REG - Jade Road Investmnts - Circ re. Investing Policy, Proposed Placing & GM

Jade Road InvestmentsAnnouncement

31/01/2023 08:45

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RNS Number : 3909O  Jade Road Investments Limited  31 January 2023

31 January 2023

JADE ROAD INVESTMENTS LIMITED

("Jade Road Investments", "JADE", the "Company" or the "Group")

Circular, Notice of General Meeting, Change of Investing Policy and Proposed
Placing

 

Jade Road Investments Limited (AIM: JADE), the London quoted pan-Asian
diversified investment vehicle focused on providing shareholders with
attractive uncorrelated, risk-adjusted long-term returns is pleased to
announce today the publication of a circular "Circular" containing a notice of
general meeting to be held at 10 am on Monday 20 February at 29/F Infinitus
Plaza, 199 Des Voeux Road Central, Hong Kong.

 

The Company is intending to raise equity finance of up to US$1,750,000 by
issuing 191,256,831 new Ordinary Shares ("New Ordinary Shares") at a price of
£0.0075 per Ordinary Share ("Issue Price") (using a pre-determined exchange
rate of US$1.22 to £1) ("Equity Fundraise"). The Equity Fundraise is being
entirely underwritten by Heirloom, who has agreed to purchase any number of
New Ordinary Shares not otherwise purchased by prospective placees introduced
to the Company by the Placing Agent.

 

Completion of the Equity Fundraise is conditional, inter alia, on all of the
Resolutions being passed by the Shareholders at the general meeting.  They
are as follows:

 

·     the waiver of the application of Article 46 (Takeover Provisions)
to the Underwriting in its entirety (the "Waiver Resolution");

·     the approval of the New Investing Policy;

·     the adoption of an amended and restated Memorandum of Association;
and

·     the resolutions regarding the Company's shares, including the grant
of authority to the Directors to buy back Ordinary Shares.

 

The Circular provides the background and reasons for the Equity Fundraise, the
waiver of Article 46 (Takeover Provisions), the proposed New Investing Policy,
the adoption of an amended and restated Memorandum of Association and the
reasons for the authority to allot and buy back Ordinary Shares.

 

The Circular, which includes the notice of the General Meeting has been sent
to shareholders on 31 January 2023, it will be available on the company's
website at http://jaderoadinvetsment/documents
(http://jaderoadinvetsment/documents%C2%A0) .

 

The details of the circular are repeated below.

 

 

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 Jade Road Investments Limited                      +44 (0) 778 531 5588
 John Croft

 WH Ireland Limited - Nominated Adviser             +44 (0) 20 7220 1666
 James Joyce
 Andrew de Andrade

 Hybridan LLP - Corporate Broker                    +44 (0) 203 764 2341
 Claire Noyce

 Lionsgate Communications - Communications Adviser  +44 (0) 779 189 2509
 Jonathan Charles

About Jade Road Investments

Jade Road Investments Limited is quoted on the AIM Market of the London Stock
Exchange and is committed to providing shareholders with attractive
uncorrelated, risk-adjusted long-term returns from a combination of realising
sustainable capital growth and delivering dividend income.

 

The Company is focused on providing growth capital and financing to emerging
and established Small and Medium Enterprises (SME) sector throughout Asia, and
is well-diversified by national geographies, instruments and asset classes.
This vital segment of the economy is underserved by the traditional banking
industry for regulatory and structural reasons.

 

The Company's investment manager, Harmony Capital, seeks to capitalise on its
team's established investment expertise and broad networks across Asia.
Through rigorous diligence and disciplined risk management, Harmony Capital is
dedicated to delivering attractive income and capital growth for shareholders
with significant downside protection through selectively investing in assets
and proactively managing them.

 

Harmony Capital is predominately sourcing private opportunities and continues
to create a strong pipeline of attractive income-generating assets from
potential investments in growth sectors across Asia, including healthcare,
fintech, hospitality, IT and property. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 JADE ROAD INVESTMENTS LIMITED

 (Incorporated and registered in the British Virgin Islands, registered no.
 1459602)

 Underwritten equity fundraise of up to US$1,750,000

 and

 Waiver of Article 46 (Takeover Provisions) of the Articles of Association

 and

 Proposed New Investing Policy

 and

 Adoption of an amended and restated Memorandum of Association

 and

 Authority to allot Ordinary Shares

 and

 Authority to buy back Ordinary Shares

Your attention is drawn to the letter from the Executive Chairman of the
Company set out on pages 11 to 18 of this document, which contains the
unanimous recommendation of the Board that you vote in favour of the
resolutions to be proposed at the General Meeting referred to below.

Notice of a General Meeting of the Company to be held on Monday 20 February
2023, commencing at 10:00 a.m. GMT/ 6:00 p.m. HKT is set out at the end of
this document.  Shareholders should ensure that the enclosed Form of Proxy is
completed and returned in accordance with the instructions printed on it to
Computershare Investor Services (BVI) Limited, c/o The Pavilions, Bridgwater
Road, Bristol BS99 6ZY or by hand (during normal business hours only) to
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol
BS13 8AE so as to be ‎received by not later than 10:00 a.m. (GMT) on
Thursday 16 February 2023 or 48 hours before any adjourned meeting.
Depositary Interest Holders should ensure that the Form of Instruction is
received no later than 10:00 a.m. GMT / 6:00 p.m. HKT on Wednesday 15 February
2023 or 72 hours before any adjourned meeting.  Completion and return of a
Form of Proxy or a Form of Instruction will not preclude a Shareholder or a
Depositary Interest Holder from attending in person and voting at the General
Meeting.

The Company and the Directors accept responsibility for the information
contained in this document.  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 document is in accordance with the
facts and contains no omission likely to affect the import of such
information.

To the extent information has been sourced from a third party, this
information has been accurately reproduced and, as far as the Directors and
the Company are aware, no facts have been omitted which may render the
reproduced information inaccurate or misleading.  In connection with this
document, no person is authorised to give any information or make any
representation other than as contained in this document.

