INCAGOLD PLC (the "Company")
PROPOSED CANCELLATION AND NOTICE OF GENERAL MEETING
The Board of IncaGold plc announces that a circular will today be posted to its
shareholders giving notice of a general meeting which will be held at Lorne
House, Castletown, Isle of Man on 30 July 2010 at 12 p.m.
The circular includes proposals to consider, and, if thought relevant, approve
the Cancellation of admission to trading on AIM and the Conversion of the
Company from a public limited company to a private limited liability company
and together with this announcement explains the rationale behind the proposed
Cancellation and Conversion and why the Directors unanimously consider the
proposed Cancellation and Conversion to be in the best interests of the Company
and its shareholders as a whole and seek Shareholder approval for it.
Shareholder approval is required under the AIM Rules for the Cancellation and
under the Companies Act 2006 for the re-registration as a private limited
company.
An extract from the circular is disclosed below and a copy of the full circular
may also be downloaded from the company's website at www.incagoldplc.com
ENQUIRIES
IncaGold plc
Justin Martin, Director
Tel: +44(0)1624 822337
Website: www.incagoldplc.com
Zeus Capital Limited
Ross Andrews
Tel: +44(0)161 8311512
Website: www.zeuscapital.co.uk
EXPECTED TIMETABLE
Dispatch of the Circular to Shareholders 8 July 2010
Last date and time for receipt of Forms of 12.00 p.m. on 28 July 2010
Proxy
General Meeting 12.00 p.m. on 30 July 2010
Expected date of cancellation of Ordinary 6 August 2010
Shares from Admission
PROPOSED CANCELLATION OF ADMISSION, PROPOSED REREGISTRATION AS A PRIVATE
LIMITED COMPANY AND NOTICE OF GENERAL MEETING
* Introduction
The Company has today announced that it is seeking Shareholder approval for the
cancellation of admission to trading on AIM of the Ordinary Shares and the
conversion of the Company from a public limited company to a private limited
liability company.
The purpose of this announcement, and the circular from which it is extracted,
is to explain the rationale behind the proposed Cancellation and Conversion and
why the Directors unanimously consider the proposed Cancellation and Conversion
to be in the best interests of the Company and its shareholders as a whole and
to seek your approval for it. The notice of General Meeting is set out at the
end of the circular.
* Cancellation of Admission
Following careful consideration, the Directors have concluded that it is no
longer in the best interests of the Company or its Shareholders to maintain the
admission to trading on AIM of the Ordinary Shares.
* In the admission document dated 19 May 2005, the Company set out its scope
of activities to operate in the publication of mass-market computer games,
entertainment and the like.
* On 25 June 2008, the Board received shareholder approval to alter the
sector focus of the Company's scope of activities to enable it to also
consider opportunities within the international money transfer industry.
Your board identified one principal reverse takeover target and several
ancillary acquisitions however the principal target did not pass the
Company's due diligence and the transaction was abandoned on commercial
grounds by your Board;
* On 31 October 2008, the Board received shareholder approval to further
alter the sector focus of the Company's scope of activities to enable it to
also consider opportunities within the cosmetic surgery insurance industry.
Your board was regrettably forced to abandon its proposed activities in
this industry in March 2009 following the launch of an identical cosmetic
surgery insurance product by a former associate of the Company's principal
shareholder;
* On 9 September 2009 the Board entered into heads of terms to acquire the
entire issued share capital of Lorne House Trust Limited, a company then
licensed by the Isle of Man Financial Supervision Commission to provide
Corporate, Trust and Investment Business Services. However, following
consultation, the Isle of Man Financial Supervision Commission would not
support this potential reverse takeover and thus the transaction was
reluctantly abandoned by your Board.
Following the disposal of the Company's subsidiary on 23 December 2009, the
Company divested of substantially all of its trading business and was
thereafter treated as an investing company under the AIM Rules.
* On 13 April 2010 the Board entered into pre-contractual heads of terms
agreement with a third party operating in the renewable energy sector. The
proposed transaction incorporated a secondary fundraising which was not
sufficiently supported by the investment community and as such negotiations
have broken down and the proposed transaction abandoned.
