REG - Scholium Group PLC - Proposed cancellation of admission

ScholiumAnnouncement

28/11/2024 07:00

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RNS Number : 9189N  Scholium Group PLC  28 November 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 ("UK MAR").
Upon the publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the public domain.

 

Scholium Group plc ("Scholium", the "Company" or the "Group")

Proposed cancellation of admission of Ordinary Shares to trading on AIM

 

Scholium Group plc announces the proposed cancellation of the admission of its
ordinary shares ("Ordinary Shares") to trading on AIM (the "Cancellation") in
accordance with Rule 41 of the AIM Rules for Companies ("AIM Rules"), subject
to shareholder approval at a General Meeting which is expected to take place
on 18 December 2024.  The Directors unanimously recommend that Shareholders
vote in favour of the Cancellation. It is expected that subject to the
resolution being passed, Cancellation will occur on 6 January 2025.

Background to the Proposal

Scholium has been admitted to trading on AIM since March 2014.

As was highlighted in the annual report of the Group for the year ended 31
March 2024, the Group has been bearing the cost of maintaining its public
company status. The Board estimates that the Group could, by cancelling the
admission of its Ordinary Shares to trading on AIM, reduce its overheads by at
least £75,000 per annum, in respect, primarily, of professional adviser fees,
stock exchange related expenses and other costs associated with the running of
a quoted company. This reduction would have increased profit before taxation
in the year ended 31 March 2024 by at least 25 per cent.

Through cancelling the admission of its shares to trading on AIM, the Board is
confident that the cost savings so secured will contribute to greater profits,
thereby enabling greater investment in the business and an opportunity to pay
dividends to Shareholders.

In addition, over the last 30 months the mid-price of each Ordinary Share has
not exceeded 45 pence, notwithstanding the significant discount that that
price represents to net asset value per share. This discount amounted to over
50 per cent. at 30 September 2024, the date of the Company's most recent
interim statement (based on the closing price per share of 36 pence on 27
November 2024). This has significantly hampered the ability of the Group to
grow by acquisition.

The Board has therefore resolved to seek Shareholder approval to cancel the
admission of the Ordinary Shares to trading on AIM.

Principal effects of the Proposed Cancellation

The Directors are aware that Shareholders may wish to acquire or dispose of
Ordinary Shares in the Company following the Proposed Cancellation, to the
extent that they have not sold their shares on AIM before the Proposed
Cancellation takes effect. Should the Resolutions be approved by Shareholders
at the General Meeting, the Company is seeking to implement a Matched Bargain
Facility, which is to 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.

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
remaining in CREST can be traded during normal business hours via a UK
regulated stockbroker. Should the Proposed Cancellation become effective and
the Company put in place the Matched Bargain Facility, details will be made
available to Shareholders on the Company's website at
https://scholiumgroup.com/.

The Matched Bargain Facility is expected to operate for 12 months after the
Proposed Cancellation takes effect.

If Shareholders wish to buy or sell Ordinary Shares prior to the Proposed
Cancellation becoming effective, they can buy or sell shares on or before the
last day of dealings in the Ordinary Shares on AIM. As noted above, in the
event that Shareholders approve the Proposed Cancellation, it is anticipated
that the last day of dealings in the Ordinary Shares on AIM will be 3 January
2025 and that the effective date of the Proposed Cancellation will be 6
January 2025.

Rule 41 of the AIM Rules requires any AIM company that wishes the London Stock
Exchange to cancel the admission of its shares to trading on AIM to notify
Shareholders and to separately inform the London Stock Exchange of its
preferred cancellation date at least 20 clear Business Days prior to such
date. In accordance with AIM Rule 41, the Directors have notified the London
Stock Exchange of the Company's intention, subject to the Resolutions
approving the Proposed Cancellation being passed at the General Meeting, to
cancel the admission of its Ordinary Shares to trading on AIM on 6 January
2025. Accordingly, if the Resolutions are passed at the General Meeting, the
Proposed Cancellation will become effective at 7.00 a.m. on 6 January 2025.

If the Proposed Cancellation becomes effective, Zeus Capital Limited ("Zeus")
will cease to be the nominated adviser of the Company pursuant to the AIM
Rules and the Company will no longer be required to comply with the AIM Rules,
however the Company will remain subject to the City Code on Takeovers and
Mergers (the "the Takeover Code") until 3 February 2027.

Under the AIM Rules, it is a requirement that the Proposed Cancellation must
be approved via a special resolution by Shareholders holding not less than 75
per cent. of votes cast by Shareholders (by proxy or in person) at the General
Meeting. Accordingly, the Notice of General Meeting set out at the end of this
document includes a resolution to approve the Proposed Cancellation.

