Notice of EGM

RNS Number : 2199W

Star Phoenix Group Ltd

14 August 2020

 

Star Phoenix Group Ltd

("Star Phoenix" or "the Company")

14 August 2020

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. 

NOTICE OF EGM

Star Phoenix (AIM: STA), an international company with an oilfield services business in Trinidad and an oil and gas interest in Indonesia, announces that following announcements on 27 July, 29 July and 5 August 2020, a circular has been sent to shareholders together with a notice of General Meeting ("General Meeting") which is to be held at Uncommon, 1 Long Lane, London, SE1 4PG, United Kingdom at 9.00 a.m. (BST) on 25 September 2020. Copies of the circular and notice of General Meeting are available from the Company's website https://www.starphoenixgroup.com/ . An extract of the circular can also be seen below.

This announcement has been approved by Chairman Kerry Gu on behalf of the Company.

Contact Details
Star Phoenix Group Ltd Evgenia Bezruchko (Group Corporate Development Manager & Joint Company Secretary) e. [e-mail] t.   [phone]	WH Ireland Limited (Nominated Adviser and Broker) James Joyce / Matthew Chan t.   [phone]

Star Phoenix Group Ltd
ACN 002 522 009

Notice of General Meeting

Notice is given that the Meeting will be held at:

Time:   9:00am (BST)  

Date:   25 September 2020

Place:   Uncommon

  1 Long Lane

  London SE1 4PG

  United Kingdom

Please note that, due to COVID-19 safety measures, if you intend to attend the Meeting in person you will need to register your attendance in advance by sending an email to the Company Secretary Evgenia  Bezruchko at [e-mail] no later than 9:00am BST on 23 September 2020.

Directors' Recommendations
Refer to Section 2 of the Explanatory Statement

Important

The business of the Meeting affects your shareholding and your vote is important.

This Notice of General Meeting should be read in its entirety.  If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 7:00pm (Sydney time) on 23 September 2020.

Business of the Meeting

Agenda

1  Resolution 1 - Removal of Dr YuFeng Meng as a Director 

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"Removal of Dr YuFeng Meng from the Board of Directors."

2  Resolution 2 - Appointment of Dr Yang Chong Yi as a director of the Company

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

"That Dr Yang Chong Yi, having consented to act, be elected to the office of non-executive director of the Company."

3  Resolution 3 - Appointment of Mr Paul Norris as a director of the Company

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

"That Mr Paul Norris, having consented to act, be elected to the office of non-executive director of the Company."

4  Resolution 4 - Appointment of Mr Omar C.S. Stanford IV as a director of the Company

To consider and, if thought fit, to pass, the following resolution as an ordinaryresolution:

"That Mr Omar C.S. Stanford IV, having consented to act, be elected to the office of non-executive director of the Company."

5  Resolution 5 - Appointment of Mr Li Jun as a director of the Company

To consider and, if thought fit, to pass, the following resolution as an ordinaryresolution:

"That Mr Li Jun, having consented to act, be elected to the office of non-executive director of the Company."

6  Resolution 6 - Removal of Mr Zhiwei (Kerry) Gu as a Director 

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That Mr Zhiwei (Kerry) Gu be removed from the office of director of the Company with immediate effect."

7  Resolution 7 - Removal of Mr Lubing Liu as a Director 

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That Mr Lubing Liu be removed from the office of director of the Company with immediate effect."

 

Dated: 14 August 2020

By order of the Board

Evgenia Bezruchko
Company Secretary

Voting in person

To vote in person, attend the Meeting at the time, date and place set out above. 

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

· each Shareholder has a right to appoint a proxy;

· the proxy need not be a Shareholder of the Company; and

· a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise.  If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member's votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

· if proxy holders vote, they must cast all directed proxies as directed; and

· any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

United Kingdom (CREST Voting Instruction)

DI Holders in CREST may transmit voting instructions by utilising the CREST voting service in accordance with the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to their CREST sponsor or voting service provider, who will be able to take appropriate action on their behalf.

In order for instructions made using the CREST voting service to be valid, the appropriate CREST message (a "CREST Voting Instruction") must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual (available via www.euroclear.com/CREST). 

To be effective, the CREST Voting Instruction must be transmitted so as to be received by the Company's agent (3RA50) no later than 21 September 2020 at 9.00am (BST). For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the CREST Voting Instruction by the CREST applications host) from which the Company's agent is able to retrieve the CREST Voting Instruction by enquiry to CREST in the manner prescribed by CREST. DI Holders in CREST and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the transmission of CREST Voting Instructions. It is the responsibility of the DI Holder concerned to take (or, if the DI Holder is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that the CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a CREST Voting Instruction is transmitted by means of the CREST voting service by any particular time.

