RCS - Ridgecrest PLC - Notice of General Meeting

Aukett SwankeAnnouncement

22/04/2024 11:15

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RNS Number : 4956L  Ridgecrest PLC  22 April 2024

22 April 2024

Ridgecrest plc

("Ridgecrest" or "the Company")

Notice of General Meeting

 

The Company announces the publication of a circular ("the Circular")
containing a notice to convene a general meeting of shareholders ("the General
Meeting"). The Circular and the notice will shortly be made available on the
Company's website - https://www.ridgecrestplc.com/
(https://www.ridgecrestplc.com/) . Hard copies of the Circular will be posted
today to shareholders that have elected to receive printed copies of
shareholder documents.

 

The General Meeting will be held at 11.00 am on 9 May 2024 at the offices of
Allenby Capital Limited, 5(th) Floor, 5 St Helen's Place, London EC3A 6AB.

 

An extract from a letter from the joint Non-Executive Chairmen contained
within the Circular is set out below.

 

 Enquiries:                                    www.ridgecrestplc.com (http://www.ridgecrestplc.com/)

 Ridgecrest plc
 James Normand, Joint Non-Executive Chairman   (via Allenby Capital Limited)

 Philip Holt, Joint Non-Executive Chairman

 Allenby Capital Limited (Financial Adviser)   www.allenbycapital.com (http://www.allenbycapital.com/)
 Nick Naylor / Liz Kirchner                    020 3328 5656

 

 

Extract from the joint Non-Executive Chairmen's letter contained in the
Circular

 

Proposed new strategy
and
proposed appointment of new directors

 

On 8 March 2024, the Company announced that it had decided to pause its
proposed acquisition of Galápagos Cable Systems GACASYS SA ("GCS") by way of
a reverse takeover and a listing/quotation of the enlarged entity's shares on
a market operated by London Stock Exchange PLC, due to increasing political
and security instability in Ecuador. The announcement also noted that one of
the principals of GCS had, through a company formed for the purpose ("Newco"),
revitalised his pre-existing contact with Fast2Fibre Limited ("F2F"), in
which, shareholders will recall, Ridgecrest has a material interest in the
form of two convertible loan notes, totalling £550,000, issued to Sparkledun
Limited ("Sparkledun"), F2F's holding company.  Shareholders should note
that, in order to comply with prudent accounting principles, the value of
these convertible loan notes was written down to zero in the Company's audited
accounts for the year ended 31 March 2023.

The Board has been advised that Newco has contracted with a major
telecommunications carrier to extract copper from underground cables in Brazil
and replace it with fibre using F2F's technology, for which F2F will receive a
royalty based upon the amount of copper extracted.  This contract, which is
anticipated to commence in the second quarter of this year, is expected by
Newco to provide significant income for F2F and thus to restore value to
Ridgecrest's convertible loan notes and, in due course, the possibility of
reverting to the Company's previous plan to reverse Sparkledun and F2F into
Ridgecrest.

Separately, your Board has been approached by a private shareholder, Marco
Schezzini, who has informed us that he represents a number of shareholders
collectively holding a substantial minority of the Company's issued share
capital (the "Schezzini Shareholder Group"). The Schezzini Shareholder Group
has indicated that it does not wish the Company to continue to explore a
reverse takeover of Sparkledun/F2F, GCS or indeed, of any other company. It
instead wishes the Company to appoint two new directors and then to find a
route to providing liquidity to all shareholders without the delay, risks and
cost inherent in a reverse takeover. Its proposal would involve the Company
investing its remaining free cash in a company with an existing UK stock
market quotation, on terms to be negotiated. The Board understands that the
Schezzini Shareholder Group has identified a number of suitable quoted
companies but that no approach has been made to any company nor terms agreed.

The proposed new directors, details of whom are set out below, are considering
a shortlist of potential investments in the micro-cap sphere. The proposed
directors have indicated that they are mindful of the importance of monitoring
actual or perceived conflicts of interest and, in the event of such a
situation arising, the relevant proposed director would recuse himself from
relevant decision making and otherwise fully observe the relevant provisions
of the Company's articles of association.

The Schezzini Shareholder Group would then seek to have the Company wind-down
its affairs and place itself into a members' voluntary liquidation (an "MVL").
A liquidator would be appointed by a special resolution of the members
obtained in general meeting and would seek to generate value from the
Company's assets, at this time comprising just its convertible loan notes held
in Sparkledun and residual net cash balances.  Once all the liabilities of
the Company had been satisfied, the liquidator would make a solvent
distribution of assets and any residual cash, so that all shareholders in the
Company would receive their pro rata share of the Company's investment in any
listed business. This pro-rata distribution would necessarily be contingent on
there being a sufficient number of shares in the investee company to
distribute to Ridgecrest shareholders, comprising approximately 490 registered
holders of which a number are nominees representing many more underlying
beneficial holders.

Shareholders are reminded that the value of any investment may go down as well
as up and there can be no guarantee that an interest in any investee business
would be readily capable of being realised nor return any value. Shareholders
should also note that there can be no guarantee that the Company will be able
to undertake an MVL, nor that there will be material assets to be distributed
to shareholders and that the Schezzini Shareholder Group has not suggested a
timetable for the conclusion of (nor the costs likely to be associated with)
any MVL process.

