Result of AGM
RNS & Investor News
Notice of General Meeting
01 November 2013
Ceres Media International Plc announces that it is today posting a circular to shareholders ("Circular") containing a notice convening a general meeting of the Company ("General Meeting")to be held at 9.00a.m. on 18 November 2013, at the offices of Peterhouse Corporate Finance Limited, 31 Lombard Street, EC3V 9BQ.
The Circular contains proposals (the "Proposals") for, inter alia:
- the disposal of its trading subsidiaries
- the adoption of an Investing Policy under AIM Rule 15
- the reorganisation of the share capital of the Company
- a placing by Peterhouse Corporate Finance Limited of ordinary shares at a price of £0.0004 to raise £285,000
- the issue of warrants
- the change of name
Following the Company's interim results for the six month period to 31 January 2013, the board of the Company (the "Board") has been reviewing the performance of the business. The Board has now concluded that due to the limited resources and difficult trading conditions faced by the trading subsidiaries, the performance of the Company and its subsidiaries is not currently strong enough to generate revenues to support the costs associated with being quoted on a public market.
The directors of the Company (the "Directors") are therefore proposing to dispose of the Company's subsidiary Ceres Media Plc, which is the holding company of the group's trading companies, to Alexander Dowdeswell, Ceres' Chief Executive, for a consideration based on the future performance of the business.
In order to recapitalise the Company, Peterhouse Corporate Finance Limited has conditionally raised £285,000 at £0.0004 per placing share, through the placing of 712,500,000 new ordinary shares for working capital purposes, and in order to fulfil its proposed Investing Policy.
Peterhouse will be appointed as sole broker to the Company immediately following the General Meeting.
Following the approval of the resolutions at the General Meeting, it is the intention of the proposed Directors for the Company to raise up to £81,352 through an open offer pursuant to which up to 203,380,942 new ordinary shares will be offered at an issue price of £0.0004 per share to existing shareholders.
It is proposed that the name of the Company be changed to Ducat Ventures Plc.
Conditional upon the approval of the Proposals, Leslie Barber and Clive Garston will be allotted 47,150,000 new ordinary shares, in aggregate, in full and final settlement of fees owed to them by the Company.
It is proposed that immediately following the General Meeting Adam Reynolds will join the Board as Executive Chairman and Nicholas Nelson as Non-Executive Director and that Leslie Barber, Alex Dowdeswell and Clive Garston will resign from office with no compensation for loss of office, and will waive all claims against the Company under their appointment letters, except those claims already included in the Circular.
The Directors consider the Proposals to be in the best interests of the Company and the shareholders as a whole as the only alternative will be cessation of trading and realisation of assets, which the Directors believe would deliver very little or no value to its shareholders. The Directors therefore recommend that you vote in favour of the resolutions to be proposed at the General Meeting as they intend to do themselves in respect of their direct and indirect shareholdings totalling 26,922,726 shares representing approximately 19.85 per cent. of the issued share capital of the Company.
A copy of the Circular is available at www.ceresmediaplc.com. Further information extracted from the Circular is set out below.
For further additional information please contact:
Ceres Media International PLC
Tel: 020 3178 5622
Alex Dowdeswell/Leslie Barber
Nominated Adviser, Cairn Financial Advisers
Tel: 020 7148 7900
Liam Murray/Jo Turner
Peterhouse Corporate Finance
Tel: 020 7469 0936
Lucy Williams/Fungai Ndoro
The following has been extracted from the Circular without material adjustment:
To Shareholders (and for information purposes to the holders of warrants and options in the Company)
The purpose of this letter is to provide you with the background to and the reasons for, the proposed disposal of Ceres Media Plc, the adoption of an Investing Policy under AIM Rule 15, the reorganisation of the share capital of the Company and other matters to be proposed at the General Meeting. In addition, it is to explain why the Directors consider these proposals to be in the best interests of the Company and Shareholders as a whole and why they recommend that Shareholders should vote in favour of the Resolutions to be proposed at the General Meeting. The Notice of the General Meeting, together with a Form of Proxy is included with this Document.
The Company's interim results for the six month period to 31 January 2013, showed a loss for the period of £89,861 (2012: loss £454,945). Following these results, the Board has been reviewing the performance of the business. Although the operating revenues of the Company have increased during the years following the Company's admission to AIM they have not reached the level anticipated at the time of admission and CMI's administrative overheads have also increased, resulting in far greater losses than expected. The Board has now concluded that due to the limited resources and difficult trading conditions faced by CMI's trading subsidiaries, the performance of the Company and the Subsidiaries is not currently strong enough to generate revenues to support the costs associated with being quoted on a public market.
The Directors are therefore proposing to dispose of the Company's subsidiary Ceres Media Plc, which is the holding company of the group's trading companies, to Alexander Dowdeswell, CMI's Chief Executive, for a consideration based on the future performance of the business. The Board has also reached agreements with various creditors of the Company to settle outstanding debts, leaving CMI substantially free of debt, apart from those occurring from ongoing administrative costs.
In order to recapitalise the Company, Peterhouse Corporate Finance Limited has conditionally raised £285,000 at £0.0004 per Placing Share, through the placing of 712,500,000 new Ordinary Shares. The Placing Shares will be issued following the passing of Resolution 1. Should Resolution 1 not be passed at the General Meeting, the Company will have insufficient working capital to fulfil its proposed Investing Policy.
Conditional on the passing of the Resolution 1, Alex Dowdeswell, Leslie Barber and Clive Garston will resign as Directors immediately following the conclusion of the General Meeting and Nicholas Nelson and Adam Reynolds will be appointed as directors of the Company.
The Circular sets out the background to and the reasons for the Proposals and seeks Shareholders' approval of them. A notice convening a General Meeting for 9.00 a.m. on 18 November 2013, at the offices of Peterhouse Corporate Finance Limited, 31 Lombard Street, London, EC3V 9BQ, to consider the Resolutions, is set out at the end of this Circular.
The Directors consider the Proposals to be in the best interests of the Company and the Shareholders as a whole as the only alternative will be cessation of trading and realisation of assets, which the Directors believe would deliver very little or no value to its Shareholders. The Directors therefore recommend that you vote in favour of the Resolutions as they intend to do themselves in respect of their direct and indirect shareholdings totalling 26,922,726 shares, representing approximately 19.85 per cent. of the share capital of the Company.
Information on Ceres Media PLC
Ceres Media Plc, a subsidiary of CMI, is the holding company of Natural AdCampaign Limited, which was formed to identify and develop natural, sustainable and environmentally-friendly products. Natural AdCampaign Limited is split into two divisions, Natural AdCampaign Print and NAC Industrial Products.
Natural AdCampaign Print focuses on the large format retail printing and advertising sector concentrating on the recent introduction and stocking of its 100% oil free compostable TierraFilmTM products into the US and European markets. The business sells variants of this product for the Backlit, Clear and Window film markets.
NAC Industrial Products focuses on the construction and plumbing and heating industries aimed at the temporary protective flooring markets. NatureFloorTM Chorus and Gossyp have been developed as a variant of the NatureWovenTM print materials and have improved characteristics over current materials used including ease of laying, lay flat, tensile strength and water barrier incorporation. These products additionally have the added feature, as with all Ceres products, of being recyclable therefore reducing landfill requirements and associated fees for constructors.
Trading within the print business remains challenging and although significant work has been done on utilising technology to develop suitable products, the business experiences continued ongoing delays in testing by potential customers and downward pricing pressure caused by current economic conditions. This has caused a slower than expected uptake of material adoption within this sector.
The recently launched industrial products business is still at a relatively early stage in its life with significant work still required to fully develop and roll out the marketplace within the United Kingdom. Within the current economic conditions it is difficult to forecast the speed of adoption of these new products in this market and the likely ultimate size of this business.
Background to and reasons for the Disposal
Since admission to AIM in September 2011, the Company has continued to experience difficult trading conditions which have manifested into the slower than anticipated adoption of its new printing materials by both the out of home advertising and in store point of sales markets. As stated above, the Company has recently looked at a number of ways to make the Subsidiaries sufficiently profitable to support CMI. As a consequence of the disappointing revenues of the Subsidiaries, the Company is no longer able to finance the operations of Natural AdCampaign Limited. Therefore, as part of the Proposals, the Company intends to divest its trading operations.
