REG - i(x) Net Zero PLC - Proposed cancellation of trading on AIM

I (X) Net ZeroAnnouncement

28/06/2024 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240628:nRSb3235Ua&default-theme=true

RNS Number : 3235U  i(x) Net Zero PLC  28 June 2024

The information contained within this Announcement is deemed by i(x) Net Zero
plc to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR").

 

 

28 June 2024

i(x) Net Zero PLC

 

("i(x) Net Zero" or the "Company")

 

Proposed cancellation of admission of Ordinary Shares to trading on AIM

 

i(x) Net Zero PLC (AIM: IX.), the investing company which focuses on Energy
Transition and Sustainability in the Built Environment, announces the proposed
cancellation of admission of its Ordinary Shares to trading on AIM
("Cancellation").

The Directors have undertaken a review to evaluate the benefits and drawbacks
to the Company and its Shareholders of retaining the admission to trading of
the Ordinary Shares on AIM.  The Directors have taken into consideration
numerous factors, both positive and negative, and considered the interests of
all Shareholders in reaching its decision. Following this review, the Board
has concluded that the continued admission to trading of the Ordinary Shares
on AIM is not appropriate and, accordingly, the Cancellation is in the best
interests of the Company and its Shareholders as a whole including for the
following reasons:

·    The Company's share price fell by approximately 70% to 22 pence in
the 6 months after IPO and has since remained at or around this level, despite
the NAV of the Company's underlying investments having materially increased
during this period.

·    There has been limited liquidity in the Ordinary Shares for some time
and, as a result, the Directors believe that continued admission to trading on
AIM no longer sufficiently provides the Company with the advantage of
providing access to capital in the medium to longer-term, nor in the opinion
of the Directors, provides liquidity to investors.

·    The Directors believe that the low share price is seen as a barrier
to the Company issuing further shares and so the Company's ability to provide
additional funds to it portfolio companies or to make new investments.

·    Notwithstanding the public reporting of NAV, whilst the low share
price has become disconnected with the underlying NAV of the Company's
investments and the Directors believe that this low share price hampers
valuation discussions when looking to realise investments the Company has
made.

·    The considerable cost, management time and legal and regulatory
burden associated with maintaining the Company's admission to trading on AIM
are, in the Directors' opinion, disproportionate to the benefits to the
Company's continued admission to trading on AIM.

·    More generally, the Directors believe that the UK small and micro-cap
public markets have had a significant change in sentiment over the past few
years and that the Company's current public market valuation does not reflect
the underlying potential of the business with the result that growth prospects
are more readily accessible and managed in a private market environment.

Pursuant to AIM Rule 41, the Cancellation can only be effected by the Company
after securing a resolution of Shareholders in a general meeting passed by a
requisite majority, being not less than 75 per cent. of the votes cast by
Shareholders (in person or by proxy).    The Directors intend to propose
the resolution to approve the Cancellation at or around the time of the
forthcoming AGM and a further announcement of the timing of the proposed
Cancellation will be made in due course.  Further details of the effect of
the proposed Cancellation is set out at the end of this Announcement.

The Directors are aware that Shareholders may wish to acquire or dispose of
Ordinary Shares in the Company following the Cancellation but there will be no
formal market for this which would make it more difficult for Shareholders to
buy and sell Ordinary Shares should they wish to do so.

The Company intends to make arrangements for a Matched Bargain Facility to
assist Shareholders to trade in the Ordinary Shares to be put in place from
the date of the Cancellation, if the resolutions necessary to approve the
proposed Cancellation are passed. The intended Matched Bargain Facility would
be provided by J P Jenkins. J P Jenkins is an appointed representative of
Prosper Capital LLP, which is authorised and regulated by the FCA.

