Notice of General Meeting
Sabien Technology Group plc
("Sabien" or the "Company")
Notice of General Meeting
On 23 November 2018, the Company announced that it proposed to undertake a reorganisation of the Company's share capital ("Reorganisation") whereby each Existing Ordinary Share would be subdivided into one new ordinary share of 0.01 pence ("New Ordinary Share") and one new deferred share of 0.49 pence ("New Deferred Share"). The Board of Sabien announces that the Company is today posting to shareholders a circular setting out the reasons for and background to the Reorganisation and to provide Shareholders with notice of a General Meeting, to be held at 11.00 a.m. on 13 December 2018 ("General Meeting") to approve the subdivision and redesignation of the Existing Ordinary Shares and the adoption of the New Articles. A copy of the circular is available from the Company's website, www.sabien-tech.co.uk. The circular contains a letter from the Chairman of Sabien and which is set out below without material adjustment or amendment:
On 23 November 2018, the Company announced that it proposed to undertake a reorganisation of the Company's share capital whereby each Existing Ordinary Share would be subdivided into one new ordinary share of 0.01 pence ("New Ordinary Share") and one new deferred share of 0.49 pence ("New Deferred Share"). This circular sets out the reasons for and background to the Reorganisation and to provide Shareholders with notice of a General Meeting to be held at 11.00 a.m. on 13 December 2018 including proposals for the subdivision and redesignation of the Existing Ordinary Shares and the adoption of the New Articles.
Background to the Placing and Reorganisation
Further to recent announcements, the Board of Sabien has continued to focus on the conversion of sales pipeline opportunities, including rental opportunities; conversion of Forensic Boiler Audit opportunities; and further non-staff cost reduction to improve Sabien's profitability. But as first announced on 6 August 2018, the Group has, to date, been unable to accelerate the current rate of pipeline conversion which has been slower than expected. As a result, the previously announced target of monthly break-even will not be achieved by December 2018, requiring the Group to raise additional equity.
To address this requirement, Sabien announced on 23 November 2018 that the Company's broker, Peterhouse Capital Limited, had conditionally raised gross proceeds of £400,000 via the placing of 400,000,000 new ordinary shares in the Capital of the Company (the "Placing Shares") with new and existing investors, at a price of 0.1 pence per Placing Share (the "Placing Price").
The Placing Price is less than the current nominal value of the Existing Ordinary Shares of 0.5 pence and the UK Companies Act 2006 (as amended) prohibits the Company from issuing ordinary shares at a discount, that is, at a price below their nominal value. Accordingly, the Company proposes to carry out a subdivision of the Existing Ordinary Shares whereby each whereby each Existing Ordinary Share will be subdivided into one New Ordinary Share of 0.01 pence and one New Deferred Share of 0.49 pence (the "Subdivision"). The New Ordinary Shares will continue to carry the same rights as attached to the Existing Ordinary Shares, save for the reduction in nominal value.
The Placing is conditional, inter alia, on the approval of the Resolutions at the General Meeting and accordingly, Shareholders should note that should the Resolutions not be passed then the Placing will not proceed. The proceeds of the Placing will be used to provide additional working capital for the Company and in particular, to support activities to generate orders from the sales pipeline outlined in the Trading Update published on 6 August 2018 and to allow the Board the ability to evaluate additional acquisition and investment opportunities to enhance the long-term value of the Company for shareholders. Should the Placing not proceed the Company would have to urgently source alternative funds for its working capital needs, and should no such alternatives be available, then the Company would be likely to be unable to continue to trade.
The Board is acutely aware that the Placing is dilutive for the existing shareholders and has considered whether any pre-emptive offering might be possible but has concluded that it was neither practicable nor cost effective to do so at this time given the current need to raise additional funds, the working capital requirements of the Company and current market conditions.
The Company proposes to sub-divide and convert each issued Existing Ordinary Share into one New Ordinary Share and one New Deferred Share. The New Ordinary Shares will have the same rights (including as to voting, dividends and return of capital) as the Existing Ordinary Shares. The rights attaching to the New Deferred Shares are set out in Resolution 2 and will be minimal. The New Deferred Shares will therefore be effectively valueless as they will not carry any rights to vote or dividend rights and they will only be entitled to a payment on a return of capital or on a winding up of the Company after each New Ordinary Share has received a payment of £1,000,000. The New Deferred Shares will not be listed or traded on AIM and will not be transferable without the written consent of the Company. No certificates will be issued in respect of the New Deferred Shares. The Board may decide to take any steps legally required for the New Deferred Shares to be cancelled in due course. The reorganisation of the Company's share capital will not of itself affect the value of your shareholding, as can be seen from the worked example below:
Existing Ordinary Shares held prior to the Reorganisation
Current market price per Existing Ordinary Share (being the closing mid-market price as at 23 November 2018, the last practicable day immediately preceding the publication of this document)
Current value of shareholding
Number of New Ordinary Shares held following the Reorganisation
Market price per New Ordinary Share immediately following the Reorganisation
Value of New Ordinary shareholding
Number of New Deferred Shares held following the Reorganisation
Market price of Deferred shareholding immediately following the Reorganisation
By effecting the Reorganisation in this way, the Company's issued ordinary share capital remains the same. In the example above, the 10,000 Existing Ordinary Shares held today each have a nominal value of 0.5 pence giving a total nominal value for the holding of £50. The New Ordinary Shares have a nominal value of 0.01 pence (£1 in aggregate) which when added to the aggregate nominal value of the New Deferred Shares (£49) means that the nominal value of the holding remains at £50.
