Avarae Global Coins : Proposed Delisting, Tender Offer and Notice of EGM - 19.09.2016

RNS Number : 1356K Avarae Global Coins PLC 19 September 2016

AVARAE GLOBAL COINS PLC

("Avarae" or the "Company")

Cancellation of admission of Ordinary Shares to trading on AIM

Tender Offer by WH Ireland Limited to purchase up to 16,156,667 Ordinary Shares Additional Proposed Buybacks of up to 16,156,667 Ordinary Shares

and

Notice of Extraordinary General Meeting

Avarae announces it will today be posting a circular to its shareholders (the "Circular") detailing the Company's proposals to:

• cancel the admission of its Ordinary Shares to trading on AIM;

• provide Qualifying Shareholders with an opportunity to realise some or all of their investment in Avarae by accepting the Tender Offer pursuant to which WH Ireland will conditionally offer to purchase up to 16,156,667 Ordinary Shares at 11.5 pence per Ordinary Share; and

• to undertake further buybacks of up to 16,156,667 Ordinary Shares following completion of the Tender Offer and the De-Listing.

This announcement sets out the background to and reasons for, and provides further details of, the Proposals including the terms and conditions of, and the procedure for participating in, the Tender Offer, details of which can be found in Part II of the Circular and the accompanying Tender Offer Form.

Implementation of the Proposals, including the Tender Offer, is conditional, inter alia, upon the Resolution being passed at the EGM to be held at noon on 13 October 2016 at Ground Floor, West Suite, Exchange House, 54-58 Athol Street, Douglas, IM1 1JD, Isle of Man. The Notice of EGM convening the EGM at which the Resolution will be proposed is set out at the end of the Circular.

Certain sections of the Circular are included below.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service.

All times are references to London time.

All events in the above timetable following the EGM are conditional, inter alia, upon the approval of the Resolution.

The De-Listing requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the EGM. TRANSACTION STATISTICS

De-Listing

Reasons for the De-Listing

The Board has conducted a review of the benefits and drawbacks to the Company in retaining its listing on AIM. The Board believes that the De-Listing is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Board has considered the following key factors:

• the management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM is, in the Directors' opinion, disproportionate to

  the benefits to the Company;

• there is, and has been for some time, a lack of liquidity in the Company's Ordinary Shares such that the current share price of the Company's Ordinary Shares and, therefore, the market capitalisation of the Company, in the Board's opinion, under values the Company;

• in light of the limited trading in the Ordinary Shares, with an average daily volume over the past 12 months of approximately 26,569 Ordinary Shares representing approximately 0.03 per cent. of the current issued share capital, the costs associated with maintaining the AIM quotation are considered by the Directors to be disproportionately high when compared to the benefits of being listed on AIM, even though these costs have been closely controlled and minimised by the Company so far as reasonably possible. The Board believes that these funds could be better utilised;

• the Directors believe that the lack of liquidity and its consequent negative effect on the Company's share price, together with fundraising costs have made fundraisings on AIM difficult for the Company as they are unattractive to potential investors. The Directors consider that this has been a factor in restricting the ability of the Company to grow;

• the Directors believe that over the past 12 - 18 months there has been a plateauing in the prices paid by the market for the very highest quality coins and that this has been reflected in the Company's Results announced today. The Company's Results include the lowest annual stock revaluation increase in the Company's 10 year trading history of approximately 2 per cent. compared to an average of at least 5 per cent. in previous years. The Directors, accordingly, believe that the Company and its shareholders would be better served by reducing the Company's cost base through the De-Listing; and

• in light of the above, the Directors believe that the Company should, where appropriate, seek to return cash to Shareholders in a controlled manner over time and in the most cost effective method permissible. The Directors currently consider that the most cost-effective ways of returning cash to Shareholders on an ongoing basis will be through share buybacks which is not easily facilitated by the Company's AIM admission.

  Effect of De-Listing

  The Directors consider that the principal effects of the De-Listing will be that:

  • Shareholders will no longer be able to buy and sell Ordinary Shares through AIM or any other public stock market, further reducing the liquidity in the Ordinary Shares;

• Ordinary Shares will no longer be held in or traded through CREST but will be held in paper form;

• the Company will no longer be required to announce material events or interim results through a Regulatory Information Service, however the Company intends to continue to provide half yearly trading reports to Shareholders;

• the Company will no longer be required to comply with many of the corporate governance requirements applicable to companies traded on AIM;

• the Company will no longer be subject to the Disclosure and Transparency Rules and will therefore no longer be required to publicly disclose major shareholdings in the Company. However, the Articles require Shareholders to notify the Company in a similar fashion to the Disclosure and Transparency Rules and the Company intends to continue to disclose major Shareholders on its website;

• the Company will no longer be subject to the AIM Rules, with the consequence that Shareholders will no longer be afforded the protections given by the AIM Rules. Such protections include a requirement to obtain shareholder approval for reverse takeovers and fundamental changes in the Company's business and to announce, inter alia, certain substantial and/or related party transactions; and

• the De-Listing may have either positive or negative taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately.

Shareholders should note that the Takeover Code will continue to apply to the Company following the De- Listing for a period of ten years (or such longer period as the Company shall decide). The Company will also continue to be bound by the Act (which requires shareholder approval for certain matters) following the De- Listing.

De-Listing Process

Under the AIM Rules, the De-Listing can only be effected by the Company after securing a resolution passed by 75 per cent. of the votes cast by its Shareholders in a general meeting and the expiry of a period of 20 clear Business Days from the date on which notice of the De-Listing is given to the London Stock Exchange. In addition, a period of at least five clear Business Days following Shareholders' approval of the De-

Listing is required before the De-Listing may become effective. The Resolution seeks the approval of Shareholders for the De-Listing. Assuming that the Resolution is approved, it is proposed that the De-Listing will take place by 8.00a.m. on 21 October 2016.

Ordinary Share dealing following De-Listing

Following the De-Listing, there will be no market facility for dealing in the Ordinary Shares, no price will be publicly quoted for the Ordinary Shares and the transfer of Ordinary Shares will be

subject to the provisions of the Articles. However, the Company will consider engaging a third party provider