 

 

 

 

- Ends -

 

 

For further information visit https://ixnetzero.com/
(https://url.avanan.click/v2/___https:/ixnetzero.com/___.YXAzOml4bmV0emVybzphOm86MWI5YTUyZmU4NmZiYWI5OGVjZjRmZWM5ZWRkZjg5OTE6NjpjYzE3OjFhMDNjOTMyMzEzNzkxYzkxY2QxYjg4YWRmYmExMjg5Y2FiNWM1YTQxYmExMjVlNDBhYTVjM2Q0YjZjZTI4NGQ6cDpU)
 or contact:

 i(x) Net Zero                               Via Buchanan below
 Pär Lindström - Chief Executive Officer
 Jonathan Stearns - Chief Financial Officer

 Canaccord Genuity Limited                   +44 20 7523 8000

 Nominated Adviser & Broker
 Max Hartley
 Harry Pardoe

 Buchanan
 Helen Tarbet                                +44 7872 604 453
 Simon Compton                               +44 7979 497 324
 Abby Gilchrist                              +44 7557 952 223

 

 

Notes to Editors

 

About i(x) Net Zero PLC

 

i(x) Net Zero PLC is an AIM quoted investing company that provides its
shareholders the opportunity to create long-term capital growth with
positive, scalable, measurable and sustainable impact on the environment and
on the communities it serves.

 

In accordance with its belief that the world's biggest problems are also the
biggest market opportunities, i(x) Net Zero focuses on two critical areas in
which it aims to make a positive impact: (i) Energy Transition and (ii)
Sustainability in the Built Environment. The Company uses a multi-strategy
investment approach, providing the companies in which it invests with the
expertise and catalytic capital to help them grow. To date, i(x) Net Zero has
invested in biofuels, direct air capture (carbon removal), renewable energy,
sustainable workforce housing and net zero construction technology.

 

i(x) Net Zero is a signatory to the UN Principles for Responsible
Investing. The Company has received the London Stock Exchange's Green Economy
Mark.

 

Effect of the Cancellation

The Directors are aware that certain Shareholders may be unable or unwilling
to hold Ordinary Shares in the event that the Cancellation is approved and
becomes effective. Such Shareholders should consider selling their interests
in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear
Business Days' notice of Cancellation. Additionally, Cancellation will not
take effect until at least 5 clear Business Days have passed following the
passing of the Resolution.

The principal effects of the Cancellation will be that:

·          there will be no formal market mechanism enabling the
Shareholders to trade Ordinary Shares and, consequently, there can be no
guarantee that a Shareholder will be able to purchase or sell any Ordinary
Shares. This decision has been taken due to increasing costs, probability of
low liquidity and the advantages of not having a publicly quoted share price
during future negotiations in respect of the Company's underlying investments;

·          while the Ordinary Shares will remain freely
transferrable, it is possible that the liquidity and marketability of the
Ordinary Shares will, in the future, be even more constrained than at present
and the value of such Ordinary Shares may be adversely affected as a
consequence the Ordinary Shares may be more difficult to sell, even if the
Company implements the expected Matched Bargain Facility with a third party
which would facilitate Shareholders buying and selling Ordinary Shares on a
matched bargain basis following Cancellation;

·          in the absence of a formal market and quote, it may be
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;

·          Shareholders will no longer be afforded the protections
given by the AIM Rules, such as the requirement to be notified of certain
material developments or events (including substantial transactions, financing
transactions, related party transactions and certain acquisitions and
disposals) and the separate requirement to seek shareholder approval for
certain other corporate events such as reverse takeovers or fundamental
changes in the Company's business;

·          the Company will no longer be required to have an AIM
Investing Policy and the Directors will be able to change its policy in
relation to asset allocation and risk diversification without the need for
shareholder approval;

·          the UK Takeover Code will no longer apply and
Shareholders will no longer be afforded the protections given by the UK
Takeover Code;

·          the legal requirements applicable to private companies
relating to transparency and corporate governance are less stringent than
those applicable to public companies quoted on AIM and whilst the Company
currently follows the QCA Corporate Governance Code, following the
cancellation it will no longer be required to follow a recognised corporate
governance code;

·          the Company will no longer be required to publicly
disclose any change in major shareholdings in the Company under the AIM Rules
or the Disclosure Guidance and Transparency Rules;

·                          Canaccord Genuity will
cease to be nominated adviser to the Company;

·                          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 and, although the Ordinary
Shares will remain transferable, they may cease to be transferable through
CREST (in which case, Shareholders who hold Ordinary Shares in CREST will
receive share certificates); and

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

The Company will remain registered with the Registrar of Companies in Jersey
in accordance with and subject to the Law, notwithstanding the Cancellation.

The Company will continue to be bound by the Articles (which require
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.

