REG - Hermes Pacific Inv - Proposed cancellation of admission

Hermes Pacific InvestmentsAnnouncement

08/08/2024 07:00

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RNS Number : 6195Z  Hermes Pacific Investments PLC  08 August 2024

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

 

8 August 2024

 

HERMES PACIFIC INVESTMENTS PLC

("Hermes" or the "Company")

Proposed cancellation of admission to trading on AIM of the Ordinary Shares

and

Notice of General Meeting

 

Hermes Pacific Investments plc (AIM: HPAC) announces that it has today posted
a circular together with the respective notice convening a General Metting to
seek approval of its shareholders for the proposed cancellation of its
ordinary shares to trading on AIM ("Cancellation"), together with the form
Form of Proxy.

The General Meeting will be held at First Floor, 1 Chancery Lane, London WC2A
1LF on 2 September 2024 at noon.

Background to and reasons for the Cancellation

The Company became an investing company in 2012 adopting an investing policy
of making investments in the financial services sector with a focus on South
East Asia. Having made a few small investments, the Company was unable to find
other investments that met its investment criteria. Therefore, in December
2021, the Company changed its investment policy to focus primarily on the
property sector. In May 2022 the Company acquired a residential property in
Westcliff-on-Sea. During 2022 and 2023 interest rates increased significantly
making property investments less attractive relative to holding cash and
therefore since then the Company has made no further investments.

In light of this, the Board reviewed its current status and future options
including the benefits and drawbacks to the Company retaining its admission on
AIM. The Board has concluded that the Cancellation is in the best interests of
the Company and its Shareholders as a whole. In reaching this conclusion, the
Board has considered the following key factors:

·      the permanent cost savings to be achieved by the Cancellation;

·      the Directors do not believe that the Company's  share price
reflects the  underlying value of the company's assets. As at 7 August 2024
the Company's share price was 52.5 pence per share compared with an underlying
net asset value of 147 pence per share as at 30 September 2023;

·      the free float of the Company is only 20.95 per cent. and trading
volumes in respect of the Shares are very low and this illiquidity prevents
Shareholders from trading in meaningful volumes or with any frequency;

·      the Company has not utilised its admission on AIM to raise fresh
capital or issue paper consideration to fund acquisitions since 2013;

·      the management time and the legal and regulatory burden
associated with maintaining the Company's admission to trading on AIM is, in
the Directors' opinion, disproportionate to the benefits to the Company; and

·      the Directors believe that Admission significantly inhibits
flexibility of the business

 

Effect of the Cancellation on Shareholders

The principal effects that the Cancellation would have on Shareholders are as
follows:

•           there will not be a formal market mechanism enabling
the Shareholders to trade Ordinary Shares;

•           while the Ordinary Shares will remain freely
transferable, it is possible that the liquidity and marketability of the
Ordinary Shares will, in the future, be more constrained than at present and
the value of such Ordinary Shares may be adversely affected as a consequence;

•           in the absence of a formal market, it may be more
difficult for Shareholders to determine the market value of their investment
in the Company at any given time;

•           the regulatory and financial reporting regime
applicable to companies whose shares are admitted to trading on AIM will no
longer apply and the Company will no longer be subject to the Market Abuse
Regulation regulating inside information or the Disclosure and Transparency
Rules and so will therefore no longer be required to disclose significant
shareholdings in the Company;

•           Shareholders will no longer be afforded the
protections given by the AIM Rules, such as the requirement to be notified of
certain events, AIM Rule 26 (requirement to provide certain information on the
Company's website), and the requirement that the Company seek Shareholder
approval for certain corporate actions, where applicable, including
substantial transactions, reverse takeovers, related party transactions and
fundamental changes in the Company's business;

•           the levels of transparency and corporate governance
within the Company may not be as stringent as for a company quoted on AIM;

•           WH Ireland will cease to be the Company's nominated
adviser and the Company will cease to have a broker;

•           whilst the Company's CREST facility will remain in
place immediately post the Cancellation, the Company's CREST facility may be
cancelled in the future. Although the Ordinary Shares will remain
transferable, they may cease to be transferable through CREST. In this
instance, Shareholders who hold Ordinary Shares in CREST will receive share
certificates;

•           stamp duty will be payable on transfers of Ordinary
Shares as the Ordinary Shares will no longer be traded on AIM; and

•           the Cancellation may have personal taxation
consequences for Shareholders. Shareholders who are in any doubt about their
tax position should consult their own professional independent tax adviser.