This document contains forward looking statements, including, without
limitation, statements containing the words "believe", "anticipated",
"expect", and similar expressions.  Such forward looking statements involve
unknown risk, uncertainties and other factors which may cause the actual
results, financial condition, performance or achievements expressed or implied
by such forward looking statements to be materially different.  In light of
these issues, uncertainties and assumptions, the events described in the
forward looking statements in this document may not occur.  Subject to legal
or regulatory requirements, the Company disclaims any obligation to update any
such forward looking statements in this document to reflect future events or
developments.

Copies of this document will be available free of charge during normal
business hours on any weekday (except public holidays) at the offices of Locke
Lord LLP, Second Floor, 201 Bishopsgate, London EC2M 3AB from the date of this
document until the expiry of one month from that date. Please refer to page 15
of this document for further details of the proposed New Investing Policy.

CONTENTS

EXPECTED TIMETABLE OF PRINCIPAL EVENTS (#_Toc125031796)

STATISTICS (#_Toc125031797)

DIRECTORS AND ADVISERS (#_Toc125031798)

DEFINITIONS (#_Toc125031799)

PART 1  LETTER FROM THE EXECUTIVE CHAIRMAN (#_Toc125031800)

PART 2  NOTICE OF GENERAL MEETING (#_Toc125031801)

 

 

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 This Circular sent to Shareholders                        31 January 2023
 Latest time and date for receipt of Forms of Instruction  10:00 a.m. GMT on 15 February 2023
 Latest time and date for receipt of Forms of Proxy        10:00 a.m. GMT on 16 February 2023
 Date of General Meeting                                   20 February 2023

 

 

 

 

 STATISTICS
 Existing issued shares of the Company                                        117,925,673
 Number of Placing Shares                                                     191,256,831
 Ordinary Shares to be issued to the Investment Manager                       2,179,011
 Total issued shares of the Company upon completion of the Placing(( 1 ))     309,182,503
 Percentage of the total issued shares of the Company represented by Placing  61.86%
 Shares(( 2 ))
 Number of Existing Warrants                                                  17,567,663
 Number of Noteholder Warrants                                                15,435,686
 Number of Underwriter Warrants                                               up to 10,000,000

 

 

 DIRECTORS AND ADVISERS

 Directors:                       John Croft (Executive Chairman)

                                  Hugh Viscount Trenchard (Non-Executive Director)

                                  Dr Lee George Lam (Non-Executive Director)

                                  Stuart Crocker (Non-Executive Director)

                                  John Batchelor (Non-Executive Director)

 Registered Office:               Commerce House, Wickhams Cay 1

                                  PO Box 3140

                                  Road Town, Tortola

                                  British Virgin Islands VG1110

 Principal Place of Business:     29/F Infinitus Plaza

                                  199 Des Voeux Road Central

                                  Hong Kong

 Company Secretary:               Conyers Corporate Services (BVI) Limited

                                  Commerce House, Wickhams Cay 1

                                  PO Box 3140

                                  Road Town, Tortola

                                  British Virgin Islands VG1110

 Investment Manager:              Harmony Capital Investors Limited

                                  Intertrust Corporate Services (Cayman) Limited

                                  190 Elgin Avenue, George Town

                                  Grand Cayman, KY1-9007

                                  Cayman Islands

 English Lawyers to the Company:  Locke Lord (UK) LLP

                                  Second Floor

                                  201 Bishopsgate

                                  London EC2M 3AB

 BVI Lawyers to the Company:      Conyers Dill & Pearman

                                  ‎29th Floor, One Exchange Square

                                  ‎8 Connaught Place‎

                                  Central Hong Kong

 Auditors:                        PKF Littlejohn LLP

                                  15 Westferry Circus

                                  London E14 4HD

 Registrars:                      Computershare Investor Services (BVI) Limited

                                  Woodbourne Hall

                                  PO Box 3162

                                  Road Town, Tortola

                                  British Virgin Islands

 Depositary Interest Registrars:  Computershare Investor Services PLC

                                  The Pavilions

                                  Bridgwater Road

                                  Bristol BS13 8AE

 Placing Agent:                   Hybridan LLP

                                  1 Poultry

                                  London EC2R 8EJ

 Underwriter:                     Heirloom Investment Management LLC

                                  Suite 105, 501 Silverside Road

                                  Wilmington Delaware 19809

                                  United States of America

 Company Website:                 www.jaderoadinvestments.com

 

DEFINITIONS

 "Admission"                   the admission of the New Ordinary Shares to trading on AIM becoming effective
                               in accordance with the AIM Rules
 "AIM Rules"                   the AIM Rules for Companies and AIM Note for Investing Companies as published
                               and amended from time to time by the London Stock Exchange
 "Articles"                    the amended and restated articles of association of the Company
 "Buy Back Record Date"        the record date for the proposed buy back of Ordinary Shares to be undertaken
                               by the Company, being 5 p.m. GMT on 16 February 2023
 "BVI"                         British Virgin Islands
 "Circular"                    this document
 "Company" or "Jade"           Jade Road Investments Limited, a company registered in the BVI with registered
                               number 1459602
 "CREST"                       the electronic systems for the holding and transfer of shares in
                               dematerialised form operated by Euroclear UK & International Limited
 "Depositary"                  Computershare Investor Services PLC
 "Depositary Interest Holder"  a holder of Depositary Interests
 "Depositary Interests"        the depositary interests in respect of the underlying Ordinary Shares
 "Directors" or "Board"        the existing board of directors of the Company
 "Elypsis"                     Elypsis Solutions Limited, a company incorporated under the laws of the
                               British Virgin Islands‎ with company number ‎1651099‎
 "Equity Fundraise"            has the meaning given to it in paragraph 1 of Part 1
 "Existing Warrants"           the 17,567,663 warrants previously authorised and constituted by the Company
 "Form of Instruction"         the depositary interest form of instruction enclosed with this document for
                               use at the GM
 "Form of Proxy"               the form of proxy enclosed with this document for use at the GM
 "General Meeting" or "GM"     the general meeting of the Company to be held at 10.00 a.m. GMT/6.00 p.m. HKT
                               time on Monday 20 February 2023
 "GMT"                         Greenwich Mean Time
 "Gross Placing Proceeds"      the gross amount raised by the Placing Agent pursuant to the Equity Fundraise
 "Heirloom"                    Heirloom Investment Management LLC, or any one of its affiliates, advised or
                               managed clients, or nominees
 "HKT"                         Hong Kong Time
 "Investing Policy"            the investing policy of the Company from time to time
 "Investment Manager"          the investment manager of the Company from time to time and as at the date of
                               this document, Harmony Capital Investors Limited
 "Issue Price"                 has the meaning given to it in paragraph 1 of Part 1
 "Loan Note Instrument"        has the meaning given to it in paragraph 1 of Part 1
 "London Stock Exchange"       London Stock Exchange plc
 "New Investing Policy"        the proposed new Investing Policy, further details of which are set out in
                               Letter from the Executive Chairman on pages 11 to 18 of this document
 "Noteholder Warrants"         the 15,435,686 warrants constituted by an instrument dated on or about the
                               date of this document and to be issued to Noteholders pursuant to the terms of
                               the Loan Note Amendments
 "Notice of General Meeting"   the notice of GM set out at the end of this document
 "Ordinary Shares"             ordinary shares of no par value each of the Company
 "New Ordinary Shares"         has the meaning given to it in paragraph 1 of Part 1
 "Placing Agent"               Hybridan LLP of 1 Poultry, London, EC2R 8EJ
 "Relationship Agreement"      the relationship agreement entered into on 29 January 2014 between the Company
                               and Elypsis setting out certain undertakings and obligations of Elypsis in
                               order to ensure that its dealings with the Company are carried out at arm's
                               length, notwithstanding its significant shareholding
 "Resolutions"                 the resolutions proposed in the Notice of General Meeting at the end of this
                               document
 "Shareholder(s)"              holder(s) of Ordinary Shares
 "Underwriter"                 Heirloom
 "Underwriter Warrants"        up to a maximum of 10,000,000 warrants, constituted by an instrument dated on
                               or about the date of this document and to be issued to the Underwriter
                               pursuant to the terms of the Underwriting Agreement
 "Underwriting Agreement"      the underwriting agreement entered into by the Underwriter and the Company on
                               or about the date of this document
 "United Kingdom" or "UK"      the United Kingdom of Great Britain and Northern Ireland
 "US$"                         US dollars
 "Waiver Resolution"           has the meaning given to it in paragraph 1 of Part 1

All references to dates and times in this document are to GMT unless otherwise
stated.  References to the singular shall include references to the plural,
where applicable, and vice versa.

PART 1

 LETTER FROM THE EXECUTIVE CHAIRMAN

JADE ROAD INVESTMENTS LIMITED

‎(Incorporated in the British Virgin Islands with registration number
1459602)‎

 Directors:                                         Registered Office:
 John Croft (Executive Chairman)                    Commerce House, Wickhams Cay 1

 Hugh Viscount Trenchard (Non-Executive Director)   PO Box 3140

 Dr Lee George Lam (Non-Executive Director)         Road Town, Tortola

 Stuart Crocker (Non-Executive Director)            British Virgin Islands, VG1110

 John Batchelor (Non-Executive Director)

31 January 2023

Dear Shareholder,

Underwritten equity fundraise of up to US$1,750,000

Waiver of Article 46 (Takeover Provisions) of the Articles

Proposed New Investing Policy

Adoption of an amended and restated Memorandum of Association

Authority to allot Ordinary Shares

Authority to buy back Ordinary Shares

Introduction

The Company is intending to raise equity finance of up to US$1,750,000 by
issuing 191,256,831 new Ordinary Shares ("New Ordinary Shares") at a price of
£0.0075 per Ordinary Share ("Issue Price") (using a pre-determined exchange
rate of US$1.22 to £1) ("Equity Fundraise"). The Equity Fundraise is being
entirely underwritten by Heirloom, who has agreed to purchase any number of
New Ordinary Shares not otherwise purchased by prospective placees introduced
to the Company by the Placing Agent.

Completion of the Equity Fundraise is conditional, inter alia, on all of the
Resolutions being passed by the Shareholders at a duly convened general
meeting.  They are as follows:

·          the waiver of the application of Article 46 (Takeover
Provisions) to the Underwriting (as defined in paragraph 2) in its entirety
(the "Waiver Resolution");

·          the approval of the New Investing Policy as set out in
paragraph 4 below;

·          the adoption of an amended and restated Memorandum of
Association; and

·          the resolutions regarding the Company's shares, including
the grant of authority to the Directors to buy back Ordinary Shares.

Paragraphs 2, 3, 4 and 6 respectively provide the background and reasons for
the Equity Fundraise, the waiver of Article 46 (Takeover Provisions), the
proposed New Investing Policy and the adoption of an amended and restated
Memorandum of Association.

Furthermore, paragraphs 6 and 7 provide details on the reasons for the
authority to allot further Ordinary Shares, the authority to be granted to
Directors to buy back Ordinary Shares and the recent amendments to the
Company's loan note instrument dated 20 October 2019 constituting up to
US$10,000,000 12.5% fixed rate secured loan notes 2022 ("Loan Note
Instrument").

Background to and reasons for the Underwritten Equity Fundraise

The Directors believe the Equity Fundraise is in the best interests of all
shareholders of the Company for the following reasons:

 

·      it will provide the Company, in conjunction with managing its
creditors, with working capital until Q4 2023 allowing the Company to pursue
orderly disposals of its existing portfolio, recycle that capital and
potentially make modest initial new investment(s) pursuant to the New
Investing Policy;

·      allow the Company time to structure and market a more significant
equity fundraising, completion of which, together with the returns from any
material exits from the existing portfolio, would allow the Company to pursue
more significant investments pursuant to the New Investing Policy; and

·      the proposals have the support of the Company's convertible loan
note holders who have accepted a restructuring of their debt, including
principally to extend its maturity until 31 December 2023.

