Proposed Cancellation & Notice of General Meeting

Myanmar Investments Intl Ltd

09 November 2023

 

9 November 2023

Myanmar Investments International Limited
Proposed Cancellation of Admission to Trading on AIM and Notice of a General Meeting

Myanmar Investments International Limited [AIM: MIL] ("MIL" or the "Company"), the AIM-quoted Myanmar focused investment company, today announces a proposal to cancel the admission of the Company's ordinary shares to trading on AIM in accordance with Rule 41 of the AIM Rules for Companies ("Cancellation").

A circular including a Notice of General Meeting and the associated form of proxy (the "Circular") will be posted to Shareholders today to convene the necessary general meeting of the Company at 11.00 (GMT) on 1 December 2023 (the "General Meeting") to approve the Cancellation. The Notice of General Meeting and the associated form of proxy will be available on the Company's website at: http://www.myanmarinvestments.com/

An extract of selected parts of the Circular is copied out below, including the full text of the Chairman's letter contained in the Circular, along with an expected timetable of principal events related to the Cancellation. The definitions that apply throughout this announcement can be found at the end of this announcement.

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information please contact:

Nick Paris  Managing Director Myanmar Investments International Limited + 44 7738 470550 [e-mail] Nominated Adviser Philip Secrett / Jamie Barklem / Ciara Donnelly Grant Thornton UK LLP [phone]

Jay Edwin CFO Myanmar Investments International Limited [phone] [e-mail] Broker William Marle Cavendish Capital Markets Limited [phone]

Proposed Cancellation of Admission to Trading on AIM and

Notice of a General Meeting

1.   Introduction

In June 2013, the Company was the first Myanmar-focused investment company to be admitted to trading on AIM. The Company was established with the intention of building long term shareholder value by proactively investing in a diversified portfolio of Myanmar businesses and it made investments in businesses active in the telecom towers, microfinance and retail pharmacy sectors. Since October 2019, the Company has however been seeking to harvest its investments after Shareholders resolved to make no new investments and to wind down the Company. As a result, the retail pharmacy business was sold in December 2019.

The military coup in Myanmar took place in February 2021 and there are increasing signs that it will be a long time before business conditions normalise and the country again becomes acceptable to broad range of international investors. As a result, the Board of Directors has concluded that the realisation of the remaining investments could be some time away and that urgent steps are needed to conserve the Company's cash reserves which stood at US$476,547.60 as at 6 November 2023 in order to ensure that they do not fall below 12 months forecast cash outflows which could then mean that the Company is no longer a going concern.

The Company therefore announced on 12 June 2023 when issuing its audited accounts to 31 March 2023 that further cost reduction measures were under consideration including the cancellation of admission of its Ordinary Shares to trading on AIM. Following consultation with several Shareholders, the Directors have concluded that it is in the best interests of the Company and its Shareholders to cancel the admission of the Ordinary Shares to trading on AIM.

Pursuant to Rule 41 of the AIM Rules, the Cancellation is conditional on the approval of not less than 75 per cent. of those votes cast by Shareholders (whether present in person, by corporate representative or by proxy) at the General Meeting, notice of which is set out on page 14 of this document. In connection with the Cancellation, the Company proposes to amend and restate the Articles to a form that, among others, reflects that the Company is no longer AIM quoted.  A summary of the proposed amendments to the Articles is set out in paragraph 4 below.  Pursuant to the Articles, the Company may amend its Articles by a resolution approved by an affirmative vote of 75 per cent. of the votes cast by Shareholders.  The amendments to the Articles are not effective until registered with the BVI Registry of Corporate Affairs.

The purpose of the Circular is to provide notice of the General Meeting, seek Shareholders' approval for the Resolutions, to provide information on the background to and reasons for the proposed Cancellation, to explain the consequences of the Cancellation and provide reasons why the Directors unanimously consider the Cancellation to be in the best interests of the Company and its Shareholders as a whole.