In this connection, DI Holders and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

United Kingdom (Form of Instruction) 

DI Holders are invited to attend the Meeting but are not entitled to vote at the Meeting. In order to have votes cast at the Meeting on their behalf, DI holders must complete, sign and return the Forms of Instruction forwarded to them along with the Notice to the Company's agent, Computershare UK, by 21 September 2020 at 9.00am (BST). 

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company by telephone on [phone] or [phone].

 

Explanatory Statement

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

· Requests for appointments and removals of directors of the Company

7.1  General

Pursuant to section 249D(1) of the Corporations Act, a general meeting is required to be called upon the request of a member with at least 5% of the votes that may be cast at a general meeting of the Company.  The Directors must call the general meeting within 21 days after the request is given to the Company, and the meeting must be held no later than 2 months after notice of the request has been given to the Company.

The Company has received two separate requests from two separate Shareholders, each of which holds at least 5% of the votes that may be cast at a general meeting of the Company, for a general meeting to be held to consider certain appointments and removals of directors of the Company.  The Company has called and arranged to hold the Meeting to consider all the resolutions proposed pursuant to these requests and in accordance with the provisions of section 249D(5) of the Corporations Act.

Shareholders should note that all Resolutions contained in the Notice have been proposed pursuant to a request from one or other of the Requisitioning Shareholders, and not by the Board.

Shareholders should also note that any Director appointment is subject to the approval of the Company's Nomad. This is consistent with the requirements of the AIM Rules for Nominated Advisers which oblige a Nomad to consider any changes to the board of directors the AIM company proposes to make, including: a) investigating and considering the suitability of proposed new directors, and b) considering the effect any changes will have on the efficacy of the Board as a whole for the Company's needs, in each case having in mind that the Company is admitted to trading on a UK public market. 

If the Nomad is not comfortable with the appropriateness of a proposed Director or the efficacy of the Board as a whole as a result of the proposed changes then such changes should not be made.

Following ongoing discussions, the Company's Nomad (WH Ireland Limited) has advised the Directors that it does not believe the Company is appropriate to be admitted to trading on AIM if the proposed board changes set out in the Company's circular were affected. Accordingly, if the board changes set out in this circular are approved the Company's Nomad is highly likely to tender its resignation with immediate effect.

Pursuant to Rule 1 of the AIM Rules for Companies if a Company ceases to have a Nomad the Exchange will suspend trading in its AIM securities with immediate effect. If a new Nomad is not appointed within one month of the date of resignation of the original Nomad, this will result in the Company's ordinary shares being delisted from AIM and the Company's admission to AIM being cancelled.

7.2  Thesolia Requisition

As announced on 27 July 2020, by notice to the Company received on 27 July 2020, Thesolia Ltd (Thesolia) requested the Directors to call and hold a general meeting in accordance with section 249D of the Corporations Act (Thesolia Requisition).

The Thesolia Requisition seeks the removal of Dr YuFung Meng as a Director, which is the subject of Resolution 1.

As at midnight on the date before the Thesolia Requisition was given to the Company, Thesolia held approximately 16.7% of the votes that may be cast at a general meeting of the Company.

7.3  Sibo Requisition

As announced on 23 July 2020, by notice to the Company received on 23 July 2020, Beijing Sibo Investment Management LP (Sibo) requested the Directors to call and hold a general meeting in accordance with section 249D of the Corporations Act.  On 28 July 2020, Sibo withdrew the request received by the Company on 23 July 2020 and the Company received a separate request from Sibo on that same date for the Directors to call and hold a general meeting accordance with section 249D of the Corporations Act (Sibo Requisition).

The Sibo Requisition seeks the appointments and removals of directors of the Company, which are the subject of Resolutions 2 to 7.

As at midnight on the date before the Sibo Requisition was given to the Company, Sibo held approximately 17.3% of the votes that may be cast at a general meeting of the Company.

7.4  Biographies of persons proposed to be appointed and removed as directors of the Company

Section 203D(4) of the Corporations Act provides that a director who is the subject of a proposed resolution for their removal from office is entitled to submit a statement for circulation to shareholders.

