THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document, you should consult your accountant, legal or professional adviser, financial adviser or an independent professional adviser authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities. If you have sold or transferred all of your Ordinary Shares, please send this document, immediately to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. However, this document should not be forwarded or transmitted in or into any jurisdiction in which such act would constitute a violation of relevant laws. If you have sold or transferred part only of your holding of Ordinary Shares, you are advised to consult your stockbroker, bank or other agent through whom the sale or transfer was effected. Craven House Capital plc (Incorporated in England and Wales under Company Number 5123368) Notice of General Meeting This Circular does not constitute a prospectus for the purposes of the Prospectus Rules and, accordingly, this Circular has not been approved by, or filed with, the FCA or the London Stock Exchange. A notice convening a General Meeting of Craven House Capital Plc, to be held at 60 Cannon Street, London, EC4N 6NP on the 4 th January 2019 at 10.45 am is set out in this document. Please note that hard copy form of proxies will not be posted to shareholders with this notice. Whether or not you intend to be present at the General Meeting, you are asked to vote either online at www.signalshares.com or through Crest to be received by the Company s Registrars, Link Asset Services, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible but in any event not later than 10.45 am on the 2 nd of January 2019. Completion of the Form of Proxy will not preclude you from attending and voting at the General Meeting should you so wish. The distribution of this Circular in jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and, therefore, persons into whose possession this Circular comes should inform themselves about and observe such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. This Circular does not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this Circular or otherwise in any jurisdiction in which such offer or solicitation is unlawful. No person has been authorised to make any representation on behalf of the Company or the Investment Manager concerning the proposals described in this Circular which is inconsistent with the statements contained in this Circular and any such representation, if made, may not be relied upon as having been so authorised. Shareholders should not construe the contents of this Circular as legal, accounting, tax or financial advice and should consult with their own advisers as to the matters described in this Circular. Certain statements contained in this Circular are or may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be 1
materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, among others: general economic and business conditions, changes in exchange rates, currency controls, government policy and the ability to attract and retain personnel. These forward-looking statements speak only as at the date of this Circular. Except as required by law or the AIM Rules, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the General Meeting to be held at 60 Cannon Street, London, EC4N 6NP on the 4 h January 2018 at 10.45 am. and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider should refer to their CREST sponsors or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction ) must be properly authenticated in accordance with Euroclear UK & Ireland Limited s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the Company s agent, Link Asset Services (CREST Participant ID: RA10), no later than 48 hours before the time appointed for the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the Company s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. CREST members and, where applicable, their CREST sponsor or voting service provider should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsor or voting service provider are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. Copies of this document are available from the Company s registered office at 776-778 Barking Road, London, E13 9PJ from the date of this document until the date of the General Meeting. This document will also be available for download from the Company s website: www.cravenhousecapital.com. Timetable Latest time and date for receipt of Form of Proxy: 10.45am on the 2 nd January 2019 General Meeting: 10.45am on the 4 th January 2019 2
DEFINITIONS The following definitions apply throughout this Circular unless the context otherwise requires: "AIM" "AIM Rules" "Board" or "Directors" "Business Day" the AIM market of the London Stock Exchange the rules for AIM Companies issued by the London Stock Exchange the directors of the Company a day on which the London Stock Exchange and banks in England and Wales are normally open for busines "Companies Act" the UK Companies Act 2006, as amended "Company" Craven House Capital plc, a company incorporated with limited liability under the laws of England and Wales with registered number 05123368 "CREST" CREST Regulations" Deferred Shares "Existing Ordinary Shares" "FCA" "Form of Proxy" "General Meeting" the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the CREST Regulations) the Uncertificated Securities Regulations 2001 (SI 2001/3755) of the UK The 77,979,412 deferred shares of 0.09 each in the capital of the Company together with the 77,979,412 deferred shares of 0.009 each in the capital of the Company the ordinary shares of $1.00 each in the capital of the Company the Financial Conduct Authority of the UK the form of proxy for use in connection with the Meeting the general meeting of the Company to be held at 10.45am on 4th January 2019 at 60 Cannon St, London, EC4N 6JP "Investment Manager" Desmond Holdings Limited, a company incorporated with limited liability under the laws of Hong Kong with registered number 1469771 Link Asset Services" Notice "Ordinary Shares" "Resolutions" Shareholder a trading name of Link Registrars Limited, a company incorporated with limited liability under the laws of England and Wales with registered number 02605568 the notice of the General Meeting set out in this Circular Ordinary Share capital of the Company as traded on the AIM market the resolutions set out in the Notice a holder of Existing Ordinary Shares in Craven House Capital Plc 3
LETTER TO SHAREHOLDERS CRAVEN HOUSE CAPITAL PLC (Registered in England and Wales under Company Number 5123368) Directors Mark Pajak (Acting Chairman) Balbir Bindra Calum Morrison Registered Office 776-778 Barking Road London E13 9PJ 11 th December 2018 Dear Shareholder Introduction Further to the recent Company announcement regarding the proposed reduction in capital, cancellation of Deferred Shares and buy-back and cancellation of the Company s Ordinary Shares, I write to you on behalf of the Board, to seek approval in relation to these matters. The Board unanimously recommends that you vote in favour of the Resolutions at the General Meeting. Proposed reduction in capital and cancellation of Deferred Shares The Company s called up share capital includes a total of 155,958,824 allotted Deferred Shares. These shares have no voting rights and are not entitled to any dividends or other distribution from the Company. On a return of capital on a winding up of the Company, the holders of the Deferred Shares shall be entitled to receive only the amount credited as paid up on each share but only after the holder of each Ordinary Share shall have received the amount paid up or credited as paid up on such a share together with the payment of 1,000,000 per share and the holder of the Deferred Shares shall not be entitled to participate further in the assets or profits of the Company. Given the restrictions associated with the Deferred Shares as outlined above, the Deferred Shares are of negligible value to the Deferred Shareholders. The Articles of Association of the Company allow for these Deferred Shares to be cancelled at any time for no consideration by way of a reduction of capital for which High Court approval is required. This process which will commence immediately upon approval of the resolutions below and which is anticipated to be complete by the end of January 2019 Proposed reduction in capital and buy-back of Ordinary Shares As has been previously outlined to shareholders; the Company s share price continues to trade at a significant discount to the Company s most recently published net asset value per share. The Investment Manager has therefore determined that it is in the best interests of Shareholders to seek Shareholder approval for the Company to buy back and cancel its Ordinary Shares. This will provide flexibility to achieve the most efficient allocation of capital as cash proceeds are generated from asset sales and loan repayments are realised. As a result of historic operating losses, the Company currently demonstrates negative retained earnings. In order to generate the distributable reserves necessary to undertake a buy-back of shares, the Directors are proposing to transfer a total of $25,000,000 in capital from the Company s Share Premium account to its Retained Earnings. This must be done by way of a reduction in capital, for which High Court approval is required. This is a common process which will commence immediately upon approval of the resolutions below and which is anticipated to be complete by the end of January 2019. 4
