REG - Tern PLC - Notice of AGM and Director Retirement

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RNS Number : 6918L  Tern PLC  06 June 2025

6 June 2025

 

Tern plc

 

("Tern" or the "Company")

 

Notice of AGM

and

Director Retirement

 

Tern Plc (AIM:TERN), the company focused on value creation from Internet of
Things ("IoT") technology businesses, announces that the Company's Annual
General Meeting ("AGM") will be held at 10.30am on Monday 30 June 2025 at the
offices of Allenby Capital, 5 St Helen's Place, London, EC3A 6AB.

 

The notice of AGM (the "Notice of AGM") will shortly be available from the
Company's website https://www.ternplc.com/investors
(https://www.ternplc.com/investors) and will be posted to shareholders today,
together with the form of proxy.

 

Extracts from the Notice of AGM

 

Background and reasons for the Resolutions

 

The Resolutions cover routine business, inter alia, the approval of the
Company's annual report and accounts for the year ended 31 December 2024, the
reappointment of the auditors and the re-election of two directors, together
with important resolutions to grant the directors of the Company (the
"Directors") the authority to issue new Ordinary Shares generally and for cash
whilst dis-applying the pre-emption rights of existing shareholders
("Shareholders") in relation to such an issue (the "Share Issuance
Resolutions", being Resolutions 5 and 6), and to conduct share buy-backs.

 

The Share Issuance Resolutions would permit the Directors to issue up to
200,000,000 new Ordinary Shares (representing approximately 34.6 per cent. of
the Company's existing issued ordinary share capital) generally and
100,000,000 new Ordinary Shares (representing approximately 17.3 per cent. of
the Company's existing issued ordinary share capital) for cash whilst
dis-applying the pre-emption rights of Shareholders in relation to such an
issue.

 

In relation to the Share Issuance Resolutions the Directors believe that
Shareholders are faced with a pivotal choice, one that will determine the
financial stability and strategic flexibility of the Company at what is
considered to be a crucial juncture. The Share Issuance Resolutions are not
just routine corporate measures; the Directors believe they are essential
safeguards that provide the Company with the ability to raise capital
efficiently and potentially at short notice, to secure and maximise the value
of its portfolio investments, and protect shareholder value.

 

The Directors believe that failure to approve the Share Issuance Resolutions
would have severe shorter-term consequences for the Company:

 

·    Loss of financial leverage - Without the ability and flexibility to
issue new ordinary shares, the Company will lose critical negotiation power
when investment is sought by its investee companies, putting the Company at a
disadvantage in discussions involving third-party investors;

·    Forced liquidation of maturing assets - Several of the Company's
portfolio investments are approaching maturity, presenting opportunities for
strategic exits or reinvestment at attractive valuations. However, without
access to additional funding, the Company may be forced to prematurely
liquidate holdings, potentially at reduced valuations, which would directly
undermine shareholder returns; and

 

·    Increased dilution and strategic weakness - The inability to
participate in key funding rounds for portfolio companies, often at relatively
short notice, could lead to significant dilution of existing holdings and
impair the Company's ability to influence their future direction.

 

By approving the Share Issuance Resolutions, Shareholders will provide the
Company with the financial flexibility that the Directors believe is necessary
to defend its market position, maximise the value of maturing investments, and
execute on its strategy, without being forced into potentially unfavourable
asset sales.

 

Should the Share Issuance Resolutions not be passed the Company will likely be
required to seek to satisfy its further funding requirements from the disposal
of holdings in its portfolio in the shorter-term and in a timeframe and
potentially in a manner that the Directors consider may not be in the best
interests of the Company and its shareholders. In these circumstances the
Directors believe that the Company may also suffer greater dilution of its
remaining portfolio holdings than if the Company had access to potential
funding through the issue of Ordinary Shares. The Directors therefore believe
that failure to pass the Share Issuance Resolutions will likely therefore
result in a lower value being ultimately achieved for the Company's
shareholders than if they are passed.

