11:45 London, 13:45 Helsinki, September 21, 2018 - Afarak Group Plc ("Afarak" or "the Company")
AFARAK GROUP HAS RECEIVED A REQUEST TO CONVENE AN EXTRAORDINARY GENERAL MEETING
Afarak Group has received a request on the 21st September 2018 from shareholder LNS Ltd (formerly known with the name Kermas Resources Ltd), representing over 10 % of shares and voting rights, to convene an extraordinary meeting of shareholders.
The content of the request is:
The presenter of the request, who at the time of the request owns more than one-tenth of all shares of Afarak Group Plc (hereinafter Afarak) is putting forward a request to the Board of Directors of Afarak, pursuant to Chapter 5 Paragraph 4 of the Limited Liability Companies Act, to convene without delay and Extraordinary General Meeting of Afarak to address the following issue:
Authorising the Board of Directors to decide on the repurchase of Afaraks own shares
LNS proposes that Afaraks Extraordinary General Meeting would resolve to authorise the Board of Directors of Afarak (Board) to plan, decide and to execute the swap of Afaraks shares by a voluntary takeover bid to be made by Afarak to Afaraks shareholders in accordance with the Finnish Securities Markets Act (Takeover Bid) as proposed below.
Background of the proposal
In LNSs view, there is not enough liquidity in the Helsinki and London Stock Exchanges to allow larger shareholders to exit, hence LNS proposes that Afaraks Extraordinary General Meeting would resolve to authorise the Board to plan, decide and to execute the Takeover Bid in order to create a window of opportunity to those shareholders who would like to exit from Afarak.
After the execution of the Takeover Bid Afarak Group would have only those shareholders remaining who either have decided to continue as current shareholders in Afarak or who alternatively have decided to transfer to be new shareholders in Afarak Holdings Ltd.
LNSs view is that after the execution of the Takeover Bid Afarak Group would be in a better position due to the fact that the remaining shareholders would be committed and interested in the long-term development of Afarak Group. Currently some shareholders of the Company have had difficulties to find common understanding in various issues involving the Company, and in the long run the Companys businesses might suffer because of this.
LNS also believes that the current share price in the market is at least partially based on factors that are not directly related to the Companys business performance, but nevertheless suggests to use it as a basis for the Takeover Bid. Therefore in LNSs justified view, the reasonable price offered per share to the shareholders in the potential Takeover Bid would be at least EUR 0.90 per share and not more than EUR 1.15 per share.
The cash consideration in the Takeover Bid of at least EUR 0.90 per share and not more than EUR 1.15 per share corresponds to a premium of approximately 15.4 percent to the closing price of the shares of Afarak (EUR 0.78) on Nasdaq Helsinki on 18 September 2018.
Alternatively, Afarak would be able to pay the consideration in securities i.e. shares of Afarak Holdings Ltd owned by Afarak; with an exchange ratio of 1:1 in such a way that against one (1) Afarak share the consideration would be one (1) existing share in Afarak Holdings Ltd currently owned by Afarak.
In order to ensure equal treatment of Afaraks shareholders, the Takeover Bid should naturally be directed to all of the shareholders of Afarak.
In the event of the General Meetings decision in accordance with the this proposal, Afarak would have to, inter alia, draw up a prospectus in accordance with the Finnish Securities Markets Act and have it approved by the Financial Supervisory Authority in order to carry out the Takeover Bid. The prospectus for the Takeover Bid would contain, inter alia, the detailed terms of the Takeover Bid and instructions to shareholders, in accordance with which the shareholders could, if they so wished, offer their Shares to Afarak for acquisition.
LNS states its support to proposal and additionally state that it undertakes to use its right to offer its shares for acquisition by Afarak in the possible Takeover Bid in such a way that against one (1) Afarak share the consideration shall be one (1) existing share in Afarak Holdings Ltd. The willingness expressed and support given by LNS naturally significantly reduces the amount of funds required for the potential acquisition of the shares in the possible Takeover Bid.
Proposal for a conditional authorisation given to the Board of Directors
LNS proposes that the Afarak Group Plcs General Meeting would decide to conditionally authorise Afarak Group Plcs Board to acquire Afarak Group Plcs shares as follows:
Content of the authorisation
The Board of Directors of Afarak Group Plc (Afarak) is authorised to decide on the acquisition of a maximum of 31,500,000 own shares (Shares) by a voluntary takeover bid (Takeover Bid) made to Afaraks shareholders in accordance with the Finnish Securities Markets Act so that:
Each shareholder of Afarak shall also have the right not to participate in the Takeover Bid and to continue as a shareholder in Afarak.
The decision concerning the authorisation requires a qualified majority of at least two thirds of the votes cast and shares represented at the meeting.
Conditionality of the authorisation
The authorisation granted to the Board is conditional on the fulfilment of all of the following conditions:
The Board of Directors of Afarak Group will discuss the received letter of request in the manner provided by the Finnish Companies Act.
The Board of Directors
Afarak Group plc
For additional information, please contact:
Guy Konsbruck, CEO, +356 2122 1566, guy.konsbruck@afarak.com
Jean Paul Fabri, +356 2122 1566, jp.fabri@afarak.com
Financial reports and other investor information are available on the Company's website: www.afarak.com.
Afarak Group is a specialist alloy producer focused on delivering sustainable growth with a Speciality Alloys business in southern Europe and a FerroAlloys business in South Africa. The Company is listed on NASDAQ Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK).
Distribution:
NASDAQ Helsinki
London Stock Exchange
Main media
www.afarak.com