Press Release 19 April 2017

Transcription

1 Press Release 19 April 2017 This announcement is released by Turbo Power Systems Inc and contains inside information for the purpose of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the Transaction, and is disclosed in accordance with the Company's obligations under Article 17 of MAR. For the purposes of MAR and Article 2 of the Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by the Board of the Company. Turbo Power Systems Inc ( TPS or the Company ) Proposed Cancellation of Admission of Common Shares to Trading on AIM Proposed Share Consolidation and Notice of Annual General and Special Meeting TPS, the innovative high-speed electrical machines and power electronic systems provider, announces that it will today post its Annual Report and Accounts for the financial year ended 31 December 2016, together with notice of the Company s Annual General and Special Meeting and a Management Proxy and Information Circular, to shareholders. The Information Circular sets out, inter alia, information regarding the intention to seek Shareholder approval for the cancellation of admission of its Ordinary Shares to trading on AIM and for the proposed share consolidation of 5,000 Common Shares into one New Common Share. The Company has received a letter of intent from the Company s Major Shareholder to vote in favour of the Cancellation Resolution and Consolidation Resolution in respect of 2,982,444,445 Common Shares representing 89.4 per cent. of the issued share capital of the Company. As a result the Directors believe it will be highly likely that the Cancellation Resolution and Consolidation Resolution will be passed at the Annual General and Special Meeting. Subject to the Cancellation Resolution being passed at the Annual General and Special Meeting, the expected last day of dealings in Common Shares on AIM will be Friday 2 June 2017 and the Cancellation will become effective at 7.00 a.m. on Monday 5 June Pursuant to Rule 41 of the AIM Rules, the Company, through its nominated adviser, finncap, has notified the London Stock Exchange of the proposed Cancellation. An extract from the Management Proxy and Information Circular, regarding the background to and principal effects of the Cancellation and Consolidation is set out at the bottom of this announcement. The Management Proxy and Information Circular should be read by Shareholders in full. Notice of Annual General and Special Meeting The Annual General and Special Meeting will be held at 1.00 p.m. (London, GMT + 1) on Thursday 25 May 2017 at the Company's registered office at 1 Queens Park, Queensway North, Team Valley Trading Estate, Gateshead, NE11 0QD. Copies of these documents will shortly be available to view on the Company's website ( For further information, please contact: Turbo Power Systems Ric Piper, Chairman Carlos Neves, Chief Executive Officer Charles Rendell, Chief Financial Officer Tel: +44 (0)

2 finncap (NOMAD and broker) Henrik Persson, Emily Watts Tel: +44 (0) Kreab (financial public relations) Robert Speed Tel: +44 (0) Proposed Cancellation of Admission of Common Shares to Trading on AIM On March 30, 2017, the Company announced that TWC3N, a company controlled principally by certain members of the Company's existing management team, had acquired the entire issued and to be issued share capital of TAO UK. The Company also announced on March 30, 2017 that TWC3N, in a separate transaction, had acquired all of the A Ordinary Shares (the "A Shares") in the capital of TPSL, the Company's subsidiary, at a price of pence each. The A Shares are convertible into an equal number of Common Shares of no par value in the Company on request by the holder, having given 61 days' notice. As a result of TWC3N's acquisition of TAO UK and the A Shares, the ultimate parent undertaking of the Company is TWC3N, a company entirely owned by Carlos Neves, Chief Executive Officer of the Company (26.5% voting rights of TWC3N), Charles Rendell, Chief Financial Officer of the Company (26.5% voting rights of TWC3N), Nigel Jakeman, Engineering and Business Development Director of the Company (26.5% voting rights of TWC3N), and Adderstone Group Limited, a group comprising a diverse range of businesses involving property and investment within the UK, whose Chief Executive Officer and Founder is Ian Baggett (20.5% voting rights of TWC3N).. In the announcement made by the Board on March 30, 2017, the Board concluded that it is in the best interests of the Company to cancel the admission of the Common Shares to trading on AIM. Pursuant to Rule 41 of the AIM Rules, the Company, by way of its nominated adviser, finncap Ltd, has notified the London Stock Exchange of the date of the proposed Cancellation. The Cancellation is conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than 75 per cent (75%) of the votes cast by Shareholders (whether present in person or by proxy) at the Annual General and Special Meeting, notice of which is set out in the Management Proxy and Information Circular. The Company is therefore seeking Shareholders' approval of the Cancellation at the Annual General and Special Meeting, which has been convened for 1:00 p.m. (London, GMT +1) on May 25, 2017 at the Company s offices at 1 Queens Park, Queensway North, Team Valley Trading Estate, Gateshead, NE11 0QD, United Kingdom. If the Cancellation Resolution is passed at the Annual General and Special Meeting, it is anticipated that the Cancellation will become effective at 7:00 a.m. on June 5, The purpose of the Management Proxy and Information Circular is to seek Shareholders' approval for the Cancellation Resolution, to provide you with the information on the background and reasons for Cancellation and to explain the consequences of the Cancellation and why the Directors unanimously consider the Cancellation to be in the best interests of the Company and its Shareholders as a whole. 1.1 Background and reasons for Cancellation The Board has conducted a review of the benefits and drawbacks to the Group and its Shareholders in retaining its quotation on AIM, and believes that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Board has considered the following key factors: the considerable cost, management time and the legal and regulatory burden associated with maintaining the Company s admission to trading on AIM which, in the Directors opinion, are disproportionate to the benefits to the Company; the Directors and the Major Shareholder hold in total 89.4 per cent (89.4%) of the Company s current issued share capital and, as a result, the free float and liquidity of the Common Shares is limited; 2

