31 May 2016
NORCON PLC
("Norcon" or the "Company")
Proposed Cancellation of Admission to Trading on AIM
Publication of Circular and Notice of Extraordinary General Meeting
and
Notice of Annual General Meeting
Proposed Cancellation of Admission to Trading on AIM
Norcon (AIM: NCON), the global communications network specialist, announces that, as a result of a
review of the benefits and drawbacks of being a quoted company, the Board has concluded that the cancellation of admission of its
Ordinary Shares to trading on AIM ("Cancellation") is in the best interests of the Company and its
Shareholders as a whole.
The Company therefore announces its intention to seek Shareholders' approval for the
Cancellation. An explanatory circular will be posted to Shareholders today setting out the background to and reasons for
the Cancellation, the reasons why the Directors believe that this is in the best interests of the Company and its Shareholders as
a whole and their recommendation to Shareholders to vote in favour of the resolution on the Cancellation ("Resolution").
An Extraordinary General Meeting of the Company will be held at 12 p.m. on Wednesday 29 June 2016
at the Company's registered office at Fort Anne, Douglas, Isle of Man, IM1 5PD at which the Resolution will be proposed to
Shareholders for approval. A notice convening the Extraordinary General Meeting is set out in the circular to shareholders which
will shortly be available on the Company's website (www.norconplc.com).
The Company has received irrevocable undertakings from certain Directors being Trond Tostrup
(Executive Chairman), Gaute Vik (Executive Director) and Jørn Longem (Non-Executive Director) and from Norconsult Telematics
Holdings LTD. (a company controlled by Jørn Longem, Non-Executive Director of the Company and a company that Trond Tostrup,
Executive Chairman of the Company, Arne Dag Aanensen, Chief Financial Officer of the Company and Gaute Vik, Executive Director of
the Company are directors of), to vote in favour of the Resolution for 34,359,844 Ordinary Shares in aggregate, representing
approximately 69.7 per cent. of the issued share capital of the Company.
Norconsult Telematics Holdings LTD., the Company's Major Shareholder, has advised the Company that
on the date this Circular is posted to Shareholders (being Tuesday 31 May 2016) it will make an order to purchase up to 8,000,000
Ordinary Shares in the market at a price of 19 pence per Ordinary Share. Such order will remain open until the last trading day
on AIM being Wednesday 6 July 2016 (unless the order is fulfilled in advance of this date). Shareholders should consult with
their own independent financial adviser and/or broker should they wish to consider selling their interests in the market prior to
the Cancellation becoming effective.
Subject to the Resolution being passed at the Extraordinary General Meeting, the expected last day
of dealings in Ordinary Shares on AIM will be Wednesday 6 July 2016 and the Cancellation will become effective at 7.00 a.m. on
Thursday 7 July 2016. 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.
Further information regarding the background to and principal effects of the Cancellation is set
out at the bottom of this announcement.
Notice of Annual General Meeting
In addition, the Company announces that its annual accounts for the year ended 31 December 2015
will today be sent to Shareholders, together with the Notice of Annual General Meeting ("AGM").
The AGM will be held at 11.30 a.m. on Wednesday 29 June 2016 at the Company's registered office at
Fort Anne, Douglas, Isle of Man, IM1 5PD. Copies of these documents will shortly be available to view on the Company's website
(www.norconplc.com).
For further information, please contact:
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Norcon plc
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Trond Tostrup, Executive Chairman
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+47 901 69 369
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Arne Dag Aanensen, Chief Financial Officer
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+357 25736830
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finnCap Ltd
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Corporate Finance- Stuart Andrews/Emily Watts
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+44 (0) 20 7220 0500
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ABOUT NORCON:
Established in 1957, Norcon (LSE/AIM: NCON) has been a trusted consultant and project manager for
more than half a century to governments and some of the world's largest global firms. These organisations rely on Norcon to
select, implement and maintain a communication infrastructure that not only matches, but also supports the critical needs of
their operations. Norcon's strength lies in its understanding of complex communication networks and their
design.
www.norconplc.com
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 70.5 per cent. of the Company's current issued share capital and, as a result, the free float and liquidity of the
Ordinary Shares is limited;
· the AIM listing of the Ordinary 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 Ordinary 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.
PROCESS FOR, AND PRINCIPAL EFFECTS OF, THE CANCELLATION
The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary
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 20 clear Business Days' notice of
Cancellation. Additionally, Cancellation will not take effect until at least 5 clear Business Days have passed following the
passing of the Resolution. If the Resolution is passed at the Extraordinary General Meeting, it is proposed that the last day of
trading in Ordinary Shares on AIM will be Wednesday 6 July 2016 and that the Cancellation will take effect at 7.00 a.m. on
Thursday 7 July 2016.
