REG - Caspian Sunrise plc - Proposed Debt Conversion and General Meeting
15/02/2022 07:00
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RNS Number : 6551B Caspian Sunrise plc 15 February 2022
Caspian Sunrise PLC
("Caspian Sunrise" or the "Company")
PROPOSED US$6.2 MILLION DEBT CONVERSION
APPROVAL OF WAIVER OF OBLIGATIONS UNDER RULE 9 OF THE CITY CODE ON TAKEOVERS
AND MERGERS
AND
NOTICE OF GENERAL MEETING
Caspian Sunrise, the Kazakhstan based oil and gas exploration and production
company, is pleased to announce that it will shortly be posting to
Shareholders a Circular regarding a proposed Debt Conversion in respect of the
Company's Oraziman Family Loan of approximately US$6.2m, first announced in
August 2021.
The Independent Directors have, subject to Independent Caspian Sunrise
Shareholder approval and regulatory consent, agreed to convert the Oraziman
Family loan of approximately US$6.2m into 139,729,446 Ordinary Shares in the
Company to be issued to Aibek Oraziman and Aidana Urazimanova pursuant to the
Debt Conversion, as detailed below.
This will result in the Oraziman Family Concert Party shareholding increasing
from 45% to 48.41%.
Clive Carver, Chairman commented
"On completion of the Debt Conversion the Group will be free of debt and
therefore better placed to further develop the Group's assets and to commence
dividend payments."
Caspian Sunrise PLC
Clive Carver
Chairman
+7 727 375 0202
WH Ireland, Nominated Adviser & Broker
James
Joyce
+44 (0) 207 220 1666
Andrew de Andrade
This announcement has been posted to:
www.caspiansunrise.com/investors (http://www.caspiansunrise.com/investors)
The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014.
The Circular will be made available on the Company's website at
www.caspiansunrise.com .
Extracts from the Circular are included below:
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this Circular and the Notice of General
Meeting 15 February 2022
Latest time and date for receipt of Forms of Proxy
7 March 2022
General Meeting
9
March 2022
Completion of the Debt Conversion
9 March 2022
Admission of the Conversion Shares and commencement of dealing in 15
March 2022
such shares on AIM
Notes:
1. The times and dates set out in this document that fall
after the date of this document are based on the Company's current
expectations and are subject to change.
2. The timetable assumes that there is no adjournment of the
General Meeting. If the date scheduled for the General Meeting changes, the
revised date and / or time will be notified to Shareholders by a further
Shareholder letter.
3. All times shown are London times unless otherwise stated.
STATISTICS
Issued share capital
Number of Ordinary Shares as at 11 February 2022 (being the 2,110,772,114
latest practicable date prior to the publication of this Circular)
Conversion statistics*, **
Aggregate consideration payable by the Company pursuant to the Debt Conversion US$ 6,215,166
(to be satisfied by the issue of the Conversion Shares at the Issue Price)
Number of Conversion Shares proposed to be issued pursuant to the Debt 139,729,446
Conversion
Issue price per Conversion Share 3.2 pence
Number of issued Ordinary Shares Enlarged Share Capital following completion 2,250,501,560
of the Debt Conversion
Conversion Shares as a percentage of the Enlarged Share Capital 6.21%
*These figures set out the maximum Conversion Shares to be issued on the
assumption that (i) the Waiver Resolution contained within this Circular is
passed at the General Meeting and the Debt Conversion completes in accordance
with the terms set out in this Circular; and (ii) there are no changes to the
share capital of the company between the date of this circular and the date of
the conversion of Oraziman Family Loan
** US$ : £ exchange rate for the purposes of calculating consideration
payable US$1.39 : £1.00
Being the prevailing rate at the date on which the conditional Debt Conversion
agreement was signed
DEFINITIONS
"Admission" the admission of the Conversion Shares to trading on AIM becoming effective in
accordance with the AIM Rules
"Admission Document" the admission document published by the Company relating to the acquisition of
59% of Eragon, dated 31 January 2008
"AGM" the Company's annual general meeting held on 23 July 2021
"AIM" the AIM market operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies issued by the London Stock Exchange
"Akku Investments" an investment advisory company registered in Almaty, Kazakhstan that manages
the Oraziman Family Concert Party's shareholding in Caspian Sunrise, which is
owned equally by Aibek Oraziman and Aidana Urazimanova with Kuat Oraziman as
the sole director.
"Baverstock" Baverstock GmbH, a company organised under the laws of Switzerland with a
registered office c/o Acton Treuhand AG, Innere Gueterstrasse 4, 6300 Zug,
Switzerland, which merged with the Company in February 2017
"Baverstock Quota Holders" those persons historically beneficially entitled to, in aggregate, the whole
of the issued quotas in the capital of Baverstock, being Kuat Oraziman, Dosbol
Zholdybayev, Dae Han New Pharm Co. Ltd and Cody Star Investment
"BNG" the Kazakh subsoil use contract in respect of the BNG contract area, which is
located in the west of Kazakhstan 40 kilometres southeast of Tengiz on the
edge of the Mangistau Oblast, covering an area of 1,561 square kilometres, and
the oil and gas assets and operations carried out therein
"Board" or "Directors" the board of directors of the Company as at the date of this Circular
consisting of Clive Carver, Edmund Limerick, Aibek Oraziman, Kuat Oraziman and
Seokwoo Shin
Mr Altynbek Bolatzhan, Mr Aibek Oraziman, Mr Alibek Mugaila, Mr Berik
Bemuratov and Mr Kang Junyoung
"Caspian Explorer Vendors"
"Circular" this document
"Companies Act" or "Act" the Companies Act 2006 as amended
"Company" or "Caspian Sunrise" or "CS" or "CASP" Caspian Sunrise PLC, formerly Roxi Petroleum Plc
"Conversion Shares" the 139,729,446 new Ordinary Shares proposed to be issued to the Aibek
Oraziman and Aidana Urazimanova in consideration of the Debt Conversion at the
Issue Price
"CREST" the computerised settlement system (as defined in the CREST Regulations)
operated by Euroclear which facilitates the transfer of shares in
uncertificated form
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any
enactment or subordinated legislation which amends or supersedes those
regulations or any such enactment or subordinate legislation for the time
being
"Debt Conversion" the release and conversion of the Oraziman Family Loan into the Conversion
Shares at the Issue Price
"Enlarged Share Capital" the Issued Ordinary Shares and the Conversion Shares.
"Eragon" Eragon Petroleum Limited, a company incorporated in England and Wales with
company number 06162215
"Euroclear" Euroclear UK & Ireland Limited, the operator of CREST
the Financial Conduct Authority
"FCA"
"Form of Proxy" the form of proxy for use by Shareholders at the General Meeting
"General Meeting" or "GM" the general meeting of the Company convened by the Notice, to be held at the
offices of Taylor Wessing LLP, 5 New Street Square, London EC4A 3TW on 9 March
2022 at 11:00 a.m.
"Group" Caspian Sunrise PLC and its subsidiaries
"Independent Directors" the Directors other than Aibek Oraziman and Kuat Oraziman (being Clive Carver,
Edmund Limerick and Seokwoo Shin)
"Independent Shareholders" the Shareholders other than members of the Oraziman Family Concert Party and
the Wider Concert Party
"Issued Ordinary Shares" the 2,110,772,114 Ordinary Shares in issue as at 11 February 2022 (being the
latest practicable date prior to the publication of this Circular)
"Issue Price" 3.2 pence per Conversion Share
"Link Group" the trading name of Link Market Services Ltd
"London Stock Exchange" London Stock Exchange plc
"Merger Circular" the circular dated 27 February 2017 issued by the Company
"Notice" the notice of general meeting which is set out at the end of this Circular
"Ordinary Shares" the ordinary shares of 1 pence each in the capital of the Company
"Oraziman Family Concert Party" Aibek Oraziman, Aidana Urazimanova, Kuat Oraziman, Altynbek Boltazhan,
Boltazhan Kerimbayev and the estate of the late Rafik Oraziman
"Oraziman Family Loan" or "Loan" the aggregate amount of US$ 6,215,166 (consisting of principal of US$
5,070,244, interest of US$ 544,537 and unpaid salary of US$ 600,385) owed by
the Company and certain other Group companies to the Oraziman Family Concert
Party as at 5 August 2021 (being the latest practicable date prior to the Debt
Conversion agreement was entered into). Interest accruing after that date will
be settled in cash.
"Panel" the Panel on Takeovers and Mergers
"Related Party Transaction" as defined under the AIM Rules for Companies. The Debt Conversion comprises a
Related Party Transaction as further described in this Circular
"Relationship Agreement" the agreement dated 20 January 2020 between the Company and members of the
Oraziman Family Concert Party, summarised in Part II of this Circular
"Securities Act" US Securities Act of 1933, as amended
"Shareholders" the holders of Ordinary Shares
"subsidiary" or "subsidiary undertaking" have the meanings given to them by the Act
"Takeover Code" the City Code on Takeovers and Mergers
"Waiver" the waiver granted by the Panel (conditional on the approval of the Waiver
Resolution by the Independent Shareholders on a poll) of the obligation of the
Oraziman Family Concert Party to make an offer under Rule 9 of the Takeover
Code on the allotment and issue to it (or members of it) of the Conversion
Shares
"Waiver Resolution" the ordinary resolution of the Independent Shareholders to approve the Waiver
in respect of the issue and allotment of the Conversion Shares, to be proposed
on a poll at the General Meeting and set out in the Notice
"WH Ireland" WH Ireland Limited, the Company's Nominated Adviser and Broker for the
purposes of the AIM Rules and independent financial adviser for the purposes
of Rule 3 of the Takeover Code
"Wider Concert Party" the Oraziman Family Concert Party & Dae Han New Pharm Co. Ltd, Raushan
Sagdiyeva, Kang Junyoung, Dosbol Zholdybayev, Zhanat Bukenova, Daulet Beisenov
and Chang Min Seok
"UK" the United Kingdom of Great Britain and Northern Ireland
the lawful currency of the United Kingdom
"£" or "Pounds"
"US$" the lawful currency of the United States of America
"₩" the lawful currency of the Republic of Korea
LETTER FROM THE CHAIRMAN
(Incorporated and registered in England & Wales under the Companies Acts
1985 and 1989 registered No. 05966431)
Directors: Registered Office:
Clive Carver (Chairman) Caspian Sunrise PLC
Kuat Oraziman (Chief Executive Officer) 5 New Street Square
Seokwoo Shin (Chief Operating Officer) London
Edmund Limerick (Non-Executive Director) EC4A 3TW
Aibek Oraziman (Non-Executive Director)
15 February 2022
To Shareholders and, for information purposes only, to the holders of options
under the Caspian Sunrise PLC share option schemes
Dear Sir or Madam
1. INTRODUCTION
The purpose of this Circular is to:
· explain the background to and the reasons for the Debt Conversion
and associated Waiver Resolution; and
· explain why the Independent Directors consider the Debt
Conversion and Waiver Resolution to be in the best interests of the Company
and the Independent Shareholders as a whole and why the Independent Directors
unanimously recommend that the Independent Shareholders vote in favour of the
Waiver Resolution at the General Meeting.
The Debt Conversion is the conversion of approximately US$6.2 million of debt
due to the Oraziman Family Concert Party by the Company and other members of
the Group, into new Ordinary Shares in the capital of the Company to be issued
to Aibek Oraziman and Aidana Urazimanova and the associated Waiver Resolution
which, if approved would waive the obligation under Rule 9 of the Takeover
Code for the Oraziman Family Concert Party Concert Party or any member of the
Oraziman Family Concert Party to make a general offer to Shareholders as a
result of the allotment and issue to it of the Conversion Shares.
In the event that the Waiver Resolution is passed and the Debt Conversion is
completed, the aggregate shareholding of the Oraziman Family Concert Party in
Caspian Sunrise will increase from its current level of approximately 45.00%
(comprising 949,815,346 Ordinary Shares) to 48.41% (comprising 1,089,544,792
Ordinary Shares) of the Enlarged Share Capital.
The Panel has, subject to the approval of Independent Shareholders of the
Waiver Resolution, agreed to a waiver of the obligations that would otherwise
arise on the Oraziman family Concert Party to make a mandatory offer under
Rule 9 of the Takeover Code (commonly referred to as a "whitewash"), as
further detailed in this document.
Reasons to vote in favour of the Proposals
The Board wishes to start making regular dividend payments. This would not
only reward long term shareholders but is also likely to attract investors for
whom regular dividend payments are an important investment criterion.
As the Group's business matures and enters what the Board expects to be a cash
generative phase in the Group's development the Board is targeting declaring
the first dividend payments in 2022.
The support provided from the Oraziman Family Concert Party in recent years,
which was vital in the Company's survival, has left the Group with
approximately US$6.2 million of short-term debt, repayable on demand.
The Directors would deem it imprudent to commence dividend payments with
US$6.2 million of debt repayable on demand. Approval of the Debt Conversion
will both eliminate the US$6.2 million debt and remove a future obstacle to
dividends. On 6 August 2021, the Company announced it had agreed with the
Oraziman Family Concert Party, conditional on approval of the Waiver
Resolution, to convert the Oraziman Family Loan owed by the Group, which is
repayable on demand into 139,729,446 at a price of 3.2p per share, which was a
12.50% premium to the market price at the time.
The conversion of this debt into new Ordinary Shares, is regarded as a Related
Party Transaction.
Independent Shareholders are being asked to approve the Waiver Resolution to
waive the requirement that would otherwise arise on the Oraziman Family
Concert Party, in converting the Oraziman Family Loan, to make a general offer
for the Company under Rule 9 of the Takeover Code.
The Oraziman Family Concert Party have supported the Group in recent years
when other sources of funding have not been available. The Loan has grown
steadily to the point that it would take a very significant part of the
Group's operational income to repay.
Should Independent Shareholders not approve the Debt Conversion, funds that
would have been available for further development of the Group's assets would
instead be diverted to repay the Loan and the commencement of dividend
payments would be delayed until such time as sufficient distributable reserves
were created.
Concentration of ownership
Following completion of the Debt Conversion the Oraziman Family Concert Party
would increase their aggregate holding in the Company from 949,815,346
Ordinary Shares (45.00% of the Issued Ordinary Shares) to 1,089,544,792
Ordinary Shares (48.41% of the Enlarged Share Capital).
The Independent Directors do not consider that this concentration of ownership
materially changes the control which the Oraziman Family Concert Party could
already exert on the Company and do not believe it will be detrimental to the
future of the Company.
Further, the Company already has in place a formal relationship agreement with
the Oraziman Family Concert Party to prevent its use of their controlling
stake against the interest of Shareholders generally, including Independent
Shareholders. Further details of the relationship agreement are set out in the
"Relationship Agreement" paragraph below in Part II of this Circular.
The Wider Concert Party, which includes the Oraziman Family Concert Party,
currently holds 1,321,188,992 Ordinary Shares (representing 62.59% of the
Issued Ordinary Shares) which would increase to approximately 1,460,918,437
(Ordinary Shares (representing 64.92% of the Enlarged Share Capital) as a
result of the Debt Conversion.