3 the AIM listing of the Common Shares does not, in itself, offer investors the opportunity to trade in meaningful volumes or with frequency within an active market. With little trading volume, the Company s share price can move up or down significantly following trades of small numbers of shares; and due to the Company s limited liquidity in its shares and, in practical terms, a small free float and market capitalisation, continuing admission to trading on AIM no longer sufficiently provides the Company with the advantages of providing access to capital or enabling the Common Shares to be used to effect acquisitions. Following careful consideration, the Board believes that it is in the best interests of the Company and Shareholders to seek the proposed Cancellation at the earliest opportunity. 1.2 Process for, and principal effects of, the Cancellation The Directors are aware that certain Shareholders may be unable or unwilling to hold Common Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective. Under the AIM Rules, the Company is required to give at least twenty (20) clear Business Days notice of Cancellation. Additionally, Cancellation will not take effect until at least five (5) clear Business Days have passed following the passing of the Cancellation Resolution. If the Cancellation Resolution is passed at the Annual General and Special Meeting, it is proposed that the Cancellation will take effect at 7.00 a.m. on June 5, The principal effects of the Cancellation will be that: there would be no formal market mechanism enabling the Shareholders to trade Common Shares on AIM and, furthermore, no other recognised market or trading facility (other than the proposed Matched Bargain Facility referred to in paragraph below) will be available to enable trading of the Common Shares; while the Common Shares will remain freely transferrable, it is possible that following publication of the Management Proxy and Information Circular, the liquidity and marketability of the Common Shares may be significantly reduced and the value of such shares may be adversely affected as a consequence; it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time; the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply; Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events, or required to obtain shareholder approval, where applicable, including substantial transactions, financing transactions, reverse takeovers, related party transactions and fundamental changes in the Company s business, including certain acquisitions and disposals; the levels of transparency and corporate governance within the Company are unlikely to be as stringent as for a company quoted on AIM; the Company will cease to have an independent nominated adviser and broker; 3

4 the Company s CREST facility will remain for the foreseeable future and the Common Share will remain transferable through CREST for the purposes of the Matched Bargain Facility. This will enable shareholders to continue to hold and trade their shares in uncertificated form post Cancellation; and the Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser. The Company will remain subject to Business Corporation Act (Yukon). Shareholders should also note that the Takeover Code does not apply to the Company and, therefore, the rights of the shareholders may be different from the rights of shareholders in UK incorporated companies (for example statutory pre-emption rights on new share issues. The Company will also continue to be bound by the Articles (which requires shareholder approval for certain matters) following the Cancellation. It is presently expected that on Cancellation, the Company will still be a "Reporting Issuer" under Canadian securities laws, until such time, if any, that is takes steps to cease to be a "Reporting Issuer". The above considerations are non-exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them. The Company will endeavour to continue to provide certain facilities and services to Shareholders that they currently enjoy as shareholders of an AIM company. Following the Cancellation, the Company will: continue to communicate information about the Company (including annual accounts) to its Shareholders, as required by law, and the Company will continue to hold annual general meetings; and continue to maintain its website, and to post updates on the website from time to time (being at least every six months), although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under AIM Rule 26 or to update the website as required by the AIM Rules. 1.3 Transactions in the Common Shares following the proposed Cancellation The Board is aware that the proposed Cancellation, should it be approved by Shareholders at the Annual General and Special Meeting, would make it more difficult for Shareholders to buy and sell Common Shares should they wish to do so. Immediately following the proposed Cancellation, the Company intends put in place a Matched Bargain Facility to assist Shareholders to trade in the Common Shares. The Matched Bargain Facility will be made available either directly through the a third party provider. Under the Matched Bargain Facility, Shareholders or persons wishing to acquire or dispose of Common Shares would be able to leave an indication with the Matched Bargain Facility that they are prepared to buy or sell at an agreed price. In the event that the Matched Bargain Facility is able to match that order with an opposite sell or buy instruction, the Matched Bargain Facility would contact both parties and then effect the bargain. Details of the Matched Bargain Facility, will be made available to Shareholders on the Company s website at and directly by letter or (where appropriate). In due course, the Company and/or TWC3N may decide to purchase Common Shares tendered through the Matched Bargain Facility however there can be there is no guarantee that either the Company and / or TWC3N will ultimately proceed with purchasing further Common Shares. 4

5 1.4 Letters of Intent The Company has received a letter of intent from the Company s Major Shareholder to vote in favour of the Cancellation Resolution in respect of 2,982,444,445 Common Shares representing 89.4 per cent. (89.4%) of the issued share capital of the Company as at the date of the Management Proxy and Information Circular. As a result the Directors believe it will be highly likely that the Cancellation Resolution will be passed at the Annual General and Special Meeting. 1.5 Process for Cancellation Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75 per cent (75%) of votes cast by Shareholders at an Annual General and Special Meeting. Accordingly the Notice of Annual General and Special Meeting within the Management Proxy and Information Circular contains a special resolution to approve the Cancellation. Furthermore, Rule 41 of the AIM Rules requires an AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date. In accordance with AIM Rule 41, the Directors have notified AIM of the Company s intention, subject to the Resolution being passed at the Annual General and Special Meeting, to cancel the Company s admission of the Common Shares to trading on AIM on June 5, Accordingly, if the Resolution is passed the Cancellation will be effective at 7:00 a.m. on June 5, Approval of Share Consolidation The Company is seeking Shareholder approval to effect the Share Consolidation. The Company currently has over 1,000 registered shareholders and has 3,336,865,922 Common Shares in issue, of which 1,008 shareholders represent in aggregate per cent. (99.90%) of the total number of shareholders but only per cent. (10.57%) of the total issued share capital of the Company. The size of the shareholder register (relative to the Company's current market value) places an unwarranted financial and administrative burden on the Company. The Company is therefore seeking shareholder approval to rationalise the share capital of the Company by way of a consolidation of share capital, with a view to reducing costs and streamlining the shareholdings in the Company. The proportion of the total issued share capital of the Company held by each Shareholder following the Consolidation will, save for fractional entitlements, be unchanged. Each New Common Share will carry the same rights as a Common Share as set out in the Company's Articles. However, it is expected that if the value of the shareholding of New Common Shares post consolidation is less than 2.00 (or Canadian Dollar equivalent) then these shares will be aggregated and the total value gifted to a local independent charity. The Company considers that the total cost of administrating these small individual payments is less than the value to the individual shareholders, and therefore, considers a gift to charity to be appropriate. The sole Independent Director has considered the share consolidation and considers it to be in the best interest of the Company and Shareholders to undertake a share consolidation. The sole Independent Director therefore recommends the share consolidation to the Board and approval of the consolidation. At the Meeting, Shareholders will be asked to consider and, if thought fit, approve an amendment to the articles of the Company to effect the consolidation (the "Consolidation") of the Common Shares on a 5,000 for one (1) basis. Pursuant to the consolidation, if carried out, 5,000 Common Shares will be consolidated into one (1) New Common Share in the capital of the Company. As of April 11, 2017, the Company currently has 3,336,865,922 Common Shares issued and outstanding. If the Common Shares are consolidated on a 5,000 for one (1) basis, the Company will have 667,116 Common Shares issued and outstanding. Instead of receiving fractional Common Shares, the remaining Shareholders will be paid in cash per fractional Common Share held by them prior to the Consolidation, upon delivery of certificates representing their Common Shares, a duly completed Letter of Transmittal and such other documents as Computershare may reasonably require. All fractional Common Shares will be cancelled. It is expected no amount will be paid 5

