TIDMREG
RNS Number : 7942D
Rare Earths Global Limited
02 April 2014
2 April 2014
Rare Earths Global Limited
("REG" or the "Company")
Proposed cancellation of admission to trading on AIM of the
Ordinary Shares
Rare Earths Global (AIM: REG) announces its intention to seek
shareholder approval for the cancellation of the admission of its
ordinary shares ("Ordinary Shares") to trading on AIM
("Cancellation" or "Delisting").
The Directors of REG (the "Directors") have concluded, after
careful consideration, details of which are outlined below, that
the Cancellation is in the best interests of the Company and its
Shareholders.
To enable Shareholders to buy and sell Ordinary Shares, REG will
be retaining the services of its Registrars, Capita Registrars to
facilitate any private transfer of Ordinary Shares. All
shareholders shall be issued with share certificates and should
they wish to execute a trade they should confirm details with the
Registrars by sending details of the trade and their share
certificate to Capita Registrars (Guernsey) Limited, Mont Crevelt
House, Bulwer Avenue, St Sampson, Guernsey, GY2 4LH, Channel
Islands.
The Delisting is conditional upon the approval of a resolution
by no less than 75 per cent. of the votes cast by Shareholders at a
General Meeting to be held at 3.00 p.m. Hong Kong Time (8.00 a.m.
UK Time) on 22 April 2014 (the "Resolution"). Subject to the
Resolution being passed at the General Meeting, it is anticipated
that trading in the Ordinary Shares on AIM will cease at close of
business on 1 May 2014. The proposed date for the Cancellation
taking effect is 2 May 2014.
A notice convening the General Meeting and an accompanying
letter from the Chairman ("the Circular") will be posted to
Shareholders today and will be available on the Company's website
shortly. The information in this announcement has been extracted
from the Circular without material adjustment.
Rationale for the Delisting
Since listing on AIM in 2012 the Company's performance has been
adversely affected by the introduction of the Chinese White Paper
on Rare Earth (the "White Paper"). The White Paper set minimum
production targets for separation plants and smelters in China of
2,000 metric tonnes per annum and production targets of 20,000
metric tonnes for mixed rare earth mines. In doing this the Chinese
Government was seeking to limit the number of market participants,
prevent illegal smuggling and help underpin falling rare earth
prices. REG's rare earth smelting and separation plant has a
maximum production capacity of circa 800 tonnes and therefore does
not meet these strict criteria. Since then, the Board have been
working on and continues to work on a number of solutions to be
able to meet these criteria and get the separation plant
operational once again. Included in this was the agreement the
Company entered into with Tianjin Ruixiang Stone Investment Company
Limited ("TRSICL") on 15 October 2013, more details of which are
set out below. However, during this time of inactivity when the
separation plant has had to remain largely inactive, cashflow has
had to be managed very carefully.
As part of this review the Board have looked at a number of cost
cutting measures in order to conserve cash. This has included a
review of both the advantages (such as ability to raise new funds
on AIM and the Company's enhanced profile as a listed Company) and
disadvantages (such as cost and management time) of maintaining
Admission of the Ordinary Shares to trading on AIM. After careful
consideration, the Directors have concluded that it is no longer in
the best interests of the Company or its Shareholders to maintain
the Admission.
In reaching the decision, the Directors have specifically
considered the following factors:
-- the significant professional fees associated with its
admission to AIM (such as legal, accounting, London Stock Exchange
and nominated adviser costs);
-- the disproportionate amount of senior management time spent
on ensuring compliance with the AIM Rules and regulatory
requirements, including reporting, disclosure and corporate
governance requirements;
-- that admission to AIM no longer serves a useful function for
the Company in terms of providing access to capital or enabling the
Company's Ordinary Shares to be used to effect acquisitions,
although the Directors acknowledge the benefit to Shareholders of
having a public market in the ordinary shares;
-- the lack of liquidity in trading of the Company's Ordinary Shares;
-- the Company has been unable to attract any significant
investor interest and support in the UK, making a listing on AIM of
limited value to the Company; and
-- since flotation on AIM the Company has been unable to deliver
upon its core business objectives as planned, for the reasons
outlined above, despite various initiatives by the Board. As a
result the cost base which the Company carries is not sustainable
and many of the Company's most significant costs relate directly
and indirectly to maintaining the quotation on AIM.
Pursuant to AIM Rule 41, the Delisting can only be effected by
the Company after securing a resolution of Shareholders in a
general meeting passed by a requisite majority, being not less than
75 per cent. of the votes cast by Shareholders (in person or by
proxy). Under the AIM Rules, the Delisting can only take place
after the expiry of a period of twenty Business Days from the date
on which notice of the Delisting is given. In addition, a period of
at least five Business Days following the Shareholder approval of
the Delisting is required before the Delisting may be put into
effect.
The Company has notified the London Stock Exchange of the
proposed Delisting. In the event that Shareholders approve the
Resolution approving the Delisting, it is anticipated that the
trading in the Ordinary Shares on AIM will cease at close of
business on 1 May 2014 with the Delisting taking effect at 7.00
a.m. on 2 May 2014.
Effect of Delisting
The principal effect of the Delisting is that cancellation in
the trading of the Ordinary Shares on AIM will substantially reduce
the liquidity and marketability of Ordinary Shares. In addition,
there would be no public stock market in the UK on which
Shareholders can trade their Ordinary Shares, and the Company would
no longer be required to comply with the AIM Rules. The Company's
CREST facility will be cancelled and, although the Ordinary Shares
will remain transferable, they will cease to be transferable
through CREST. However, the Company has retained the services of
its Registrars, Capita Registrars to facilitate any private
transfer of shares. All Shareholders shall be issued with share
certificates and should they wish to execute a trade they should
confirm details with the Registrars by sending details of the trade
and their share certificate to Capita Registrars (Guernsey)
Limited, Mont Crevelt House, Bulwer Avenue, St Sampson, Guernsey,
GY2 4LH, Channel Islands.
Current Trading
The Company issued its unaudited interim financial statements
for the period ended 30 June 2013 on 26 September 2013.
Since then the Company has announced an agreement with Tianjin
Ruixiang Stone Investment Company Limited ("TRSICL") with the
intention to expedite securing the relevant rare earth
production/export quotas and licences in China. The Company
continues to work with TRSICL on securing the relevant quotas but
the reality is that this process will take longer than the Board
had previously hoped. The plant at Sanxie has remained inactive as
advised in our announcement of 30 June 2013. The Board believes
that although progress has been made towards securing the relevant
quotas the Sanxie plant will remain inactive in the short term.
General Meeting
The General Meeting of the Company will be held at the offices
of Proton Invest Holdings Ltd., 7 Floor, 10 Block Shenzhen Software
Park Keji Middle 2nd Road, Nanshan District, Shenzhen, Guangdong,
P.R. China 518000 at 3.00 p.m. Hong Kong time (8.00 a.m. UK Time)
on 22 April 2014 at which the Resolution will be put to
Shareholders.
Recommendation
For the reasons set out above, the Directors believe that the
proposed Delisting is in the best interests of the Company and its
Shareholders as a whole. Accordingly, the Directors unanimously
recommend that Shareholders vote in favour of the Resolution at the
General Meeting as they intend to do in respect of their own
beneficial holdings amounting to, in aggregate, 49,314,390 Ordinary
Shares representing approximately 73 per cent. of the total voting
rights of the Company.
- Ends -
For further information:
Rare Earths Global Limited
Simon Ong, Chief Executive Tel: +86 755 8633
Officer 6388
www.rareearthsglobal.com
Charles Stanley Securities
Nominated Adviser & Broker
Dugald J. Carlean / Carl Tel: +44 (0) 20
Holmes 7149 6000
www.csysecurities.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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