Posting of Circular

RNS Number : 8456T

Spark Ventures PLC

19 December 2012

 



SPARK Ventures plc

("SPARK" or the "Company")

Notice of General Meeting, Proposed Return of Cash to Shareholders and Posting of Circular

On 7 August 2009, SPARK received the approval of Shareholders to an alteration to the Company's investing strategy so that no more investments would be made into new businesses and that existing investments would be sold, when appropriate, with a view to all existing investments being realised over the period to 31 March 2014.

SPARK has successfully implemented this strategy, returning approximately £16.4 million to shareholders to date pursuant to previously authorised return of cash schemes.

SPARK announced on 5 December 2012 its intention to provide Shareholders with a further Return of Cash of an amount equivalent to at least 2 pence per Existing Ordinary Share (in aggregate approximately £8.22 million) (the "Basic Return") or equivalent to 2.5 pence per Existing Ordinary Share (in aggregate £10.27 million) in the event the Company has received cash from the liquidation of Wycombe AS Realisations Limited (formerly Aspex Semiconductor Limited ) by the time of the General Meeting (the "Enhanced Return").  This represents approximately:

-       In the case of the Basic Return:

·          16.49 per cent. of the Company's closing middle-market share price of 12.125 pence per Existing Ordinary Share on 4 December 2012 (the dealing day immediately prior to the announcement of the Return of Cash); and

·          12.38 per cent. of the Group's net asset value as at 30 September 2012, being the date of the last published net asset value of the Group.

-       In the case of the Enhanced Return:

·          20.62 per cent of the Company's closing middle-market share price of 12.125 pence per Existing Ordinary Share on 4 December 2012 (the dealing day immediately prior to the announcement of the Return of Cash); and

·          15.47 per cent of the Group's net asset value as at 30 September 2012 being the date of the last published net asset value of the Group.

The implementation of the Return of Cash is conditional upon, among other things, approval by Shareholders at the General Meeting, to be held on 18 January 2013 at 10.00 a.m. at the offices of Bracher Rawlins LLP, Second Floor, 77 Kingsway, London, WC2B 6SR, and upon Admission.

It is proposed that the Return of Cash will be effected by means of the issue to Shareholders of B Shares and/or C Shares, which are intended to give Shareholders, where eligible under their prevailing tax regime (such as the UK), the flexibility to treat the Return of Cash as either capital or income for tax purposes, or a combination of the two.

The implementation of the Return of Cash involves a number of steps, which are all subject to approval of the Shareholders at the General Meeting:

·          each Existing Ordinary Share in issue at the Record Time will be sub-divided into one New Ordinary Share together with either one C Share or (at the election of the Shareholders of such Existing Ordinary Shares) one B Share. The B Shares will be purchased by finnCap as principal pursuant to the Tender Offer for either 2 pence per B Share if the Basic Return is implemented or 2.5 pence per B Share if the Enhanced Return is implemented. The C Shares will entitle their holders to receive the Special Dividend of 2 pence per C Share if the Basic Return is implemented or 2.5 pence per C Share if the Enhanced Return is implemented;

·          Shareholders will automatically receive C Shares unless they elect for B Shares;

·          Shareholders (except for Shareholders not resident in the United Kingdom or with no registered address in the United Kingdom or who are citizens resident in or nationals of other countries "Non-United Kingdom Shareholders" who will be deemed to have elected for C Shares) who elect to participate in the Tender Offer will have their B Shares purchased by finnCap as principal for 2 pence per B Share if the Basic Return is implemented or 2.5 pence per B Share if the Enhanced Return is implemented.  finnCap has a put option to sell such B Shares off-market to the Company for cancellation pursuant to the Repurchase Agreement;

·          Shareholders (including Non-United Kingdom Shareholders who will be deemed to have elected for C Shares) who elect to receive C Shares will be paid a Special Dividend of 2 pence per C Share held if the Basic Return is implemented or 2.5 pence per C Share if the Enhanced Return is implemented and, following such payment, each C Share shall automatically convert into a 2013 Deferred Share; and

·          the New Ordinary Shares will be traded on AIM in the same way as Existing Ordinary Shares and will be equivalent in all other respects to the Existing Ordinary Shares, with the exception of the difference in nominal value and subject to the rights of the B Shares, C Shares, existing D Shares and Deferred Shares (as applicable).

If the Return of Cash is approved by Shareholders at the General Meeting, it is expected that CREST accounts will be credited, or cheques despatched, in respect of the Tender Offer for the B Shares and the Special Dividend on the C Shares, by 28 January 2013.

Further details of the steps required to implement the Return of Cash are set out in Part 2 of the circular which will be posted to Shareholders on 19 December 2012 (the "Circular").

The Alternatives

The Alternatives for the Return of Cash available to Shareholders are summarised below and explained in further detail in Part 4 of the Circular. Shareholders may split the aggregate amount to be returned to them between the Alternatives.

Shareholders who do not make a valid election and Non-United-Kingdom Shareholders will be deemed to have elected for the Dividend Alternative in respect of ALL of their Share Entitlement.

The general guidance on the UK tax treatment included below is only a summary, is based on current UK law and practice as at the date of this announcement and applies only to Shareholders who are resident and, if they are individuals, ordinarily resident in the UK for tax purposes and who hold their Existing Ordinary Shares beneficially as investments and not on trading account. UK tax resident Shareholders should read Part 5 of the Circular as the Alternatives will have different UK tax consequences.

Shareholders who are in any doubt as to their tax position, or are subject to tax in a jurisdiction other than the United Kingdom, should consult an appropriate professional adviser without delay.

·      Alternative I - Capital Alternative (B Shares)

Shareholders who elect for the Capital Alternative in respect of their Share Entitlement will receive one B Share (in addition to one New Ordinary Share) for each Existing Ordinary Share they hold at the Record Time.

It is intended that the B Shares will be purchased pursuant to the Tender Offer by finnCap as principal and the amount paid pursuant to the Tender Offer will be 2 pence for each B Share purchased if the Basic Return is implemented or 2.5 pence for each B Share purchased if the Enhanced Return is implemented. Proceeds will be sent to relevant Shareholders by 28 January 2013.  The terms and conditions of the Tender Offer are set out in paragraph 5 of Part 2 of the Circular. finnCap has a put option to sell such B Shares off-market to the Company for cancellation pursuant to the Repurchase Agreement

The amounts received under the Capital Alternative should generally be taxed as capital for UK tax purposes. UK tax resident Shareholders should read Part 5 of the Circular for further information.

The attention of Non-United Kingdom Shareholders is drawn to paragraph 4 of Part 2 of the Circular.

·      Alternative 2 - Dividend Alternative (C Shares)

Shareholders who elect or are deemed to have elected for the Dividend Alternative in respect of their Share Entitlement will receive one C Share (in addition to one New Ordinary Share) for each Existing Ordinary Share they hold at the Record Time. A Special Dividend of 2 pence will become payable on each such C Share if the Basic Return is implemented or 2.5 pence on each such C Share if the Enhanced Return is implemented and will be paid to relevant Shareholders by 28 January 2013. Immediately after payment of the Special Dividend, the C Shares will automatically convert into 2013 Deferred Shares. The 2013 Deferred Shares arising on conversion of the C Shares will not be listed, will have extremely limited rights and will have negligible value. The Company will have the right to purchase all of the 2013 Deferred Shares for an aggregate sum of one penny. If the Company purchases the 2013 Deferred Shares, this will be treated as a disposal of the 2013 Deferred Shares by the Shareholders. In view of the negligible amount of this consideration, Shareholders' entitlements will not be paid.

The amounts received under the Dividend Alternative should generally be taxed as income for UK tax purposes. UK tax resident Shareholders should read Part 5 of the Circular for further information.

The attention of Non-United Kingdom Shareholders is drawn to paragraph 4 of Part 2 of the Circular.

 SPARK Share Option Scheme

Participants in the SPARK Share Option Scheme are not, by virtue of the options they hold, entitled to participate in the Return of Cash. However, the schemes contain provision for adjusting the terms of options where there is a variation of capital. The Return of Cash constitutes such a variation of capital. The 2001 Plan previously operated by the Company has no subsisting options.

2005 Plan

Under the 2005 Plan, 8,090,909 share options are in issue over ordinary shares, all with an exercise price of 7 pence per share (originally 11 pence but reduced following the repayment to shareholders of 2 pence per share in August 2009, 1 penny per share in September/October 2010 and 1 penny per share in October 2011) and all of which are vested.  In 2009, it was agreed between the remuneration committee of the Board and the holders of share options, that the rules of the 2005 Plan relating to variations of capital be amended to allow the vested options to be adjusted by a reduction in the exercise price with no adjustment to the number of shares under option.  Furthermore, it was agreed that the adjustment to options made in respect of any subsequent returns of cash would be on the same basis (subject to the overriding requirement that the exercise price per share may not be reduced below the nominal value of such share).  Consequently, in accordance with the current rules, the exercise price of the share options under the 2005 Plan will be further reduced to 5 pence per ordinary share after the General Meeting if the Basic Return is implemented or to 4.5 pence per ordinary share after the General Meeting if the Enhanced Return is implemented.

Notice of General Meeting

The Company confirms that the Circular will be posted to Shareholders on 19 December 2012 and will be available from that date on the Company's website at http://www.sparkventures.com. Notice of the General Meeting, which is to be held on 18 January 2013 at 10.00 a.m., is included in the Circular.

An Election Form for use by Shareholders (with the exception of Non-United Kingdom Shareholders and Shareholders who hold their Existing Ordinary Shares in CREST) in connection with the Alternatives and a Form of Proxy for use in connection with the General Meeting are enclosed with the Circular.

 For further information, please contact:

SPARK Ventures plc	Andrew Betton /  David Potter	020 7851 7777
finnCap Ltd	Matt Goode / Christopher Raggett	020 7220 0500

Capitalised terms used in this announcement have the meaning given to them in the Circular dated 19 December 2012.

finnCap Ltd, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for SPARK Ventures plc and is acting for no-one else in connection with the Return of Cash and will not be responsible to anyone other than SPARK Ventures plc for providing the protections afforded to clients of finnCap nor for providing advice in connection with the Return of Cash or any other matter referred to herein.

 

END

 

 

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