The Disposal and Related Party Transaction
Pursuant to the SPA, Alexander Dowdeswell has agreed to buy and CMI has agreed to sell, the entire issued share capital of Ceres Media Plc. The consideration (subject to a maximum amount of £375,000) is equal to certain percentages of all gross sales (excluding VAT) by Ceres Media plc and its subsidiaries, for certain products, during the period of 24 months following the completion of the sale.
In the event of (i) a sale, transfer or other disposal of an interest in any shares of any Subsidiary to a third party purchaser which results in a change of control or (ii) the disposal of all or a substantial part of the business, assets, property or undertaking of the Subsidiaries to a third party purchaser or (iii) the successful public listing of all or any shares of any Subsidiary (or of any holding company), in each case up to and including the third anniversary of the completion of the Disposal, CMI will be entitled to certain additional monies if the consideration due to the relevant seller or, in the case of a public listing, the market capitalisation of the relevant company ("Consideration"), is more than £500,000. If, in the event of a business sale or share sale, the Consideration is more than £500,000, then CMI will be entitled to receive a sum equal to 25% of the amount by which the Consideration exceeds £500,000. In the event of a listing, if the Consideration is more than £500,000, then CMI shall be entitled to receive a sum equal to 15% of the amount by which the Consideration exceeds £500,000.
Under AIM Rule 15, the Disposal is considered a fundamental change in the business and requires the consent of Shareholders.
The sale of the Ceres Media plc is also a related party transaction under the AIM Rules as Alex Dowdeswell is a Director of the Company. Under the AIM Rules, if an AIM company enters into a related party transaction, the independent directors are required to consider, after consultation with the Company's nominated adviser, whether the terms of the transaction are fair and reasonable insofar as the Shareholders are concerned. The Independent Directors consider, having consulted with Cairn, the Company's nominated adviser, that the terms of the Disposal are fair and reasonable insofar as the Company's Shareholders are concerned.
Resolution 3 seeks Shareholders' approval for the Disposal.
Share Capital Reorganisation
The Existing Ordinary Shares have a current nominal value of £0.001 per share. The Company will not be able to raise funds via an issue of Existing Ordinary Shares at the current trading price. The AIM Rules provide that a company cannot have more than one class of shares admitted to trading. The Company is therefore proposing to undertake the Share Capital Reorganisation so that it can raise further equity capital at a price of £0.0004 per share.
Under the Share Capital Reorganisation it is proposed that each Existing Ordinary Share of £0.001 is sub-divided into one New Ordinary Share of £0.0001 nominal value and one `C' Deferred Share of £0.0009 nominal value. This would result in 135,587,295 New Ordinary Shares, 26,001,739 `A' Deferred Shares, 63,373,961 `B' Deferred Shares and 135,587,295 `C' Deferred Shares being in issue immediately following the Share Capital Reorganisation. As such, following the Share Capital Reorganisation, each shareholder with a holding of an Existing Ordinary Share will have the same number of New Ordinary Shares as Existing Ordinary Shares held before the Share Capital Reorganisation.
The rights attaching to the New Ordinary Shares will be identical in all respects to those of the Existing Ordinary Shares. The `C' Deferred Shares will have no voting rights, no entitlement to attend general meetings of the Company and will carry only the right to participate in any return of capital to the extent of the amount paid up or credited as paid up on each `C' Deferred Share after the holders of Ordinary Shares have received, in aggregate, capital repayments amounting to £30,000,000. Accordingly, the `C' Deferred Shares (as are the `A' Deferred Shares and the `B' Deferred Shares) will, for all practical purposes, be valueless and it is the Board's intention, at an appropriate time, to cancel all three classes of deferred shares.
Conditional upon the approval of the Proposals at the General Meeting, Peterhouse has placed 712,500,000 new Ordinary Shares at a price of £0.0004, raising £285,000 before expenses.
In addition to the Placing Shares, the Company will issue one warrant for every one Placing Share issued, exercisable at a price of £0.0004 per warrant at any time up to three years from issue.
Appointment of Sole Broker
Peterhouse will be appointed as sole broker to the Company immediately following the General Meeting.
Use of Proceeds
As part of the Proposals, the Board has come to agreements with certain creditors to settle the amount owed by the Company. Following the settlement of these creditors, the Company will be substantially free of debt, apart from those occurring from ongoing administrative costs.
The proceeds of the Placing and the receivables from the Disposal will be used to settle outstanding creditors, as mentioned above, and will provide the Company sufficient working capital for at least 12 months from becoming an Investing Company.
Following the approval of the Resolutions at the General Meeting, it is the intention of the Proposed Directors for the Company to raise up to £81,352 through an Open Offer pursuant to which up to 203,380,942 new Ordinary Shares will be offered at an issue price of £0.0004 per share to Existing Shareholders.
The Open Offer will only be made to Existing Shareholders, excluding, for the avoidance of doubt, holders of Placing Shares and Conversion Shares, whose names appear on the register of members of the Company on the Record Date as holders of Existing Ordinary Shares. Each Shareholder's entitlement will be calculated on the basis of three Open Offer shares for every two Existing Ordinary Shares held at the Record Date.
Subscribers to the Open Offer shares will be granted one warrant for every Open Offer share subscribed for, exercisable at a price of £0.0004 per warrant, at any time up to three years from issue.
The proceeds of the Open Offer will be used to provide additional working capital for the Company.
The Directors consider the Open Offer to be fair and reasonable and in the best interests of Shareholders and the Company and therefore unanimously recommend that Existing Shareholders take up their rights under the Open Offer, as Leslie Barber and Clive Garston intend to do.
Sale of New Ordinary Shares to Peterhouse
Should Shareholders wish to divest their investment in the Company, such Shareholders may do so by notifying Peterhouse within 30 calendar days of the date of this Circular. Peterhouse has agreed to arrange the execution of a sale of any Ordinary Shares (created following the completion of the Share Capital Reorganisation) held by Shareholders wishing to sell the same to its clients for £0.0004 per share. This sale facility effectively values the whole of the Existing Ordinary Shares, prior to the Placing, at approximately £50,000.
Alternatively, Shareholders are free to retain their new Ordinary Shares or sell them in the market as they see fit. Existing Shareholders on the Record Date will be eligible to participate in the Open Offer irrespective of whether they continue to hold their New Ordinary Shares.
Shareholders wishing to take advantage of the above sale facility should contact Peterhouse directly on 020 7469 0934 or 020 7469 0936.
As part of the Proposals, Leslie Barber and Clive Garston, directors of the Company, have agreed to settle outstanding directors' fees owed to them by the Company. Conditional upon the approval of the Proposals, Leslie Barber and Clive Garston will be issued the Conversion Shares (in aggregate 47,150,000 new Ordinary Shares) in full and final settlement of fees owed to them by the Company.
Dis-application of pre-emption rights and authority to allot shares
In order to facilitate the proposed Placing, as described above and to enable the Company to raise further funds to implement its intended Investing Policy with minimal limitations, it is necessary for the Directors to seek authority from Shareholders at the General Meeting pursuant to the Companies Act 2006 to, inter alia, issue the Placing Shares and to issue further shares for cash. The Directors may look to raise additional funds for the Company following the General Meeting, subject to any necessary resolutions being approved by Shareholders.
Full details of the authorities the Directors are seeking at the General Meeting are set out in the attached notice of General Meeting.
Change of Name
Subject to Shareholders' approval of the Proposals, it is proposed that the name of the Company be changed to Ducat Ventures Plc.
Subject to the Resolution 1 being passed, it is proposed that immediately following the General Meeting Adam Reynolds will join the Board as Executive Chairman and Nicholas Nelson as Non-Executive Director and that Leslie Barber, Alex Dowdeswell and Clive Garston will resign from office with no compensation for loss of office, and will waive all claims against the Company under their appointment letters, except those claims already included in the Document.
Adam Reynolds (aged 51) - Executive Chairman
Adam is a former stockbroker, specialising in corporate finance. In 2000 Adam set up Hansard Group and listed it on AIM in 2001. Through, a reverse takeover, this became First Africa Oil and Gas, one of the most successful listings on AIM in 2005. Since then Adam has built, rescued and re-financed a number of AIM companies including Table Mountain Minerals/Plectrum which was sold to Cairn Energy in 2007, Cielo/Curidium which was acquired by Avacta, International Brand Licensing the owner of the Admiral sportswear brand, which has become EKF Diagnostics Holdings Plc and Medavinci which is now Orogen Gold. He is currently a director of EKF Diagnostics Holdings Plc, Orogen Gold Plc, Hubco Investments PLC and Diablo Consulting Limited and Chairman of Autoclenz Limited.
Nicholas Nelson (aged 48) - Non-Executive Director
Nicholas's City career spans 30 years commencing in the mid 1980s as a junior dealer on the floor of the Stock Exchange, through investment management and into financial Public Relations for 13 years. Accordingly, he has developed a close working knowledge of the stock market, its drivers and administrative challenges.
With his broad knowledge he has assisted on several AIM and ISDX flotations providing logistical and PR support and has been appointed to the boards of numerous early stage public companies as part of their admission to the public markets. In all, he has held directorships with six publicly quoted companies principally to represent their interests in the City and amongst investors during periods of corporate change. Nicholas remains on the board of Adams Plc and is Chairman of ISDX quoted Equatorial Mining and Exploration Plc, an investment company in the minerals sector.
The Company's proposed Investing Policy is that the Company will either acquire or invest in a business or businesses which have some or all of the following characteristics:
- strong management with a proven track record;
- ready for investment without the need for material re-structuring by the Company;
- generating positive cash flows or imminently likely to do so;
- via an injection of new finances or specialist management, the Company can enhance the prospects and therefore the future value of the investment;
- able to benefit from the Proposed Directors existing network of contacts; and
- the potential to deliver significant returns for the Company.
The Company will focus on opportunities within a range of high growth sectors worldwide such as natural resources, technology and life sciences.
Moreover, the criteria set out above are not intended to be exhaustive and the Proposed Directors may make an investment which does not fulfil any or all of the investment criteria if they believe it is in the best interests of Shareholders as a whole.
Whilst the Proposed Directors will be principally focused on making an investment in private businesses, they would not rule out investment in listed businesses if this presents, in their judgment, the best opportunity for Shareholders.
The Company intends to be an active investor in situations where the Company can make a clear contribution to the progress and development of the investment. In respect of other, more substantial investment opportunities, the Proposed Directors expect that the Company will be more of a passive investor
The Proposed Directors believe that their broad collective experience together with their extensive network of contacts will assist them in the identification, evaluation and funding of appropriate investment opportunities. When necessary, other external professionals will be engaged to assist in the due diligence on prospective targets and their management teams. The Proposed Directors will also consider appointing additional directors with relevant experience if required.
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. Where the Company builds a portfolio of related assets it is possible that there may be cross-holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate.
Investments may be made in all types of assets and there will be no investment restrictions.
The Company's primary objective is that of securing for the Shareholders the best possible value consistent with achieving, over time, both capital growth and income for Shareholders through developing profitability coupled with dividend payments on a sustainable basis.
No new share certificates are being issued in respect of Existing Ordinary Shares held in certificated form but any new share certificates will be issued in the name of Ducat Ventures Plc. Shareholders should retain their existing share certificates which will continue to be valid.
Action to be taken
Shareholders will find a Form of Proxy enclosed for use at the General Meeting. Whether or not you intend to be present at the General Meeting, you are requested to complete and return the Form of Proxy in accordance with the instructions printed thereon as soon as possible. To be valid, completed Forms of Proxy must be received by the Company's registrars, SLC Registrars, not later than 9.00 a.m. on 14 November, being 2 business days before the time appointed for holding the General Meeting. You are entitled to appoint a proxy to attend and to exercise all or any of your rights to vote and to speak at the General Meeting instead of you. Completion of the Form of Proxy will not preclude you from attending and voting at the General Meeting in person if you so wish. Your attention is drawn to the notes to the Form of Proxy.
The Directors consider the Proposals to be in the best interests of the Company and the Shareholders as a whole as the only alternative will be cessation of trading and realisation of assets, which the Directors believe would deliver very little or no value to its Shareholders. The Directors therefore recommend that you vote in favour of the Resolutions as they intend to do themselves in respect of their direct and indirect shareholdings totalling 26,922,726 shares representing approximately 19.85 per cent. of the issued share capital of the Company.
For and on behalf of the Board
Ceres Media International PLC
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