6 to any Shareholders who would be entitled to receive, net of withholding taxes, less than 2.00 (or Canadian Dollar equivalent), but the aggregated amount will be gifted to a local independent charity. The Board estimate that around 460 registered shareholders each own less than 5,000 shares, a total of 738,569 shares (0.022% of the current issued share capital; 0.017% of the diluted issued share capital) In order to give effect to the consolidation of the Common Shares, the articles of the Company must be amended by a special resolution of shareholders (the "Consolidation Resolution"). The text of the Consolidation Resolution is set out below. To be effective, the Consolidation Resolution must be approved in accordance with the YBCA, by not less than two-thirds of the Common Shares represented and voted at the meeting. TAO UK has advised the Company that it intends to vote all of its Common Shares in favour of the Consolidation Resolution. EXPECTED TIMETABLE OF PRINCIPAL EVENTS Notice provided to the London Stock Exchange to notify it of the proposed Cancellation Publication and posting of the Management Proxy and Information Circular and Instrument of Proxy to Shareholders Latest time and date for receipt of Instrument of Proxy and Form of Instruction April 19, 2017 April 19, :00 p.m. (London, GMT+1) on May 23, 2017 Annual General and Special Meeting 1:00 p.m. (London, GMT+1) on May 25, 2017 Expected last day of dealings in Common Shares on AIM (2) June 2, 2017 Expected time and date of Cancellation (3) 7:00 a.m. on June 5, 2017 Notes: (1) All of the times referred to in the Management Proxy and Information Circular refer to London time, unless otherwise stated. (2) Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and dates will be notified to Shareholders by an announcement through a Regulatory Information Service. (3) The Cancellation requires the approval of not less than 75 per cent of the votes cast by Shareholders at the Annual General and Special Meeting. DEFINITIONS AIM AIM Rules Annual General and Special Meeting or Meeting Articles AIM, the market operated by the London Stock Exchange the rules and guidance for companies whose shares are admitted to trading on AIM entitled "AIM Rules for Companies" published by the London Stock Exchange, as amended from time to time the Annual General and Special Meeting of the Company convened for 1:00 p.m. (GMT +1) on May 25, 2017 and any adjournment thereof, notice of which is set out in the Management Proxy and Information Circular the articles of association of the Company as at the date of this announcement 6

7 "Business Day" Cancellation Cancellation Resolution Common Shares Company or "Turbo Power" CREST Directors or Board a day (excluding Saturday, Sunday and public holidays in England and Wales) on which banks are generally open for business in London for the transaction of normal banking business the cancellation of admission of the Common Shares to trading on AIM, subject to passing of the Cancellation Resolution and in accordance with Rule 41 of the AIM Rules the resolution to be proposed at the Annual General and Special Meeting regarding the Cancellation, in the form set out in this Notice of Annual General and Special Meeting the common shares of no par value in the capital of the Company, and Common Share means any one of them Turbo Power Systems Inc. a relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations) the board of directors of the Company Effective date June 05, 2017 Form of Instruction Instrument of Proxy London Stock Exchange Major Shareholder or "TAO UK" Management Proxy and Information Circular Matched Bargain Facility Minority Shareholder New Common Share Notice of Annual General and Special Meeting the form of instruction that accompanies the Management Proxy and Information Circular for use at the Annual General and Special Meeting or at any adjournment thereof the instrument of proxy that accompanies the Management Proxy and Information Circular for use at the Annual General and Special Meeting or at any adjournment thereof London Stock Exchange plc Tao Sustainable Power Solutions (UK) Ltd, which has an interest in 2,982,444,445 Common Shares. It is a wholly owned subsidiary of TWC3N Limited, a company controlled principally by certain members of the Company s existing management team. the circular dated April 19, 2017 An online marketplace to buy and sell shares in UK private companies provided by a third party Shareholder who does not have the voting control of the Company by virtue of their shareholding being less than 50% of the total common shares of the Company. A Common Share after the proposed share consolidation the notice of Annual General and Special Meeting 7

8 Regulatory Information Service Reporting issuer Shareholders Share Consolidation Takeover Code TPSL A Shares "TWC3N" "United Kingdom" has the meaning given to it in the AIM Rules any of the services approved by the London Stock Exchange for the distribution of AIM announcements and included within the list maintained on the website of the London Stock Exchange For the purposes of the Management Proxy and Information Circular, the Company holders of Common Shares from time to time and Shareholder means any one of them The proposed consolidation of 5,000 Common Shares into one New Common Share The Company is a Canadian Business Corporation, registered in Yukon, Canada and is not subject to the provisions of the UK City Code on Takeovers and Mergers. TPSL A Shares are non-voting shares of Turbo Power Systems Limited ( TPSL ), the Company s subsidiary, that carry with them the right to be exchanged for the same number of Common Shares means TWC3N Limited, a company controlled principally by members of the Company's management team, and which owns all of the issued and outstanding shares of TAO UK the United Kingdom of Great Britain and Northern Ireland 8