REG - Tintra PLC - Intention to Seek Cancellation from Trading on AIM

TintraAnnouncement

28/11/2023 18:00

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RNS Number : 9684U  Tintra PLC  28 November 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

 

28 November 2023

TINTRA PLC

("Tintra" or the "Group" or the "Company")

 

Intention to Seek Cancellation from Trading on AIM

 

Further to the announcement of 6 November 2023 (the "Announcement"), the board
of directors of the Company (the "Board") announces its intention to seek
shareholder approval for the cancellation of the Company's ordinary shares of
1 pence each ("Ordinary Shares") to trading on AIM ("Cancellation") and will
convene a general meeting of the Company's shareholders to pass the necessary
resolutions to effect the Cancellation which is to be held at [1.30 pm] on 4
January 2024 at the offices of Allenby Capital Limited, 5 St Helen's Place,
London, EC3A 6AB ("GM").

The resolutions that will be put to shareholders at the GM are to seek
shareholder approval for the Cancellation and, subject to the approval by
shareholders passing this resolution, to seek the re-registration of the
Company as a private company, changing its name to Tintra Limited.   Should
the Cancellation be approved by shareholders at the GM, Cancellation will
become effective at the earliest at 0730 on 12 January 2024.  The notice of
the GM will be published and posted this week on to the Company's website in
accordance with the electronic communications provisions of the Company's
articles of association.

Over the past few years, the Company has modelled its capital raising on a US
style private equity strategy, seeking funding in the private markets for the
most part. This strategy's origin received substantial support from big name
funding partners, including a member of a royal family, a major US PE firm and
a number of family offices. We were able to do this at a premium to the price
on AIM based on the valuation of the concept and its future potential.
Something that is natural in the US, but uncommon in public markets in the UK
as we discovered.

The assumption in running this strategy was that, over time as the concept
turned into build (current phase) and build later turned into deployment, that
the valuation of the Company would track a public valuation in line with those
early raises. Not only has this not been the case, Tintra's share price today
is the same as it was three years ago. Clearly this does not behove
shareholders at any level or type, to the point where with current deals
starting to gain traction and the build well underway, the valuation of the
Company has become damaging to current negotiations of funding.

The Board also consider that the limited free float and liquidity of its
Ordinary Shares, together with costs associated with having the Ordinary
Shares admitted to trading on AIM ("Admission") are not commensurate with the
associated benefits of Admission to the Company.

The considerable cost associated with maintaining the Admission (such as
nominated adviser and broker fees, London Stock Exchange fees and the costs
associated with being a quoted company in having perceived higher level
corporate governance and audit scope) are, in the Board's opinion,
disproportionately high, compared to the benefits. The Board have identified
circa £505,000 of direct costs related to Admission that will be saved within
the first full year after Cancellation.

 

The Board further believes that the additional indirect costs associated with
management time invested in the legal and regulatory burden associated with
maintaining Admission is, in the Board's opinion, disproportionate to the
benefits to the Company as a private entity.  Further information on these
matters is set out below.

The Company has been in discussions for almost a year with a Middle Eastern
sovereign fund and is now in advanced negotiations regarding a partnership
where funding to build out the entire regulatory and technological
infrastructure will be provided over a two-year period. This would in turn
lead to a potential relisting in the future in the Middle East. A condition
precedent of this partnership is that the Company is a private company. It is
expected (but not certain) that this funding will close during February 2024,
conditional on the Company being private by that time.

We are building a business that we hope one day will help drive financial
inclusion and climate justice across the global south and help hundreds of
millions of people secure the kind of access to payments and funding that
currently is only available to a privileged few in those countries. As such we
have always endorsed the idea of giving that same equitable access to equality
with our Company. Giving retail investors a chance to sit side by side with
major investors as the Company is being built and not having only to come in
later at much higher prices. Unfortunately, that mission has not borne out as
we had hoped in public markets.

Given that and driven by the requirements of the next phase of funding, the
Board is of the view that the public markets do not provide the optimal
platform for our go forward strategy. Further, the activities in which the
Company is to provide services in relation to Blue Green Banks (further
information on Blue Green Banks can be found below) in the global south are
related to large funds and public bodies who are heavily involved themselves
in those projects and with which the Company is to collaborate in either a
formal or informal capacity.  It is more realistic to do that in a privately
owned company environment, while still maintaining a broad and diverse
investor base.

The goal of this process is to become a private entity, not necessarily to
bring the Company into being more tightly held. We very much hope that most
shareholders do not take up the offer from LRB35 Limited ("LRB"), should such
a tender offer (the "Tender Offer" - as set out in the announcement of 5
November 2023) be forthcoming. However, with any potential relisting being
24-30 months away and no assurance that the Tender Offer will proceed, the
Board felt that a facility that allowed some liquidity after any potential
tender offer and before any future listing allowed for a best-of-all-worlds
solution.

Following Cancellation, the Company intends to introduce a matched bargain
facility for the Ordinary Shares, to help facilitate purchases or sales of
shares once a private company ("MBF"). This flexibility is so that
shareholders have the option to sell their Ordinary Shares should they wish to
do so but to do not need to make that decision immediately.

 

The MBF will be provided by J P Jenkins, an appointed representative of
Prosper Capital LLP, which is authorised and regulated by the Financial
Conduct Authority.  Further details of the MBF can be found in the Notice and
at https://jpjenkins.com/ (https://jpjenkins.com/) once the contract is
signed. The MBF, which is expected to be available from 19 January 2024 and is
expected (but not certain) to be available for a period of at least one year,
with an intended minimum bid price for the first nine months as set out below
at 150p per Ordinary Share.

 

Shareholders should be aware that whilst it is the intention to set the price
at 150p per Ordinary Share, there is no guarantee that there will be a buyer
at this price.

 

Shareholders wishing to trade these securities can do so through their
stockbroker. Trades will be conducted at a level that JP Jenkins is able to
match a willing seller and a willing buyer. Shareholdings remain in CREST and
can be traded during normal business hours via a UK regulated stockbroker.

 

In the Announcement, the Board noted the proposed Tender Offer.  The Board is
informed that after the changes to the strategy announced on 5 November 2023
at the request of The Takeover Panel that LRB is reviewing its options in
discussion with their advisers regarding the proposed Tender Offer, and while
there can be no assurance that the Tender Offer will proceed, the Board has
received no indications to the contrary.

 

Further announcements will be made in due course.

 

 

For further information, contact:

 

TINTRA
PLC
020 3795 0421

Richard Shearer, CEO

Website www.tintra.com

 

Allenby Capital Limited
                                      020
3328 5656

(Nomad, Financial Adviser & Broker)

John Depasquale / Nick Harriss / Vivek Bhardwaj

 

 

Further Information on Strategy

 

The Board has considered four main factors in arriving at its decision to
propose the Cancellation to Shareholders:

 

·    Enhance Funding Strategy

·    Costs - Financial and Resource Deployment

·    Current Focus

·    Valuation

 

The Company commented earlier in the year through previous announcements on
the challenges it had faced around the audit process. The amount of work
required for what is a Research & Development company is asymmetric with
the benefit.

 

Enhanced Funding Strategy

 

·    The Company is operating on a global stage with global players. The
AIM market is not suited to a company such as this, this has been evident for
some time but that delta between price and value has become so vast as to be
damaging.

·    If the Company completes on its entire mission, then, as has been
stated the Board and several of its current large investor base views the
valuation in the billions of US dollars. And whilst success has many hurdles
it is the Company's view that this will never be the case in the UK public
markets, where there is a tendency to value companies significantly lower than
the US and increasingly the Middle East and Singapore.

 

Costs - Financial and Resource Deployment

·    Other direct costs arise from having the Ordinary Shares admitted to
trading on AIM, in comparison to a private company, including stock exchange,
nominated adviser, regulatory announcement fees, and requiring a larger board
with non-executive directors supporting the executive management.

·    The Board estimates the first full year savings as a result of the
Cancellation will be circa £505,000.

·    RNS announcements on the challenges the Company had faced in
procuring an audit by its deadline of 31 July, due to lack of auditor
availability and its request to AIM to amend its year end date having been
rejected. The Company had been working extremely hard to deliver its accounts
on time, having engaged specialist consultants for technical aspects of the
audit in addition to the work the auditors themselves would do.

·    The Company published the audited reports on 30 September 2023,
having parted amicably with its then current auditor and onboarding a new
firm, and setting out our case for a change in year-end date (to no avail).

·    The audit process having highlighted how much a price premium exists
simply by being a quoted Company. Whether that be annual audit, insurances, or
technical and legal advisory - the premium is significant.

 

Current Focus

·    On 25 September 2023, the Company announced that it had entered into
a technology partnership agreement
(https://otp.investis.com/clients/uk/boxhill/rns/regulatory-story.aspx?cid=954&newsid=1717330)
to provide early stage advisory with a Green Climate Fund backed project,
managed by a leading global private markets impact investment manager, to
provide the planning and technology for the core digital banking system of a
Blue Green Bank (https://www.greenclimate.fund/project/fp213) . With the 2023
United Nations Climate Change Conference ("COP 28") just 3 weeks away and the
world's attention having turned again to the growing urgency to combat climate
change, Tintra's collaboration within this partnership is expected to help
address the challenges faced by the global south.

·    The Company will be in attendance during COP28, fully focused on how
to deploy the design of the configured core banking system for the BGB across
more at-risk countries in the global south.

·    The designed core banking system is augmented by patented compliance
technology internally developed by Tintra's Innovation Lab, staffed by PhD
level researchers and practitioners in artificial intelligence, machine
learning, anthropology, political science, and sociology. In this
collaboration, Tintra will design the delivery profile for a bespoke,
innovative, secure, and fully compliant banking technology infrastructure,
designed and developed to the specific needs of the initial, and further Blue
Green Banks.

 

Despite the positive progress being made in the Company's business
development, it has been a difficult second half of the year for the Company,
pulling on all of the resource and reserves of its Board and executive
management to deliver on its business development pledges while also
navigating through complex processes to move the Company into being a
non-public entity.