The Equity Fundraise is being undertaken at the following discounts:

70.59% to the share price of 2.55p on 25 January 2023, being the last trading
day before this Circular was approved for publication; and

98.47% to the last published Net Asset Value per share of £0.49 on 30 June
2022.

The Directors note the fact that there is a significant disparity between the
market capitalization of the Company at the Issue Price (assuming the Equity
Fundraise is completed) and the last published net asset value of the
Company's portfolio of assets.  The Directors remind Shareholders of the
difficulty of realizing the full value of those assets, which the Directors
believe can be achieved, but will likely take a material amount of time and
money to complete.

The Company has instructed the Placing Agent to identify prospective placees,
and Heirloom will subscribe for all New Ordinary Shares not otherwise
purchased by a placee.  The Equity Fundraise will result in the issue of a
total of ‎191,256,831‎ New Ordinary Shares, representing, in aggregate,
‎approximately 61.86% of the issued shares of the Company as enlarged by the
issue of the New Ordinary ‎Shares.

Subject to the approval of the Resolutions, application will be made to London
Stock Exchange for the New Ordinary Shares to be admitted to trading on ‎AIM
and such admission is expected to occur on Tuesday 21 February 2023 and in
‎any event no later than 8:00 a.m. on Wednesday 22 February 2023.

The New Ordinary Shares, when issued and fully paid, will rank pari passu in
all respects with the existing Ordinary Shares in issue and therefore will
rank equally for all dividends or ‎other distributions declared, made or
paid after the issue of the New Ordinary Shares on Admission.‎

Accordingly, the Company has engaged the Placing Agent to carry out the
Placing pursuant to an engagement letter dated 17 January 2023 and expects to
enter into a placing agreement with the Placing Agent on market standard
terms.

The Equity Fundraise is ‎being underwritten by Heirloom pursuant to an
underwriting agreement with the Company entered into on the date of this
document (the "Underwriting" and "Underwriting Agreement"), the terms of which
are as follows:

·          Heirloom will underwrite the entirety of the US$1,750,000
to be raised under the Equity Fundraise;

·          Heirloom will be paid a fee ("Underwriting Fee")
comprising (i) 5% of an amount equalling US$1,750,000 less the Gross Placing
Proceeds, to be satisfied by the issue of such number of new Ordinary Shares
at the Issue Price as shall equal that amount, and (ii) 5% of the Gross
Placing Proceeds, to be satisfied by the grant of the resulting number of
Underwriter Warrants at an exercise price per Ordinary Share equalling the
Issue Price, to be exercisable over a three-year period from the date of
grant; and

·          the Underwriting is conditional, inter alia, on (i) the
publishing of this Circular; and (ii) the passing of the Resolutions
contemplated herein.

The Underwriter Warrants will not be admitted to trading on AIM or any other
stock market and are not ‎transferable (save to affiliates of Heirloom). ‎

Waiver of Article 46 (Takeover Provisions)

The Company is registered in the British Virgin Islands and is not subject to
the UK City Code on ‎Takeovers and Mergers.‎

In accordance with Article 46 (Takeover Provisions), where a Shareholder (or
persons acting in concert with such Shareholder) acquires Ordinary Shares
which, in aggregate, carry 30 per cent. or more of the voting rights of the
Company, such Shareholder is required to make an offer to all other
Shareholders.

Should Heirloom be required to underwrite the entirety of the Equity
Fundraise, Heirloom will acquire, in aggregate, more than 30 per cent. of the
Company's total issued shares post-Equity Fundraise, and unless waived
pursuant to the Waiver Resolution, Article 46 would require Heirloom to make
an offer to all other Shareholders ("Mandatory Offer"). In the event that
Heirloom was required to make such a Mandatory Offer and it was completed upon
its terms, Heirloom would become the sole Shareholder of the Company. In
addition, executing such a Mandatory Offer would incur significant costs for
the Company.

To avoid Heirloom being required to make a Mandatory Offer, the Directors are
proposing that Article 46 be waived in its entirety to the extent that it
applies to the Underwriting. Pursuant to Article 46, Heirloom will not be able
to vote on the Waiver Resolution. Heirloom currently owns 10,068,676 Ordinary
Shares, representing 8.73 per cent. of the current issued shares of the
Company entitled to vote.

The proposed New Investing Policy

Current Investing Policy

The current Investing Policy, as set out in the Company's circular to
Shareholders dated 3 May 2017, is ‎as follows‎:

‎The Company has an indefinite life and is targeting both capital gains and
income distributions for its Shareholders over time.

The Company will provide equity and credit funding to companies, principally
in the Pan-Asia region or with a connection to Asia.  It will seek to do this
by:

providing funding directly to companies via the provision of loans or other
credit instruments which may be secured against assets of the borrower or its
affiliates;

providing funding to companies to accelerate their growth, expand the scale of
their business and/or to consolidate their organizational structure in
preparation for a public listing.  Investments could be in the form of
structured equity, debt and hybrid debt securities;

providing growth, development and acquisition capital in the form of equity or
quasi-equity to companies within growth industries;

providing funding to transactions structured around significant corporate
events such as recapitalisations, debt restructurings, buybacks of shares,
asset spin-offs and corporate reorganisations;

investing in publicly traded or 'over the counter' traded equity or credit
securities, such as preferred stock, common stock, high yield bonds, senior
loans, warrants, where the market is mispricing a company's securities and
thereby offering an attractive risk adjusted return due to one-off or short
term factors; and

investing (in addition to securing co-investment rights for the Company) as a
limited partner or shareholder in third party managed vehicles which have a
strategy to provide credit and/or equity funding to companies in a specific
industry.

The Company will be sector agnostic in its investment activities.

New investments will be managed actively, including through appropriate
investor protections which will be negotiated on each transaction as
appropriate and relevant.

The Company will consider using debt to finance transactions on a case by case
basis and may assume debt on its own balance sheet when appropriate to enhance
returns to Shareholders and/or to bridge the financing needs of its investment
pipeline.

The Company may decide to dispose of or exit, partially or fully, existing
investments in the Company's portfolio where appropriate and based on the
recommendations of the Investment Manager.

The Company intends to pursue its publicly stated objective of monetising its
legacy portfolio and ‎will report on its progress when dispositions are
achieved.‎

Modified Investing Policy

The Directors believe that there is an excellent long-term opportunity to
provide financing, primarily backed by real assets, with a primary focus on
income-production and a secondary focus on capital gains. The Directors
believe that by investing in asset-backed assets that are income-generating,
the Company will be provided with more certainty when predicting future cash
flows, thus allowing it to plan an appropriate dividend policy in due course.
It is believed that this will allow for the optimal delivery of shareholder
value in the form of the payment of a safe, consistent dividend yield at an
attractive spread to other yielding options, while growing the underlying
capital base of the Company.

In order to take advantage of this opportunity and to deliver this shareholder
value, the Company requires an updated Investing Policy that will permit it to
take advantage of the best risk-adjusted investments globally, provided the
majority of them are asset-backed and/or income producing and backed by legal
jurisdictions that the Directors are comfortable with and provide a safe
underpinning to allow for the Company to earn its return and recoup its
investment as per the terms of the financing that it agrees to.

Moreover, given the long-term nature of the Company's investment horizon, the
Directors believe that an updated Investing Policy should enable the Company
to navigate changes in the relative attractiveness of various financing
opportunities through varying economic cycles and geopolitical shifts.

Finally, and most importantly, the Board expects the Company's investment
portfolio to be repositioned over time such that it generates both income and
capital gains.

In order to facilitate the Company's strategic objectives, the Company is
proposing the Resolution to amend the Investing Policy to the following:

1)         The Company has an indefinite life, is sector agnostic and
is targeting assets in any class which will produce income returns, with a
‎secondary focus on capital gains over time for its Shareholders.‎

2)         The Company will seek the best risk-adjusted returns
globally, with a preference for investments ‎governed by legal systems that
the Company understands and believes to be reliable.  ‎

3)         The Company may invest directly into listed securities,
over-the-counter traded securities, ‎currencies, companies, real assets,
contractual obligations, or commodities ("Direct Financings").‎

4)         The Company may provide financing to entities, becoming a
lender to, or a limited partner or ‎shareholder of, an affiliated or third
party which itself has a strategy to invest in underlying listed
‎securities, over-the-counter traded securities, currencies, companies, real
assets, contractual ‎obligations or commodities ("Indirect Financings").‎

5)         The Company shall ensure that at the time of entering into
a Direct Financing, it shall represent not ‎more than 30% of the Company's
net asset value immediately following the relevant transaction. There is no
limit on the number of investments the Company may take.

6)         ‎The Company shall ensure that at the time of entering
into an Indirect Financing, no underlying ‎asset of the indirectly financed
entity shall represent more than 30% of the Company's net asset ‎value
immediately following the relevant transaction. ‎

7)         There is no restriction on the duration the Company will
hold any investment nor any restriction on the time for the Company to make
its investments in such assets.

8)         The Company will pursue a predominantly passive management
strategy.   However, on a case by case basis, it may consider securing
additional governance rights such as observer or board appointments where the
situation or asset dictates such additional oversight.

9)         The Company may utilise gearing when appropriate.  The
Company will continue to exercise prudence in determining whether prevailing
market conditions and investor expectations warrant the utilisation of any
leverage over its portfolio.

10)        The Company will consider issuing its own shares as
consideration for interests in other companies but such cross holdings will be
limited to 20 per cent. of the Company's issued shares in aggregate from time
to time.

The Directors believe that the proposed change of Investing Policy will
broaden the Company's activities and allow it to build a portfolio of
investments producing income and with the potential for capital gains. The
Directors further believe that the change of Investing Policy also enables the
Company to:

·          increase the breadth of the transactions and
opportunities it can consider;

·          lower its overall investment risk by increasing
diversification and shifting geographic focus toward more stable geographies
with stronger legal systems; and

·          implement its long-term objective of providing
Shareholders with a stock that produces income and retains the potential for
appreciation.

The Board and the Investment Manager each have extensive international
experience across a range ‎of industries and asset classes.
Income-producing assets which are backed by real assets have ‎already been
indicatively assessed as part of the Investment Manager's internal processes
and while ‎no specific commitments have been entered into, the Board and
Investment Manager are ‎comfortable in their ability to execute the New
Investing Policy.‎

Increase in maximum number of shares authorised for issue; adoption of an
amended and restated Memorandum and Association

The Company proposes to increase the maximum number of shares it is authorized
to issue to a ‎maximum of 2,348,233,198 shares.  The Company will amend
clause 5 of its memorandum of ‎association and adopt an amended and restated
Memorandum of Association, reflecting such ‎amendment, as follows: ‎

"5. NUMBER AND CLASSES OF SHARES

The Company is authorised to issue up to a maximum of 2,348,233,198 ordinary
shares of a single class without a par value".

The amendment will increase the maximum number of shares being available for
issue by the Directors going forwards ‎and ‎ will also ensure that the
Company will have sufficient headroom to allot outstanding Ordinary Shares
owed to the Investment Manager,‎ to complete the Equity Fundraise, and to
raise further equity capital when required (please see paragraph 6 for further
information).