2.   Background to and reasons for the cancellation

The Directors believe that the military coup in Myanmar has created significant uncertainty to the business prospects of the Company's remaining investments and to the possibility of selling them as planned (as further explained below). As neither of the Company's investments pay dividends to the Company, its operating costs have to be paid out of the Company's cash holding and although the Directors have undertaken significant cost cutting in recent years reflecting the decision to wind down the Company, the current rate of annual operating costs, without the Cancellation, is such that the cash reserves could be used up within a period of approximately 22 months from the date of this document.

The Directors have identified that the costs of remaining on AIM are significant and believe that approximately US$115,185 of direct costs per annum could be saved in a full year through the Cancellation, although the exercise of doing so will involve one off costs including professional advisory costs of approximately US$182,131, much of which have already been incurred by the Company. In addition, the Company will after Cancellation make other cuts to operating costs amounting to US$113,600 per annum as a result of the reduced complexity of running the Company as an unquoted business and all costs will be kept under constant review to see if they can be reduced further. Shareholders need to be aware that there is still no visibility on when the Company is likely to be able to sell its interest in either of its two remaining investments or any certainty that this will happen before the current cash balances are used up by September 2025. In the absence of a sale which brings in cash proceeds, the Company would need to raise additional finance from its Shareholders or face the prospect of being put into liquidation by the Directors.  

The Directors have conducted a review of the benefits and drawbacks to the Company and its Shareholders of remaining admitted to trading on AIM and believe that the Cancellation is in the best interests of the Company and the Shareholders as a whole. In reaching this conclusion the Directors have considered the following key factors:

·      the current investment objective of the Company is to realise its remaining investments in an orderly fashion and return the net proceeds to Shareholders. The Board remains committed to this objective and will continue to do so should the Cancellation become effective; 

·      the considerable costs and legal and regulatory requirements associated with maintaining the admission of the Ordinary Shares to trading on AIM are, in the Director's opinion, now disproportionate to the benefits to the Company and are not conducive to maximising distributions to Shareholders;

·      the Company needs to ensure that its existing cash reserves will last as long as possible given the current uncertainty to the exit plans for its two remaining investments and reducing the operating costs by implementing the Cancellation will extend the time over which the current cash reserves can be expected to last and preserving cash should enable the best possible exit prices to be negotiated for the remaining investments as it will avoid the situation where potential purchasers reduce their offer prices in the anticipation that the Company has insufficient cash to allow it time to seek other purchase offers; and

·      the Directors believe that the low levels of turnover in the Ordinary Shares since the decision was taken to wind down the Company in October 2019 indicate that few Shareholders have wanted to trade their Ordinary Shares whilst they await the sale of the Company's investments.

3.   THE PROCESS FOR THE CANCELLATION

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares if 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, it is a requirement that the Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders at the General Meeting. Accordingly, the Notice of General Meeting set out at the end of this document contains a resolution of the Shareholders to approve the Cancellation.

Furthermore, Rule 41 of the AIM Rules requires any 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 clear Business Days prior to such date. In accordance with AIM Rule 41, the Directors have notified the London Stock Exchange of the Company's intention, subject to the Resolutions being passed at the General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 12 December 2023.

Accordingly, if the Cancellation Resolution is passed, the last day of dealings in Ordinary Shares on AIM will be 11 December 2023 and the Cancellation will take effect at 7.00 a.m. on 12 December 2023. If the Cancellation becomes effective, Grant Thornton UK LLP will cease to be the Nominated Adviser of the Company and the Company will no longer be required to comply with the AIM Rules. If the Resolutions relating to the amendment and restatement of the Articles are passed, then the amended and restated Articles will be in effect on or after the Cancellation.

If the Resolutions are not approved at the General Meeting and Cancellation does not become effective, the admission of the Ordinary Shares to trading on AIM will be maintained and the Company's investment objective will remain unchanged. However, the Company will then be unable to make the reductions in operating costs that would have come as the result of the Cancellation.