Mr Zhiwei Gu and Mr Lubing Liu have exercised their right under section 203D(4) of the Corporations Act to provide Shareholders with a joint statement in relation to the proposed resolutions which is included in Schedule 1 of this Notice.

Dr YuFeng Meng (nominee of Sibo) has also exercised her right under section 203D(4) of the Corporations Act to provide Shareholders with a statement in relation to the proposed resolutions which is included in Schedule 2 of this Notice.

Biographies of the persons proposed to be appointed and removed as directors of the Company are included below.

Director proposed to be removed pursuant to the Thesolia Requisition

2.4.7  Dr YuFeng Meng

Dr Meng's career spans over 30 years across the USA, Australia, Hong Kong and China, where she held various leadership, management and consulting roles in different sectors including education, aircraft tyre logistics, waste management, real estate, equity investment, banking and Free Trade Zone management and marketing. Dr Meng has experience in the public sector, project management, and finance (particularly in the Build-Operate-Transfer or Build-Own-Operate-Transfer project financing).  More recently, she organised numerous government trade delegations to promote bilateral business co-operation between China and Australia.  Dr Meng holds a PhD in Business Administration from InterAmerican University and an MBA in Business Administration from Southern California University.

Dr Meng is a nominee of Sibo and was appointed as a Non-Executive Director on 14 April 2020 pursuant to Sibo's contractual right to appoint up to three Non-Executive Directors while it holds at least 10% shareholding in the Company. The appointment of each nominee director is required to comply with the AIM rules and requires the approval of the Company's Nomad.

In the event Resolution 1 is passed and Dr Meng is removed as a director the Resolution does not take effect until a replacement to represent Sibo's interests has been appointed. 

Persons proposed to be appointed pursuant to the Sibo Requisition 

Biographies of the persons proposed to be appointed pursuant to the Sibo Requisition, being the persons subject of Resolutions 2 to 5 are set out in Schedule 4.

Directors proposed to be removed pursuant to the Sibo Requisition

2.4.1  Mr Zhiwei Gu

Mr Gu is an experienced corporate lawyer, who has worked with numerous companies seeking listings on various international stock markets, including the Toronto Stock Exchange and the Hong Kong Stock Exchange.  He is currently a partner of Dentons, one of the largest global law firms.  Mr Gu has participated in several venture capital and private equity investment cases by various funds such as London Asia Fund, Warburg Pincus, Korea Development Bank, China Venture Investment Co., and China Cinda AMC.  During his time with China National Gold Group Corp., Mr Gu was in charge of mineral resources merger and acquisition activities.  Mr Gu holds an LLB from Jilin University in China, an LLM from Northeast University in China, and Master of Applied Finance from Macquarie University in Australia.  Mr Gu is a qualified lawyer and securities practitioner in China.

Mr Gu is the Executive Chairman of the Company.  He has been a Director since 11 December 2014 and was last re-elected as a Director on 30 November 2017.

2.4.2  Mr Lubing Liu

Mr Lubing Liu has 25 years of global experience in petroleum exploration, development, production, joint venture operations and new ventures. Prior to joining the Company, Mr Liu held various subsurface leader roles, including Chief Reservoir Engineer with Melbana Energy Limited, Vice President of Exploration and Petroleum Technology with Sinopec East Puffin Pty Ltd, and principal petroleum engineering leader roles with other international exploration and production and energy service companies including ConocoPhillips, CNOOC, Woodside, RPS and LR. Mr Liu is experienced in petroleum engineering and has extensive IOR/EOR (waterflood inclusive) and gas cycling experience having worked at the Xijiang24-3/30-2/24-1 oilfields, Liuhua 11-1 oilfield and Penglai oilfield in China, the Chinguetti oilfield in Mauritania, Block 95 in Peru, Goodwyn gas field, Thylacine & Geographe gas field and Longtom gas field in Australia. Mr Liu holds a BSc in Petroleum Engineering from the Southwest Petroleum University, China. He is a Member of the Society of Petroleum Engineers.

Mr Liu is an Executive Director, Joint Company Secretary and Chief Operating Officer of the Company.  He is also Trinidad General Manager. He has been a Director since 16 June 2016 and was last re-elected as a Director on 29 November 2019.

7.5  Statements of Requisitioning Shareholders under section 249P of Corporations Act

Section 249P of the Corporations Act gives shareholders who hold shares representing at least 5% of the votes that may be cast on a resolution at a general meeting the right to submit a statement for circulation to all shareholders regarding the proposed resolutions and any other matter that may be properly considered at the meeting (Section 249P Statement). 