The principal effects of the Cancellation will be that:
· there would be no formal market mechanism
enabling the Shareholders to trade Ordinary Shares on AIM and, furthermore, no other recognised market or trading facility (other
than the proposed Matched Bargain Facility referred to in paragraph 3.2 below) will be available to enable trading of the
Ordinary Shares;
· while the Ordinary Shares will remain
freely transferrable, it is possible that following publication of this document, the liquidity and marketability of the Ordinary
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;
· the Company's CREST facility will be
cancelled and, although the Ordinary Shares will remain transferable, they will cease to be transferable through CREST. Instead,
Shareholders who hold Ordinary Shares in CREST will receive share certificates; 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 the Isle of Man Companies Act 2006. Shareholders should also
note that the Takeover Code will continue to apply to the Company following the Cancellation for the period of 10 years from the
date of Cancellation and, therefore, Shareholders will continue to receive the minority and other protections afforded by the
Takeover Code. The Company will also continue to be bound by the Articles (which requires shareholder approval for certain
matters) following the Cancellation; the Company may, however, seek Shareholder approval to amend the Articles so as to reflect
the Company's change from listed to unlisted status.
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,
http://www.norconplc.com/ 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.
In addition, the Company has been notified that it is the intention of Kenneth West to resign as
Non-Executive Director of the Company on or around 31 December 2016.
TRANSACTION IN THE ORDINARY SHARES PRIOR TO AND FOLLOWING THE PROPOSED CANCELLATION
Prior to the Cancellation
Norconsult Telematics Holdings LTD., the Company's Major Shareholder, has advised the Company that
on the date the Circular is posted to Shareholders (being Tuesday 31 May 2016) it will make an order to purchase up to 8,000,000
Ordinary Shares in the market at a price of 19 pence per Ordinary Share. Such order will remain open until the last trading day
on AIM being Wednesday 6 July 2016 (unless the order is fulfilled in advance of this date). Shareholders should consult with
their own independent financial adviser and/or broker should they wish to consider selling their interests in the market prior to
the Cancellation becoming effective.
Following the Cancellation
The Board is aware that the proposed Cancellation, should it be approved by Shareholders at the
Extraordinary General Meeting, would make it more difficult for Shareholders to buy and sell Ordinary
Shares should they wish to do so.
Shortly following the proposed Cancellation, the Company intends, subject to being able to comply
with Isle of Man company law, to return cash to Shareholders by way of a Tender Offer, which will be open to all Shareholders
aside from the Major Shareholder, at a price of 19 pence per Ordinary Share. It is intended that the Tender Offer will be open
for a period of 3 months (the "Closing Date") from the date that the Tender Offer documentation is sent
to Shareholders. Any Ordinary Shares purchased by the Company by way of the Tender Offer will be subsequently held in treasury.
The Company will send a circular to Shareholders containing the terms of the Tender Offer at an appropriate time and further
details will be made available through the Company's website at http://www.norconplc.com/.
Following the Closing Date of the Tender Offer, the Company will consider, depending on the number
of Shareholders remaining after the Closing Date, putting in place a Matched Bargain Facility to assist Shareholders to trade in
the Ordinary Shares. If implemented, the Matched Bargain Facility would be made available either directly through the Company or
through a third party provider. Under the Matched Bargain Facility, Shareholders or persons wishing to acquire or dispose of
Ordinary 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. Should the Company put in place
a Matched Bargain Facility, details would be made available to Shareholders on the Company's website at http://www.norconplc.com/
and directly by letter or e-mail (where appropriate).
CURRENT TRADING AND STRATEGY
The Company released its Annual Report for the year ended 31 December 2015 on 19 April 2016. In
this report the Directors stated that the Company's new solutions portfolio continued to deliver encouraging results and the
interaction between engineering solutions and deployment services was proving profitable. The Company has a strong cash position
and order backlog and, in light of this, will seek to pursue new markets and engage with new customers. Following the
Cancellation, the Company will continue with this strategy.
IRREVOCABLE UNDERTAKINGS
The Company has received irrevocable undertakings from certain Directors being Trond Tostrup
(Executive Chairman), Gaute Vik (Executive Director) and Jørn Longem (Non-Executive Director) and from Norconsult Telematics
Holdings LTD. (a company controlled by Jørn Longem, Non-Executive Director of the Company and a company that Trond Tostrup,
Executive Chairman of the Company, Arne Dag Aanensen, Chief Financial Officer of the Company and Gaute Vik, Executive Director of
the Company are directors of), to vote in favour of the Resolution for 34,359,844 Ordinary Shares in aggregate, representing
approximately 69.7 per cent. of the issued share capital of the Company. As a result, the Directors believe it is likely that the
Resolution will be passed at the Extraordinary General Meeting.
PROCESS FOR CANCELLATION
Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than
75 per cent. of votes cast by Shareholders at an Extraordinary General Meeting. Accordingly the Notice of
Extraordinary General Meeting set out in Part II of this document 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 Extraordinary General
Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 7 July 2016. Accordingly, if the
Resolution is passed the Cancellation will be effective at 7.00 a.m. on 7 July 2016.
EXTRAORDINARY GENERAL MEETING
The Extraordinary General Meeting will be held at the Company's registered office at Fort Anne,
Douglas, Isle of Man, IM1 5PD commencing at 12.00 p.m. on Wednesday 29 June 2016. If approved it is expected that the
Cancellation will take effect from 7.00 a.m. on Thursday 7 July 2016.
If the Cancellation becomes effective, finnCap Ltd will cease to be nominated adviser of the
Company and the Company will no longer be required to comply with the AIM Rules.
RECOMMENDATION
The Directors consider that the Resolution and Cancellation is in the best interests of the
Company and its Shareholders as a whole. The Directors unanimously recommend that you vote in favour of the
Resolution.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
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Notice provided to the London Stock Exchange to notify it of the proposed
Cancellation
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Tuesday 31 May 2016
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Publication and posting of the Circular and Form of Proxy to Shareholders
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Tuesday 31 May 2016
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Latest time and date for receipt of completed Forms of Proxy in respect of the
Extraordinary General Meeting
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12 p.m. on Monday 27 June 2016
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Time and date of the Extraordinary General Meeting
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12 p.m. on Wednesday 29 June 2016
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Expected last day of dealings in Ordinary Shares on AIM(2)
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Wednesday 6 July 2016
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Expected time and date of Cancellation(2)
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7.00 a.m. on Thursday 7 July 2016
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DEFINITIONS
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"AIM"
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AIM, the market operated by the London Stock Exchange
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"AIM Rules"
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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
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"Articles"
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the articles of association of the Company as at the date of this document
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"Business Day"
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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
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"Cancellation"
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the cancellation of admission of the Ordinary Shares to trading on AIM, subject to passing
of the Resolution and in accordance with Rule 41 of the AIM Rules
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"Circular"
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the circular to Shareholders dated 31 May 2016
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"Company" or "Norcon"
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Norcon plc, a company registered in Isle of Man with company number 002730V and whose
registered office is at Fort Anne, Douglas, Isle of Man, IM1 5PD
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"CREST"
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a relevant system (as defined in the CREST Regulations) in respect of which Euroclear is
the Operator (as defined in the CREST Regulations)
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"CREST Regulations"
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the Uncertificated Securities Regulations 2006 of the Isle of Man
(Statutory Document Number 743/06) including any modifications or any regulations made in
substitution under sections 48 and 215 of the IoM 2006 Act and for the time being in force
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"Directors" or "Board"
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the board of directors of the Company
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"Extraordinary General Meeting"
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the Extraordinary General Meeting of the Company convened for 12.00 p.m. on Wednesday 29
June 2016 and any adjournment thereof, notice of which is set out at the end of the Circular
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"Form of Proxy"
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the form of proxy enclosed within the Circular for use at the Extraordinary General
Meeting or at any adjournment thereof
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"London Stock Exchange"
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London Stock Exchange plc
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"Major Shareholder"
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Norconsult Telematics Holdings LTD., who have an interest in 27,170,511 Ordinary Shares,
representing 55.1 per cent. of the issued share capital of the Company
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"Matched Bargain Facility"
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the proposed matched bargain trading facility
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"Notice of Extraordinary General Meeting"
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the notice of Extraordinary General Meeting which is set out in the Circular
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"Ordinary Shares"
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the ordinary shares of £0.01 each in the capital of the Company, and "Ordinary Share"
means any one of them
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"Regulatory Information Service"
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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
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"Resolution"
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the resolution to be proposed at the Extraordinary General Meeting in the form set out in
the Notice of Extraordinary General Meeting
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"Shareholders"
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holders of Ordinary Shares from time to time and "Shareholder" means any one of
them
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"Takeover Code"
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the City Code on Takeovers and Mergers
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"Tender Offer"
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the proposed tender offer to be made by the Company to purchase Ordinary Shares
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"United Kingdom"
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the United Kingdom of Great Britain and Northern Ireland
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