4.   THE PRINCIPAL EXPECTED EFFECTS oF THE cancellation 

The principal expected effects of the Cancellation include the following:

·      there will no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares and no other recognised market is intended to be put in place to facilitate the trading of Ordinary Shares;

·      the Company will no longer have an independent Nominated Adviser or a broker after the Cancellation;

·      whilst the Ordinary Shares will still be freely transferable and held within the CREST settlement system, it is likely that their liquidity and marketability will be significantly reduced and the current secondary market value of them may be adversely affected as a consequence;

·      in the absence of a formal market and quote, it will be more difficult for Shareholders to determine the market value of their investment in the Company at any given time. There is no guarantee that Shareholders will be able to realise their investment in the Company following the Cancellation;
 

·      the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply to the Company;

·      Shareholders will lose certain protections to minority shareholders under the AIM Rules, such as the independence of the Board and scrutiny of transactions with related parties, potentially allowing larger shareholders to exercise more influence and control;

·      the Company may no longer be required to seek Shareholder approval, where applicable, for reverse takeovers and fundamental changes in the Company's business;

·      the Company will not be required to announce material developments as required by the AIM Rules, such as interim results, final results, substantial transactions, related party transactions, and the information maintained on the Company's website under AIM Rule 26. However, the Company will continue to maintain its website (https://www.myanmarinvestments.com/) and the Directors intend to make all significant information available on it and to continue to publish audited annual and unaudited interim accounts of the Company;

·      the Company will no longer be subject to UK MAR regulating inside information and other matters;

·      the Company will no longer be required to publicly disclose any change in major shareholdings in the Company under the Disclosure Guidance and Transparency Rules, although the Articles do retain certain similar requirements;

·      whilst the Company's CREST facility will remain in place immediately post the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Ordinary Shares will remain transferable, they may cease to be transferable through CREST. Post the Cancellation, additional formalities, such as a written instrument of transfer, will be required pursuant to BVI law in order to effect a transfer of Ordinary Shares; and

·      the Company will remain (and will comply with all regulatory requirements to remain) registered as a company limited by shares in the British Virgin Islands and will also remain subject to the provisions of the Articles, pursuant to which Shareholder approval is required for certain matters.

Pursuant to the Cancellation, the Company proposes to amend and restate its Articles to reflect the consequences of the Cancellation and to introduce certain protections for minority shareholders. The form of the proposed amended and restated Articles can be found on the Company's website (https://www.myanmarinvestments.com/).  In summary, the key proposed amendments are set out below:

·      Deletion of definitions related to the listing, including "Admission", "Securities Regulations", "Stock Exchange" and "UK Companies Act", together with the corresponding provisions throughout the M&A, including Takeover Provisions.

·      The maximum number of directors of the Company shall now be five, instead of twelve.

·      New share transfer restrictions have been incorporated with the inclusion of pre-emption rights in favour of existing Shareholders for transfers exceeding 3 per cent. of the issued share capital and drag rights and tag-along rights for existing Shareholders where other Shareholders intend to sell or transfer more than 75 per cent. of the Ordinary Shares.

·      The Company shall not issue new shares at a discount without the approval of not less than 75 per cent. of those votes cast by Shareholders (whether present in person, by corporate representative or by proxy) at a general meeting.

·      The emoluments of all directors and officers shall be fixed by the Directors and shall be subject to an annual cap of US$50,000 per director or officer (as applicable).

·      In order to transfer shares in the Company after the Cancellation, a share transfer form will be required pursuant to BVI law and this has been reflected in the proposed amendments to the Articles.

·      For convenience purposes, flexibility has been provided so that for future Shareholder meetings, a form of proxy may be delivered to the Company via email.

·      In light of the Cancellation, references to the rules and legislation applicable to companies listed on the London Stock Exchange have been removed.  Regulation 24 (Disclosure of Interest in Shares and Failure to Disclose) and Regulation 25 (Untraced Shareholders) of the Articles have been retained with certain appropriate amendments to reflect that the Company is no longer trading on AIM.

