Further re Cancellation


 

TIDMOXN 
 
RNS Number : 2161V 
Oxonica plc 
07 July 2009 
 

 
 
7 July 2009 
 
 
Oxonica plc 
("Oxonica" or the "Company") 
 
 
Further to the announcement on 18 June 2009 of Oxonica's intention to seek 
shareholders' approval for the cancellation of the Company's admission to 
trading on AIM, Oxonica is pleased to announce that it will be posting a 
circular to shareholders today. The circular will be available on the Company's 
website at www.oxonica.com 
Oxonica today confirms that an application has been made for the cancellation of 
admission of the ordinary shares of the Company from trading on the AIM market 
of the London Stock Exchange. The general meeting of the Company will take place 
on 24 July 2009 at Hammonds LLP, 7 Devonshire Square, London, EC2M 4YH at 11.00 
a.m. If the Cancellation Resolution is passed by the requisite majority, the 
Cancellation is expected to become effective as at 7.00 a.m. on 4 August 2009. 
Reasons for seeking the Cancellation 
 
 
Having carefully reviewed the position and consulted with the Company's advisers 
and a number of its major Shareholders, the Board of Directors of the Company 
(the "Board") has concluded that it is no longer in the Company's best interests 
to maintain the admission of the Shares to trading on AIM. 
 
 
The Board is concerned by a number of factors, including the relatively small 
total market capitalisation of the Company, the small free float, the limited 
trading volumes in the Shares and the significant direct and indirect costs of 
compliance with the AIM Rules for Companies (the "AIM Rules"), which the Board 
estimates to be at least GBP150,000 per annum. 
 
 
The resolution to cancel the admission to trading on AIM requires the approval 
of not less than 75 per cent. of those present and entitled to vote or voting by 
proxy at the General Meeting. This majority is required by rule 41 of the AIM 
Rules. 
 
 
It is the intention of the Board for the Company to remain as a public limited 
company and not to re-register as a private company. This is in order for the 
Company to retain the ability to make new offers of shares to the public. 
 
 
How Shareholders will be able to effect Share Transactions 
 
 
Whilst the Board believes that the proposed Cancellation is in the Shareholders' 
interests, it has evaluated alternative arrangements to enable Shareholders to 
continue to trade their Shares after the Cancellation. In the event that the 
Cancellation is approved, the Board intends to apply for the Shares to be traded 
on Sharemark. 
 
 
Sharemark is a periodic auction-based dealing facility offering smaller 
companies a simple, flexible and cost effective service through which their 
shares can be traded. The facility is operated by The Share Centre Limited, 
which is a member firm of the Exchange and is authorised and regulated by the 
Financial Services Authority. Sharemark is not a recognised investment exchange, 
recognised clearing house or regulated market within the meaning of the Markets 
in Financial Instruments Directive. The Sharemark dealing facility constitutes a 
Multilateral Trading Facility. Transactions are matched at a single auction 
price. The frequency of auction deals is determined on admission to Sharemark 
and is based primarily on the projected liquidity of the market in the company's 
securities. All orders for dealing within Sharemark are subject to continuous 
price display on Sharemark's website (www.sharemark.com) on an anonymous basis. 
This is to ensure transparency of price and volume. Where appropriate, the 
indicative auction price is also displayed. 
 
 
On the basis that the Company's application to Sharemark is successful, which 
the Company expects it to be, further details of Sharemark including how 
Shareholders will be able to effect share transactions will be provided to the 
Shareholders. 
 
 
If Shareholders wish to sell their Shares on AIM, they must do so prior to the 
Cancellation becoming effective (such Cancellation will occur no earlier than 
five clear business days after the General Meeting and it is expected that 
trading in the Shares on AIM will cease at the close of business on 3 August 
2009, with Cancellation being effective at 7.00 a.m. on 4 August 2009). 
 
 
EFFECT OF THE PROPOSAL ON SHAREHOLDERS 
 
 
After the Cancellation, the price which investors may realise for their Shares, 
when they are able to do so, may be influenced by a large number of factors, 
some of which are specific to the Company and others of which are extraneous. 
 
 
Shareholders who hold Shares in the Company through a PEP or ISA will be 
required to dispose of their Shares if the Cancellation becomes effective as the 
Shares will no longer be "qualifying shares" for the purpose of a PEP or an ISA. 
 
 
Shareholders who remain a shareholder in the Company after the Cancellation 
should be aware that the value of the Shares could go down as well as up, and 
investors may not recover their original investment. 
 
 
It is possible that the Company may require additional funds to respond to 
business challenges and to further develop its business. If, after the 
Cancellation, the Company raises additional funds through further issues of 
equity, existing shareholders could suffer a dilution. However, your attention 
is drawn to the Board's proposals in relation to corporate governance and 
shareholder protections below. 
 
 
Shareholders should note that, following conclusion of the Cancellation, the 
Company will remain subject to the provisions of the City Code on Takeovers and 
Mergers. However, the regulatory regime imposed through the AIM Rules, which 
applies solely to companies with shares trading on AIM, will no longer apply. 
 
 
corporate governance AND SHAREHOLDER PROTECTIONs 
 
 
Companies traded on Sharemark are required to comply with the Sharemark Code of 
Practice (the "Code of Practice"), which includes the requirement for companies 
to publish annual accounts no later than six months after the end of the 
financial period to which they relate and a half yearly report in respect of the 
first six month period of any financial period no later than three months after 
the end of the period to which they relate. Companies are required to have 
proper regard to corporate governance and maintain corporate governance 
procedures commensurate with the size of its business. Companies are also 
required to adopt a code on directors' dealings in line with the UK Listing 
Authority's Model Code on Directors' Dealings and comply with the UK Market 
Abuse and Insider Dealing regimes. 
 
 
The Board has carefully reviewed the Code of Practice and consider it 
appropriate and in the interests of good corporate governance to extend the 
requirements under the Code of Practice. Accordingly, the Company will give an 
undertaking to Sharemark on its application becoming successful that it will 
comply with a number of additional requirements, including: notifying the 
Shareholders of any substantial transactions which exceed 20 per cent. in any 
tests adopted by the Board based on gross assets, profits, turnover, 
consideration to market capitalisation and gross capital (the "Class Tests"), 
notifying Shareholders of any "related party" transactions which exceed 10 per 
cent. in any of the Class Tests, notifying and obtaining the necessary consent 
of Shareholders to a "reverse takeover", maintaining a comprehensive and 
detailed website, disclosing to Shareholders any changes in the Board or major 
Shareholders, having at least two non-executive directors of which one shall be 
an independent non-executive director and maintaining its audit and remuneration 
committees comprising at least two non-executive directors. 
 
 
The Company will also continue to seek the following resolutions at each annual 
general meeting ("AGM") (as it has done at previous AGMs): (a) the authority 
under section 80 of the Companies Act 1985 (the "Act") to allot shares up to the 
aggregate nominal amount of the authorised but unissued share capital of the 
Company at the date of the AGM; and (b) the disapplication of pre-emption rights 
on the issue of new shares in the Company pursuant to section 95 of the Act 
provided that this authority is limited to: (i) the allotment of shares in 
connection with a rights issue; and (ii) the allotment (otherwise than pursuant 
to (i) above) of shares up to an aggregate nominal amount representing no more 
than 10 per cent. of the issued share capital of the Company at the date of the 
AGM. Such authorities shall expire at the next AGM or, if earlier, 15 months 
following the passing of the resolutions. 
 
 
GROUP STRATEGY 
 
 
As set out in the Group's 2008 Annual Report and the AGM Statement issued on 18 
June 2009, the Board's objective is to improve the profitability of Oxonica and 
ensure that the Group has a sustainable position from which to build for the 
future. It is the Board's intention to achieve this within the Group's current 
resources. 
 
 
Oxonica's strategy was set-out in the AIM Admission Document issued in July 
2005. This document stated that the Group's strategy was to introduce products 
to large end user markets, to establish the customer value proposition, create 
customer demand and outsource manufacturing. The objective was then to seek to 
form partnerships with international brand owners to maximise market reach. 
 
 
Having developed product offerings in all of its businesses, Oxonica is now 
focusing on partnering the Group's businesses to secure profitable platforms for 
growth. In 2008, Oxonica's Diagnostics business was partnered with BD and this 
enabled the Group to significantly reduce costs and cash burn in its US 
operations. 
 
 
The Company is currently in discussions with potential partners for its three 
remaining businesses. The structure of the resulting relationships will be 
announced on completion of the negotiations. It is anticipated that on 
completion of this strategy the Group's income will consist primarily of royalty 
income generated by partners' product sales. This strategy will facilitate 
further reductions in the Group's cost base resulting in a business that should 
generate positive earnings and cash flow in the medium term as the Group's 
strategic partners leverage their infrastructures to increase sales. 
 
 
It is envisaged that the earnings generated from the Group's various royalty 
incomes going forward will be returned to shareholders through dividends or 
share buy-backs as appropriate, or alternatively, invested in new opportunities. 
 
 
CHANGES TO THE BOARD 
 
 
As announced on 24 June 2009, Dr Kevin Matthews, Oxonica's CEO, has informed the 
Company of his intention to resign from the Board and will leave the Company on 
29 September 2009. In addition, Ed Weeks currently the senior independent 
director and Chairman of the Remuneration Committee will step down from the 
Board on the same date. Gordon Ringold will remain on the Board until such time 
as the Security business is successfully partnered. The Company is commencing 
the search for an executive director to lead the future development of Oxonica 
and ultimately it is envisaged that the Board will consist of an executive 
director, Richard Farleigh as non-executive chairman and George Elliott as the 
independent non-executive director. 
 
 
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 
In accordance with rule 41 of the AIM Rules, the Company has notified the 
Exchange of its intention to cancel admission of its AIM securities. Set out 
below is the expected timetable of principal events: 
+----------------------------------------------------+-------------------------+ 
| Announcement of General Meeting                    | 7 July 2009             | 
+----------------------------------------------------+-------------------------+ 
| Latest time and date for receipt of completed      | 11.00 a.m. on 22 July   | 
| forms of proxy to be valid at the General Meeting  | 2009                    | 
+----------------------------------------------------+-------------------------+ 
| General Meeting                                    | 11.00 a.m. on 24 July   | 
|                                                    | 2009                    | 
+----------------------------------------------------+-------------------------+ 
| Last day of dealing in Shares                      | Close of trading on 3   | 
|                                                    | August 2009             | 
+----------------------------------------------------+-------------------------+ 
| Cancellation of admission to trading on AIM        | 7.00 a.m. on 4 August   | 
| effective from                                     | 2009                    | 
+----------------------------------------------------+-------------------------+ 
 
 
Each of the times and dates in the above timetable is subject to change. If any 
details in the above timetable should change, the revised times and dates will 
be notified to Shareholders by means of an announcement through a Regulatory 
Information Service. 
 
 
Recommendation 
 
 
The Board considers the Cancellation to be fair and reasonable and in the best 
interests of the Company and the Shareholders as a whole. Accordingly, the Board 
recommends that you vote in favour of the Resolution to be proposed at the 
General Meeting. 
 
 
The Board intends to vote in favour of the Resolution in respect of their own 
shareholding interests, representing 13,783,542 Shares (approximately 21.0 per 
cent. of the issued share capital of the Company) in aggregate. 
 
 
In addition, the Company has received irrevocable undertakings from various of 
its Shareholders (including from the Board in respect of their shareholdings) to 
vote in favour of the Resolution, representing 32,596,583 Shares (approximately 
49.7 per cent. of the issued share capital of the Company) in aggregate. 
 
 
 
 
 
 
 
 
 
 
For further information, please contact: 
 
Oxonica plc    01865 856 728 
Kevin Matthews, Chief Executive Officer 
Richard Clarke, Chief Financial Officer 
 
Panmure Gordon  020 7459 3600 
Hugh Morgan 
Andrew Potts 
 
 
 
 
Notes to Editors 
 
About Oxonica plc - www.oxonica.com 
 
Oxonica (AIM: OXN.L) is a leading nanomaterials group with products already 
launched into international markets. Oxonica's leading product is Envirox(TM) 
Fuel Borne Catalyst - a nanocatalyst improving fuel economy and reducing 
emissions. The Group has also developed Optisol(TM), a photostable UV protection 
system designed to optimise the performance of quality sunscreens and 
anti-premature ageing products, and generates licence and development revenue 
from activities in the clinical diagnostics and security markets. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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