Authority to allot and buy back Ordinary Shares

In order to ensure that the Company can complete the Equity Fundraise and
raise further equity capital when required, the Board is proposing that the
Directors be granted a mandate to allot up to a maximum of 743,435,842
Ordinary Shares for cash consideration, representing 33.33% (one-third) of the
unissued Ordinary Shares of the Company and comprising (a) ‎191,256,831‎
Ordinary Shares pursuant to the Equity Fundraise, (b), 2,179,011 Ordinary
Shares due to the Investment Manager pursuant to a meeting of the Board dated
14 September 2021, and (c) 650,000,000 Ordinary Shares for any future equity
fundraise as may be required (including, for the avoidance of doubt, the
allotment of Ordinary Shares following any exercise of warrants). Subject to
satisfaction of the Fundraising Condition, the Board is further proposing to
offer all Shareholders holding Shares on the Buy Back Record Date the
opportunity to sell those Ordinary Shares back to the Company and accordingly
it is proposed that the Directors be granted a mandate to buy back up to
117,925,673 Ordinary Shares of the Company.  These authorities will revoke
the authorities previously granted at the Company's annual general meeting
held on 14 September 2021, and will expire at the conclusion of the first
annual general meeting of the Company following the passing of this
resolution, unless otherwise renewed by ordinary resolution.

Related Party Transaction

On 30 January 2023, in consideration for Elypsis Solutions Limited ("Elypsis")
and Asia Private Credit Fund ("APCF"), which are associated with each other
and together represent the Company's largest shareholding with 47.91% of the
issued voting shares (the "Shareholding"), providing an irrevocable
undertaking to vote in favour of the Resolutions, the Company entered into a
conditional put option agreement with Elypsis and APCF (the "Put Option
Agreement").  Under the terms of the Put Option Agreement the Company has
conditionally agreed to buy back a pro-rated amount of the Shareholding at a
price equal to or greater than 2p per share on each occasion that the Company
completes an equity fundraising (unless and to the extent any part or all of
the Shareholding is sold into any placing) until the Shareholding has either
been entirely bought back or sold, as the case may be.  Such a buy back is
conditional, inter alia, on the passing of the Resolutions.  If the put
option is exercised, the Company will make a buyback offer in relation to the
same pro rata amount of all other current existing shares held by Depositary
Interest Holders on the Buy Back Record Date on the same terms.

The Directors (other than John Batchelor who is not independent) consider,
having consulted with WH Ireland plc, the Company's nominated adviser, that
the terms of the Put Option Agreement are fair and reasonable insofar as
Shareholders are concerned for the purposes of AIM Rule 13 (Related Party
Transactions).

Amendment to the loan note instrument

As announced on 1 December 2022, on 29 November 2022, the holders of loan
notes ("Noteholders") in the Company issued pursuant to the Loan Note
Instrument ("Notes") resolved by a 91.71% majority to amend the terms of the
Loan Note Instrument by way of a supplemental instrument dated 1 December 2022
("Loan Note Amendments").

The terms of the Loan Note Amendments include, among others:

·          the extension of the maturity date to 31 December 2023
("Maturity Date");

·          the increase of the interest rate payable to Noteholders
on the outstanding principal amount of the Notes from 12.5% per annum to 15%
per annum; and

·          should US$1,800,000 of the principal amount of the Notes
remain outstanding by 30 June 2023, the interest rate will increase to 16% per
annum until the Maturity Date.

Noteholders will also be issued with warrants equalling 5% of the net proceeds
of the ‎Equity Fundraise, exercisable over a three-year period with an
exercise price equalling 150% of the ‎Issue Price ("Noteholder
Warrants")‎. The Noteholder Warrants will not be admitted to trading on AIM
or any other stock market and are not ‎transferable (save to affiliates of
the transferring Warrantholder).

Working Capital

The Company is currently needing to manage its creditors and its working
capital position is tight. The completion of the Equity Fundraise, in
conjunction with the management of its creditors, would provide additional
working capital until Q4 2023 and provide time to seek to realise funds from
the divestment of its current investment portfolio and to seek to raise
further new funds both for working capital and to make new investments in
accordance with the proposed new investing policy.

Action to be taken

You will find the Notice of General Meeting set out at the end of this
document.  The GM (at which the ‎Resolutions will be proposed) will be held
at 10.00 a.m. GMT/6.00 p.m. HKT on Monday 20 February 2023.  All the
‎Shareholders are entitled to vote for or against the Resolution.‎

Shareholders will find a Form of Proxy enclosed for use at the General
Meeting.  Whether or not you ‎intend to be present at the General Meeting,
you are requested to complete and return the Form of ‎Proxy in accordance
with the instructions printed thereon as soon as possible.  To be valid,
completed ‎Forms of Proxy must be received by the Company's registrars,
Computershare Investor Services (BVI) ‎Limited, c/o at The Pavilions,
Bridgwater Road, Bristol BS99 6ZY no later than 10.00 a.m. GMT on Thursday 16
February 2023, being 48 hours before the time appointed for holding the
General Meeting (excluding non-business days). Completion and return of a Form
of Proxy ‎will not preclude you from attending in person and voting at the
General ‎Meeting. ‎

Depositary Interest Holders will find a Form of Instruction enclosed for use
at the General Meeting.  ‎Whether or not you wish to be present at the
General Meeting, you are requested to complete and ‎return the Form of
Instruction or lodge a vote through the CREST system in accordance with the
‎instructions printed thereon as soon as possible.  To be valid, completed
Forms of Instruction must be ‎received by the Depositary at The Pavilions,
Bridgwater Road, Bristol BS99 6ZY no later than 10.00 a.m. GMT‎‎/6.00 p.m.
HKT on Wednesday 15 February 2023, being 72 hours before the time appointed
for holding the General ‎Meeting (excluding non-business days).‎
Completion of the Form of Instruction will not preclude you from attending and
voting at the General ‎Meeting in person if you so wish.‎

‎Recommendation and irrevocable undertaking

The Directors note the fact that there is a significant disparity between the
market capitalization of the Company at the Issue Price (assuming the Equity
Fundraise is completed) and the last published net asset value of the
Company's portfolio of assets.  The Directors remind Shareholders of the
difficulty of realizing the full value of those assets, which the Directors
consider will likely take a material amount of time and money to complete.

The Directors have approached Elypsis and APCF, together representing the
Company's largest shareholding with 47.91% of the issued voting shares, to
seek their support for the proposals, in particular the Equity Fundraise.
The Directors are pleased to report that Elypsis and APCF have entered into an
irrevocable undertaking to vote in favour of all of the Resolutions.

The Directors (other than John Batchelor who is not considered independent)
recommend Shareholders vote in favour of the Resolutions to be proposed at the
General Meeting, as they intend to do in respect of the 383,732 Ordinary
Shares in aggregate ‎held by them at the date of this Circular.‎

Yours faithfully,

 

 

John Croft

Executive Chairman

Jade Road Investments Limited

PART 2

NOTICE OF GENERAL MEETING

_________________________________________________________________________________

JADE ROAD INVESTMENTS LIMITED

‎(Incorporated in the British Virgin Islands under the BVI Business
Companies Act, 2004)‎

‎(the "Company")‎

_________________________________________________________________________________

NOTICE IS HEREBY GIVEN that the general meeting (the "Meeting") of the members
of the Company ‎will be held at 10.00a.m. GMT/6.00 p.m. HKT on Monday 20
February 2023 at 29/F Infinitus Plaza, 199 Des Voeux Road Central, Hong Kong,
to consider and, if thought fit, pass the following resolutions as ordinary
resolutions:

1)   WAIVER OF ARTICLE 46

THAT Article 46 (Takeover Provisions) as it applies to the subscription of
ordinary shares of no par value each in the Company by Heirloom Management
Investment LLC pursuant to an underwriting letter with the Company dated 30
January 2023 be waived in its entirety in accordance with Article 46.2.

2)   NEW INVESTING POLICY

THAT the existing investing policy of the Company be replaced with a new
investing policy as follows:

(a)       The Company has an indefinite life, is sector agnostic and is
targeting assets in any class which will ‎produce income returns, with a
‎secondary focus on capital gains over time for its Shareholders.‎ ‎

(b)       The Company will seek the best risk-adjusted returns globally,
with a preference for investments ‎‎governed by legal systems that the
Company understands and believes to be reliable.  ‎

(c)       The Company may invest directly into listed securities,
over-the-counter traded securities, ‎currencies, ‎companies, real assets,
contractual obligations, or commodities ("Direct Financings").‎

(d)       The Company may provide financing to entities, becoming a
lender to, or a limited partner or ‎‎shareholder of, an affiliated or
third party which itself has a strategy to invest in underlying listed
‎‎securities, over-the-counter traded securities, currencies, companies,
real assets, contractual ‎‎obligations or commodities ("Indirect
Financings").‎

(e)       The Company shall ensure that at the time of entering into a
Direct Financing, it shall represent not ‎‎more than 30% of the Company's
net asset value immediately following the relevant transaction. ‎There is no
limit on the number of investments the Company may take.

(f)       ‎The Company shall ensure that at the time of entering into
an Indirect Financing, no underlying ‎asset of ‎the indirectly financed
entity shall represent more than 30% of the Company's net asset ‎value
‎immediately following the relevant transaction. ‎

(g)       There is no restriction on the duration the Company will hold
any investment nor any restriction on the ‎time for the Company to make its
investments in such assets.‎

(h)       The Company will pursue a predominantly passive management
strategy. However, on a case by ‎case basis, it may consider securing
additional governance rights such as observer or board ‎appointments where
the situation or asset dictates such additional oversight.‎

(i)        The Company may utilise gearing when appropriate.  The
Company will continue to exercise prudence in ‎determining whether
prevailing market conditions and investor expectations warrant the utilisation
‎of any leverage over its portfolio.‎

(j)        The Company will consider issuing its own shares as
consideration for interests in other companies but ‎such cross holdings will
be limited to 20% percent of the Company's issued shares in aggregate ‎from
time to time.‎

3)   AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

(a)       THAT the Company increase the maximum number of shares it is
authorized to issue to a maximum of 2,348,233,198 ‎shares.‎

(b)       THAT clause 5 of the Company's currently adopted memorandum of
association be deleted in its ‎entirety and replaced with the following new
clause‎:

5.       NUMBER AND CLASSES OF SHARES

 

The Company is authorised to issue up to a maximum of 2,348,233,198 ordinary
shares of a single class without par value.

 

(c)       THAT the Company adopts a new amended and restated memorandum
and articles of association ‎reflecting the Amendment in the form produced
to the Meeting.‎

(d)       THAT the members of the Company be and hereby approve and
ratify all issues of shares under all ‎general mandates granted to the
directors of the Company ("Directors") since 17 August 2018.‎

4)   AUTHORITY TO ALLOT SHARES

THAT:

(a)       subject to paragraphs (b) and (c) of this Resolution and in
accordance with the amended and restated articles of association of the
Company (the "Articles"), the exercise by the board of Directors during the
Relevant Period (as defined below) of all the powers of the Company to allot,
issue and otherwise deal with the unissued shares of the Company (the
"Shares") and to allot, issue or grant securities convertible into Shares, or
options, warrants or similar rights to subscribe for any Shares or such
convertible securities, and to make or grant offers, agreements, options and
warrants which would or might require the exercise of such powers be generally
and unconditionally approved;

(b)       the approval in paragraph (a) of this Resolution shall not
extend beyond the Relevant Period but shall authorise the Directors during the
Relevant Period to make or grant offers, agreements, options and warrants
which would or might require the exercise of such power after the end of the
Relevant Period; and

(c)       the number of Shares allotted or agreed conditionally or
unconditionally to be allotted (whether pursuant to an option or otherwise) by
the Directors for cash consideration pursuant to the approval in paragraph (a)
of this Resolution, and otherwise than pursuant to the exercise of the
subscription or conversion rights attaching to any warrants or any securities
convertible into Shares or the exercise of the subscription rights under any
option scheme or similar arrangement for the time being adopted for the grant
or issue to persons such as officers and/or employees of the Company and/or
any of its subsidiaries of Shares or rights to acquire Shares or any scrip
dividend providing for the allotment of Shares in lieu of the whole or part of
a dividend on Shares in accordance with the Articles, shall not exceed 33.33%
(one‐third) of the unissued Shares of the Company and the said approval
shall be limited accordingly.

5)   AUTHORITY TO BUY BACK SHARES

THAT:

(a)       subject to paragraph (b) of Resolution 4, the exercise by the
Directors during the Relevant Period (as defined below) of all the powers of
the Company to purchase or repurchase on AIM, a market operated by the London
Stock Exchange plc on which the securities of the Company are traded and
recognised by AIM for this purpose, Shares (including any form of depositary
interests representing the right to receive such Shares issued by the Company)
and the exercise by the Directors of all powers of the Company to repurchase
such securities, subject to and in accordance with all applicable laws and the
requirements of both the AIM Rules for Companies and the AIM Rules for
Nominated Advisers, be and are hereby generally and unconditionally approved;
and

(b)       the number of Shares which may be purchased or repurchased by
the Company pursuant to the approval in paragraph (a) of this resolution
during the Relevant Period shall not exceed 117,925,673 Shares of the Company,
and the said approval shall be limited accordingly.

For the purposes of Resolutions 4 and 5:

"Relevant Period" means the period from the passing of the resolution until
the conclusion of the first annual general meeting of the Company following
the passing of the resolution, unless otherwise renewed by ordinary resolution
passed at that meeting.

 

6)   AUTHORITY OF DIRECTORS TO EXECUTE RELEVANT DOCUMENTS

THAT any director or officer of the Company be and is hereby authorised for
and on behalf of the Company to execute and deliver all such other documents,
instruments and agreements, whether under the seal of the Company or
otherwise, and to do all such acts or things as may be necessary or desirable
to give effect to the foregoing.

 

 

Notes to the Notice of General Meeting

1.        In order to be entitled to attend and vote at the Meeting, a
registered member must be on the Company's share register by close of business
on 15 February 2023 or 48 hours for any adjourned meeting.

2.        Subject to notes 3 and 5 below, only members are entitled to
attend and vote at the Meeting.

3.        A member entitled to attend and vote at the Meeting is
entitled to appoint one or more proxies (for holder of two or more shares) to
attend and vote instead of that member. A proxy need not be a member of the
Company. To be valid, the form of proxy, together with the power of attorney
or other authority (if any) under which it is signed, or a certified copy of
such power or authority, must be lodged with the Company's share registrar,
Computershare Investor Services (BVI) Limited, c/o The Pavilions, Bridgwater
Road, Bristol, BS99 6ZY no later than 10.00 a.m. (GMT)/6.00 p.m. (HKT) on
Thursday 16 February 2023 or 48 hours before any adjourned meeting.

4.        At the Meeting, the chairman of the Meeting will exercise his
power under Article 15.1(a) of the Articles to put the above resolution to the
vote by way of a poll.

5.        Depositary Interest Holders who are CREST members and who
wish to issue an instruction through the CREST electronic voting appointment
service may do so by using the procedures described in the CREST manual
(available from www.euroclear.com).  CREST personal members or other CREST
sponsored members, and those CREST members who have appointed a voting service
provider(s), should refer to their CREST sponsor or voting services
provider(s), who will be able to take the appropriate action on their behalf.

In order for instructions made using the CREST service to be valid, the
appropriate CREST message (a CREST Voting Instruction) must be properly
authenticated in accordance with the specifications of Euroclear UK &
International Limited (EUI) and must contain the information required for such
instructions, as described in the CREST Manual (available via
www.euroclear.com).

The message, regardless of whether it relates to the voting instruction or to
an amendment to the instruction given to the Depositary must, in order to be
valid, be transmitted so as to be received by the issuer's agent (ID 3RA50) no
later than  10.00 a.m. (GMT)/6.00 p.m. (HKT) on Wednesday 15 February 2023.
For this purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the CREST Voting Instruction by the
CREST applications host) from which the issuer's agent is able to retrieve the
CREST Voting Instruction by enquiry to CREST in the manner prescribed by
CREST.

CREST members and, where applicable, their CREST sponsors or voting service
providers should note that EUI does not make available special procedures in
CREST for any particular messages.  Normal system timings and limitations
will therefore apply in relation to the transmission of CREST Voting
Instructions.  It is the responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member or sponsored member or has
appointed a voting service provider(s), to procure that the CREST sponsor or
voting service provider(s) take(s)) such action as shall be necessary to
ensure that a CREST Voting Instruction is transmitted by means of the CREST
service by any particular time.  In this connection, CREST members and, where
applicable, their CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings.

The Company may treat as invalid a CREST Voting Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.

Alternatively, holders of Depositary Interests can complete a Form of
Instruction to appoint Computershare Company Nominees Limited, the
Depositary's custodian, to vote on the holder's behalf at the General Meeting
or, if the General Meeting is adjourned, at the adjourned meeting. To be
effective, a completed and signed Form of Instruction (and any power of
attorney or other authority under which it is signed) must be delivered to the
offices of the custodian, Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZY, UK by no later than 10.00 a.m. (GMT)/6.00
p.m. (HKT) on Wednesday 15 February 2023 or 72 hours before any adjourned
meeting.

Entitlement to attend and vote at the meeting and the number of votes which
may be cast thereat will be determined by reference to the Depositary Interest
register at close of business on 14 February 2023. Changes to entries on the
register after that time shall be disregarded in determining the rights of any
person to attend and vote at the meeting.

 

 

 

 1  Excluding any Ordinary Shares allotted by way of commission.

 2  Excluding any Ordinary Shares allotted by way of commission.

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