 

Being private will allow the Company to calibrate into a format where all of
its moving parts work toward rather than away from each other. We are too
early to be public and that has been damaging for the Company. We need to be
nimble and agile as we invent solutions to global problems.

 

We had expected after receiving the LRB35 offer that, within 4 weeks it would
have been completed. This has not been the case with the process having
started almost 10 weeks ago now, it has taken longer and been more challenging
than expected. During that period, the Company has faced challenges, mostly
attributable to being in that recent period of uncertainty, where interim
capital could not be drawn down.

 

Recapitalisation:

 

The Board now believes that what it set out to achieve is finally coming
together. We are in the process of:

·    Finalising settlement repayment of the Share Placement Deed, and we
acknowledge the patience, co-operation and understanding of the providers of
that Facility during this longer than expected period of change

·    Recalibrating management focus and resource back into business growth
and development

·    Major capitalisation of the business through privately sourced
investments, including the LRB35 Limited consortium in the immediate term and
with other strategic investors ready to follow once the Company is a private
entity.

 

Valuation and option to remain a future Shareholder

 

The mission of the Company has not changed and we remain focused; with
developments around the Blue Green Bank, the mission has in fact been enhanced
which will be covered in a trading update during the next week. As such,
existing shareholders who are mission driven are very much welcome to continue
to hold Ordinary Shares, in the proposed status of a private company limited
by shares.

 

Whilst liquidity cannot be guaranteed, to give Shareholders ongoing ability to
offer their Ordinary Shares for sale, the MBF will be priced to the same price
per share as the Tender Offer set out in the Announcement, but with a much
more flexible construct. That is, to provide the option for Shareholders to
remain as such or to take a view at a later date once understanding more of
the go forward steps of the Company.

 

It is clear that there is a major disconnect in the current share price, which
is at the same level as 3 years ago and does not reflect the £7.15m of net
assets the Company declared as at 31 July 2023 through funds already invested,
or the value of patents already filed and awarded for which we have an
informal valuation from the Company's patent lawyers of circa £15m (a formal
valuation is being produced and will be announced in due course), or the
goodwill value of the licences, technology, progress on implementation and
validation by sizeable third party partners. The Company raised funds at
greater than the current valuation more than two years ago and 8x 504p price
per share valuation 22 months ago (with warrants attached at the then market
price) and yet the share price has averaged around 70p.

 

That has affected the Company's conversations with major partners as it seems
that we are 'too small' for them to be interested in investing in. It has
interfered with our ability to raise funds with major investors who view the
disconnect as a risk, and it is, in the Board's opinion, also unfair to retail
investors. The Board undertakes to set a 'floor price' in line with the Tender
Offer price in the contract with JP Jenkins as described below:

 

In addition to the intended initial price of £1.50 per Ordinary Shares, the
Board intends that it will set a minimum price per Ordinary Share of £1.50
from the date of Cancellation ("Floor Price"). It is envisaged that the actual
price will move with subsequent funding rounds to provide better alignment
between share price and valuation as we move forward. In determining what that
Floor Price should be, the Company aggregated the weighted average closing
price in June 2023, to which it applied a 75% premium and rounded the £
result to 1 decimal place. This represents a premium to the retail price while
it is a discount to the funds raised in private markets and is intended as a
reasonable mark-to-market price.

 

In this price determination, and in consideration of the forward-looking
statements made above together with the reality of a distorted and volatile
share price that is not correlated with reality, the Board intends to create
an attractive platform in which retail investors, should they choose to,
believe they are welcome to remain invested in the Company as we continue the
program to build the core system augmented by patented compliance technology
to meet the needs of banking for the global south, but with a retained option
to offer shares for purchase through the MBF at a minimum of £1.50 per
Ordinary Share for a period of time should shareholders wish to exit.

 

All shareholders are being treated entirely equally in this regard, including
during any 'scaling back' should more shareholders take up the offer to trade
their Ordinary Shares through the MBF such that it is oversubscribed. After
the initial period, the Company intends that it will instruct any intentions
lodged with JP Jenkins by shareholders to be grouped together and traded as a
bulk sell and buy instruction at periodic intervals after the Cancellation
becoming effective. The Company intends to retain the MBF facility as part of
its core ongoing service to Shareholders.

 

Shareholders should be aware that whilst it is the intention to set the price
at 150p per Ordinary Share, there is no guarantee that there will be a buyer
at this price.

 

 

Whilst the Company sets out its clear intention above, Shareholders should be
aware that, until a contract is in place between J P Jenkins and the Company,
the matched bargain facility may not be in place once cancellation has
occurred, and if it is, it may not remain in place for an extended period of
time.

 

About Tintra PLC

 

Tintra PLC (Ticker: TNT) is an AIM quoted company, with its principal
activities in the near term being the research, development and delivery of a
global banking infrastructure focused on emerging markets.

 

With a team that comprises academics, scientists, geo-politicians,
technologists, and experienced business leaders the Company has already
positioned itself as a revolutionary voice in both banking and technology.

Digital or full bank licences to operate have been awarded or the application
process has commenced in key global territories and patents been applied for
in the United Kingdom and the United States.

 

 

 

 

- ENDS -

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