Thesolia Section 249P Statement

Thesolia has given a Section 249P Statement to the Company which is included in Schedule 3 of this Notice.

Sibo Section 249P Statement

Sibo has given a Section 249P Statement to the Company which is included in Schedule 4 of this Notice.

· Directors' recommendations

7.6  General

The Board currently consists of four Directors, being Mr Zhiwei (Kerry) Gu, Mr Lubing Liu, Dr Mu (Robin) Luo, and Dr YuFeng Meng.

One Director, Dr YuFeng Meng, is the subject of a removal Resolution requested under the Thesolia Requisition (Resolution 1).  Dr Meng is a nominee of Sibo.

Two of the Directors, Mr Zhiwei Gu and Mr Lubing Liu, are the subject of removal Resolutions requested under the Sibo Requisition (Resolutions 6 and 7). 

The fourth Director, Dr Mu Luo, is not subject to a removal Resolution.

In the circumstances, the Board is not unanimous in its response to the Requisitions.

7.7  Thesolia Requisition (Resolution 1)

Mr Zhiwei Gu, Mr Lubing Liu Dr Mu (Robin) Luo consider that the removal of Dr Meng as a Director is in the best interests of the Company and recommend that shareholders vote in favour of Resolution 1. The Directors believe that Dr Meng's experience and skillset does not benefit the Board or the Company and causes distraction to the team.

Dr Meng is the subject of Resolution 1 and does not make a recommendation in respect of her own removal. 

7.8  Sibo Requisition (Resolutions 2 to 7)

Mr Zhiwei Gu and Mr Lubing Liu consider that their removals are not in the best interests of the Company and recommend that shareholders vote against Resolutions 2 to 7 (other than that Mr Zhiwei Gu does not make a recommendation in respect of the Resolution 6 in respect of his own removal, and Mr Lubing Liu does not make a recommendation in respect of Resolution 7 in respect of his own removal).

Mr Zhiwei Gu and Mr Lubing Liu have provided the following reasons for their recommendations:

Resolutions 2 to 5

· The proposed candidates are nominated by one shareholder Sibo. If these directors are to be elected, five out of six directors on the Board will be nominees of Sibo, which is not in the best interests of the Company or its other 83% shareholders;

· Most of the Directors on the Board will be non-independent (given they are proposed by Sibo) which provides no protection to the majority of other shareholders who own this Company;

· Shareholders (other than Sibo) will have no control over the future direction of the Company with Sibo proposing for the Company to change its strategy with no clear indication of the new sector or how it could benefit the Company's shareholders; and

· There is a significant risk that the new appointments will not be approved by the Company's Nomad, which may lead to suspension and subsequent delisting of the Company's shares from AIM.

Resolutions 6 and 7

· Mr Zhiwei Gu and Mr Lubing Liu have been Directors of the Company for the last six and four years, respectively;

· We are independent of any shareholder and have best interests of all shareholders rather than an individual party;

· Not only we are familiar with the business of the Company but are also significantly experienced to develop and grow the Company as evidenced from the recent notable achievements; 

· Following challenging times and despite turbulent macro and sector-specific conditions, we have successfully completed debt restructure for the benefit of all shareholders. This restored financial health to the balance sheet and ensured the Company has a bright future ahead of it; and

· Our concern is solely for the future of the Company and its shareholders, with our removal potentially leading to: (1) instability of the Company; (2) loss of market confidence in the Company; (3) uncertainty of future direction; (4) difficulty to retain the management team; and (5) imbalance of the Board of directors, controlled by one shareholder.

Mr Gu and Liu provided a joint statement to Shareholders which can be found in Schedule 1 of this Notice.

Dr Meng considers that the removal of Mr Gu and Mr Liu and their replacement with Dr Yang Chong Yi, Mr Paul Norris, Mr Omar C.S. Stanford IV and Mr Li Jun is in the best interests of the Company and recommends that shareholders vote in favour of Resolutions 2 to 7.