The principal effects of the Proposed Cancellation would include the
following:

•           there will be no formal market mechanism enabling
Shareholders to trade in the Ordinary Shares (other than any limited
off-market mechanism provided by the Matched Bargain Facility);

•           there will be no formal market quote or live pricing
for the Ordinary Shares, therefore it may be more difficult to sell Ordinary
Shares or for Shareholders to determine the market value of their investment
in the Company, compared to shares of companies admitted to trading on AIM (or
any other recognised market or trading exchange);

•           it is possible that immediately following the
publication of this document, the liquidity and marketability of the Ordinary
Shares may be reduced and their value adversely affected as a result;

•           the regulatory and financial reporting regime
applicable to companies whose shares are admitted to trading on AIM will no
longer apply, albeit the Company will remain subject to the Takeover Code
until 3 February 2027;

•           Shareholders will no longer be afforded the
protections given by the AIM Rules, such as the requirement to be notified of
price sensitive information or certain events, and the requirement that the
Company seek shareholder approval for certain corporate actions, including
reverse takeovers and fundamental changes in the Company's business;

•           the levels of disclosure and corporate governance
within the Company will not be as stringent as would otherwise be required for
a company whose shares are admitted to trading on AIM;

•           the Company will no longer be subject to UK MAR
regulating inside information and other matters;

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

•           whilst the Company's CREST facility will remain in
place following the Proposed Cancellation, and it is anticipated that this
will be maintained for 12 months, 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);

•           stamp duty will be due on transfers of shares and
agreements to transfer shares unless a relevant exemption or relief applies to
a particular transfer; and

•           the Proposed 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.

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

For the avoidance of doubt, the Company will remain registered with the
Registrar of Companies in England & Wales in accordance with, and subject
to, the Companies Act, notwithstanding the Proposed Cancellation and adoption
of the Proposed Articles of Association.

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

•           continue to communicate information about the Company
(including annual accounts) to its Shareholders, as required by the Companies
Act; and

•           continue, for at least 12 months following the
Proposed Cancellation, to maintain its website, www.scholiumgroup.com, 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 the Disclosure Guidance and Transparency Rules, UK
MAR or AIM Rule 26, or to update the website as currently required by the AIM
Rules.

Proposed Articles of Association

In the event that the Proposed Cancellation is approved and implemented, the
Directors have also resolved to seek Shareholder approval to the adoption of
new articles of association appropriate to an unquoted company ("Proposed
Articles of Association"). A copy of the Proposed Articles of Association is
available at www.scholiumgroup.com.

The Proposed Articles of Association will not contain certain of the
provisions of the existing articles of association of the Company which are
common for quoted companies, and which will not be necessary for the Company
following the Proposed Cancellation.

For example, the existing articles of association of the Company contain
provisions requiring a director to retire from office at the third annual
general meeting after the general meeting at which that director was
appointed. These provisions are not included in the Proposed Articles of
Association. The Proposed Articles of Association will also no longer require
any director appointed by the Board to be re-appointed by the Shareholders at
the next annual general meeting following his or her appointment, as is
currently required.

Options

Options over Ordinary Shares granted to certain individuals will remain in
situ.

General Meeting

The Company will be circulating to Shareholders a notice convening a General
Meeting to be held at 10.30am on 18 December 2024 at 94 New Bond Street,
London W1S 1SJ at which the resolutions will be proposed as special
resolutions to approve the cancellation of admission of the Ordinary Shares to
trading on AIM and the adoption of the Proposed Articles of Association (if
such cancellation is approved).

Irrevocable undertakings

The Board has received irrevocable undertakings from Messrs Bernard Shapero,
Philip Blackwell, Charles Sebag-Montefiore CBE, Thomas Jennings CBE and Peter
Gyllenhammar, and FIJ PTC Limited (representing in aggregate approximately
66.48 per cent. of the Ordinary Shares), to vote in favour of the Resolutions.

The person responsible for arranging the release of this announcement on
behalf of the Company is Philip Tansey, Chief Financial Officer of the
Company.

 

For further information please visit www.scholiumgroup.com
(https://url.avanan.click/v2/___http:/www.scholiumgroup.com/___.YXAxZTp3aGlyZWxhbmRwbGMyOmE6bzoyYjU3YWZiOWFiMDRlMzAwN2E0OWQ4NzExZmYyODU4ZTo2OjcyZGY6MWY4OWQ2ZGM4OGQ1ODQxYjY5ODlhYzk1ODA0Mzk1YTQ1MjJjZTQxOGYwYTFkNmQ2YTYwNTQzMTVlN2Y3YWYzYTpoOkY)
 or contact:

 

 Scholium Group plc                                    +44 (0)20 7493 0876

 Bernard Shapero, Chief Executive Officer

 David Harland, Chairman

 Philip Tansey, Chief Financial Officer

 Zeus (Nominated Adviser and Joint Broker)             Tel: +44 (0) 203 829 5000

 Chris Fielding

 Isaac Hooper

 

 

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