With the recent breakdown in these latest negotiations, the Company has
approximately six months remaining to implement its investing policy or face
the cancellation of trading on AIM of the Company's Ordinary Shares. The Board
believes there is insufficient time and insufficient appetite from potential
reverse takeover targets to identify, select and conduct due diligence on any
potential business that may be suitable for this type of transaction.
As a result, the amendment to the Secured Loan Agreement announced on 3 June
2009 between the Company and its principal funder, Fox Capital Limited (a
related party because it is a substantial shareholder controlled by RW Tilleard
representing 80.20% of the issued share capital of the Company, and two of its
directors, Roy Tilleard and Justin Martin, are directors of the Company) was
withdrawn with effect from the 7th July 2010.
With this in mind, the Board has decided to immediately propose cancelling
admission to trading on AIM of the Ordinary Shares.
* Conversion to a limited company
Furthermore, the Board is also proposing to re-register the Company as a
private company limited by shares by passing a special resolution to do so and
to adopt new articles of association of the Company reflecting the Company's
status as a private limited company.
* Appointment of a liquidator
Upon conversion to a private limited company Fox Capital Limited, intends to
instruct the Board to resolve to appoint a liquidator to the Company for the
purposes of immediately undertaking a creditors' voluntary liquidation of the
Company.
On appointment of an insolvency practitioner, a liquidation of the Company will
be carried out in accordance with the Isle of Man Companies Acts 1931 to 2004.
Once the Board resolution for the liquidation has been passed it is the
responsibility of the Secretary of the Company to file the notice of this
extraordinary resolution. Other than the filing of this extraordinary
resolution, the Directors' responsibilities for the Company cease at the time
this extraordinary resolution is passed unless they are specifically authorised
by the Creditors to carry out acts on behalf of the Company.
The appointed insolvency practitioner is required to call a General Meeting of
the Creditors at least once per year if the liquidation continues for more than
a year. The liquidator is also required to call a General Meeting of Members
and Creditors when the winding up has been fully completed at which time the
liquidator's accounts shall be laid before the meeting.
* Effect of the Cancellation, Conversion and appointment of a liquidator on
Shareholders
The principal effects of the Cancellation and Conversion would be that:
a. there would no longer be a formal market mechanism enabling the
Shareholders to trade their shares on AIM or any other market or tracking
exchange and the CREST trading facility will be cancelled;
b. the Company would not be bound to announce material events or material
transactions nor to announce interim or final results;
c. the Company would no longer be required to comply with any of the
additional specific corporate governance requirements for companies
admitted to trading on AIM; and
d. the Company will no longer be subject to the AIM Rules and Shareholders
will no longer be required to vote on certain matters as provided in the
AIM Rules.
On appointment of a liquidator;
(i) all the powers of the Directors shall cease, except so far as a committee
of inspection, or if there is no such committee, the creditors sanction the
continuance thereof;
(ii) the control of all bank accounts relating to the Company passes to the
liquidator and the Directors are barred from giving any further instructions to
banks in relation to the banking for the Company after the board resolution
appointing a liquidator has been passed;
(iii) given the nature of the impending liquidation the Directors are imposing
a moratorium on the making of any further payments to any creditors, including
Fox Capital Limited, after the date of this circular to avoid the possibility
of giving an undue preference to a creditor;
(iv) once the Company has gone into liquidation, the shares may only be
transferred with the approval of the appointed insolvency practitioner. The
Board therefore recognises that not only will it be difficult for Shareholders
to buy and sell Ordinary Shares should they so wish, but also that the
establishment of a matched bargain facility would be futile, given the shares
will effectively have no economic value.
(iv) the provisions of the City Code on Takeovers and Mergers will continue to
apply to the Company following the Cancellation and conversion from a public
limited company to a private limited liability company for a period of 10 years
from the date of Cancellation or until the Company has been dissolved for a
period of two years.
* Approving the Cancellation and Conversion
Under the AIM Rules, it is a requirement that the Cancellation must be approved
by not less than 75 per cent. of the Shareholders voting in the General
Meeting. Accordingly, the notice of General Meeting set out on page 12 of this
document contains a special resolution to approve the application to the London
Stock Exchange for the Cancellation. If the resolution is approved, it is
expected that the Cancellation will take effect on 6 August 2010, being at
least 5 business days following the passing of the resolution.
Under the 1931 Act, it is a requirement that the Conversion of the Company must
be approved by not less than 75 per cent. of the Shareholders voting in the
General Meeting. Accordingly, the notice of General Meeting set out on page 12
of this document contains a special resolution to approve the Conversion. If
the resolution is approved, it is expected that the Conversion will take effect
on 6 August 2010.
* Irrevocable undertakings and voting in relation to IncaGold plc
The Company has received an irrevocable undertaking to vote in favour of the
Resolutions to be proposed at the General Meeting from Shareholders (including
Directors) holding an aggregate 360,319,890 Ordinary Shares representing
approximately 80.20 per cent of the entire issued share capital of the Company
at the time of the proposed General Meeting.
* General Meeting
Set out at the end of this document is the notice convening the General Meeting
to be held at 12.00 p.m. on 30 July 2010 at which the Resolutions will be
proposed.
* Action to be taken by Shareholders
A Form of Proxy for use at the General Meeting is included at the end of this
document. The Form of Proxy should be completed and signed in accordance with
the instructions thereon and returned to the Company Secretary at Lorne House,
Castletown, Isle of Man, IM9 1AZ, as soon as possible, but in any event so as
to be received by no later than 12.00 p.m. on 28 July 2010. The completion and
return of a Form of Proxy will not preclude a Shareholder from attending the
General Meeting and voting in person should he or she so wish.
* Recommendation
For the reasons set out above, particularly in paragraph 2, the Directors
unanimously recommend Shareholders to vote in favour of the Resolutions as they
have irrevocably undertaken to do so in respect of their own beneficial
holdings of 360,319,890 Ordinary Shares, representing approximately 80.20 per
cent. of the entire issued share capital of the Company.
* Definitions
"1931 Act" the Companies Act 1931 (as amended)
"Admission" the admission of the Ordinary Shares to trading
on AIM
"AIM" a market operated by London Stock Exchange plc
"AIM Rules" the AIM Rules for Companies published by the
London Stock Exchange from time to time
(including, without limitation, any guidance
notes or statements of practice) which govern
the rules and responsibilities of companies
whose shares are admitted to trading on AIM
"Board" the board of directors of the Company at the
date of this document
"Cancellation" the proposed cancellation of the Company's
Ordinary Shares from admission to trading on
AIM, subject to the passing of the Resolutions
"Company" or "IncaGold" IncaGold plc
"Conversion" the proposed conversion of the Company from a
public limited company to a private limited
company, subject to the passing of the
Resolutions
"CREST" the computer based system established under the
Uncertificated Securities Regulations 2001 (SI
2001 No. 3755) which enables title to units of
relevant securities to be evidenced and
transferred without a written instrument and in
respect of which Euroclear UK & Ireland is the
operator
"Directors" the directors of the Company whose names are
set out on page 5 of this document
"General Meeting" or " GM" the extraordinary general meeting of the
Company, convened for 12.00 p.m. on 31 July
2010, and any adjournment thereof, notice of
which is set out at the end of this document,
which will consider the Resolutions
"Form of Proxy" the Form of Proxy enclosed on Page 13 of this
document for use by Shareholders in connection
with the GM
"Group" IncaGold and its subsidiaries
"Ordinary Shares" ordinary shares of 0.001p each in the capital
of the Company
"Resolutions" the special resolutions to be proposed at the
General Meeting, details of which are set out
in the notice of General Meeting set out at the
end of this document
"RIS" Regulatory Information Service
"Shareholders" holders of Ordinary Shares and "Shareholder"
means any one of them
"UK" the United Kingdom of Great Britain and
Northern Ireland