Information on the concert parties
There are two concert parties. The first is the Wider Concert Party, of which
the Oraziman Family Concert Party forms part. The Wider Concert Party already
holds more than 50% of the Company's voting rights and as such does not
require the approval of either the Panel or Independent Shareholders to
acquire additional shares.
The second is the Oraziman Family Concert Party, which is a sub concert party
of the Wider Concert Party.
For the purposes of the Takeover Code, members of both the Oraziman Family
Concert Party and the Wider Concert Party are treated as acting in concert, as
defined by the Takeover Code, with regard to their interests in the issued
share capital of the Company. Further information on this and the Takeover
Code can be found in Part III of this Circular.
BACKGROUND ON THE WIDER CONCERT PARTY
On 29 February 2008, Shareholders approved the acquisition by the Company of
59% of the issued share capital of Eragon, a company with a number of oil and
gas assets in Kazakhstan, including the BNG contract area, which is the
Company's principal commercial asset. The remaining 41% of the issued share
capital of Eragon was then held by Baverstock for the benefit of the original
Baverstock Quota holders, the largest of which was Kuat Oraziman, Chief
Executive Officer of the Company. Further details of such acquisition are set
out in the Company's Admission Document.
The Company subsequently obtained 100% ownership of the share capital of
Eragon by way of the reduction of share capital in Eragon, which entailed the
cancellation of the whole of the 41% of the issued share capital of Eragon
held by Baverstock for the benefit of the Baverstock Quota holders, in
consideration of the issue and allotment to Baverstock (for the benefit of the
Baverstock Quota holders) of 651,436,544 new Ordinary Shares, thereby giving
the Company full operational control and 99% ownership of its principal
commercial asset. This transaction united 99% of BNG under the Company's
ownership. Further details of this transaction are set out in the Merger
Circular.
The Baverstock Quota holders were treated as acting in concert, as defined by
the Takeover Code, with a number of other Shareholders of the Company,
including Kuat Oraziman and his family, resulting in the Wider Concert Party
as it is currently constituted. The shares in the Company were all
subsequently distributed directly to the Baverstock quota holders.
Further information of the transactions which led to the formation of the
Wider Concert Party, is included in the following Company circulars:
· Eragon Acquisition, dated 29 February 2008;
· Proposed Baverstock Merger dated 27 February
2017;
· Proposed Acquisition of Caspian Explorer dated 21
January 2020; and
· the Admission Document
which are available on the Company's website at
https://www.caspiansunrise.com.
Kuat Oraziman is treated as acting in concert with his immediate family
comprising Aibek Oraziman (adult son), Aidana Urazimanova (adult daughter),
Altynbek Boltazhan (nephew) and Boltazhan Kerimbayev (brother-in-law) and the
Estate of the late Rafik Oraziman, along with Dae Han New Pharm Co. Ltd,
Raushan Sagdiyeva, Dosbol Zholdybayev, Chang Min Seok, Kang Junyoung, , Zhanat
Bukenova and Daulet Beisenov.
A brief description of the Wider Concert Party members
Mr Kuat Oraziman is a Kazakh national. Mr Oraziman has nearly 31 years of
business experience in Kazakhstan and abroad and nearly 29 years of oil and
gas experience in Kazakhstan. Kuat Oraziman's experience has included the
operation of import and export businesses, the establishment and operation of
an international brewery in Kazakhstan, and the Kazakhstan representative of
Phillips and Stork. Since 1991 Kuat Oraziman has been a director of ADA Oil
LLP. Kuat Oraziman also holds a doctorate in science and is a trained
geologist. He was appointed to the board of Roxi Petroleum as a Non-Executive
Director in November 2006, became an Executive Director in 2008 and was
appointed Chief Executive Officer in 2012.
Mr Aibek Oraziman is the adult son of Kuat Oraziman. He has more than 12 years
oil and gas experience, including 3 years in the field at Aktobe, Kazakhstan
working for a local company. He was appointed to the Caspian Sunrise board on
21 August 2020 as a non-executive director and holds approximately 22.4% of
the Company's voting rights.
Aidana Urazimanova is the adult daughter of Kuat Oraziman. She holds
approximately 17.8% of the Company's voting rights. She plays no role in the
day to day business of the Company.
Altynbek Boltazhan is the adult nephew of Kuat Oraziman. He works in the oil
& gas industry in Kazakhstan but not presently for Caspian Sunrise. He
holds approximately 1.3% of the Company's voting rights.
Boltazhan Kerimbayev is the brother-in-law of Kuat Oraziman and a Kazakh
national. He plays no role in the day to day business of the Company and has
no other business connections with Kuat Oraziman.
Dae Han New Pharm Co. Ltd. is a Korean-registered pharmaceutical company. It
is listed on the Korean Stock Exchange and has a current market capitalisation
of approximately US$130 million.
Directors Mr Wan Jin Lee, Mr WonSuk Lee and Mr Oh-Gyeong Kwon
Registered office 66 Jeyakgongdan 1-gil Hyangnam-eup Hwaseong-si Korea, Republic of (South)
Place of incorporation South Korea
Registration number 229-81-10729
In the latest financial period for the 12 months to 31 December 2020 Dae Han
New Pharm Co. Ltd. reported revenues of ₩150 million, a loss after tax of
₩10 million and net assets of ₩57 million.
Mrs Raushan Sagdiyeva, a Kazakh national. She plays no role in the day to day
business of the Group.
Kang Junyoung, is a Korean national and one of the vendors of the Caspian
Explorer. He was previously the captain of the Caspian Explorer drilling
vessel. He plays no role in the day to day business of the Group.
Mr Dosbol Zholdybayev is a Kazakh national who worked with and for Caspian
Sunrise previously. He plays no role in the day to day business of the
Group.
Mr Chang Min Seok, the owner of Cody Star Investment Limited, which is a
private company that is registered in the British Virgin Islands, the sole
director of which is Haejung Rah. Cody Star was a former quota holder in
Baverstock, one of the original investors in the BNG Contract Area. He plays
no role in the day to day business of the Group.
Mrs Zhanat Bukenova is a Kazakh national. She loaned US$500,000 to the Company
on 10 October 2010. Since then she has played no role in the Group's
business.
Mr Daulet Beisenov is a Kazakh national. Mr Beisenov has nearly 31 years of
business experience in Kazakhstan and abroad. Mr Beisenov's experience has
included the operation of import and export businesses and the establishment
and operation of service orientated businesses including various hotels and
restaurants, much of which was together with Mr Kuat Oraziman. He plays no
role in day to day business of the Group.
The following table sets out the members of the Wider Concert Party and their
respective holdings in Caspian Sunrise PLC.
Other than as disclosed above, there are no further relationships (personal,
financial and commercial), arrangements and understandings between Wider
Concert Party members or the directors of the Company.