No new share certificates are being issued in respect of Existing Ordinary Shares held in certificated form. Shareholders should retain their existing share certificates which will continue to be valid.
Options and Optionholders
The Options and the rights of the holders of the Options (the "Optionholders") are not expected to be affected by the Reorganisation. The terms of the options provide that in the event of a share capital reorganisation of the kind contemplated by the Reorganisation, the Board shall be able to make such adjustment to the Options as they consider appropriate and the Company's auditors must confirm in writing that the adjustment is, in their opinion, fair and reasonable. Accordingly, the Board intend to adjust the Options such that Optionholders will still able to exercise their rights under the Options, save that such Options shall be for the equivalent number of New Ordinary Shares, and the Board believe that the Company's auditors will consider this fair and reasonable.
A notice convening the General Meeting to be held S4B (UK) Limited, Burlington House, 1-13 York Road, Maidenhead, Berkshire, SL6 1SQ at 11.00 a.m. on 13 December 2018 is set out at the end of this document. At the General Meeting, the following Resolutions will be proposed:
- A resolution set out in Resolution 1 to sub-divide and reclassify the Existing Ordinary Shares into New Ordinary Shares and Deferred Shares; and
- A resolution set out in Resolution 2 to amend the Articles in consequence of the Reorganisation.
Resolution 1 shall be conditional upon the passing of Resolution 2 and Resolution 2 shall be conditional upon the passing of Resolution 1. Accordingly, for the Reorganisation to be effective and for the Placing to proceed, you would need to choose to agree to both of the Resolutions.
Action to be taken
A Form of Proxy is enclosed for use at the General Meeting. Whether or not you intend to be present at the meeting you are requested to complete, sign and return the Form of Proxy as soon as possible but in any event so as to arrive not later than 11.00 a.m. on 11 December 2018 in accordance with the notes to the form of proxy. The completion and return of a Form of Proxy will not preclude you from attending the meeting and voting in person should you subsequently wish to do so. I would like to draw your attention to the detailed notes to the Notice of General Meeting and Form of Proxy.
The Directors unanimously recommend the Shareholders to vote in favour of the Resolutions as they intend to do so in respect of their own beneficial holdings of 63,075,851 Existing Ordinary Shares representing 33.2 per cent of the Existing Ordinary Share capital.
The person who arranged for the release of this announcement on behalf of the Company was Alan O'Brien, CEO and Director.
For further information:
Sabien Technology Group plc
+44(0)20 7993 3700
Beaumont Cornish Limited (Nominated Advisor)
Michael Cornish and Roland Cornish
+44(0)20 7628 3396
Peterhouse Capital Limited (Broker)
Martin Lampshire and Fungai Ndoro
+44(0)20 7469 0930
The following definitions apply throughout this announcement and the circular unless the context requires otherwise:
the admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules;
the market of that name operated by the London Stock Exchange plc;
the AIM Rules for Companies published by the London Stock Exchange (as amended from time to time);
"AIM Rules for Nominated Advisers"
the AIM Rules for Nominated Advisers published by the London Stock Exchange (as amended from time to time);
the articles of association of the Company as at the date of this document;
"Board" or "Directors"
the directors of the Company, whose names are set out on page 5 of this document;
Companies Act 2006, as amended from time to time;
the relevant system (as defined in the CREST Regulations), in respect of which Euroclear is the operator;
means the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedures and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as subsequently amended);
a person who has been admitted by Euroclear as a system-member (as defined in the CREST Regulations);
a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
"CREST Proxy Instruction"
an appropriate and valid CREST message appointing a proxy by means of CREST;
the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended;
"Existing Deferred Shares"
the existing non-voting deferred shares of 4.5 pence each in the capital of the Company following the Capital Reorganisation;
"Existing Ordinary Shares"
the existing ordinary shares of 0.5 pence each in the capital of the Company;
CREST operator (as defined in the CREST Regulations);
the Financial Conduct Authority of the United Kingdom, and any of its successor authorities;
the Financial Services and Markets Act 2000, as amended from time to time;
"General Meeting" of "GM"
the general meeting of the Company to be held at 11.00 a.m. on 13 December 2018 at the Company's registered office S4B (UK) Limited, Burlington House, 1-13 York Road, Maidenhead, Berkshire, SL6 1SQ, a notice for which is set out at the end of this document, and any adjournment thereof;
the Company and each of its subsidiaries and subsidiary undertakings;
"London Stock Exchange"
London Stock Exchange plc;
"New Deferred Shares"
the new non-voting deferred shares of 0.49 pence each in the capital of the Company following the Reorganisation;
"New Ordinary Shares"
the new ordinary shares of 0.01 pence each in the capital of the Company following the Reorganisation;
"Notice of General Meeting"
the notice of the General Meeting set out on pages 12 to 13 of this document;
the options granted by the Company entitling the holders to subscribe for Existing Ordinary Shares;
the form of proxy enclosed with this document for use at the General Meeting;
"Regulatory Information Service"
a service approved by the FCA for the distribution to the public of regulatory announcements and included within the list maintained on the FCA's website;
the subdivision and reclassification of the Company's share capital as set out in Resolution 2;
the resolutions set out in the Notice of General Meeting to be proposed at the General Meeting and set out on pages 12 to 13 of this document;
the holders of Existing Ordinary Shares;
subsidiary as that term is defined in section 1159 of the Companies Act;
a subsidiary undertaking as that term is defined in section 1162 of the Companies Act;
"UK Listing Authority" or "UKLA"
the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA;
as defined in regulation 5 of the US Securities Act of 1933 (as amended from time to time);
the United Kingdom of Great Britain and Northern Ireland; and
the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction.