TIDMCRC
RNS Number : 9204Q
Circle Property PLC
24 February 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 (AS AMED) (WHICH FORMS PART
OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018 (AS AMED)). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
24 February 2023
Circle Property plc
("Circle", the "Company" or the "Group")
Proposed Disposal of Concorde Park
Proposed Cancellation of admission of Ordinary Shares to trading
on AIM
and
Notice of Extraordinary General Meeting
Circle Property plc (AIM: CRC), is pleased to announce that it
has conditionally exchanged contracts to sell Concorde Business
Park, Maidenhead ("Concorde Park"), the Group's largest remaining
asset, to Skelton Developments (Nottingham) Limited (the "Buyer")
for a cash consideration of approximately GBP12.3 million (the
"Disposal"). Completion of the Disposal is expected to take place
on 29 March 2023, subject to Shareholder approval.
Following Completion, the net proceeds from the Disposal will be
held as Group cash and are expected to be returned to Shareholders
through the proposed B Shares Issues as announced by the Company on
20 January 2023, the first of which is expected to occur in March
2023.
Upon completion of the Disposal, the Company will be regarded as
an AIM Rule 15 cash shell, having ceased to own, control or conduct
all or substantially all, of its existing trading business,
activities or assets. The Disposal is therefore conditional on the
consent of Shareholders at the Extraordinary General Meeting. The
Resolutions to be proposed at the Extraordinary General Meeting
also include a resolution approving the future disposal of the
Company's final remaining asset, 300 Pavilion Drive, Northampton,
when appropriate (the "Final Disposal").
In addition, the Company is seeking Shareholders' approval to
cancel the admission of the Company's Ordinary Shares to trading on
AIM. In accordance with Rule 41 of the AIM Rules, the Company has
noti ed the London Stock Exchange of the proposed Cancellation.
Given that the Board wishes to complete the Returns of Capital
whilst the Company remains traded on AIM, the definitive timetable
in relation to Cancellation is dependent on timing of the receipt
of completion monies from the sale of Somerset House and 400
Pavilion Drive (expected in late February and mid March 2023), and
consequently, the timing of the proposed Returns of Capital to
Shareholders. Assuming the passing of the Resolutions, completion
of the Disposal and Returns of Capital in March and April 2023, it
is expected that Cancellation will occur in May 2023.
A copy of the Circular containing more information in relation
to the Disposal, Final Disposal, Cancellation and Notice of
Extraordinary General Meeting will be posted to Shareholders on 28
February 2023 and will be available on the Company's website at
https://www.circleproperty.co.uk/investors/reports-and-presentations/2023
shortly.
The Extraordinary General Meeting will be held at the offices of
Oak Group (Jersey) Limited, 3rd Floor, IFC5 Castle Street, St.
Helier, Jersey, JE2 3BY, Channel Islands at 3.30 p.m. on 22 March
2023.
Enquiries:
+44 (0)20 7930
Circle Property Plc 8503
John Arnold, CEO
Edward Olins, COO
+44 (0)20 7397
Cenkos Securities plc 8900
Katy Birkin
George Lawson
Radnor Capital
Joshua Cryer +44 (0)20 3897
Iain Daly 1830
+44 (0)20 3757
Camarco 4992
Ginny Pulbrook
Toby Strong
Details of the Proposed Disposal of Concorde Park, proposed
Cancellation of admission of Ordinary Shares to trading on AIM and
Notice of Extraordinary General Meeting
1. Introduction
The Company announces that it has conditionally exchanged
contracts to sell Concorde Business Park, Maidenhead ("Concorde
Park"), the Group's largest remaining asset, to Skelton
Developments (Nottingham) Limited (the "Buyer") for a cash
consideration of approximately GBP12.3 million (the "Disposal").
Completion of the Disposal is expected to take place on 29 March
2023, subject to Shareholder approval.
Following Completion, the net proceeds from the Disposal will be
held as Group cash and are expected to be returned to Shareholders
through the proposed B Shares Issues as announced by the Company on
20 January 2023, the first of which is expected to occur in March
2023.
Upon completion of the Disposal, the Company will be regarded as
an AIM Rule 15 cash shell , having ceased to own, control or
conduct all or substantially all, of its existing trading business,
activities or assets . The Disposal is therefore conditional on the
consent of Shareholders at the Extraordinary General Meeting. The
Resolutions included in the Notice of Extraordinary General Meeting
at the end of this document also include a resolution approving the
future disposal of the Company's final remaining asset, 300
Pavilion Drive, Northampton, when appropriate (the "Final
Disposal").
