect the Share Reorganisation; and

(b)           give the Directors the authority to allot the Placing Shares and to dis-apply statutory pre-emption rights in respect thereof.

In order to obtain the necessary Shareholder approval, a General Meeting of the Company is to be held at which the Special Resolution will be proposed. Further information regarding the General Meeting is set out in paragraph 7 below.

The Directors believe the Placing to be the most appropriate way to provide the capital necessary to meet the Company's future requirements. Should the Placing not proceed for any reason, the Company would need to find alternative funding else face future uncertainty. The Directors urge Shareholders to vote in favour of the Special Resolution set out in this notice.

7.             General Meeting

A notice convening the General Meeting to be held at the offices of finnCap, 60 New Broad Street, London EC2M 1JJ at 2.00 p.m. on 21 June 2018 is set out at the end of this document.

8.            Action to be taken by Shareholders

A reply-paid Form of Proxy is enclosed for use at the General Meeting. Whether or not you intend to be present at the meeting you are requested to complete, sign and return this Form of Proxy to the Company's registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen B63 3DA as soon as possible but in any event so as to arrive not later than 2.00 p.m. on 19 June 2018. The completion and return of this Form of Proxy will not preclude you from attending the General Meeting and voting in person should you subsequently wish to do so.

9.             Recommendation

The Directors consider that the Placing will promote the success of the Company for the benefit of its members as a whole. Accordingly, the Directors unanimously recommend and strongly urge Shareholders to vote in favour of the Special Resolution at the General Meeting as they intend to do in respect of their own beneficial holdings of 192,785 Ordinary Shares representing approximately 2.02 per cent. of the Existing Ordinary Shares in issue as at the last practicable date before publication of this document.

Yours faithfully

David Ford

Chairman

 

END

 

 

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