Shareholders should also note that the Takeover Code may continue to apply to
the Company following the Cancellation for a period of ten years, provided the
Company continues to have its place of central management and control in the
UK, Channel Islands or Isle of Man. However, in the event that, subsequent to
the Cancellation further Board changes result in the Company's place of
central management and control being outside the UK, Channel Islands or Isle
of Man, then the Company may not be subject to the Takeover Code. Shareholders
should also note that the Panel has recently issued a public consultation
regarding possible changes to the Takeover Code which, if adopted, would
amongst other things shorten the period during which the Takeover Code
potentially continues to apply to a company following its delisting. If these
rule changes are adopted in the form and broadly in the timescale proposed,
the Company would cease to be subject to the Takeover Code three years after
the date of implementation of such changes.

The Company will continue to be bound by its Articles and the Companies Act
(each of which requires shareholder approval for certain matters) following
the Cancellation.

The above considerations are not exhaustive, and Shareholders should seek
their own independent advice when assessing the likely impact of the
Cancellation on them.

 

Following the Cancellation becoming effective, the Board intends to provide
certain facilities and services to Shareholders, including:

•           holding general meetings in accordance with the
applicable statutory requirements; and

•           providing access to and/ or provide copies of the
Company's audited accounts in accordance with the applicable statutory
requirements.

Shareholders should be aware that if the Cancellation takes effect, they will
at that time cease to hold Shares in a Company whose shares are admitted to
trading on AIM and the matters set out above will automatically apply to the
Company from the date of the Cancellation.

Shareholders who are in any doubt about their taxation  position should
consult their own independent professional adviser.

Process for the Cancellation

In accordance with Rule 41 of the AIM Rules, the Company has notified the
London Stock Exchange of its intention to cancel Admission subject to
Shareholders' approval and giving 20 Business Days' notice. In addition, a
period of at least five clear Business Days following Shareholders' approval
of the Resolution is required before the Cancellation may become effective.
Under the AIM Rules, it is a requirement that the Cancellation is approved by
the requisite majority of Shareholders voting at the General Meeting (being
not less than 75 per cent. of the votes cast, whether in person or by proxy).
Accordingly, the Resolution seeks Shareholders' approval of the Cancellation.
Subject to the Resolution being passed, it is anticipated that trading in the
Ordinary Shares on AIM will cease at the close of business on 9 September 2024
with the Cancellation taking effect at 7.00 a.m. on the following business
day, 10 September 2024.

Ordinary Share dealing following the Cancellation

If a Shareholder retains their Ordinary Shares following the Cancellation,
although the Ordinary Shares will remain freely transferable, they will no
longer be tradeable on AIM. The Board is aware that following the Cancellation
(should the Resolution be approved by Shareholders at the General Meeting)
liquidity in, and marketability of, the Ordinary Shares will be very limited
and holdings of Ordinary Shares will be difficult to value and to trade.
Therefore, whilst there will be no formal dealing facility, Shareholders
seeking to buy or sell Ordinary Shares can contact the Company Secretary, who
will seek to facilitate contact between potential buyers and sellers of
Ordinary Shares. Shareholders should also be aware that the arrangements set
out above could be withdrawn at a later date.

Current trading and prospects

There have been no further material developments since the Company announced
its interim results for the six months ended 30 September 2023, on 15 December
2023. At that time, the Company reported revenues of £14,000, a gain in the
period of £9,000 and net assets of £3,441,000.

A copy of the circular convening the general meeting on 2 September 2024, the
Notice of General Meeting, the Form of Proxy and the Form of Instruction will
be available on the Company's website at www.hermespacificinvestments.com/.

 

 Contacts

 Hermes Pacific Investments Plc                         www.hermespacificinvestments.com (http://www.hermespacificinvestments.com/)
 Haresh Kanabar, Non-Executive Chairman                 Tel:  078 0285 8893

 WH Ireland Limited ( Nominated Adviser & Broker)       www.whirelandplc.com/capital-markets
                                                        (http://www.whirelandplc.com/capital-markets)
 Mike Coe/ Sarah Mather                                 Tel: +44 (0) 207 220 1666

 

 

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