TIDMNVTA
RNS Number : 6233H
Noventa Limited
21 June 2013
NOVENTA LIMITED
("Noventa" or the "Company") (AIM: NVTA; ISDX: NV)
Issue of Equity and Warrants,
Change of Name, Class Meeting and update on Appointment of
Directors
21 June 2013
Issue of Equity
On 20 June 2013 the Company issued 14,578,561 ordinary shares of
0.05p each ("Ordinary Shares") to settle obligations of the Company
totalling approximately $140,000. An application has been made for
these new Ordinary Shares to be admitted to trading on AIM and ISDX
on 27 June 2013.
Following the issue of these new Ordinary Shares, the Company
will have a total of 172,237,380 Ordinary Shares in issue, and the
significant shareholders will be as follows:
Name of shareholder Number of Ordinary % of the total number
Shares held of Ordinary Shares
held
--------------------- ------------------- ----------------------
Thomas Allan * 15,962,380 9.27%
--------------------- ------------------- ----------------------
John Allan ** 13,194,663 7.66%
--------------------- ------------------- ----------------------
R J Fleming *** 5,660,443 3.29%
--------------------- ------------------- ----------------------
* This includes 10,323,584 Ordinary Shares held by Apex
Utilities Limited, a company in which Mr T Allan has a beneficial
interest.
** These Ordinary Shares are held by Ekasure Limited, a company
in which Mr J Allan has a beneficial interest.
*** This includes 3,968,653 Ordinary Shares held by Highland
African Ventures Limited, a company in which Mr R J Fleming has a
beneficial interest.
Issue of Warrants
The Company has granted warrants to subscribe for 8,676,790
Ordinary Shares at 0.461p per share for a period of 5 years to
Allenby Capital Limited.
Change of Name
The Company's Ordinary Shares are expected to trade under the
Company's new name of Paragon Resources plc with effect from 24
June 2013 and its TIDM "ticker" will change to "PAR" on the same
day. The Company's new website address will be
www.paragon-resources.com and will be available shortly.
Class Meeting & Appointment of New Directors
The Company has convened a Class Meeting for the holders of the
convertible redeemable GBP1.00 preference shares ("Preference
Shares") for 17 July 2013 (the "Class Meeting"), with the documents
posted to holders of Preference Shares today. The letter from the
Chairman of Noventa to holders of Preference Shares is extracted
below.
Complete copies of the document can be downloaded from
www.noventagroup.com.
The appointment of Andrew Beveridge and Daniel Cassiano-Silva as
Directors of the Company is proposed to take effect after the
conclusion of the Class Meeting.
For further information, please contact:
Noventa Limited Allenby Capital Limited
Simon Hunt (Nominated Adviser and Broker)
(Chairman) Nick Harriss/Jeremy Porter/James
+44 7733 337 755 Reeve
www.noventagroup.com +44 20 3328 5656
www.allenbycapital.com
--------------------- ---------------------------------
Class Meeting
Introduction
You will find enclosed with this letter a notice convening the
Class Meeting of Preference Shareholders in the Company to be held
at 12.00 on 17 July 2013 at the offices of Mourant Ozannes, 22
Grenville Street, St Helier, Jersey, JE4 8PX for the purpose of
considering and, if thought fit, passing the Special Redemption
Resolution as set out in the Notice attached to this letter.
The purpose of the Class Meeting and the Special Redemption
Resolution is for Preference Shareholders to consider and, if
thought fit, approve certain amendments to the Terms and Conditions
which were fixed at the time of issue in accordance with article
4(7)(d)(i) of the Articles as subsequently varied by way of a
special resolution passed at the class meeting of the Preference
Shareholders held on 28 September 2011.
If the Special Redemption Resolution is passed the Company will
be permitted to compulsorily redeem all of the outstanding
Preference Shares in consideration for the allotment and issue of
new Ordinary Shares and Deferred Shares. The aggregate number of
Ordinary Shares that will be allotted and issued to holders of
Preference Shares pursuant to the Special Redemption will be a
number equal to the aggregate number of existing issued Ordinary
Shares at that time. Accordingly, immediately following completion
of the Special Redemption, the holders of Preference Shares will
hold, together, 50% of the enlarged issued Ordinary Share Capital
of the Company. If passed at the Class Meeting, the Directors
intend to take the necessary steps to implement the Special
Redemption as soon as practicable following the Class Meeting. As
is explained further below, the Deferred Shares will have no
economic value.