Following Cancellation there will be a reduction in the number of Directors. Subject to the Cancellation Resolution being approved by Shareholders it is intended that I will resign effective immediately after the Cancellation. It is also proposed that, subject to the Cancellation Resolution being approved by Shareholders, Nick Paris will resign on 31 December 2023.

The above considerations are not exhaustive, and all Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation and of any possible tax effects on them.

Certain Shareholders may be unable or unwilling to hold Ordinary Shares following the Cancellation and they should consider selling their Ordinary Shares on AIM prior to the Cancellation becoming effective. The Board is however making no recommendation as to whether or not Shareholders should buy or sell Ordinary Shares. 

5.   The Employee Share Option Plan

Cancellation will have the effect of accelerating the exercise date of all of the outstanding options under the ESOP to the date of Cancellation and thereafter all unexercised options would expire. The ESOP holds options on behalf of current and former employees of MIL which can be converted into 2,180,527 Ordinary Shares representing approximately 5.7 per cent. of the number of Ordinary Shares already in issue and the exercise prices of the options vary according to the date that they were issued and range between US$1.100 and US$1.265 per option. The options currently expire at varying times up to November 2026 but as the price of MIL shares was US$0.06 per Ordinary Share on 6 November 2023 they are significantly out of the money. 

The carried interest scheme that was put into effect in September 2018 and which replaced the ESOP will not be affected by the Cancellation, although this scheme would not result in any payments if the investments were sold at their current net asset values.

6.   The Company's remaining investments and their disposal plans

The Company currently owns investments in Asia Pacific Towers ("APT") and Myanmar Finance International Limited ("MFIL") as follows:

·      the investment in APT represents a holding of 4.1 per cent. in the equity of this telecom towers business and it is held alongside a stake of 2.1 per cent. owned by LIM Asia Special Situations Master Fund Limited, a co-investor giving a combined stake in APT of 6.2 per cent. MIL's stake was valued by the Directors at US$10.0 million in the audited interim accounts for the eighteen months ended 31 March 2023 before the portfolio level discount of 25 per cent. was applied to calculate the net asset value. The Directors anticipated being able to exit from APT via a trade sale or flotation of APT on an Asian stock exchange although the military coup in Myanmar on 1 February 2021 has delayed the possibility of this happening and it is currently unclear when such an exit can be achieved. 

·      the investment in MFIL represents a holding of 37.5 per cent. in the equity of this microfinance lender and MIL's stake was valued by the Directors at US$0.5 million in the audited accounts for the eighteen months ended 31 March 2023 before the portfolio level discount of 25 per cent. was applied to calculate the net asset value. On 1 April 2020, MIL announced that terms had been agreed for all the equity shareholders in MFIL to sell 100 per cent. of the company to Thitikorn plc, a Thai finance company. However, on 31 August 2023, the Company announced that it had mutually agreed with Thitikorn plc not to extend the terms with respect to the sale by the Company and its co-shareholders of 100 per cent. of MFIL. MIL, and its co-shareholders, will continue to explore other exit options, including with Thitikorn plc, to enable a sale at the earliest opportunity.

In the audited accounts for the eighteen months ended 31 March 2023, the Directors also imposed a 25 per cent. valuation discount on the value of the Company's two investments to reflect the added uncertainty to their business prospects and to the possibilities of selling them following the military coup which valued APT at US$7.5 million and MFIL at US$0.5 million.

The Company had net assets attributable to Shareholders as at 31 March 2023 of US$8.7 million or US$0.23 per Ordinary Share. 