Pursuant to section 701 of the Companies Act 2006 the Company will have the ability to acquire and cancel its own Ordinary Shares following the passing of the resolutions below, the successful completion of the reduction in capital application and subject to the rules of the London Stock Exchange and the AIM. The maximum total value of Ordinary Shares to be acquired under this authority will be $5,000,000 with a maximum authorised price of $10.00 per share and a minimum of $0.01 per share. Matters requiring approval As noted above, the purpose of the General Meeting is to seek shareholder approval for a reduction in capital, the cancellation of Deferred Shares in the Company the buy-back and cancellation of Ordinary Shares in the Company. Summary of Resolutions The Board unanimously recommends that you vote in favour of the following resolutions at the General Meeting. Resolution 1, to be proposed as a special resolution, seeks Shareholder approval to cancel the Deferred Shares for no consideration by way of a Reduction of Capital. Resolution 2, to be proposed as a special resolution, seeks Shareholder approval to transfer $25,000,000 if capital from the Company s Share Premium account to its Retained Earnings account by way of a Reduction in Capital. Resolution 3, to be proposed as a special resolution, seeks Shareholder approval to buy back and cancel up to $5,000,000 of the Company s Ordinary Shares, at a minimum price of $0.01 per share and a maximum price of $10.00 per share, which such authority expiring five years following the passing of this resolution. General Meeting The General Meeting will be held at 60 Cannon St, London, EC4N 6JP on 4th January 2019 at 10.45am Notice of the General Meeting is given below. Action to be taken Please note that hard copy form of proxies will not be posted to shareholders with this notice. Whether or not you intend to be present at the General Meeting, you are asked to vote either online at www.signalshares.com or through Crest to be received by the Company s Registrars, Link Asset Services, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible but in any event not later than 10.45 am on the 2nd of January 2019. Completion of the Form of Proxy will not preclude you from attending and voting at the General Meeting should you so wish. Recommendation The Board believes that the Resolutions to be put to the General Meeting are in the best interests of the Shareholders as a whole and, accordingly, recommends that Shareholders vote in favour of the Resolutions. Yours sincerely Mark Pajak Acting Chairman 5
CRAVEN HOUSE CAPITAL PLC NOTICE OF GENERAL MEETING NOTICE IS HEREBY GIVEN that a General Meeting of the above-named company ( the Company ) will be held at 60 Cannon Street, London, EC4N 6NP on the 4 th January 2019 at 10.45 am for the following purposes, namely: To consider and, if thought fit, to pass the following resolutions: SPECIAL RESOLUTIONS: That the Directors be and are generally and unconditionally authorised to exercise all the powers of the Company to cancel the Deferred Shares for no consideration by way of a Reduction of Capital. That the Directors be and are generally and unconditionally authorised to exercise all the powers of the Company to transfer $25,000,000 of capital from the Company s Share Premium account to its Retained Earnings account by way of a Reduction in Capital. That the Directors be and are generally and unconditionally authorised to exercise all the powers of the Company to buy back and cancel up to $5,000,000 of the Company s Ordinary Shares, at a minimum price of $0.01 per share and a maximum price of $10.00 per share, which such authority expiring five years following the passing of this resolution. BY ORDER OF THE BOARD Brian Winters (Company Secretary) 776-778 Barking Road, Barking (Registered Office) London E13 9PJ 11 th December 2018 6
Notes: 1. As a member of the Company, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting. A shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise the rights attached to a different ordinary share or ordinary shares held by that shareholder. A proxy need not be a shareholder of the Company. 2. If you do not give your proxy an indication of how to vote on any resolution, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting. 3. You can vote either: by logging on to www.signalshares.com and following the instructions; you may request a hard copy form of proxy directly from the registrars, Link Asset Services, on Tel: 0371 664 0300. Calls cost 12p per minute plus your phone company s access charge. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 17:30, Monday to Friday excluding public holidays in England and Wales. in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out in this notice. 4. In order for a proxy appointment to be valid a form of proxy must be completed. In each case the form of proxy must be received by Link Asset Services at 34 Beckenham Road, Beckenham, Kent, BR3 4ZF by 10.45 am on 2 nd January 2019. 5. Only those members entered on the register of members of the Company at close of business on 2 nd January 2019 or, in the event that this meeting is adjourned, in the register of members as at close of business on the day two days before the date of any adjourned meeting, shall be entitled to attend and vote at the meeting in respect of the number of ordinary shares registered in their names at that time. Changes to the entries on the register of members after the close of business on 2 nd January 2019 or, in the event that this meeting is adjourned, in the register of members after the close of business on the day two days before the date of the adjourned meeting, shall be disregarded in determining the rights of any person to attend or vote at the meeting. 7