The Board does not believe the proposed plan by the Schezzini Shareholder
Group to be in the best interests of shareholders as a whole but, having
regard to their statutory and fiduciary duties, respects the wishes of
shareholders to determine the future direction and strategy of their Company.

The Board does not believe the Schezzini Shareholder Group's proposals to be
in the best interests of shareholders for (among others) the following
reasons:

a)    after a long period of frustration with the Company's investment in
F2F (via its convertible loan notes held in Sparkledun), F2F is now, via
Newco's activities in Brazil, apparently on the verge of generating revenues
and so, in the opinion of the Board, now is not the time to dispose of the
Company's investment in F2F, the valuation of which could well be lower if
arrived at in the context of an MVL;

 

b)    there can be no certainty that the Company will be able to complete
an investment in a listed/quoted company on acceptable terms or that
subsequently, any liquidator would be able to distribute those shares to all
underlying shareholders nor, should such a distribution be possible, that they
would then each have the ability to realise any value from the shares they
would receive in any investee company;

 

c)    the direct costs associated with undertaking an MVL, notice periods
and payments due to the Company's advisers pursuant to the termination of
agreements and the expense of maintaining the Company during this process
would in all likelihood absorb a significant part of the Company's current
cash resources (which currently stand at £570,000); and

 

d)    the tax effects of a distribution made pursuant to an MVL may well be
different to those to which members are currently subject and each shareholder
will need to seek its own advice in that regard.

 

As noted above, the Board will consider the possibility, in due course, of
reversing Sparkledun and F2F into Ridgecrest but also remains open to
appraising other reverse takeover candidates and any credible alternative
investment opportunities that present themselves as the Board continues to
believe that a reverse takeover remains in the best interests of
shareholders.

The Schezzini Shareholder Group has proposed the appointment of two new
directors who would be willing to implement its proposed strategy. Should
shareholders approve the resolutions to be proposed at the General Meeting,
the Non-Executive joint Chairmen would both stand down following the meeting.

Set out at the end of this document is the notice convening a General Meeting
of the Company to be held at the offices of Allenby Capital Limited, 5(th)
Floor, 5 St Helen's Place, London EC3A 6AB at 11:00 a.m. on 9(th) May 2024 at
which the ordinary business set out in Resolutions 1 to 3 will be proposed,
namely:

•     to propose the election of John Barker as a director;

 

•     to propose the election of Nicholas Clark as a director; and

 

to require the Board to implement the Schezzini Shareholder Group strategy, as
set out above, and to grant the Board full authority to make such variations
to that strategy as it sees fit.

 

The resolution to implement the Schezzini Shareholder Group strategy is
conditional on the appointment of the new directors.  Should both the new
directors not be appointed, the resolution to implement the Schezzini
Shareholder Group strategy will not be put to the meeting.

 

As noted above, if the resolutions are all passed at the General Meeting (or
at any adjournment thereof), your existing directors will resign their
positions with effect from conclusion of the meeting.

If shareholders wish the current Board to continue with the Company's existing
strategy, they should vote AGAINST the resolutions.

Information on the proposed directors

John Barker (aged 63). John was a director at Instinet UK Limited, being a
founder employee in 1988. Instinet was acquired and is now owned by Nomura.
John was a founder director at Liquidnet Europe Limited which was successfully
sold to ICAP in 2021. John has held numerous director roles in the financial
services sector, as well as a number of director and chairman roles in the
sports, games and e-sports sector, having sold Phoenix Games Network Limited
and XSeries Limited to a NASDAQ-quoted company in 2021. John was appointed as
a Non-Executive Director of Mobile Streams plc, an AIM quoted mobile content
and data intelligence company, on 11 April 2024.

John is the beneficial owner of 3,500,000 ordinary shares in Ridgecrest,
representing 0.78 per cent. of the Company's issued share capital.

Nicholas ("Nick") Clark (aged 49). Nick was appointed as Chief Executive of
AIM-quoted Aukett Swanke Group plc in April 2023 following the acquisition of
Torpedo Factory Group Ltd ("TFG"), a company he founded in 1997. Nick is also
a non-executive director at Acuity RM Group plc, the AIM-quoted provider of
risk management software.  Prior to starting TFG, Nick studied physics at
Imperial College, followed by an MPhil in Microelectronic Engineering and
Semiconductor Physics at the University of Cambridge. Nick was a director of
HVS Media Limited, a company which became insolvent whilst he was a director.
He became a director of HVS Media Limited when the company was acquired on 4
July 2007 by TFG for a nominal consideration. It was placed into
administration on 9 May 2008, and while secured creditors were paid in full
there was an estimated shortfall to unsecured creditors of £225,355.

Nick is the beneficial owner of 100,000 ordinary shares in Ridgecrest,
representing 0.02 per cent. of the Company's issued share capital.

Recommendation

The Board, for the reasons set out above, DO NOT consider the business to be
proposed at the General Meeting to be in the best interests of the Company and
shareholders as a whole. Accordingly, the Non-Executive joint Chairmen of
Ridgecrest unanimously recommend that you vote AGAINST the resolutions to be
proposed at the General Meeting.

Yours faithfully,

Philip Holt                          James Normand

Non-Executive Joint Chairmen

 

 

 

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