The Proposed Amendment amounts to a variation of the class
rights attaching to the Preference Shares. A blackline of the Terms
and Conditions showing the Proposed Amendment is included in Part V
of this document. In accordance with the Articles, any variation of
the special rights attaching to Preference Shares may be approved
by the Preference Shareholders passing a special resolution at a
meeting of the Preference Shareholders. Accordingly, the Special
Redemption Resolution will be proposed at the Class Meeting as a
special resolution.
The Class Meeting will only be quorate (and able to pass the
Special Redemption Resolution) if there are present at that meeting
(in person or by proxy) two or more Preference Shareholders holding
between them at least one-third in nominal value of all of the
issued Preference Shares as at the date of the Class Meeting. If
the meeting is not quorate, the Articles provide, among other
things, that the Class Meeting be adjourned to a place, time and
day in the following week and that the quorum at the Adjourned
Class Meeting shall be one Preference Shareholder present in person
or by proxy (irrespective of the number of Preference Shares held
by that Preference Shareholder).
If the necessary quorum is not present at the Class Meeting
within 30 minutes of its commencement, the Class Meeting will be
adjourned to 12:00 on 24 July 2013 being one week after the time
and date of the Class Meeting. The Directors believe there is a
reasonable expectation that the necessary quorum will be present at
the Class Meeting.
Background to the Proposed Amendment
Secured Loan Facility
The Company's Ordinary Shares were admitted to trading on AIM on
20 March 2007 and the Preference Shares were admitted to trading on
ISDX on 11 April 2011. The Company's business plan was to develop
operations capable of large scale production of tantalum
concentrate at the mining concessions it held in Mozambique through
a subsidiary company. This was never successfully achieved despite
significant capital investment due to a number of factors including
on-going engineering and logistical issues. As a result of
significantly lower than expected production of tantalum
concentrate, both actual and forecast, HAMCM defaulted on the
Secured Loan Facility, which in turn resulted in the Company
ceasing to have any management or ownership involvement in its
former operations in Mozambique, the Democratic Republic of Congo
and South Africa (other than for any Excess Sale Amount).
Accordingly the Company and its subsidiaries ceased to be involved
in the business of mining, processing and distribution of tantalum
concentrate. The process of the disposal of HAMCM is being
organised on behalf of Richmond (in its capacity as security
trustee of the Secured Loan Facility) by Euro Pacific Canada Inc.,
a full service IIROC registered brokerage headquartered in Toronto,
Canada and specializing in foreign markets and securities. As at
the date of this document the disposal of HAMCM under the terms of
the Secured Loan Facility has not been completed. The Directors
have been informed that Richmond now expects the disposal process
to be completed by the end of June. As at the date of this
document, the Directors do not anticipate that any Excess Sale
Amount will be realised.
New Investing Policy
Following the above, the Board faced the choice of either
proposing to Shareholders that the remaining group of companies be
wound up, or attempting to identify new projects which may in the
future provide some return for existing Shareholders and Preference
Shareholders. The Board concluded that, in the circumstances in
which the Company found itself in, better value for Shareholders
and Preference Shareholders could be achieved through adopting a
new Investing Policy focussing on the agricultural sector where it
believes sources of funding are more readily available if the
Company has the appropriate management and Board expertise. The
Shareholder approval required to provide the Board with a clear
investing mandate and the authorities and flexibility needed to
pursue this strategy was obtained at the June 2013 EGM. The
Company's name was also changed to Paragon Resources PLC from
Noventa Limited at the June 2013 EGM to reflect more clearly the
nature of the Company's activities following the approval of the
Company's new investing policy at that EGM. Preference Shareholders
should refer to the Notice of Class Meeting of the Ordinary
Shareholders of the Company, the Notice of Extraordinary General
Meeting and the related documents which are enclosed with this
document and available at the Company's website, under the Investor
Centre, Corporate Documents page. For ease of reference, the
following is the Company's Investing Policy with effect from 19
June 2013:
"Investing Policy
The Directors intend initially to seek to acquire a direct
and/or an indirect interest in projects and assets in the
agricultural sector. However they will consider opportunities in
the wider natural resources sector where these are ancillary or
complimentary to the agricultural projects or assets that the
Company may acquire in the future. The Company will focus on
opportunities in Africa and Asia but will also consider, on a
limited basis, possible opportunities anywhere in the world.
The Company may invest by way of purchasing quoted or unquoted
shares in appropriate companies, outright acquisition or by the
acquisition of assets, including the intellectual property, of a
relevant business, or by entering into partnerships or joint
venture arrangements or by providing loan funding. Such investments
may result in the Company acquiring the whole or part of a company
or project (which in the case of an investment in a company may be
private or listed on a stock exchange, and which may be
pre-revenue), and such investments may constitute a minority stake
in the company or project in question. The Company will not have an
external investment manager, and investment decisions will be made
by the Directors after receiving appropriate professional
advice.
The Company may be both an active and a passive investor
depending on the nature of the individual investments. Although the
Company intends to be a medium to long-term investor, the Directors
will place no minimum or maximum limit on the length of time that
any investment may be held and therefore shorter term disposal of
any investments cannot be ruled out.
There will be no limit on the number of projects into which the
Company may invest, and the Company's financial resources may be
invested in a number of propositions or in just one investment,
which may be deemed to be a reverse takeover pursuant to Rule 14 of
the AIM Rules. The Company will carry out an appropriate due
diligence exercise on all potential investments and, where
appropriate, with professional advisers assisting as required. The
Board's principal focus will be on achieving capital growth for
Shareholders.
Investments may be in all types of assets and there will be no
investment restrictions within the overall policy.
The Company will require additional funding as investments are
made and new opportunities arise. The Directors may offer new
Ordinary Shares by way of consideration as well as cash, thereby
helping to preserve the Company's cash resources for working
capital. The Company may in appropriate circumstances, issue debt
securities or otherwise borrow money to complete an investment. The
Directors do not intend to acquire any cross-holdings in other
corporate entities that have an interest in the Ordinary
Shares."
Future Prospects
Although the Company's available cash balances are sufficient
for its immediate needs, they are insufficient to enable it to
continue in operation for a period of twelve months from the date
of this document or to fund its preliminary activities under the
new Investing Policy. To remain a going concern, the Company will
need to access additional sources of funding which in all
likelihood will involve the issue of additional new Ordinary Shares
through one or a combination of a placing, an open offer or
drawdown(s) on the Equity Finance Facility. The attractiveness of
the Company's Ordinary Shares as an investment opportunity will
depend on a number of factors, including but not limited to, the
quality and experience of its management team, the nature of the
projects it identifies and the anticipated return available to
Shareholders once preferential claims are discharged. In this
latter respect, it is fundamental that the Company has no priority
claims on the cash flows it may derive from its future projects
other than for claims that arise from those future projects (e.g.
trade and other payables) or from the funding of those projects
(e.g. project specific loan or other funding). Accordingly, and for
the Company to be a viable Investing Company suitable for new
equity investment, it is vital that the Company's cash obligations
to Preference Shareholders (either in the form of the Preferential
Dividend or redemption in cash) are extinguished. If the Company's
cash obligations to Preference Shareholders remain in part or in
full, the Directors believe that the Company will not be able to
raise the additional investment required to implement its Investing
Policy and accordingly will not have a viable long term future.
Proposed Amendment and Special Redemption
Current Terms and Conditions applicable to the Preference
Shares
The Terms and Conditions currently provide that the Company must
pay the Preferential Dividend, subject to the Law, quarterly in
arrears, within 10 calendar days of each of 31 March, 30 June, 30
September and 31 December in each calendar year until 11 April
2016, being the Final Maturity Date.
The Final Maturity Date is the date upon which, amongst other
things, the Company is obliged, so far as it is able pursuant to
applicable law and regulation, to redeem all of the Preference
Shares at the Redemption Price (which includes any accrued but
unpaid Preferential Dividend).
Amongst other things, the Terms and Conditions further provide
that the Company may redeem the Preference Shares at any date prior
to the Final Maturity Date at the Redemption Price, such price
being payable in either cash or Ordinary Shares of the Company. As
at 20 June 2013, the aggregate Redemption Price is approximately
US$4,867,000.
Financial Position of the Company
As at 20 June 2013 the Company has cash balances of
approximately US$180,000 and the market capitalisation of the
Company's Ordinary Shares is approximately $1,500,000. The Company
is accordingly unable to redeem the Preference Shares in cash or
Ordinary Shares in accordance with the Terms and Conditions.
Proposed Amendment and Special Redemption
As explained above, to make the Company a suitable investment
opportunity, and to provide both Preference Shareholders and
existing Ordinary Shareholders with an opportunity for future
returns that may accrue to the Company through the implementation
of the Investing Policy, the Directors consider it necessary to
settle the Company's obligations in relation to the Preference
Shares.
The Company is therefore proposing to alter the terms of the
Preference Shares through the Proposed Amendment so as to permit
the Special Redemption. Pursuant to the Special Redemption, the
Company will redeem the Preference Shares, in full satisfaction of
any and all accrued rights, including, without limitation, accrued
but unpaid amounts in respect of Preferential Dividends, in
consideration for the allotment and issue by the Company to the
holders of Preference Shares of new Ordinary Shares and Deferred
Shares in the Company.
The aggregate number of Ordinary Shares to be allotted and
issued by the Company pursuant to the Special Redemption will be
equal to the aggregate number of Ordinary Shares in issue at the
date the Company issues the Special Redemption Notice (i.e. and
that immediately after the Special Redemption, holders of
Preference Shares will together hold 50% of the enlarged Ordinary
Share Capital of the Company).
Deferred Shares
In addition to Ordinary Shares, Deferred Shares will also be
allotted and issued to holders of Preference Shares. The purpose of
the Deferred Shares is to ensure that the aggregate nominal value
of the Company's issued share capital remains the same both before
and after the Special Redemption. The aggregate nominal value of
all of the Ordinary Shares and Deferred Shares issued pursuant to
the Special Redemption will equal the aggregate nominal value of
the issued Preference Shares. The Deferred Shares will not carry
voting rights or a right to receive a dividend. The holders of
Deferred Shares will not have the right to receive notice of any
general meeting of the Company, nor have any right to attend, speak
or vote at any such meeting. In addition, holders of Deferred
Shares will only be entitled to a payment (of an amount equal to
the nominal value of such share) on a return of capital or on a
winding up of the Company after each of the holders of Ordinary
Shares has received a payment of GBP100,000 in respect of each
Ordinary Share. Accordingly, the Deferred Shares will have no
economic value. The Company does not intend to make any application
for Deferred Shares to be admitted to trading on any stock
exchange. The Company will not issue new share certificates to
Shareholders following the Special Redemption.
Timing of Special Redemption
If the Special Redemption Resolution is approved at the Class
Meeting, the Company intends to issue a Special Redemption Notice
as soon as practicable thereafter.
The Special Redemption will be binding on all holders of
Preference Shares
For the avoidance of doubt, if the Proposed Amendment is
approved at the Class Meeting, it will be binding on all holders of
Preference Shares irrespective of whether an individual holder
votes against or withholds their vote at the Class Meeting.
Further, Preference Shareholders are advised that if the Proposed
Amendment is approved, the Company intends to issue a Special
Redemption Notice as soon as practicable and accordingly the
Preference Shares will be redeemed in full shortly following the
Class Meeting by the allotment and issue of new Ordinary Shares and
Deferred Shares.
Number of Ordinary Shares and Deferred Shares to be allotted and
issued pursuant to the Special Redemption.
The precise number of Ordinary Shares and Deferred Shares to be
allotted and issued in consideration for the redemption of the
Preference Share(s) cannot be determined until such date as the
Special Redemption Notice is issued by the Company because it
depends on the number of Ordinary Shares in issue at such date. As
at the date of this document the Company has 172,237,380 Ordinary
Shares in issue and 1,028,075 Preference Shares in issue.
Assuming that there were no further issues of either Ordinary
Shares or Preference Shares, upon completion of the Special
Redemption a holder of Preference Shares would receive:
For every one Preference Share: 168 Ordinary Shares and 1,832 Deferred Shares
The Directors anticipate that the aggregate number of Ordinary
Shares and Deferred Shares to be issued pursuant to the Special
Redemption would be as follows:
Aggregate number of Ordinary Shares to be issued under the terms
of the Special Redemption for all Preference Shares (1) 172,237,380
Aggregate number of Deferred Shares to be issued under the terms
of the Special Redemption for all Preference Shares (1) 1,883,912,620
Aggregate number of Ordinary Shares in issue following the Special
Redemption (1) 344,474,760
Percentage of enlarged issued Ordinary Share Capital held by Preference
Shareholders 50%
1. The actual number of Ordinary Shares and Deferred Shares may be affected
by the individual holdings of Preference Shares; fractional Ordinary Shares
to be issued under the Special Redemption will be rounded up to the nearest
whole Ordinary Share.
The Directors do not anticipate that any new Ordinary Shares
will be issued between the date of this document and the date of
the Class Meeting.
If the Proposed Amendment is not approved at the Class
Meeting
If the Special Redemption Resolution is not approved at the
Class Meeting, the Directors believe that the Company will be
unable to raise additional funding to implement its Investing
Policy and provide funds for working capital purposes. In this
case, the Directors believe they would have no alternative other
than to propose to Shareholders at the 2013 AGM that the Company be
wound up. If the Company is wound up Preference Shareholders will
be highly unlikely to receive any return on their Preference Shares
because the Company's outstanding liabilities, as at the date of
this document, and anticipated expenditure that would necessarily
be incurred up to and including the winding up of the Company
exceed the Company's available cash balances.
Approval of Special Redemption Resolution
The Special Redemption Resolution is proposed as a special
resolution which means that for it to be passed at least two thirds
of the votes cast at the Class Meeting must be cast in favour.
The Class Meeting will only be quorate (and able to pass the
Special Redemption Resolution) if there are present at that meeting
(in person or by proxy) two or more Preference Shareholders holding
between them at least one-third in nominal value of all of the
issued Preference Shares as at the date of the Class Meeting. If
the meeting is not quorate, the Articles provide, among other
things, that the Class Meeting be adjourned to a place, time and
day in the following week and that the quorum at the Adjourned
Class Meeting shall be one Preference Shareholder present in person
or by proxy (irrespective of the number of Preference Shares held
by that Preference Shareholder).
If the necessary quorum is not present at the Class Meeting
within 30 minutes of its commencement, the Class Meeting will be
adjourned to 12:00 on 24 July 2013 being one week after the time
and date of the Class Meeting. The Directors believe there is a
reasonable expectation that the necessary quorum will be present at
the Class Meeting.
Recommendation
The Board believe that the passing of the Special Redemption
Resolution is in the best interests of the Company, the Group and
Shareholders as a whole, and is in the view of the Directors, the
only viable option by which Preference Shareholders might make a
possible future return on their investment because it provides the
Company with an opportunity to implement its Investing Policy.
If the Special Redemption Resolution is not passed then the
Company is unlikely to represent a sufficiently attractive
investment opportunity to allow the Company to raise the additional
funding it requires to implement its Investing Policy. In this
case, the Directors are likely to propose to Shareholders at the
2013 AGM that the Company be wound up.
Accordingly the Board unanimously recommend that you vote in
favour of the Special Redemption Resolution.
Action to be taken
You will find enclosed with this letter a Form of Proxy for use
by Preference Shareholders at the Class Meeting. Whether or not you
intend to be present at the Class Meeting, you are requested to
complete and return the Form of Proxy in accordance with the
instructions in the Notice and printed thereon. To be valid,
completed Forms of Proxy must be received by Computershare Investor
Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY as
soon as possible and in any event not later than 12.00 on 15 July
2013 or, in the case of any adjournment or postponement of the
Class Meeting, not later than 48 hours before the time fixed for
the holding of the adjourned or postponed meeting. Completion of a
Form of Proxy will not preclude you from attending the Class
Meeting and voting in person if you so choose.
If you hold your Preference Shares in uncertificated form you
may use the CREST proxy voting service in accordance with the
procedures set out in the CREST Manual (please also refer to the
accompanying notes to the Notice of Class Meeting set out at the
end of this document). Proxies submitted via CREST (under CREST ID
3RA50) must be received by the Company's registrars not later than
12.00 on 15 July 2013 or, in the case of any adjournment or
postponement, not later than 48 hours before the time fixed for the
holding of the adjourned or postponed meeting.
Yours faithfully
Simon Hunt
Executive Chairman
This information is provided by RNS
The company news service from the London Stock Exchange
END
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