The Company currently intends that it will continue to provide certain
facilities and services to Shareholders that they currently enjoy as
shareholders of an AIM company. The Company will:

·          continue to communicate information about the Company
(including annual accounts) to its Shareholders, as required by the Law;

·          continue to hold Annual General Meetings;

·          continue, for at least 12 months following the
Cancellation, to maintain its corporate website, www.ixnetzero.com
(https://url.avanan.click/v2/___http:/www.ixnetzero.com___.YXAzOml4bmV0emVybzphOm86NDM0MWY5NzUyMDliYWUxNDkzZDZlZGRmM2Q4ZTA0MzM6NjozNjc0OjczNjgwNzM1OTFjMGRlZGI0NjY3MDhlZTJkYjc0NjJmNzY2MDY5M2Y3MmIzYmNmNTQ4Y2I0NmNiYjdhMzdhNWE6cDpUOk4)
and to post updates on the website from time to time, although Shareholders
should be aware that there will be no obligation on the Company to include all
of the information required under AIM Rule 26 or to update the website as
required by the AIM Rules; and

The Company also intends to make available to Shareholders, through J P
Jenkins, the Matched Bargain Facility which will allow Shareholders to buy and
sell Ordinary Shares on a matched bargain basis following the Cancellation.

There will be no change to the composition of the Board immediately following
the Cancellation.

UK Takeover Code

The UK Takeover Code currently applies to the Company and will do so for ten
years following the Cancellation becoming effective if the Company meets the
"residency test" under the UK Takeover Code (as described below). The
composition of the Board is such that, assuming that they are all reappointed
at the AGM, a majority of the board of directors are not resident in the UK,
the Channel Islands or the Isle of Man and so the Company would no longer meet
the residency test from the Cancellation becoming effective. Following the
Cancellation becoming effective, for so long as the Company no longer meets
the residency test, the UK Takeover Code will not apply to the Company and the
protections afforded by the UK Takeover Code will not apply to any offer made
to Shareholders to acquire their Ordinary Shares.

The UK Takeover Code applies to all offers for companies which have their
registered offices in the United Kingdom, the Channel Islands or the Isle of
Man if any of their equity share capital or other transferable securities
carrying voting rights are admitted to trading on a UK regulated market or a
UK multilateral trading facility or on any stock exchange in the Channel
Islands or the Isle of Man.

The UK Takeover Code also applies to all offers for companies (both public and
private) which have their registered office in the United Kingdom, the Channel
Islands or the Isle of Man which are considered by the Panel to have their
place of central management and control in the United Kingdom, the Channel
Islands or the Isle of Man, but in relation to private companies only if one
of a number of conditions are met - for example, if the company's shares were
admitted to trading on a UK regulated market or a UK multilateral trading
facility or on any stock exchange in the Channel Islands or the Isle of Man at
any time in the preceding ten years.

If the Cancellation is approved by Shareholders, its securities will no longer
be admitted to trading on a regulated market or a multilateral trading
facility in the United Kingdom. In these circumstances, the UK Takeover Code
will only apply to the Company if it is considered by the Panel to have its
place of central management and control in the United Kingdom, the Channel
Islands or the Isle of Man. This is known as the "residency test". In
determining whether the residency test is satisfied, the Panel has regard
primarily to whether a majority of a company's directors are resident in these
jurisdictions.

The Panel has confirmed to the Company that, on the basis of the current
residency of the Directors and assuming that they are all re-elected at the
AGM, the Company will have its place of central management and control outside
the United Kingdom, Channel Island and Isle of Man following the Cancellation.
Therefore, if the Cancellation is approved by Shareholders at the AGM and
becomes effective, the  UK Takeover Code will cease to apply to the Company
with effect from such Cancellation.

Under the current rules, the UK Takeover Code could apply to the Company in
the ten year period from the date of the Cancellation if the composition of
the Board were to change such that the Company would have its place of central
management and control in the United Kingdom. Following the expiry of the ten
year period from the date of the Cancellation, the Company would not in any
circumstances be subject to the provisions of the UK Takeover Code. The
Takeover Panel Consultation Paper "Companies to which the Takeover Code
applies" dated 24 April 2024 sets out a proposal which, if implemented, would
provide for a new jurisdictional framework which would narrow the scope of the
companies to which the UK Takeover Code applies. Should the proposed
amendments to the UK Takeover Code be implemented, such ten year period could
be reduced to three years.