Dr Meng has provided the following reasons for her recommendations:

Resolutions 2 to 5

· All proposed directors by Sibo should be considered independent directors as despite them being nominated by Sibo they have no contractual agreement and / or material interest with Sibo and are not shareholders of Sibo;

· Other than being nominated by Sibo, the proposed directors had no prior connection or dealings with Sibo, in particular, Mr. Norris and Mr. Stanford IV who come highly recommended by third parties;

· Sibo has selected the proposed candidates based on their professional experience, outlook and background, and ensured the proposed directors have a wider experience and business background than what is currently being represented on the Board;

· Mr Paul Norris is a highly respected UK national with an established track record in the financial and investment sector;

· Mr Omar C. S. Stanford IV is a highly professional US-based individual, specialising in the technology, telecommunications, computing and security industries;

· Dr Yang Chong Yi is a highly experienced seasonal professional with background in assisting companies listed on the main board of Nasdaq; and

· Mr Li Jun is an entrepreneur specialising in start-ups and value creation for shareholders.

Resolutions 6 and 7

· The Executive Directors failed to move the Company forward in its development or communicate any strategy to do so;

· The Executive Directors failed to make any attempt to engage with Sibo in relation to the Company's forward strategy and plan; and

· As far as I am aware, there have been no attempt to discuss issues with Sibo or with the Nomad to avert the current situation and reduce any further distractions for the Company.

Dr Meng provided a statement to Shareholders which can be found in Schedule 2 of this Notice.

Dr Mu (Robin) Luo considers that the removal of Mr Gu and Mr Liu and their replacement with Dr Yang Chong Yi, Mr Paul Norris, Mr Omar C.S. Stanford IV and Mr Li Jun is not in the best interests of the Company and recommends that shareholders vote against Resolutions 2 to 7. Dr Mu believes that the Company is an established international oil and gas company that requires its directors to have a relevant professional experience in the sector, which none of the proposed replacement candidates have. Therefore, their appointments would not benefit the Company or its shareholders. Furthermore, Dr Luo disagrees with Sibo's proposed exit for the Company from the oil and gas industry, as he believes that the sector is highly prospective with oil and gas companies continuously dominating the top 30 companies globally (with over 20% dominance) in the last five years. Despite the material adverse impact of the pandemic in 2020, the oil companies continued to dominate the top 10 companies globally with a significant 50% dominance, once again highlighting the very realistic prospectivity of the oil and gas industry.

7.9  Undirected proxies

The Chairperson intends to exercise all undirected proxies for Resolution 1 and against Resolutions 2-7.

· Directors' response to Section 249P Statements

Directors have exercised their right under section 203D(4) of the Corporations Act to provide Shareholders with statements in relation to the proposed resolutions which are included in Schedules 1 and 2 of this Notice.

· Resolutions 1, 6 and 7 - Removal of Directors

7.10  General

In accordance with the requirements of the Constitution and the Corporations Act, the Company has convened the Meeting to allow Shareholders to vote on the removal of each of Dr YuFeng Meng, Mr Zhiwei Gu and Mr Lubing Liu as a Director.

Resolutions 1, 6 and 7 are each ordinary resolutions.

7.11  Qualifications and other material directorships

Details regarding the experience, ability and background of the Directors proposed to be removed are set out at Section 1.4.

7.12  Independence

The Board considers Dr YuFeng Meng is not an independent director, by reason of her being a nominee of Sibo, which is a substantial shareholder of the Company holding approximately 17.3% of the Company's voting shares, and will continue not to be an independent director if she is not removed.

The Board considers Mr Zhiwei Gu is not an independent director as he holds an executive position with the Company as Executive Chairman.

The Board considers Mr Lubing Liu is not an independent director, as he is an Executive Director, Joint Company Secretary, and Chief Operating Officer. 

· Resolutions 2 to 5 - Appointments of directors of the Company

7.13  General

In accordance with the requirements of the Constitution and the Corporations Act, the Company has convened the Meeting to allow Shareholders to vote on the appointments of each of Dr Yang Chong Yi, Mr Paul Norris, Mr Omar C.S. Stanford IV and Mr Li Jun as directors of the Company.

Resolutions 2 to 5 are each ordinary resolutions.

7.14  Qualifications and other material directorships of proposed directors of the Company

Details regarding the experience, ability and background of the persons proposed to be appointed pursuant to Resolutions 2 to 5 are set out in Schedule 4.

7.15  Independence

If elected the Board (other than Dr Meng) considers each of Dr Yang Chong Yi, Mr Paul Norris,  Mr Omar C.S. Stanford IV and Mr Li Jun will not be an independent director, by reason of each being a nominee of Sibo, which is a substantial shareholder of the Company holding approximately 17.3% of the Company's voting shares.
 

Glossary

AIM means the market of that name operated by the London Stock Exchange.

Board means the current board of directors of the Company.

BST means British Summer Time.

Chair means the chair of the Meeting.