7.   POTENTIAL DISTRIBUTION TO SHAREHOLDERS FOLLOWING DISPOSALS

The Directors are intent on disposing of the remaining two investments owned by the Company in an orderly fashion and subsequently, and subject to the requirements of applicable law, consider a potential distribution to Shareholders and wind up the Company. However, given the uncertain timing of the sale of both APT and MFIL, the Directors believe that the cash reserves should be conserved within the Company to pay future operating expenses as they are incurred. When the sale of an investment has been completed, the Directors will re-consider this decision and consider capital distributions to Shareholders. If the investments have not been sold before the time that the Company reaches a cash level representing one year's forecast expenses, the Directors will need to arrange alternative funding such as a loan from or placement of new Shares with Shareholders or new investors. 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Event	Time and/or date (1)(2)
Announcement of the proposed Cancellation	9 November 2023
Publication and posting of the Circular	9 November 2023
Latest time and date for receipt of Form of Proxy for General Meeting	11.00 a.m. (GMT) on 29 November 2023
Record date in respect of the General Meeting	close of business on 29 November 2023
General Meeting	11.00 a.m. (GMT) on 1 December 2023
Announcement of the results of the General Meeting	1 December 2023
Last day of dealings in the Ordinary Shares on AIM	11 December 2023
Cancellation of the Company's admission of the Ordinary Shares to trading on AIM	7.00 a.m. on 12 December 2023

DEFINITIONS

The following words and expressions shall have the following meanings in this document unless the context otherwise requires:

'AIM'	AIM, the market operated by the London Stock Exchange;
'AIM Rules'	the rules for AIM companies as published by the London Stock Exchange from time to time;
'Announcement'	the Company's announcement relating to the contents of this Circular, dated 9 November 2023;
'Articles'	the amended and restated memorandum and articles of association of the Company;
'Board' or 'Directors'	the directors of the Company;
'Business Day'	any day which is not a Saturday, Sunday or public holiday) on which banks are open for business in the City of London;
'certificated' or 'in certificated form'	a share or other security which is not in uncertificated form;
'Cancellation'	cancellation of the admission to trading on AIM of the Ordinary Shares, in accordance with Rule 41 of the AIM Rules, subject to passing of the Cancellation Resolution;
'Cancellation Resolution'	Resolution 1 to be proposed at the General Meeting;
'Circular' or 'this document'	the circular dated 9 November 2023;
'Company' or 'MIL'	Myanmar Investments International Limited, a company incorporated in the British Virgin Islands with registration number 1774652 and having its registered office at Jayla Place, Wickhams Cay I, Road Town, Tortola VG1110, British Virgin Islands;
'CREST'	the computerised settlement system to facilitate transfer of title to or interests in securities in uncertificated form operated by Euroclear UK & Ireland Limited;
'ESOP'	the employee share option plan that operated from June 2013 to November 2016;
'Form of Proxy'	the form of proxy for use at the General Meeting, which accompanies this document;
'General Meeting'	the general meeting of the Shareholders, notice of which is set out on page 14 at the end of this document;
'London Stock Exchange'	London Stock Exchange plc;
'Notice of General Meeting'	the notice of the General Meeting, which is set out on page 14 at the end of this document;
'Ordinary Shares'	ordinary shares of nil par value each in the Company;
'Registrars'	Link Market Services (Guernsey) Limited of Mont Crevelt House, Bulwer Avenue, St. Sampson, Guernsey, GY2 4LH, Channel Islands;
'Regulatory Information Service'	has the meaning given to it in the AIM Rules for 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;
'Resolutions'	the resolutions to be proposed at the General Meeting, as set out in the Notice of General Meeting;
'Shareholder(s)'	holder(s) of Ordinary Shares;
'UK' or 'United Kingdom'	the United Kingdom of Great Britain and Northern Ireland;
'UK MAR'	Regulation (EU) (No 596/2014) of the European Parliament and of the Council of 16 April 2014 on market abuse to the extent that it forms part of the domestic law of the United Kingdom including by virtue of the European Union (Withdrawal) Act 2018 (as amended by virtue of the European Union (Withdrawal Agreement) Act 2020);
'uncertificated' or 'in uncertificated form'	a share or security recorded in the Company's register of members as being held in uncertificated form, title to which may be transferred by means of CREST (subject to BVI law requirements); and
'US' or 'United States'	the United States of America.

 

END