Circular Publication & Notice of General Meeting

RNS Number : 5497T

Impax Environmental Markets PLC

21 July 2020

 

Impax Environmental Markets plc

LEI: 213800RAR6ZDJLZDND86

21 July 2020

Publication of Circular

Introduction and background

Since the last AGM of the Company on 21 May 2020 (the "2020 AGM"), the Company has enjoyed continued strong demand for its ordinary shares ("Ordinary Shares"). Under the Company's premium and discount control policy, the Company issues or purchases Ordinary Shares to ensure, in normal market conditions, that the Ordinary Shares trade close to their underlying net asset value per share.

At the 2020 AGM, the Directors were authorised to issue, on a non pre-emptive basis, just over 23 million Ordinary Shares in the 12 months leading up to the AGM of the Company to be held in 2021 (the "2021 AGM") and this equated to 10 per cent. of the Company's then issued share capital. Following the granting of that authority at the 2020 AGM, and notwithstanding the disruption to financial markets caused by the Covid-19 pandemic, the Board has experienced further strong demand for the Ordinary Shares such that, as at 17 July 2020, the foregoing authority has been used to the extent of approximately 11.6 million Ordinary Shares.

Whilst it is possible that what currently remains of the existing 10 per cent. authority granted at the 2020 AGM will provide sufficient issuance authority for the Company until the 2021 AGM, in the light of the current level of demand for the Company's shares, the Board believes that it is now necessary to seek further shareholder authority in order to seek to control, in line with the Company's premium and discount control policy, the premium at which the Company's shares trade relative to their net asset value. The Board is concerned that, in the absence of new shares to issue, a supply/demand imbalance may lead to an unhealthy premium developing in the Company's share price.

In the light of the above, the Board has today published a circular convening a general meeting (the "General Meeting") at which shareholders will be asked to consider and, if thought fit, approve the resolutions required to permit the further issue of new Ordinary Shares on a non pre-emptive basis.

Share issuance capacity

The Board has discussed with the Company's investment manager, Impax Asset Management (AIFM) Limited ("IAM"), what further share issuance capacity can be made available to the Company. As a result of these discussions, the Board has agreed with IAM that it will seek approval from the Company's shareholders to issue on a non-pre-emptive basis a further 12.2 million Ordinary Shares, representing approximately five per cent. of the Ordinary Shares currently in issue. This will be in addition to the authority which was obtained at the Company's 2020 AGM.

The Board has further agreed with IAM that following the General Meeting to be held on 14 August 2020, the Board will not seek further share issuance capacity before the end of 2020 owing to the need to manage overall flows into the Impax Asset Management strategy within which the Company sits. The Company and its brokers will endeavour to manage demand within this authority, but the Board notes that, should all the available share issuance capacity be used before the end of 2020, there is the prospect of an increasing share price premium to net asset value developing, which the Board would find it hard to control in these circumstances.

Benefits of the additional authority

The Board believes that any share issuance pursuant to the proposed additional authority should yield several benefits, including (i) an improvement in the liquidity in the market for the Ordinary Shares; (ii) maintenance of the Company's ability to issue Ordinary Shares tactically, so as to continue to operate the Company's premium and discount control policy; (iii) increasing the size of the Company, thereby spreading operating costs over a larger capital base which should reduce the ongoing charges ratio; and (iv) enhancement of the net asset value per share of the existing Ordinary Shares through share issuance at a premium to the prevailing net asset value per Ordinary Share.

In addition, the Company is now a constituent of the FTSE-250 Index and a larger shareholder base will assist the Company in retaining this position.

Publication of Circular and General Meeting

The Company has today published a circular convening the General Meeting to be held at 11.00 a.m. on 14 August 2020 at the offices of Impax Asset Management, 7th Floor, 30 Panton Street, London SW1Y 4JR.

At the General Meeting, resolutions will be proposed to give the Board authority to issue further new Ordinary Shares up to an aggregate nominal amount of £1,224,385 (being 12,243,850 Ordinary Shares), which represents approximately five per cent. of the total Ordinary Share capital of the Company in issue as at 17 July 2020.

If such authority is granted by shareholders, the Directors intend to use the authority to issue new Ordinary Shares on a non pre-emptive basis only: (i) at a premium to net asset value; (ii) to meet demand from investors; and (iii) when the Directors believe that it is in the best interests of the Company and its shareholders to do so.

In the light of the Coronavirus pandemic and associated Government guidance, including the rules on physical distancing and limitations on public gatherings, shareholders are strongly discouraged from attending the General Meeting and indeed entry will be refused if the law and/or Government guidance so requires. Arrangements will be made by the Company to ensure that a minimum number of shareholders required to form a quorum will attend the General Meeting in order that the meeting may proceed.

Given the restrictions on physical attendance at the General Meeting, shareholders are strongly encouraged to appoint the Chairman of the General Meeting as their proxy to vote on their behalf as it is unlikely that third party proxies will be able to attend the meeting. This should ensure that your votes are registered.

We always welcome questions from our shareholders and, given the restrictions on physical attendance at the General Meeting, we would encourage shareholders to submit any questions they have concerning the General Meeting or the proposed resolutions to the Board by email to [e-mail] by 5.00 p.m. on 12 August 2020. Please put "IEM - General Meeting" in the subject heading of any email.

A copy of the circular has been submitted to the Financial Conduct Authority and will be available for inspection at the National Storage Mechanism which is located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website at www.impaxenvironmentalmarkets.co.uk.

Enquiries:

Martin Darragh

PraxisIFM Fund Services (UK) Limited 0207 653 9689

Note: The content of the Company's web-pages and the content of any website or pages which may be accessed through hyperlinks on the Company's web-pages, other than the content of the document referred to above, is neither incorporated into nor forms part of the above announcement.

 

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