 

Resolutions

 

The following Resolutions will be proposed at the AGM:

 

1.  Resolution 1, which will be proposed as an ordinary resolution, is to
receive and adopt the Company's annual accounts for the financial year ended
31 December 2024, together with the Directors' Report and Auditors' Report on
those accounts.

2.  Resolution 2, which will be proposed as an ordinary resolution, is to
re-appoint S&W Partners Audit (nee Evelyn Partners) as auditors to the
Company at a remuneration to be determined by the directors.

3.  Resolution 3, which will be proposed as an ordinary resolution, is to
re-appoint Iain Ross as a director of the Company.

4.  Resolution 4, which will be proposed as an ordinary resolution, is to
re-appoint Jane McCracken as a director of the Company.

5.  Resolution 5, which will be proposed as an ordinary resolution, is to
authorise the Directors to allot and grant rights to subscribe for, or convert
any security into, Ordinary Shares up to a total nominal value of £40,000
(representing a total of up to 200,000,000 new Ordinary Shares).

6.  Resolution 6, which will be proposed as a special resolution and which is
subject to the passing of resolution 5, is to disapply statutory pre-emption
rights, provided that such authority shall be limited to an aggregate nominal
value of £20,000 (representing a total of up to 100,000,000 new Ordinary
Shares).

7.  Resolution 7, which will be proposed as a special resolution, is to
authorise the Company to make market purchases of its Ordinary Shares, subject
to certain restrictions.

 

Recommendation

 

The Directors consider that the proposed Resolutions are in the interests of
the Company and of its shareholders as a whole. The Directors believe that
failure to pass the Resolutions will likely result in a lower value being
ultimately achieved for Shareholders than if they are passed. Accordingly,
they unanimously recommend that you vote in favour of the Resolutions to be
proposed at the AGM, as the Directors and members of Tern's senior management
team intend to do in respect of their own beneficial shareholdings amounting
to 24,458,933 Ordinary Shares, representing approximately 4 per cent. of the
issued share capital of the Company.

 

Capitalised terms used, but not otherwise defined in this announcement, bear
the meanings ascribed to them in the Notice of AGM.

 

Director Retirement

 

Ian Ritchie, who has been the Company's Non-Executive Chairman since 2017, has
decided to retire from the Board at the conclusion of the AGM.  The Company
would like to thank Ian for his considerable contribution to Tern over the
last eight years and wish him well in his retirement.

 

Assuming Jane McCracken, currently an independent Non-Executive Director of
the Company, is re-appointed as a director of the Company at the AGM, she will
assume the role as the Company's Chair at the conclusion of the AGM, initially
on an interim basis.

 

The Board of the Company following the conclusion of the AGM, assuming Iain
Ross is also re-appointed as a director of the Company at the AGM, will
therefore comprise Jane McCracken (Independent Interim Non-Executive Chair)
and Iain Ross (Independent Non-Executive Director).  The Board will continue
to be supported by a non- Board senior management team, led by Al Sisto and
Bruce Leith.  An overview of Tern's management and governance arrangements
can be found in the Company's announcement of 21 November 2023 and
biographical details of the members of the Board and the senior management
team can be found in the Company's annual report for the year ended 31
December 2024, published yesterday.

 

The Company notes that whilst it will fulfil the Companies Act requirement as
a public company to have at least two directors, the Board is mindful of the
Company's needs, having in mind that the Company is admitted to a trading on a
UK public market and will look to appoint an additional Non-Executive Director
when a suitable candidate is identified.

 

Enquiries:

 

 Tern Plc                                                       via IFC Advisory

 Ian Ritchie (Chairman)

 Allenby Capital Limited                                        Tel: 0203 328 5656

 (Nominated Adviser and Broker)

 Alex Brearley / Dan Dearden-Williams (Corporate Finance)

 Kelly Gardiner / Guy McDougall (Sales and Corporate Broking)

 IFC Advisory                                                   Tel: 0203 934 6630

 (Financial PR and IR)

 Tim Metcalfe

 Graham Herring

 Florence Chandler

 

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