Concert Party Member Ordinary Shares currently held Ordinary Shares held after the Debt Conversion
Number % Number %
Kuat Oraziman nil nil nil nil
Aibek Oraziman 472,982,144 22.41 542,846,867 24.12
Aidana Urazimanova 376,828,317 17.85 446,693,040 19.85
the Estate of the late Rafik Oraziman 57,369,124 2.72 57,369,124 2.55
Altynbek Boltazhan 26,851,612 1.27 26,851,612 1.19
Boltazhan Kerimbayev 15,784,149 0.75 15,784,149 0.70
Oraziman Family Concert Party Total 949,815,346 45.00 1,089,544,792 48.41
Dae Han New Pharm Co. Ltd 224,830,964 10.65 224,830,964 9.99
Raushan Sagdiyeva 66,425,290 3.15 66,425,290 2.95
Kang Junyoung 16,025,641 0.76 16,025,641 0.71
Dosbol Zholdybayev 34,341,130 1.63 34,341,130 1.53
Chang Min Seok 16,112,884 0.76 16,112,884 0.72
Zhanat Bukenova 11,993,000 0.57 11,993,000 0.53
Daulet Beisenov 1,644,737 0.08 1,644,737 0.07
Total Wider Concert Party 1,321,188,992 62.59 1,460,918,437 64.92
Notes:
The currently held Ordinary Shares noted in the table above held by the
various members of the Oraziman Family Concert Party are held beneficially by
the family member concerned. The underlying shareholdings are managed by Akku
Investments, a Kazakh entity with Kuat Oraziman as the sole director and
decision maker. 100,021,432 Conversion Shares will be issued to Akku
Investments and 19,854,007 and 19,854,007 will be issued directly to Aibek
Oraziman and Aidana Urazimanova respectively. Aibek Oraziman and Aidana
Urazimanova are the sole beneficiaries of Akku Investments and own the
Ordinary Shares of Akku Investments equally.
Kuat Oraziman also holds 3,000,000 options over Ordinary Shares.
A full breakdown of rights to subscribe held by the Directors of Caspian
Sunrise PLC is included in Part III of this Circular in Paragraph 3 entitled:
"Interests and Dealings".
Under Rule 9 of the Takeover Code, any person who acquires an interest (as
such term is defined in the Takeover Code) in shares which, taken together
with the shares in which he and persons acting in concert with him are
interested, carry 30% or more of the voting rights in a company which is
subject to the Takeover Code, is normally required to make a general offer to
all of the remaining shareholders to acquire their shares. Similarly, when any
person, together with persons acting in concert with him, is interested in
shares which in aggregate carry not less than 30% of the voting rights but
does not hold shares carrying more than 50% of the voting rights of such a
company, a general offer will normally be required if any further interests in
shares are acquired by any such person. These limits apply to the entire
concert party as well as the total beneficial holdings of individual members.
Such an offer would have to be made in cash at a price not less than the
highest price paid by him, or by any member of the group of persons acting in
concert with him, for any interest in shares in the Company during the 12
months prior to the announcement of the offer.
Prior to and upon completion of the Debt Conversion, the Oraziman Family
Concert Party will be interested in Ordinary Shares carrying more than 30% of
the company's voting rights but will hold less than 50% of the Company's
voting share capital, and, for as long as members continue to be treated as
acting in concert a general offer will normally be required if any further
interest in shares is acquired by any members of the Oraziman Family Concert
Party, or any person acting in concert with it. The individual members of the
Oraziman Family Concert Party will not be able to increase their percentage
interests in shares through or between a Rule 9 threshold without Panel
consent.
Prior to and upon completion of the Debt Conversion and issue of the
Conversion Shares, the Wider Concert Party will hold more than 50% of the
Company's voting share capital, and, for as long as it continues to be treated
as acting in concert, any further increase in that aggregate interest in
shares by the Wider Concert Party will not be subject to the provisions of
Rule 9 of the Takeover Code, although individual members of the Wider Concert
Party and the Oraziman Family Concert Party will not be able to increase their
percentage interests in shares through or between a Rule 9 threshold without
Panel consent.
The Panel has agreed, subject to the Waiver Resolution being passed on a poll
by the Independent Shareholders at the General Meeting, to waive the
requirement under Rule 9 of the Takeover Code for the Oraziman Family Concert
Party to make a mandatory offer for the Ordinary Shares they do not already
own, as would otherwise arise from the issue of further shares in the Company
pursuant to the Debt Conversion. The Wider Concert Party, of which the
Oraziman Family Concert Party is part, will be disenfranchised from voting on
the Waiver Resolution and have undertaken to the Company not to vote on the
Waiver Resolution.
In the event that the Waiver Resolution is approved at the General Meeting,
neither the Oraziman Family Concert Party, the Wider Concert Party nor any of
their respective connected persons or other persons acting in concert with it
will be restricted from making an offer for the Company.
Relationship Agreement
On 20 January 2020, the Company and the members of the Oraziman Family Concert
Party other than Altynbek Boltazhan and Boltazhan Kerimbayev entered into a
relationship agreement pursuant to which those members of the Oraziman Family
Concert Party undertook to the Company and WH Ireland, in or acting in their
capacities as Shareholders and not in any other capacity that they would use
the voting powers attaching to the shares held by them, amongst other things,
to ensure no directors are appointed or removed without the consent of the
board, ensure the board comprises at least 2 independent directors and to
ensure that any committee of the board of the Company is comprised of a
majority of Independent Directors.
On 10 February 2022, Altynbek Boltazhan & Boltazhan Kerimbayev signed the
Relationship Agreement.
Each member of the Oraziman Family Concert Party also agreed not to do
anything that would have the effect of preventing the Company from complying
with the AIM Rules or other applicable laws or seek to cancel the admission of
the Ordinary Shares to trading on AIM. Further, transactions between the
Company and any member of the Oraziman Family Concert Party, in or acting in
their capacities as Shareholders and not in any other capacity must be
approved by a majority of Independent Directors. The relationship agreement,
as amended, will be effective from the Admission of the Conversion Shares
until such time as the Oraziman Family Concert Party ceases to hold, in
aggregate, 20 per cent. or more of the aggregate voting rights in the Company.
The relationship agreement is governed by English law and the courts of
England have exclusive jurisdiction to settle any dispute arising in
connection with the relationship agreement.
Waiver of the obligation to make a mandatory offer under Rule 9 of the
Takeover Code
The Panel has agreed, subject to the Waiver Resolution being passed on a poll
by the Independent Shareholders at the General Meeting, to waive the
requirement under Rule 9 of the Takeover Code for the Oraziman Family Concert
Party to make a mandatory offer for the Ordinary Shares they do not already
own, which would otherwise arise as a result of the issue of the Conversion
Shares. The Wider Concert Party, of which the Oraziman Family Concert Party is
part, will be disenfranchised from voting on the Waiver Resolution and have
undertaken to the Company not to vote on the Waiver Resolution.
Related Party Transactions
The Debt Conversion is considered a Related Party Transaction pursuant to the
AIM Rules for Companies.
The Independent Directors consider, having consulted with WH Ireland, that the
terms of the proposed Debt Conversion are fair and reasonable insofar as
shareholders of Caspian Sunrise and the Company are concerned.
Existing authorities to allot new Ordinary Shares
The Company will satisfy the consideration payable for the Debt Conversion by
the issue of, in aggregate, 139,729,446 new Ordinary Shares, which would be
issued to Aibek Oraziman and Aidana Urazimanova, members of the Oraziman
Family Concert Party.
The Company will issue and allot the Conversion Shares under the existing
authorities and powers granted by Shareholders at the AGM, and accordingly no
specific authorisation or disapplication of pre-emption rights is being sought
at the General Meeting in connection with such share issuance.
2. GENERAL MEETING
You will find set out at the end of this Circular the Notice convening the
General Meeting to be held at the offices of Taylor Wessing LLP, 5 New Street
Square, London EC4A 3TW at 11:00a.m. on 9 March 2022, at which the Waiver
Resolution will be proposed.
Waiver Resolution
The Waiver Resolution required in order for the Debt Conversion to proceed. It
will be proposed as an ordinary resolution to be voted on a poll by
Independent Shareholders only in accordance with the requirements of the
Panel.
Approval of the Waiver Resolution would waive the obligation under Rule 9 of
the Takeover Code for the Oraziman Family Concert Party or any member of the
Oraziman Family Concert Party to make a general offer to Shareholders as a
result of the allotment and issue to it of the Conversion Shares.
