Proposed Cancellation of Admi

RNS Number : 4805W

Traction Technology PLC

11 June 2008

 



Traction Technology Plc ('Traction' or the 'Company)

Proposed Cancellation of Admission

and

Notice of General Meeting

The Company announces that, subject to shareholder approval, it has decided to cancel the admission to trading on AIM ('Cancellation') of the Company's ordinary shares of 3p each ('Shares') with effect from 10 July 2008.

Rule 41 of the AIM Rules for Companies states that the cancellation of admission of securities to AIM is conditional upon the consent of not less than 75% of the votes cast by the company's shareholders in general meeting. Accordingly, a circular has today been sent to shareholders of the Company giving details of, and seeking shareholder approval for, the proposed Cancellation.

Background

On 23 May 2008 the Company issued a trading statement to update the market in respect of the Company's trading and funding position (the 'Trading Statement'). 

As described more fully in the Trading Statement, delays have been experienced in the Company's endeavours to jointly develop a range of single deck series hybrid vehicles for the UK bus market under a memorandum of understanding ('MOU') with the Optare Group ('Optare'). Specifically, the completion of a prototype vehicle which was anticipated in Spring 2008 in line with the terms of the MOU, is now not expected until the end of June 2008. The terms of the MOU also provided that, subject to the satisfaction of certain fuel economy and emissions targets, Optare would then have an option to build a minimum of 10 vehicles using the Traction hybrid system during 2008. 

In light of the new timetable for the completion of the prototype vehicle, Traction now considers it unlikely that it will be requested to supply its hybrid power pack system to Optare for that purpose during 2008.

As a consequence of the delays described above and in the absence of a further fundraising, the Company also stated in the Trading Statement that it had cash resources as at 23 May 2008 which, based on the current cash burn rate and management forecasts, provided sufficient working capital for approximately two months of operations.

With these material limiting factors to growth existing, it is extremely difficult for a company of Traction's size and stage of development to raise further material funds through the AIM market. The costs and regulatory requirements associated with maintaining the Company's AIM listing are also a significant burden on the Company in terms of management time and also on its ability to execute a re-financing or sale of the business should that be deemed appropriate by the Directors. The Directors believe that these issues outweigh any benefit of retaining the AIM listing at this point in time.

The Directors therefore consider that it would be in the best interests of the Company to seek a delisting of its shares on AIM to minimise costs and to allow the Directors the flexibility to continue to pursue alternative options for the Company.

General Meetings

A general meeting has been convened for 11:00 a.m. at the offices of Defries Weiss LLP, 311 Ballards Lane, North Finchley, London N12 8LY on 3 July 2008 for shareholders to consider the proposed Cancellation.

A notice has also been sent to shareholders today to convene the 2008 Annual General Meeting of shareholders of the Company to be held at the offices of Defries Weiss LLP, 311 Ballards Lane, North Finchley, London N12 8LY at 11:30 a.m. on 3 July 2008. 

Recommendation

The Directors believe that Cancellation is in the best interests of the Company and its shareholders as a whole. The circular contains a recommendation by the Directors that Shareholders vote in favour of Cancellation as they intend to do in respect of their aggregate shareholdings of 7,469,249 Shares, representing approximately 20.5% of the ordinary issued share capital of the Company.

In addition, the Employee Benefit Trust, which is controlled by the Directors, has an interest in 2,316,321 Shares representing approximately 6.3% of the ordinary issued share capital of the Company.

Accordingly, the Directors control aggregate shareholdings of 9,785,570 Shares representing approximately 26.8% of the Company's issued share capital which they intend to vote in favour of Cancellation.

Contacts:

Traction Technology plc	Ambrian Partners Ltd	Parkgreen Communications Ltd
Nick Brayshaw, Chairman	Richard Brown	Paul McManus
01403 791392	Richard Greenfield	020 7479 7933
www.ttplc.co.uk	020 7634 4700	07980 541 893
		[e-mail]

 

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