Brief details of the Panel, and of the protections afforded by the UK Takeover
Code are described below.

Before giving your consent to the Cancellation, you may want to take
independent professional advice from an appropriate independent financial
adviser.

The UK Takeover Code

The UK Takeover Code is issued and administered by the Panel. The UK Takeover
Code currently applies to the Company and, accordingly, its Shareholders are
entitled to the protections afforded by the UK Takeover Code.

The UK Takeover Code and the Panel operate principally to ensure that
shareholders are treated fairly and are not denied an opportunity to decide on
the merits of a takeover and that shareholders of the same class are afforded
equivalent treatment by an offeror. The UK Takeover Code also provides an
orderly framework within which takeovers are conducted. In addition, it is
designed to promote, in conjunction with other regulatory regimes, the
integrity of the financial markets.

The General Principles and Rules of the UK Takeover Code

The UK Takeover Code is based upon a number of General Principles which are
essentially statements of standards of commercial behaviour. For your
information, these General Principles are set out in Part 1 of Appendix A of
this announcement. The General Principles apply to all transactions with which
the UK Takeover Code is concerned. They are applied by the Panel in accordance
with their spirit to achieve their underlying purpose.

In addition to the General Principles, the UK Takeover Code contains a series
of Rules. Some of the Rules provide more detail on how the General Principles
will be applied by the Panel and others govern specific aspects of the
takeover procedure. Like the General Principles, the Rules are to be
interpreted to achieve their underlying purpose. Therefore, their spirit must
be observed as well as their letter. The Panel may derogate or grant a waiver
to a person from the application of a Rule in certain circumstances.

Giving up the protection of the UK Takeover Code

A summary of key points regarding the application of the UK Takeover Code to
takeovers generally set out in Part 2 of Appendix A of this announcement. You
are encouraged to read this information carefully as it outlines certain
important protections which you will be giving up if you agree to the
Cancellation and, as expected, the UK Takeover Code ceases to apply to the
Company in the future.

Transactions in the Ordinary Shares prior to and post the proposed
Cancellation

Prior to Cancellation

Shareholders should note that they are able to continue trading in the
Ordinary Shares on AIM prior to Cancellation.

Dealing and settlement arrangements following Cancellation

The Directors are aware that Shareholders may wish to acquire or dispose of
Ordinary Shares in the Company following the Cancellation but there will be no
formal market for this which would make it more difficult for Shareholders to
buy and sell Ordinary Shares should they wish to do so.

The Company intends to make arrangements for a Matched Bargain Facility to
assist Shareholders to trade in the Ordinary Shares to be put in place from
the date of the Cancellation, if the Resolutions are passed. If put in place,
the Matched Bargain Facility will be provided by J P Jenkins. J P Jenkins is
an appointed representative of Prosper Capital LLP, which is authorised and
regulated by the FCA.

Subject to these arrangements being put in place, under the Matched Bargain
Facility, Shareholders or persons wishing to acquire or dispose of Ordinary
Shares will be able to leave an indication with J P Jenkins, through their
stockbroker (J P Jenkins is unable to deal directly with members of the
public), of the number of Ordinary Shares that they are prepared to buy or
sell at an agreed price. In the event that J P Jenkins is able to match that
order with an opposite sell or buy instruction, it would contact both parties
and then effect the bargain (trade). Shareholdings remain in CREST and can be
traded during normal business hours via a UK regulated stockbroker. Should the
Cancellation become effective and the Company puts in place the Matched
Bargain Facility, details will be made available to Shareholders on the
Company's website at www.ixnetzero.com
(https://url.avanan.click/v2/___http:/www.ixnetzero.com___.YXAzOml4bmV0emVybzphOm86NDM0MWY5NzUyMDliYWUxNDkzZDZlZGRmM2Q4ZTA0MzM6NjozNjc0OjczNjgwNzM1OTFjMGRlZGI0NjY3MDhlZTJkYjc0NjJmNzY2MDY5M2Y3MmIzYmNmNTQ4Y2I0NmNiYjdhMzdhNWE6cDpUOk4)
.