In addition, the Company is seeking Shareholders' approval to
cancel the admission of the Company's Ordinary Shares to trading on
AIM. In accordance with Rule 41 of the AIM Rules, the Company has
noti ed the London Stock Exchange of the proposed Cancellation.
Given that the Board wishes to complete the Returns of Capital
whilst the Company remains traded on AIM, the definitive timetable
in relation to Cancellation is dependent on timing of the receipt
of completion monies from the sale of Somerset House and 400
Pavilion Drive (expected in late February and mid March 2023), and
consequently, the timing of the proposed Returns of Capital to
Shareholders. Assuming the passing of the Resolutions, completion
of the Disposal and Returns of Capital expected in March and April
2023 it is expected that Cancellation will occur in May 2023.
2. Background to, and reasons for, the Disposal
Introduction
On 14 February 2022, the Company announced its strategy to make
targeted asset sales in an orderly manner over a period of two to
three years (if not sooner). The Board stated that it was committed
to maximising returns and delivering value to Shareholders and
expected that a minimum of two returns of capital would be made to
Shareholders.
The Company announced a Capital Reduction and proposed Return of
Capital on 20 January 2023 which was approved by Shareholders at
the extraordinary general meeting held on 15 February 2023. Subject
to successful application for reporting fund status as detailed in
the circular published by the Company on 20 January 2023, the Board
expects that the first Return of Capital will take place in March
2023.
Whilst it is currently expected that the Company will be
accepted as a reporting fund by HMRC, if for any reason following
confirmation from HMRC that is not the case, which would result in
the proposed B Share Issues being treated as income rather than
capital, the Directors may look to pursue alternative ways of
returning cash to Shareholders.
Contracts were exchanged to sell the Company's remaining
property in Birmingham (Somerset House, Temple Street) as announced
on 23 November 2022, which is expected to complete in late February
2023, for a consideration of GBP15.18 million. In addition, on 24
January 2023, the Company announced that it had exchanged contracts
on the sale of Victory House, 400 Pavilion Drive, Northampton ("400
Pavilion Drive") at a sale price of GBP2.75 million, with
completion expected by mid-March 2023. Subject to the timing of the
completion of the sale of Somerset House, the first Return of
Capital in March 2023 is expected to be for approximately GBP46
million (GBP1.57 per Ordinary Share).
Assuming completion of the sale of Somerset House and 400
Pavilion Drive as set out above, as at the date of this
announcement, the Company's remaining assets are Concorde Park and
Park House, 300 Pavilion Drive, Northampton Business Park ("300
Pavilion Drive"). 300 Pavilion Drive is currently being marketed
for sale. It is currently the Board's intention to have sold 300
Pavilion Drive prior to Cancellation occurring, in order for the
disposal proceeds to be returned to Shareholders by way of a Return
of Capital whilst the Company is admitted to trading on AIM .
However, this will depend on the timing of any sale of 300 Pavilion
Drive and the Board will keep this under review noting the costs
associated with maintaining a quotation on AIM.
Disposal of Concorde Park and AIM Rule 15
The Company today announced that it has entered into a binding
conditional sale and purchase agreement ("SPA") for the sale of
Concorde Park, the Group's largest asset, to Skelton Developments
(Nottingham) Limited (the "Buyer") for a cash consideration of
approximately GBP12.3 million (the "Disposal") payable on
Completion. Completion of the Disposal is expected to take place
five working days following Shareholder approval at the
Extraordinary General Meeting to be held on 22 March 2023 , or
earlier if agreed between the Company and the Buyer .
Concorde Park comprises approximately 68,919 sq ft of office
space including approximately 22,308 sq ft of currently vacant
refurbished offices, available to let. Concorde Park is 68% let, as
follows: Socionext Europe GMBH (27.64%), Regus Maidenhead Concorde
Park Limited (23.8%), Avetta Limited (6.77%), Stabilo International
GMBH (5.56%) and Lambert Smith Hampton Group Limited (3.85%).
Concorde Park has total rent passing of approximately GBP1.11
million per annum (GBP23.87 psf overall) and total estimated rental
value once fully let of approximately GBP1.63 million per annum.
Concorde Park was acquired by the Company in August 2019 for
GBP14.6 million and had a valuation as at 30 September 2022 of
GBP15.9 million. The profit before tax for the year ended 31 March
2022 attributable to Concorde Park was GBP0.63 million.
In accordance with AIM Rule 15, the Disposal constitutes a
fundamental change of business of the Company. The Disposal is
therefore conditional on the consent of Shareholders at the
Extraordinary General Meeting. The Resolutions at the end of the
Circular also include a resolution approving the future sale of 300
Pavilion Drive, when appropriate.
On completion of the Disposal, the Company will cease to own,
control or conduct all or substantially all, of its existing
trading business, activities or assets. The Company will therefore
become an AIM Rule 15 cash shell. As there is no intention by the
Directors to make an acquisition or acquisitions which constitute a
reverse takeover under AIM Rule 14 (including seeking re-admission
as an investing company (as defined under the AIM Rules)) on or
before the date falling six months from completion of the Disposal
or be re-admitted to trading on AIM as an investing company under
the AIM Rules (which requires the raising of at least GBP6
million), the Directors are seeking Shareholder approval for
Cancellation, as detailed below.
3. Background to, and reasons for, the proposed Cancellation
The Board has concluded that, in light of the Company becoming
an AIM Rule 15 cash shell in the near future with no trading
business, it is in the best interests of the Company and its
Shareholders to seek Shareholders' approval to cancel the admission
of the Company's Ordinary Shares to trading on AIM. In accordance
with Rule 41 of the AIM Rules, the Company has noti ed the London
Stock Exchange of the proposed Cancellation. . Assuming the passing
of the Resolutions, completion of the Disposal and Returns of
Capital expected in March and April 2023, it is expected that
Cancellation will occur in May 2023.
Pursuant to Rule 41 of the AIM Rules, Resolution 3 (relating to
the Cancellation) requires the approval of not less than 75 per
cent. of the votes cast by Shareholders (whether present in person
or by proxy) at the Extraordinary General Meeting. Resolution 3 is
conditional upon (i) Resolution 1 being approved; and (ii) the
completion of the Disposal on the terms of the Share Purchase
Agreement.
Since admission to AIM, the Company has suffered from limited
liquidity in the Ordinary Shares and the share price has remained
at a significant discount to the Company's net asset value ("NAV").
The closing mid-market price of the Ordinary Shares on 23 February
2023 (being the latest practicable date prior to this announcement)
was GBP 2.09 , a 9 per cent. discount to an unaudited estimated NAV
per share as at 31 January 2023 of GBP 2.30 .
The Directors have conducted a review of the bene ts and
disadvantages to the Company and its Shareholders in retaining its
admission to trading on AIM. The Directors believe that the
Cancellation is in the best interests of the Company and its
Shareholders as a whole. Following the Disposal, the Returns of
Capital and the Final Disposal in line with the Company's stated
strategy, the Company will have no trading business and limited
cash resources. Maintaining the Company's admission to trading on
AIM requires signi cant management time, legal and regulatory
obligations, and comes with material nancial costs (such as
professional fees, London Stock Exchange fees and other costs
associated with being an AIM-traded company) that the Directors
believe are disproportionate to the bene ts to the Company.
4. Process for, and principal effects of, the Cancellation
Under the AIM Rules, the Company is required to give at least 20
clear Business Days' notice of the Cancellation. Pursuant to Rule
41 of the AIM Rules, the Cancellation is also conditional upon the
approval of not less than 75 per cent. of the votes cast by
Shareholders (whether present in person or by proxy) at an
Extraordinary General Meeting. The Notice at the end of the
Circular contains Resolution 3 which proposes that the Company's
admission to trading on AIM be cancelled. Additionally,
Cancellation will not take effect until at least five clear
Business Days have passed following the passing of Resolution
3.
Given that the Board wishes to complete the Returns of Capital
whilst the Ordinary Shares remain admitted to trading on AIM, the
definitive timetable in relation to Cancellation is dependent on
timing of the receipt of completion monies from disposals and the
timing of the proposed Returns of Capital to Shareholders. Assuming
the passing of the Resolutions, completion of the Disposal and
Returns of Capital expected in March and April 2023, it is expected
that Cancellation will occur in May 2023. The Cancellation
timetable will be announced to Shareholders via a Regulatory
Information Service in due course. Shareholders should note that
Cancellation will not take place if Resolution 3 is not passed at
the Extraordinary General Meeting. Resolution 3 is conditional upon
(i) Resolution 1 being approved; and (ii) the completion of the
Disposal on the terms of the Share Purchase Agreement.
As soon as possible following the Cancellation, it is the
Board's intention to liquidate solvently the Group and therefore no
matched bargain facility will be implemented and there will be no
formal market for Shareholders to effect transactions in the
Ordinary Shares following Cancellation.
The principal effects of the Cancellation will be that:
-- there will be no public market on any recognised investment
exchange or multilateral trading facility for the Ordinary Shares
and, consequently, there can be no guarantee that a Shareholder
will be able to purchase or sell any Ordinary Shares;
-- while the Ordinary Shares will remain freely transferable, it
is likely that the liquidity and marketability of the Ordinary
Shares will, in the future, be more constrained than at present and
the secondary market value of such Ordinary Shares may be adversely
affected as a consequence;
-- in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
-- the levels of disclosure and corporate governance within the
Group may not be as stringent as those for a Company quoted on AIM;
however the Company will continue to be subject to the City Code
for a period of at least ten years from the date of
Cancellation;
-- Shareholders will no longer be afforded the protections given
by the AIM Rules, such as the requirement to be notified of certain
events and the requirement that the Company seek shareholder
approval for certain corporate actions, where applicable, including
substantial transactions, financing transactions, reverse
takeovers, related party transactions and fundamental changes in
the Company's business, including certain acquisitions and
disposals;
-- in order to increase the cost saving by becoming a private
company, following the Cancellation, the Company will no longer be
obligated to produce and publish half-yearly reports and related
financial statements;
-- the Company will cease to have a nominated adviser and broker;
-- whilst the Company's CREST facility will remain in place
following the Cancellation, the Company's CREST facility may be
cancelled in the future and, in that event, although the Ordinary
Shares will remain transferable, they will cease to be transferable
through CREST. In this instance, Shareholders who hold Ordinary
Shares in CREST will receive share certificates; and
-- the Cancellation may have taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
Shareholders should be aware that if the Cancellation takes
effect, they will at that time cease to hold shares in a quoted
company and will become Shareholders in an unquoted company which
will be likely significantly to reduce the marketability and
liquidity of the Ordinary Shares and the principal effects referred
to above will automatically apply to the Company from the date of
the Cancellation.
The above considerations are not exhaustive, and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
5. Extraordinary General Meeting
Set out at the end of the Circular is a Notice of Extraordinary
General Meeting to be held at the offices of Oak Group (Jersey)
Limited at 3rd Floor, IFC5 Castle Street, St. Helier, Jersey, JE2
3BY, Channel Islands at 3.30 p.m. on 22 March 2023 at which the
following Resolutions will be proposed:
-- Resolution 1 (to approve the Disposal)
-- Resolution 2 (to approve the Final Disposal)
-- Resolution 3 (to approve the proposed Cancellation)
All Resolutions are being proposed as special resolutions and
will require approval by 75 per cent. of those votes cast (by
persons present in person or by proxy) at the Extraordinary General
Meeting to be passed.
Completion of the Disposal, the Final Disposal and Cancellation
are conditional, inter alia, on Shareholders passing the respective
Resolutions being proposed at the Extraordinary General Meeting. If
Shareholders do not pass the Resolutions, completion of the
Disposal, the Final Disposal and Cancellation will not proceed.
6. Recommendation
The Board believes that the Resolutions and Disposal, Final
Disposal and Cancellation are in the best interests of the Company
and the Shareholders as a whole.
Accordingly, the Board unanimously recommends that Shareholders
vote in favour of the Resolutions to be proposed at the
Extraordinary General Meeting, as all of the Directors holding
Ordinary Shares intend to do in respect of their own beneficial
holdings of 5,334,069 Ordinary Shares representing approximately
18.26 per cent. of the Company's existing Ordinary Shares.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Announcement of the Disposal and the proposed 24 February 2023
Cancellation pursuant to AIM Rule 41
Publication of the Circular 24 February 2023
Posting of the Circular 28 February 2023
Latest time and date for receipt of Forms 3.30 p.m. on 20 March
of Proxy for the Extraordinary 2023
General Meeting
Extraordinary General Meeting 3.30 p.m. on 22 March
2023
Completion of the Disposal 29 March 2023
Cancellation of the Ordinary Shares from May 2023
trading on AIM*
* In accordance with Rule 41 of the AIM Rules, the Company has
noti ed the London Stock Exchange of the proposed Cancellation.
Given that the Board wishes to complete the Returns of Capital
whilst the Ordinary Shares remain traded on AIM, the definitive
timetable in relation to Cancellation is dependent on timing of the
receipt of completion monies from disposals and the timing of the
proposed Returns of Capital to Shareholders. Assuming the passing
of the Resolutions, completion of the Disposal and Returns of
Capital expected in March and April 2023, it is expected that
Cancellation will occur in May 2023. Further announcements will be
made by the Company through a Regulatory Information Service, as
appropriate.
DEFINITIONS
The following definitions apply throughout this document unless
the context requires otherwise:
"AIM" the market of that name, operated by the
London Stock Exchange
"AIM Rules" together, the AIM Rules for Companies and
the AIM Rules for Nominated Advisers
"AIM Rules for Companies" the AIM Rules for Companies published by
the London Stock Exchange, as amended from
time to time
"AIM Rules for Nominated the AIM Rules for Nominated Advisers published
Advisers" by the London Stock Exchange, as amended
from time to time
"Board" or "Directors" the directors of the Company
"B Share Issues" the proposed distributions of the proceeds
of the Company's disposals to Shareholders
through issues of B Shares as announced
on 20 January 2023
"Business Day" any day on which banks are generally open
in England and Wales for the transaction
of business, other than a Saturday, Sunday
or public holiday
"Cancellation" the proposed cancellation of the admission
to trading on AIM of the Ordinary Shares,
subject to passing of Resolutions 1 and
3 and in accordance with Rule 41 of the
AIM Rules
"Capital Reduction" the reduction of the Company's stated capital
by cancelling and extinguishing capital,
with the resulting reduction moneys being
credited to a special reserve of the Company,
the 'capital redemption reserve', as detailed
in the circular dated 20 January 2023
"Cenkos" Cenkos Securities plc, the Company's nominated
adviser and broker, incorporated in England
& Wales with company registration number
05210733
"Company" or "Circle" Circle Property plc, a company incorporated
in Jersey on 4 December 2015 with company
number 120165
"Completion" completion of the Disposal
"Consideration" the total cash consideration to be paid
in accordance with the terms of the Disposal
comprising approximately GBP12.3 million
at Completion
"CREST Manual" the rules governing the operation of CREST
as published by Euroclear
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 2001/3755) and the Companies
Uncertificated Securities (Jersey) Order
1999 as amended from time to time, and
any applicable rules made under those
regulations
"Disposal" the proposed disposal of Concorde Park,
Maidenhead
"Euroclear" Euroclear UK & Ireland Limited, the operator
of CREST
"Extraordinary General the Extraordinary General Meeting of the
Meeting" or "EGM" Company to be held at the offices of Oak
Group (Jersey) Limited at 3(rd) Floor,
IFC5 Castle Street, St. Helier, Jersey,
JE2 3BY, Channel Islands at 3.30 p.m.
on 22 March 2023, notice of which is set
out at the end of the Circular
"Financial Conduct the UK Financial Conduct Authority
Authority" or "FCA"
"Final Disposal" the proposed future disposal of the Company's
final remaining asset, 300 Pavilion Drive,
Northampton
"Form of Proxy" the form of proxy relating to the Extraordinary
General Meeting being sent to Shareholders
(where applicable) with this document
"FSMA" the UK Financial Services and Markets
Act 2000 (as amended)
"Group" the Company and its subsidiary undertakings
"Jersey Companies Law" the Companies (Jersey) Law 1991 (as amended)
"London Stock Exchange" London Stock Exchange plc
"MAR" or "Market Abuse the UK Market Abuse Regulation (Regulation
Regulation" 596/2014)
"Notice of Extraordinary the notice convening the Extraordinary
General Meeting" General Meeting set out at the end of
the Circular
"Official List" the official list of the UK Listing Authority
"Ordinary Shares" ordinary shares of no par value in the
capital of the Company
"Prospectus Regulation the prospectus regulation rules of the
Rules" Financial Conduct Authority made under
Part VI of FSMA
"Registrars" Computershare Investor Services (Jersey)
Limited
"Regulatory Information one of the regulatory information services
Service" or "RIS" authorised by the London Stock Exchange
to receive, process and disseminate information
in respect of AIM quoted companies
"Resolutions" the resolutions proposed to be passed
by Shareholders at the Extraordinary General
Meeting, as set out in the Notice of Extraordinary
General Meeting at the end of the Circular
and a reference to a Resolution shall
be construed accordingly
"Returns of Capital" the consecutive returns of capital pursuant
to the allotment and redemption of B Shares
as contemplated by the circular to Shareholders
published on 20 January 2023
"Shareholders" holders of the Ordinary Shares
"Share Purchase Agreement" the conditional agreement dated 23 February
or "SPA" 2023 between (1) the Company and (2) Skelton
Developments (Nottingham) Limited relating
to the Disposal
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"GBP" or "Sterling" pounds sterling, the lawful currency of
the United Kingdom
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END
DISEADADAFSDEAA
(END) Dow Jones Newswires
February 24, 2023 02:00 ET (07:00 GMT)
Circle Property (LSE:CRC)
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