All Shareholders may attend the General Meeting. The Oraziman Family Concert
Party members and the Wider Concert Party members will not be permitted to
vote on the Waiver Resolution.
3. ACTION TO BE TAKEN
A Form of Proxy for use in connection with the General Meeting is enclosed.
Whether or not you intend to attend the General Meeting, it is important,
particularly in view of the fact that the Waiver Resolution to be put to the
General Meeting will be determined by a poll of Independent Shareholders, that
you duly complete, execute and return the enclosed Form of Proxy, by hand or
by post, to Link Group, PXS 1, 10th Floor, 29 Wellington Street, Leeds, LS1
4DL in accordance with the instructions printed thereon. To be valid, the
completed Form of Proxy must be returned as soon as possible and, in any
event, so as to arrive not less than 48 hours before the time for holding the
General Meeting. Completion and return of the Form of Proxy will not prevent
Shareholders from attending and voting at the General Meeting in person should
they wish to do so.
Admission, Settlement, Dealing and Total Voting Rights
It is expected that Admission of the Conversion Shares will become effective
and that dealings in the Conversion Shares will commence on 15 March 2022,
conditional on, and subsequent to, the passing of the Waiver Resolution.
The Conversion Shares, when issued, will rank pari passu in all respects with
the Existing Ordinary Shares. The total number of Ordinary Shares in issue
following the issue of the Conversion Shares will be 2,250,501,560.
The Company has no shares in treasury, therefore (subject to any further share
issuance prior to Admission in respect of all of such shares) this figure may
be used by Shareholders, from Admission in respect of all of such shares, as
the denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change in their interest in, the
share capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules.
4. RECOMMENDATION
The Takeover Code requires the Independent Directors to obtain competent
independent advice regarding the merits of the Debt Conversion and the
associated Waiver Resolution. Accordingly, WH Ireland has provided formal
advice to the Independent Directors regarding the Debt Conversion and
associated Waiver Resolution. WH Ireland confirms that it, and any person who
is or is presumed to be acting in concert with it, is independent of the
Oraziman Family Concert Party and the Wider Concert Party and has no personal,
financial or commercial relationship or arrangements or understandings with
either the Oraziman Family Concert Party or the Wider Concert Party which it
believes would compromise its independence.
The Independent Directors, who have been so advised by WH Ireland, consider
the Debt Conversion and associated Waiver Resolution to be fair and reasonable
and in the best interests of the Independent Shareholders and the Company as a
whole. In providing advice to the Independent Directors, WH Ireland has taken
into account the Independent Directors' commercial assessments of the Debt
Conversion and associated Waiver Resolution. Kuat Oraziman and Aibek Oraziman,
being Directors of the Company who are also included in the Oraziman Family
Concert Party and the Wider Concert Party, are not considered to be
Independent Directors and therefore are not included in the Board
recommendation relating to the Debt Conversion and associated Waiver
Resolution.
Accordingly, the Independent Directors unanimously recommend that Independent
Shareholders vote in favour of the Waiver Resolution, at the General Meeting
as they intend to do in respect of their entire holdings which amount to
10,156,583 Ordinary Shares (representing approximately 0.48 per cent. of the
Issued Ordinary Shares).
Yours faithfully
Clive Carver
Chairman
ADDITIONAL INFORMATION
1. RESPONSIBILITY
1.1 Each of the Directors, whose names appear in paragraph 2
below, accepts responsibility for the information (including any expressions
of opinions) contained in this Circular, save for the Waiver Resolution
recommendation of the Independent Directors set out in Part II in paragraph 4
entitled "Recommendation", for which the Independent Directors are solely
responsible and save for any information relating to the Oraziman Family
Concert Party and the Wider Concert Party, the intentions of the Oraziman
Family Concert Party and the Wider Concert Party, for which responsibility is
accepted on the basis set out in paragraph 1.2 below. To the best of the
knowledge and belief of the Directors (who have taken all reasonable care to
ensure that such is the case) the information contained in this Circular is in
accordance with the facts and does not omit anything likely to affect the
import of such information.
1.2 Each of the Independent Directors, accepts responsibility
for the Waiver Resolution recommendation of the Independent Directors set out
in Part II in paragraph 4 entitled "Recommendation", for which the Independent
Directors are solely responsible. To the best of the knowledge and belief of
the Independent Directors (who have taken all reasonable care to ensure that
such is the case) the information contained in the Waiver Resolution
recommendation is in accordance with the facts and does not omit anything
likely to affect the import of such information.
1.3 The members of the Oraziman Family Concert Party and the
Wider Concert Party, whose names appear in Part II of this document accept
responsibility for the information (including any expressions of opinions)
contained in this Circular relating to themselves. To the best of the
knowledge and belief of the members of the Oraziman Family Concert Party and
members of the Wider Concert Party, who have taken all reasonable care to
ensure that such is the case, the information contained in this Circular for
which they are responsible is in accordance with the facts and does not omit
anything likely to affect the import of such information.
2. THE DIRECTORS OF CASPIAN SUNRISE PLC
The current Directors of Caspian Sunrise PLC are:
Clive Carver Chairman
Kuat Oraziman Chief
Executive Officer
Seokwoo Shin Chief Operating
Officer
Edmund Limerick Senior Non-executive
director
Aibek Oraziman Non-executive
director
3. INTERESTS AND DEALINGS
3.1 Definitions
For the purposes of this Part III and Part IV, the following definitions shall
apply
(a) "acting in concert" has the meaning attributed to it in the Takeover Code;
(b) "arrangement" includes any indemnity or option arrangements, or any
agreement or understanding, formal or informal, of whatever nature, relating
to the relevant securities which may be an inducement to deal or refrain from
dealing;
(c) "associate" includes (without limitation) in relation to a company:
(i) its parent, subsidiaries and fellow subsidiaries, its associated companies
and companies of which any such companies are associated companies (for this
purpose ownership or control of 20 per cent. or more of the equity share
capital of a company is regarded as the test of associated company status);
(ii) its connected advisers (as defined in the Takeover Code) or the connected
advisers to a company covered in (i) above, including persons (other than
exempt principal traders or exempt fund managers) controlling, controlled by
or under the same control as such connected advisers;
(iii) its directors (together with their close relatives and related trusts);
(iv) its pension funds or the pension funds of a company covered in (i) above;
and
(v) its employee benefit trusts or those of a company covered in (i) above;
(d) "borrowed or lent" includes for these purposes any financial collateral
arrangement of the kind referred to in Note 4 on Rule 4.6 of the Takeover
Code, but excludes any borrowed Ordinary Shares which have either been
redelivered or accepted for redelivery;
(e) "connected persons" means in relation to a director, those persons whose
interests in Ordinary Shares the director would be required to disclose
pursuant to Part 22 of the Companies Act and related regulations and includes
any spouse, civil partner, infants (including step children), relevant trusts
and any company in which a director holds at least 20 per cent. of its voting
capital;
(f) "dealing" or "dealt" includes:
(i) acquiring or disposing of relevant securities, of the right (whether
conditional or absolute) to exercise or direct the exercise of the voting
rights attaching to relevant securities, or of general control of relevant
securities;
(ii) taking, granting, acquiring, disposing of, entering into, closing out,
terminating, exercising (by either party) or varying an option (including a
traded option contract) in respect of any relevant securities;
(iii) subscribing or agreeing to subscribe for relevant securities (whether in
respect of new or existing securities);
(iv) exercising or converting, whether in respect of new or existing relevant
securities, any relevant securities carrying conversion or subscription
rights;
(v) acquiring, disposing of, entering into, closing out, exercising (by either
party) of any rights under, or varying, a derivative referenced, directly or
indirectly, to relevant securities;
(vi) entering into, terminating or varying the terms of any agreement to
purchase or sell relevant securities;
(vii) redeeming or purchasing, or taking or exercising an option over, any of
its own relevant securities by the offeree company or an offeror; and
(viii) any other action resulting, or which may result, in an increase or
decrease in the number of relevant securities in which a person is interested
or in respect of which he has a short position;
(g) a person having an "interest" in relevant securities includes where a
person:
(i) owns securities;
(ii) has the right (whether conditional or absolute) to exercise or direct the
exercise of the voting rights attaching to securities or has general control
of them;
(iii) by virtue of any agreement to purchase, option or derivative, has the
right or option to acquire securities or call for their delivery or is under
an obligation to take delivery of them, whether the right, option or
obligation is conditional or absolute and whether it is in the money or
otherwise; or
(iv) is party to any derivative whose value is determined by reference to the
prices of securities and which results, or may result, in his having a long
position in them;
(h) "relevant securities" includes:
(i) securities of an offeree company which are being offered for or which
carry voting rights;
(ii) equity share capital of the offeree company and an offeror;
(iii) securities of an offeror which carry substantially the same rights as
any to be issued as consideration for the offer; and
(iv) securities of an offeree company and an offeror carrying conversion or
subscription rights into any of the foregoing.