The Matched Bargain Facility is expected (but is not certain) to operate for a
minimum of 12 months after the Cancellation. The Directors' current intention
is that it will continue beyond that time but Shareholders should note that it
could be withdrawn and therefore inhibit the ability to trade the Ordinary
Shares. Further details will be communicated to the Shareholders at the
relevant time.

If Shareholders wish to buy or sell Ordinary Shares on AIM, they must do so
prior to the Cancellation becoming effective.

 

APPENDIX A

 

PART 1: THE GENERAL PRINCIPLES OF THE UK TAKEOVER CODE

 

1.    All holders of the securities of an offeree company of the same class
must be afforded equivalent treatment. If a person acquires control of a
company, the other holders of securities must be protected.

 

2.    The holders of the securities of an offeree company must have
sufficient time and information to enable them to reach a properly informed
decision on the takeover bid. Where it advises the holders of securities, the
board of directors of the offeree company must give its views on the effects
of implementation of the takeover bid on employment, conditions of employment
and the locations of the company's places of business.

 

3.    The board of directors of an offeree company must act in the
interests of the company as a whole and must not deny the holders of
securities the opportunity to decide on the merits of the takeover bid.

 

4.    False markets must not be created in the securities of the offeree
company, of the offeror company, or of any other company concerned by the
takeover bid in such a way that the rise or fall of the prices of the
securities becomes artificial and the normal functioning of the markets is
distorted.

 

5.    An offeror must announce a takeover bid only after ensuring that the
offeror can fulfil in full any cash consideration, if such is offered, and
after taking all reasonable measures to secure the implementation of any other
type of consideration.

 

6.    An offeree company must not be hindered in the conduct of its affairs
for longer than is reasonable by a takeover bid for its securities.

 

PART 2: DETAILED APPLICATION OF THE UK TAKEOVER CODE

 

The following is a summary of key provisions of the UK Takeover Code which
apply to transactions to which the UK Takeover Code applies. You should note
that, by agreeing to the Cancellation, you will be giving up protections
afforded by the UK Takeover Code in the event that, as expected, the UK
Takeover Code ceases to apply to the Company in the future.

 

Equality of treatment

 

General Principle 1 of the UK Takeover Code states that all holders of
securities of an offeree company of the same class must be afforded equivalent
treatment. Furthermore, Rule 16.1 requires that, except with the consent of
the Panel, special arrangements may not be made with certain shareholders in
the Company if there are favourable conditions attached which are not being
extended to all shareholders.

 

Information to shareholders

 

General Principle 2 requires that holders of securities of an offeree company
must have sufficient time and information to enable them to reach a properly
informed decision on a takeover bid. Consequently, a document setting out full
details of an offer must be sent to the offeree company's shareholders.

 

The opinion of the offeree board and independent advice

 

The board of the offeree company is required by Rule 3.1 of the UK Takeover
Code to obtain competent independent advice as to whether the financial terms
of an offer are fair and reasonable and the substance of such advice must be
made known to its shareholders. Rule 25.2 requires that the board of the
offeree company must send to the offeree company's shareholders and persons
with information rights its opinion on the offer and its reasons for forming
that opinion. That opinion must include the board's views on: (i) the effects
of implementation of the offer on all the company's interests, including,
specifically, employment; and (ii) the offeror's strategic plans for the
offeree company and their likely repercussions on employment and the locations
of the offeree company's places of business.

 

The document sent to shareholders must also deal with other matters such as
interests and recent dealings in the securities of the offeror and the offeree
company by relevant parties and whether the directors of the offeree company
intend to accept or reject the offer in respect of their own beneficial
shareholdings.

 

Rule 20.1 states that, except in certain circumstances, information and
opinions relating to an offer or a party to an offer must be made equally
available to all offeree company shareholders and persons with information
rights as nearly as possible at the same time and in the same manner.

 

Option-holders and holders of convertible securities or subscription rights

 

Rule 15 of the UK Takeover Code provides that when an offer is made and the
offeree company has convertible securities outstanding, the offeror must make
an appropriate offer or proposal to the holders of those securities to ensure
that their interests are safeguarded. Rule 15 also applies in relation to
holders of options and other subscription rights. If Cancellation occurs these
protections will be lost in the event that the Takeover Code ceases to apply
to the Company in the future.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCGUGDLGSDDGSI