Result of General Meeting

Leeds Group PLC

09 January 2024

 

9 January 2024

Leeds Group plc

("Leeds" or the "Company")

Result of General Meeting

The Board of Leeds Group plc ('Board') announces that, at the General Meeting held today at the Radisson Blue Hotel, Chicago Avenue, Manchester Airport, M30 3RA, the resolution in relation to the Proposed Sale of the Company's subsidiary, Hemmers, was duly passed.  The Proposed Sale of Hemmers is expected to complete on or around 31 January 2023.  The number of proxy votes lodged in advance of the meeting on the resolution are as noted in the table below:

Resolution	For	Against	Discretionary	Abstain / withheld	Total Votes
Ordinary Business
Resolution 1  - Proposed Sale of Hemmers-Itex Textil Import Export GmbH	15,118,090	127,000	-	-	15,245,090

The effect of the Proposed Sale will be that the Company will no longer have any trading business or activities and will become an AIM Rule 15 Cash Shell.  The disposal will constitute a fundamental change of business of the Company under Rule 15 of the AIM Rules. As such, the Company must make an acquisition or acquisitions which constitute a reverse takeover under Rule 14 of the AIM Rules within six months of Completion or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million) failing which the Ordinary Shares would then be suspended from trading on AIM pursuant to Rule 40 of the AIM Rules. Admission to trading on AIM would be cancelled six months from the date of suspension, should the reason for the suspension not have been rectified.

Going forward the Company will have no trading activities but, through LG Nordhorn, it will own three commercial properties in Germany with an aggregate net book value of £5,209,000 as at 30 November 2023. The properties will be leased back to Hemmers and, therefore, the Continuing Group will derive an average rental income of approximately £440,000 per annum over five years, which will cover the operating expenses of the Company during that period.

As an AIM Rule 15 Cash Shell, the Company will have operating cash flow and will not be dependent on any subsequent fundraisings for its working capital requirements. In the event that the Company does require additional funding in future, there can be no guarantees that funding will be forthcoming and the Company's ability to raise further funds may depend on the success of existing property investments.

It is estimated that the net cash proceeds of the Proposed Sale on Completion will be neutral after transaction costs and any taxes due.

Following the Proposed Sale, it is expected that the Company will need to arrange a bank loan secured on the properties of £950,000 in order to bridge the funding requirement of the Company between paying some of the tax liabilities which arise on the transfer of the properties until the time it can recover the majority of the tax paid. The Company will also assume a bank guarantee as part of the Proposed Sale in relation to KMR, a subsidiary of Hemmers which was placed into liquidation last financial year, amounting to a maximum amount of £345,000. Therefore, the bank loan will be used to fund this additional potential liability in respect of KMR if it crystallises.

Capitalised terms used in this Announcement shall, unless otherwise defined, have the same meaning as set out in the announcement on 15 December 2023.

This announcement contains inside information for the purposes of UK Market Abuse Regulation and has been arranged for release by Jan G Holmstrom, Chairman.

Enquiries:

Leeds Group plc Dawn Henderson	Tel:  [phone]
Cairn Financial Advisers LLP Nominated Adviser Sandy Jamieson / Liam Murray / James Western	Tel:  [phone]

 

END