(i) ''short position'' means any short position (whether conditional or
absolute and whether in the money or otherwise) including any short position
under a derivative, any agreement to sell or any delivery obligation or right
to require any other person to purchase or take delivery.
3.2 Interests and dealings of the directors of the Company
The interests of each of the Directors in the ordinary share capital of the
Company (all of which are beneficial), and the existence of which is known to
the Directors or could with reasonable diligence be ascertained by them as at
11 February 2022 (being the latest practicable date prior to the publication
of this Circular) are set out below:
Director Number of % of Issued
Ordinary Shares held Voting Shares
Clive Carver 2,245,000 0.11
Kuat Oraziman nil nil
Seekwoo Shin nil nil
Edmund Limerick 7,911,583 0.37
Aibek Oraziman 472,982,144 22.41
Total 483,138,727 22.89
The current interests of the Directors in share options agreements are as
follows:
Director Number of Share % of Diluted Issued
Options held Voting Shares
Clive Carver 5,400,000 0.26
Kuat Oraziman 3,000,000 0.14
Seekwoo Shin 2,500,000 0.12
Edmund Limerick 2,750,000 0.13
Aibek Oraziman nil nil
Total 13,650,000 0.65
On 26 November 2021 the Board, other than Clive Carver, agreed to extend the
exercise date of options held by Clive Carver over 2,400,000 Ordinary Shares
exercisable at 4p per share from 14 December 2021 to 14 December 2023.
On 10 January 2022 the Company issued 2,500,000 options to Seokwoo Shin and
1,000,000 options to Edmund Limerick exercisable at 5.5p per share and valid
until 9 January 2032.
Except as disclosed above, none of the directors of the Company, other than
the dealing disclosed in 3.3 below, have dealt in relevant securities of the
Company in the 12 months prior to publication of this Circular.
3.3 Interests and Dealings of both the Oraziman Family Concert
Party and the Wider Concert Party
Dealings by members of the Oraziman Family Concert Party members within the
last 12 months prior to publication of this Circular are as follows:
On 6 August 2021, Kuat Oraziman gifted 41,485,330 Ordinary Shares equally to
Aibek Oraziman and Aidana Urazimanova, accordingly Kuat Oraziman no longer
holds any Ordinary Shares in the Company.
On 19 January 2022, Kairat Satylganov, previously a member of the Wider
Concert Party, sold all his 221,625,001 shares at a price of 4.2p per share as
follows: 73,875,001 to Alyazeyah Ahmed Al Marri, 73,875,000 to Meera Ahmed Al
Marri and 73,875,000 to Hamda Ahmed Al Marri. None of the buyers are members
of the Wider Concert Party. Upon the sale of Kairat Satylganov's shares he was
removed from the Wider Concert Party.
Other than as disclosed immediately above, there have been no other dealings
by the Oraziman Family Concert Party members within the last 12 months.
Notwithstanding that the acquisition of voting shares (in this case, as a
result of the Debt Conversion) is made conditional upon the prior approval of
a majority of the Company's Shareholders independent of the transaction at a
general meeting of the Company the Panel will not normally waive an obligation
under Rule 9 if the person to whom the new securities are to be issued (in
this case members of the Oraziman Family Concert Party), or any person acting
in concert with it, has acquired any interest in shares in the Company in the
12 months preceding the date of this document but subsequent to negotiations,
discussions or the reaching of understandings or agreements with the directors
of the Company in relation to the proposed issue of new securities. In
addition, the waiver will be invalidated if any such acquisitions of interests
in shares are made in the period between the publication of this document and
the General Meeting.
The Panel has considered the transactions detailed above and, in these
specific circumstances, has confirmed that the dealings by the Oraziman Family
Concert Party members detailed above will not prejudice the grant of the
Waiver.
Save as disclosed in paragraph 3 of this Part III of this document, no member
of the Oraziman Family Concert Party or Wider Concert Party, nor any close
relatives, related trusts or connected persons, nor any person acting in
concert with any member of the Oraziman Concert Party or Wider Concert Party
owns or controls or is interested, directly or indirectly in, or has borrowed
or lent (save for any borrowed securities which have either been on-lent or
sold), has rights to subscribe for, or has any short position (whether
conditional or absolute and whether in the money or otherwise), including any
short position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take delivery in,
any relevant securities of the Company, nor has any such person dealt therein
during the 12 month period prior to the publication of this Circular.
Save as disclosed in paragraph 3 of this Part III of this document, neither
any of the Directors nor any of their close relatives or related trusts (so
far as the Directors are aware having made due enquiry) nor any person acting
in concert with the Company is interested, directly or indirectly, has rights
to subscribe to, or has any short position in relevant securities of the
Company, nor has any such person dealt therein during the 12 month period
prior to the publication of this Circular.
Neither the Company, the Directors, nor any person acting in concert with the
Company has borrowed or lent any relevant securities (save for any borrowed
securities which have either been redelivered or accepted for redelivery).
There is no arrangement relating to relevant securities which exists between
any member of the Oraziman Concert Party or Wider Concert Party, or their
respective groups or, so far as the members of the Oraziman Concert Party and
Wider Concert Party are aware, any person acting in concert with any member of
the Concert Party or their respective groups, and any other person, nor
between the Company or, so far as Company is aware, any person acting in
concert with the Company and any other person.
4. INTENTIONS OF THE ORAZIMAN FAMILY CONCERT PARTY
The current aggregate holding of the Oraziman Family Concert Party is
949,815,346 Ordinary Shares representing 45.00% of the Issued Ordinary Shares.
The current aggregate holding of the Wider Concert Party is 1,321,188,992
Ordinary Shares representing 62.59% of the Issued Ordinary Shares.
The Oraziman Family Concert Party, as part of the Wider Concert Party, is not
intending to seek any changes to the Board and have confirmed that it would be
their intention that, following any increase in their proportionate
shareholding as a result of the issue of the Conversion Shares, the business
of the Group would be continued in the same manner as at present, with no
changes. As a result, there will be no repercussions on employment or the
location of Caspian Sunrise's places of business and no redeployment of
Caspian Sunrise's existing fixed assets. Likewise, no changes will be made
regarding the Company's place of business or headquarters and headquarters'
functions.
The Oraziman Family Concert Party has confirmed that it is not intending to
seek any changes in respect of: (i) the future business of the Company
(including any research and development functions) (ii) the Board, nor the
Company's plans with respect to the continued employment of employees and
management of the Company and its subsidiaries or their headcount (including
to the conditions of employment or in the balance of skills and functions of
employees and management); (iii) the strategic plans for the Company and their
likely repercussions on employment and on the locations of the Company's place
of business, including the location of the Company's headquarters and
headquarters functions; (iv) employer contributions into any of the Company's
pension schemes, the accrual of benefits for existing members, nor the
admission of new members; (v) redeployment of the Company's fixed assets; or
(vi) the maintenance of the Company's Ordinary Shares being admitted to
trading on AIM.
The Independent Directors believe and have considered as part of forming their
recommendation to vote in favour of the Waiver Resolution as stated in Part II
Paragraph 4 of this circular, that the Debt Conversion will not result in any
changes in respect of: (i) the future business of the Company (including any
research and development functions) (ii) the Board, nor the Company's plans
with respect to the continued employment of employees and management of the
Company and its subsidiaries or their headcount (including to the conditions
of employment or in the balance of skills and functions of employees and
management); (iii) the strategic plans for the Company and their likely
repercussions on employment and on the locations of the Company's place of
business, including the location of the Company's headquarters and
headquarters functions; (iv) employer contributions into any of the Company's
pension schemes, the accrual of benefits for existing members, nor the
admission of new members; (v) redeployment of the Company's fixed assets; or
(vi) the maintenance of the Company's Ordinary Shares being admitted to
trading on AIM.
5. OPERATIONAL STATUS AND CURRENT TRADING
Caspian Sunrise is a Kazakhstan based oil and gas exploration and production
company established in October 2006 and listed on the Alternative Investment
Market of the London Stock Exchange in May 2007. Caspian Sunrise's current
principal asset is its 99% interest in the BNG Contract Area in the Pre
Caspian basin in Western Kazakhstan. Additionally, Caspian has interests in
the 3A Best Contract Area and owns the Caspian Explorer, a shallow water
drilling vessel designed for use in the Caspian Sea.
The latest operational update was issued by the Company on 25 January 2022 and
can be found at https://www.caspiansunrise.com/investors/announcements-alerts/
(https://www.caspiansunrise.com/investors/announcements-alerts/) and is
discussed further in Part III paragraph 8.5.
6. DIRECTORS' SERVICE AGREEMENTS
6.1 Details of the service contracts for the Board of Caspian
Sunrise PLC are as follows:
(a) Clive Carver
Clive Carver entered into a service agreement dated 20 March 2019 in
connection with his relocation to the UAE.
Under the terms of the agreement following the date of the grant of the MJF
Export licence, Clive has been paid at the rate of US$504,000 per annum. He is
also eligible to receive an annual performance related bonus which will be
determined at the discretion of the Company's remuneration committee. Clive is
entitled to be covered by a policy of directors' and officers' liability
insurance to be provided by the Company.
However, from May 2020 Clive has agreed to limit his monthly remuneration to
US$10,000.
Additionally, Clive is entitled to receive the ex-pat benefit of a
contribution towards housing costs and the use of a car which is unquantified
in the agreement.
Clive's service agreement has a rolling term 12-month notice period.
There are no profit sharing arrangements, early termination payments, and
incentive payments in relation to the Waiver Resolution or any other
arrangements to be disclosed.
(b) Kuat Oraziman
On 6 December 2019, Kuat Oraziman's base pay was increased to US$300,000 per
annum under a variation to his existing service agreement dated 19 June 2018.
He is also eligible to receive an annual performance related bonus which will
be determined at the discretion of the Company's remuneration committee. Kuat
is entitled to be covered by a policy of directors' and officers' liability
insurance to be provided by the Company
However, from May 2020 Kuat has agreed to limit his monthly remuneration to
US$10,000. Kuat has not received any payments under his Service agreement for
several years with the reduced amounts due being added to the Oraziman Family
Loan.
Kuat's service agreement has a rolling term12-month notice period.
There are no profit sharing arrangements, early termination payments, and
incentive payments in relation to the Waiver Resolution or any other
arrangements to be disclosed.
(c) Seokwoo Shin
Seokwoo Shin was appointed to the board as Chief Operating Officer on 1
December 2020 subject to regulatory confirmation. Under his service agreement
he is entitled to receive US$108,000 per annum.
Additionally, he is entitled to receive the ex-pat benefit of a contribution
towards housing costs which is unquantified in the agreement.
Seokwoo's service agreement has a rolling term 12-month notice period.
However from May 2020, Mr Shin has agreed to limit his monthly remuneration to
US$4,500.
There are no profit sharing arrangements, early termination payments and
incentive payments in relation to the Waiver Resolution or any other
arrangements to be disclosed.
(d) Edmund Limerick
Under an agreement dated 28 August 2019, Edmund Limerick is paid a base amount
of £45,000 per annum to serve as a non-executive director. Additionally, he
receives two further payments of £5,000 each for chairing the Audit Committee
and the Remuneration Committee.
However, from May 2020 Edmund has agreed to limit his annual remuneration to
£13,750.
Edmund's contract has a rolling term 6 month notice period.
There are no profit sharing arrangements, early termination payments and
incentive payments in relation to the Waiver Resolution or any other
arrangements to be disclosed.
(e) Aibek Oraziman
Under an agreement dated 28 August 2019, Aibek Oraziman is paid a base amount
of £45,000 per annum to serve as a non-executive director.
However, from May 2020 Aibek has agreed to limit his annual remuneration to
£11,250. Aibek has not received any payments under his Service agreement for
several years with the reduced amounts due being added to the Oraziman Family
Loan.
Aibek's contract has a rolling term 3 month notice period.
There are no profit sharing arrangements, early termination payments and
incentive payments in relation to the Waiver Resolution or any other
arrangements to be disclosed.
6.2 Long term incentives
In addition to their service agreements, in May 2019 Clive Carver and Kuat
Oraziman became entitled to incentive payments linked to the Company's future
share price and market capitalisation, such that for each US$500 million added
to the market capitalisation above a base figure of US$300 million and
provided the share price for a 30 day period equals or exceeds set share price
targets starting at 17.23p should the Company's market capitalisation increase
to US$800 million and then increasing by 3.44p for each additional US$500
million increase in the Company's market capitalisation. In which case both
Clive Carver and Kuat Oraziman are entitled to cash pay payments of US$3
million each for each combined market capitalisation and share price
thresholds crossed.
None of the above Directors has entered into or amended their service
agreements with the Company in the last six months.
7. MIDDLE MARKET QUOTATIONS
Set out below are the closing middle-market quotations for the Ordinary Shares
for the first dealing day of each of the six months immediately preceding the
date of this Circular and for 11 February 2022, (being the latest practicable
date prior to the publication of this Circular).
Date Price per Ordinary Share (pence)
1 July 2021 2.20
1 August 2021 2.85
1 September 2021 3.20
1 October 2021 3.80
1 November 2021 4.15
1 December 2021 4.05
1 January 2022 4.95
1 February 2022 3.85
11 February 2022 4.35
8. GENERAL
8.1 WH Ireland is Caspian Sunrise PLC's Nominated Adviser and
Broker and is considered as acting in concert with Caspian Sunrise PLC for the
purposes of the Takeover Code and this circular. Kuat Oraziman and Raushan
Sagdiyeva have share trading accounts with WH Ireland's wealth management
division.
8.2 WH Ireland has given and has not withdrawn its written
consent to the issue of this Circular with the inclusion herein of the
references to its name and its advice to the Independent Directors in the form
and context in which they appear.