Company means Star Phoenix Group Ltd (ACN 002 522 009).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

DI Holder means a holder of depositary interests representing Shares which are electronically listed for trading on AIM and issued by Computershare Investor Services plc which holds legal title to the underlying Shares.

Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting or Meeting means the meeting convened by the Notice.

Nomad means Nominated Adviser.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Proxy Form means the proxy form accompanying the Notice.

Requisition means the Sibo Requisition or Thesolia Requisition and Requisitions means both of them.

Requisitioning Shareholder means Sibo or Thesolia.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Section means a section of the Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

Sibo means Beijing Sibo Investment Management LP.

Sibo Requisition means has the meaning set out in Section 1.3.

Shareholder means a registered holder of a Share.

Thesolia means Thesolia Ltd.

Thesolia Requisition has the meaning set out in Section 1.2.

 

Schedule 1 - Statement from Executive Directors Mr Zhiwei (Kerry) Gu and Mr Lubing Liu under section 203D(4) of Corporations Act

Dear Star Phoenix Group Ltd Shareholder,

As the two Directors of the Company directly impacted by the proposed resolutions of Beijing Sibo Investment Management LP ("Sibo"), we are providing you with this joint statement with some important information that we urge you to read.

During the last 12 months, our primary focus as Executive Directors has been on completing financial debt restructuring to alleviate uncertainty with regards to the future of your Company. Despite the extremely challenging period, we have successfully eliminated all debt from the Company's balance sheet and restored financial health. Without this, the Company would not be in a position to continue its existence today.  We have both been your long-serving Directors and our efforts and achievements will be well known to most of our shareholders, as evidenced from the statement provided by one of our major shareholders Thesolia Ltd which holds 16.7% interest in the Company (the statement from Thesolia Ltd is included in Schedule 3 of this Notice). Our strive and focus has always been aimed at future growth and prosperity of the Company in the interest of all shareholders rather than interests of an individual shareholder.

We would like to take this opportunity to provide a few highlights of our recent notable achievements:

1.  Despite the obvious hardship that the Company was going through, we chose to continue to lead the team to ensure smooth running of the business whilst maintaining tight cost control. This was accomplished during the time when the Company had very limited cash resources and a significant debt position;

2.  We have progressed to successfully complete a comprehensive debt restructure, which included a divestment of the Trinidad upstream business in exchange for all of US$95 million debt being written off to zero and additional cash consideration paid to the Company. This transaction achieved a very attractive valuation of the Trinidad assets for our shareholders close to US$100 million;

3.  Two rounds of capital fundraising were completed in the last 12 months for the total sum of GB£1.3 million. This was done to ensure the Company had sufficient cash resources to continue its business and to ensure that the Company does not take on any further debt on its balance sheet;

4.  A necessary cost reduction programme was implemented across the group to save costs for the Company. This included streamlining of our organizational structure with most existing team including ourselves taking on further workload and duties. Our administrative expenses have also been kept under a very strict control;

5.  Following feedback from numerous shareholders over the recent years, the Directors also proceeded with changing the Company name to emphasize a new start and to draw a line under legacy matters; completed a share consolidation to tidy up the Company's capital structure (both these events were supported by the shareholders' votes), and completed delisting from the Australian Stock Exchange ("ASX").  As stated at the time of the ASX delisting, trading in the Company's shares on ASX had a very low level of liquidity over a continuous period, which led to low trading volumes compared to AIM.  The low level of liquidity resulted in limited trading opportunities for shareholders. In addition, ASX listing required the Company to incur considerable corporate and administrative costs, including listing fees. These factors outweighed any advantages of being listed on ASX.  Given the Company's continued listing on AIM, all shareholders with holding on ASX are able to trade their shares by transferring them to AIM (with full instructions previously provided to shareholders and available on the Company's website); and

6.  As a result of these actions taken by the current team, the Company is now completely debt free, benefits from a healthy cash position of c. US$3 million, has streamlined operations, lean cost structure, minimal expenditure commitments, and ready to focus on new value accretive opportunities.

Our plan to create shareholder value

Following completion of debt restructuring at the end of March this year, our forward strategy has been focused on securing new exciting opportunities to provide future growth for the Company and create value for all shareholders. We have evaluated numerous opportunities and projects, and are continuing to do so. We have been diligent and cautious in the project selection process as we seek opportunities that will provide cashflow and profitability. Whilst the oil sector has been going through a major downturn, we believe natural gas offers many opportunities and over the last months we have been working on some potential opportunities in this sector. Having said that, we have not limited our search to the energy sector and are continuing to consider opportunities in other industries. As always, we will provide an update via announcement to all shareholders upon any material developments.

In order to strengthen our cash position further, we are also continuing with the sale process of our rigs and equipment in Trinidad. Given the overall downturn in the sector and reduced number of new drilling by operators, the sale process is moving slower than we would have liked. There are several parties that have expressed interest in potentially purchasing the equipment and we are continuing our discussions with a view of reaching binding agreements as soon as practicable. In the meantime, we have undertaken organizational restructuring of our drilling business in Trinidad to materially reduce any ongoing costs. 

We wish to reassure you that we fully understand that shareholders might be disappointed in the Company's share price just as the Directors are. Notwithstanding factors outside of our control (such as the recent pandemic and the collapse of the oil price), we are confident that with our continued leadership and new strategic investments, the Company can achieve a steady growth and share price appreciation.

We strongly recommend that you vote in FAVOUR of Resolution 1 and AGAINST Resolutions 2 - 7 at the upcoming Meeting

Dealing with 249D notices is not only an unnecessary distraction for the team but is also very costly for the Company, which again is not in the best interests of shareholders. It is important that you are aware that the Meeting was not called by the Company by choice. The Directors tried their best to constructively engage with Sibo in order to achieve a workable solution for the benefit of all shareholders, regrettably to no avail.

Sibo has provided a statement which is included in Schedule 4 of this Notice. From the statement, it should be clearly apparent that Sibo's interests do not appear to be in the interests of the Company's other 83% shareholders. Sibo already has one nominee Director on the Company's Board, Dr Yufeng Meng who was appointed in April 2020. If Sibo's proposed resolutions are passed, the Board of your Company would consist of six Directors, five of whom would have been proposed by Sibo.  This will have significant ramifications for the Company and it is extremely important for the shareholders to be aware of these, as explained hereon.

Any appointment of a Director is subject to the approval of the Company's Nominated Adviser ("Nomad"). This is consistent with the requirements of the AIM Rules for Nominated Advisers which oblige a Nomad to consider: a) the suitability of new Directors in their own right, and b) the effect any Director changes will have on the efficacy of the Board as a whole for the Company's needs, having in mind that the Company is admitted to trading on a UK public market.

There is a significant risk that as a result of the Director appointments proposed by Sibo, the Nomad will no longer be comfortable with the appropriateness of the Board and may consider that the Company is no longer suitable for admission to AIM. This would result in the trading of the Company's shares to be suspended and, ultimately, cancelled from trading on AIM. It is, therefore, crucial that shareholders understand the ramifications of voting in favour of resolutions 2-7, as voting in favour could lead to a potential suspension and / or cancellation of the Company's AIM listing.

In addition, as published on the Company's website and the previous announcements, we have adopted the UK's QCA Corporate Governance Code for Small and Mid-Size Quoted Companies ("QCA Code") as the basis for the corporate governance. Principle 5 of the QCA Code requires the Company to maintain its Board as a well-functioning, balanced team led by the Chairman. The QCA Code requires that a Board should have an appropriate balance between executive and independent non-executive directors. Where the majority of the board are composed of shareholder nominee Directors (ie non independent Directors) as proposed by Sibo, it would not be considered good corporate governance.

In summary, we believe the 249D notice served by Sibo is an opportunistic move to take control of your Company and are deeply concerned that the future of Star Phoenix could be compromised should there be changes to the Board proposed by Sibo. The replacement candidates have no knowledge of the Company, no relevant experience or skillset, and the appointments pose a material danger that could lead to the Company to be delisted from AIM.

We firmly believe that the three existing Directors being Kerry Gu, Lubing Liu and Robin Luo are best suited to continue as your Directors to ensure the Board is acting in the best interests of all shareholders and strongly recommend that all shareholders vote in FAVOUR of Resolution 1 and AGAINST Resolutions 2 to 7.

We urge all shareholders to vote at the upcoming Meeting no matter how large or small your shareholding is. More than ever your vote is important for the future of your Company. We hope to receive your support and to continue running the Company without the needless distraction and significant expenditure associated with holding the Meeting during a challenging macro environment.

Once again, we thank you for your ongoing support and consideration and look forward to growing the Company into the future.

Yours faithfully,

Mr. Zhiwei (Kerry) Gu  Mr. Lubing Liu

Executive Chairman  Executive Director, COO and Joint Company Secretary

Schedule 2 - Statement from Non-Executive Director Dr YuFeng Meng (nominee Director of Sibo) under section 203D(4) of Corporations Act

Dear Shareholders,

I refer to the statement of Thesolia Ltd (Requisitioning Shareholder), requesting a General meeting to consider a resolution to remove myself as a director of the Company (Statement). 

I am now writing to provide you with my response to the Statement as well as important information in respect of the future direction of the Company.

I do not support the Resolution and recommend that you vote AGAINST it at the General Meeting to be held by the Company.

The decision to request for my removal is particularly disappointing, considering that no attempts whatsoever have been made by the Requisitioning Shareholder to communicate any concerns or issues it has directly to me. 

It seems that such decision may have been driven by a statement submitted by Beijing Sibo Investment Management LP (Sibo) on 29 July 2020 in support of the resolutions to remove two existing executive directors and to appoint new directors to the Board (Sibo Statement).

The decision to request board changes from Sibo has not been reached lightly.  However, notably:

· In recent years, the Company's share price on AIM and ASX (prior to its de-listing) has declined significantly; and

· the Company's shares were de-listed from the ASX in November 2019.

Sibo believes (which I am inclined to concur) that the loss of market value of the Company has been a product of a number of factors, including:

· A lack of strategic direction and foresight by the current Board (led by the current executive directors) with respect to the Company's business activities;

· Excessive cost of operations and executive remuneration; and

· Global downturn in the oil sector.

Sibo takes a view that a change in the composition of the Board (and in particular, the executive directors) is reasonably necessary in order for the Company to be able to effectively rebuild the value for the Company's shareholders.

To be effective, it is believed that the Board needs to have directors who possess a broad mix of skills and experience, are dedicated and committed to fulfilling the Company's objective and goals and who are acting in the best interests of shareholders.

For the reasons that follow, I believe that I am best suited to continuing to act as an independent director of the Company.

1.  I hold a PhD in Business Administration from the InterAmerican University and an MBA in Business Administration from the Southern California University.

2.  Over the span of my career in last 30 years, I held various leadership, management and consulting roles in different sectors including education, aircraft tyre logistics, waste management, real estate, equity investment, banking and Free Trade Zone management and marketing, across the US, Australia, Hong Kong, and China.

3.  I founded a logistics and warehouse operation in the first Guangzhou Free Trade Zone, which has been operating for almost two decades.  I was also involved in a technology start-up in the early days of the IT Boom.

4.  More recently, I organized numerous government trade delegations to promote bilateral business cooperation between China and Australia.

5.  I have acted in a volunteering capacity, working closely with the Chief Operating Officer and the President Director of Life. Be in it., a well known Australian Not-For-Profit organisation, building strong ties in the community, towards a better society for all Australians.

6.  I also have experience in the public sector, project management and finance (particularly in Build-operate-transfer (BOT) or build-own-operate-transfer (BOOT) project financing).

7.  In Australia, I have hosted incoming government trade delegates to Melbourne and in return, outgoing business delegations to China across a number of cities in order to build close economic ties between Melbourne and Chinese cities which include Guangzhou and Chengdu.

8.  My broad business experience across a range of sectors and jurisdiction and my academic qualifications  will therefore add tremendous value to the current or reconstituted board of the Company as the Company will be actively looking at new business acquisitions as part of the process for rebuilding the value for the Company's shareholders.

9.  I consider myself independent as I am not currently receiving remuneration or other non-cash benefits from the Company or Sibo for acting as a director of the Company.  Additionally, I am not a material supplier or consultant to the Company or any of its shareholders. 

10. As a director of the Company, I am committed to assisting with the rebuilding of the Company in order to enhance or restore value for the shareholders of the Company. 

11. To this end, I intend to work co-operatively with the board of the Company, focusing initially on identifying a value added business acquisition for the Company, seeking to obtain value from the existing assets of the Company, and not unnecessarily diluting the existing shareholders. 

In conclusion, I believe that I will bring to any board a truly independent outlook, a balanced and pragmatic approach to opportunity evaluation and value creation for all stakeholders in any enterprise.

For the reasons set out above, I strongly urge the Shareholders to vote against the Resolution to remove me as a director of the Company at the upcoming General Meeting.

I would appreciate an opportunity to continue to serve the Board and to assist in rebuilding the value of the Company for the mutual benefits of the Company and its shareholders as a whole.

 

 

END

 

 

NOGUSAURRVUWAAR