8.3 Save as disclosed above, there is no personal, financial or
commercial relationship, arrangement or understanding between the Oraziman
Family Concert Party, the Wider Concert Party or the Company and WH Ireland.
8.4 There is no agreement, arrangement, or understanding
(including any compensation arrangement) between the Oraziman Family Concert
Party, the Wider Concert Party or any person acting in concert with any of
them and any of the Directors, recent directors, Shareholders, or recent
shareholders of the Company, or any person interested or recently interested
in Ordinary Shares of the Company having any connection with or dependence
upon the proposals set out in this Circular.
8.5 There has been no significant change in the financial or
trading position of Caspian Sunrise PLC since the publication of the Company's
interim results for the period ended 30 June 2021 save as set out in
Regulatory News Service announcements below.
On 6 January 2022 the Company announced that "The Company notes the current
political unrest in Kazakhstan and the anti-government protests. The Company
has decided to temporarily suspend its drilling and production activities in
response to the ongoing political uncertainty. Further announcements will be
made in due course as the position becomes clearer."
On 10 January 2022, the Company announced the resumption of drilling and
production activities and issued a further operational announcement on 25
January 2022.
These announcements followed two trading updates issued on 22 and 23 December
2021 which detailed improved operational performance of the group.
8.6 No agreement, arrangement or understanding exists whereby
any Ordinary Shares in Caspian Sunrise PLC acquired by any member of the
Oraziman Family Concert Party or the Wider Concert Party will be transferred
to any other person.
9. FINANCIAL INFORMATION ON CASPIAN SUNRISE PLC
Below is a table setting out the location of certain financial information
contained within the 2019 and 2020 Annual Report and Accounts:
2020 2019
Page Number Page Number
Revenue 40 46
Net profit/loss before tax 40 46
Tax charge 40 46
Net profit/loss after tax 40 46
Amount absorbed by dividends N/A N/A
Earnings per share 40 46
Dividends per share N/A N/A
Group statement of financial position 44 50
Group statement of cash flows 46 52
Significant accounting policies and major notes to accounts 47 53
The Company's Annual Report and Accounts for the year ended 31 December 2019
can be found at the following website:
https://www.caspiansunrise.com/wp-content/uploads/2020/06/CS-accounts-2019-Final-25-6-2020.pdf
(https://www.caspiansunrise.com/wp-content/uploads/2020/06/CS-accounts-2019-Final-25-6-2020.pdf)
The Company's Annual Report and Accounts for the year ended 31 December 2020
can be found at the following website:
https://wp-caspiansunrise-2020.s3.eu-west-2.amazonaws.com/media/2021/06/29065925/Caspian-Sunrise-plc-2020-Report-Accounts-final.pdf
(https://wp-caspiansunrise-2020.s3.eu-west-2.amazonaws.com/media/2021/06/29065925/Caspian-Sunrise-plc-2020-Report-Accounts-final.pdf)
The Company's interim results for the 6 months ended 30 June 2021 can be found
at the following website:
https://polaris.brighterir.com/public/caspian_sunrise/news/rns/story/wkldd1x
(https://polaris.brighterir.com/public/caspian_sunrise/news/rns/story/wkldd1x)
The above financial information has been incorporated into the Circular by
reference in accordance with Rule 24.15 of the Takeover Code.
A Shareholder, person with information rights or person to whom this Circular
has been sent may request a copy of the above information in hard copy form
(hard copies will not be provided unless requested). Hard copies may be
requested by writing to Caspian Sunrise PLC, 5 New Street Square, London, EC4A
3TW, phone number: 020 7300 7000.
10. MATERIAL CONTRACTS
The following contracts, not being contracts entered into in the ordinary
course, have been entered into by the Company or other members of the Group in
the two years prior to the date of this Circular, or are subsisting agreements
which are included within, or which relate to, the assets and liabilities of
the Company (notwithstanding whether such agreements are within the ordinary
course or were entered into outside of the two years immediately preceding the
publication of this Circular) and are, or may be, material:
Debt Conversion Agreements
The agreement in respect of the Debt Conversion dated 5 August 2021 between
the Company and Akku Investments LLP on behalf of the Oraziman Family Concert
Party, pursuant to which the Company has agreed to repay the Oraziman Family
Loan, such repayment to be satisfied by the issue to Aibek Oraziman and Aidana
Urazimanova of the Conversion Shares at the Issue Price.
The Relationship Agreement
On 20 January 2020, the Company and Kuat Oraziman, Aibek Oraziman, Aidana
Urazimanova and subsequently on 10 February 2022, Altynbek Bolatzhan &
Boltazhan Kerimbayev entered into an agreement to ensure that the Group is
able to carry on its business independently of the Oraziman Family Concert
Party and that transactions entered into between the Group and members of the
Oraziman Family Concert Party will be on arm's length terms and a normal
commercial basis.
Placing Agreement
On 5 August 2020, The Company entered into a Placing Agreement with WH Ireland
in connection with a placing of 36,363,629 new Ordinary Shares at a price of
2.75p per share to raise before expenses £1 million for the Company for which
WH Ireland was compensated £50,000. The Placing Agreement included standard
warranties provided by the Company in favour of WH Ireland.
The 3A Best Farm-out Agreement
On 19 May 2021, Eragon Petroleum FZE, a 100% subsidiary of Caspian Sunrise
plc, entered into a framework agreement with Espelisai Operating LLP under
which Eragon Petroleum FZE agreed to sell to Espelisai Operating LLP15% of the
shares held by Eragon Petroleum FZE in 3A Best Group JSC in exchange for an
investment by Espelisai Operating LLP which invested US$2.5 million into 3A
Best Group JSC.
The agreement also provided an option to Espelisai Operating LLP to acquire
the remaining 85% of the shares in 3A Best Group JSC, subject if required
under the AIM Rules to the prior approval of Caspian Sunrise shareholders.
The agreement was conditional on the renewal of the 3A Best subsoil licence by
the appropriate Kazakh authorities.
Documents available for inspection
Copies of this Circular and the following documents will be available for
inspection on the Company's website, https://www.caspiansunrise.com/ up to and
including 9 March 2022 and at the General Meeting to be held on that day:
· the Memorandum and Articles of Association of the
Company;
· the audited consolidated accounts of the Company
for the financial years ended 31 December 2020 and 2019;
· the interim results for the six-month period to
30 June 2021;
· this Circular;
· Conversion agreement referred to above; and
· Merger Circular
NOTICE OF GENERAL MEETING
NOTICE IS HEREBY GIVEN that a general meeting of the Company will be held at
the offices of Taylor Wessing LLP, 5 New Street Square, London EC4A 3TW at
11:00 a.m. on 9 March 2022.
In this notice, words and phrases that are defined in the circular to
shareholders dated 15 February 2022 have the same meanings unless the context
requires otherwise.
The general meeting will be held for the purpose of considering and, if
thought fit, passing the following resolution of which will be proposed as an
ordinary resolution (to be voted on a poll by Independent Shareholders only in
accordance with the requirements of the Panel on Takeovers and Mergers (the
"Panel").
Ordinary resolution
1. THAT the waiver granted by the Panel of the obligation that would otherwise arise on the members of the Oraziman Family Concert Party to make a general offer to the Shareholders of the Company pursuant to rule 9 of the Takeover Code as a result of the issue to them of the Conversion Shares, as described in the circular of which this notice forms part, is hereby approved.
By Order of the Board
Clive Carver
Chairman
15 February 2022
Registered Office: Caspian Sunrise PLC, 5 New Street Square, London EC4A 3TW
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