Notice of General Meeting

RNS Number : 0804I

Trafalgar New Homes PLC

28 June 2013

 



Trafalgar New Homes PLC

("Trafalgar New Homes", the "Company" or "Group")

Notice of General Meeting, posting of Circular, formalisation of director loan

and Director participation in Placing

Notice of general meeting and posting of Circular

Trafalgar New Homes (ISDX:TRAF), the residential property developer operating in southeast England, announces that it has posted to shareholders a circular (the "Circular") convening a general meeting of the Company, to be held at the offices of Allenby Capital Ltd, 3 St. Helen's Place, London EC3A 6AB at 10.30 a.m. on 15 July 2013 (the "General Meeting").

The General Meeting is being called to propose a number of matters, primarily in connection with the Company's proposal to cancel its admission to trading on the ISDX Growth Market and apply for admission to trading on AIM. Application will be made to the London Stock Exchange for the admission of the Company's entire issued and to be issued share capital to trading on AIM ("Admission"). A copy of the Circular and admission document published in connection with the proposed Admission is available on the Company's website, www.trafalgar-new-homes.co.uk.

In an announcement on 23 May 2013 the Company provided a trading update and announced its intention to seek admission to trading on AIM and withdraw from trading on the ISDX Growth Market.  It has always been the Company's intention to move to AIM at an appropriate time and the Directors believe that the Company has made sufficient progress such that the move to AIM is now a logical next step for the Company. Since the reverse takeover of Combe Bank Homes in November 2011, trading in the Company's ordinary shares on the ISDX Growth Market has been minimal.  The Directors believe that admission to AIM will assist the Company in attracting new investors, improving liquidity in its shares and raising additional capital when required.  The Directors also believe that admission to AIM will enhance the profile of the Company and help to attract future acquisition opportunities as the Company seeks to expand.

The Directors are pleased to announce that in connection with Admission, the Company has raised £280,000 via a placing ("Placing") of new ordinary shares ("Placing Shares") with institutional and other investors, conditional on the passing of the resolutions at the General Meeting and Admission.  The proceeds of the Placing will be used for general working capital purposes. 

In order to facilitate the Placing and Admission, shareholder approval is required of a number of resolutions to be proposed at the General Meeting.  At the General Meeting, the following resolutions (the "Resolutions") will be proposed:

Resolution 1 - grant of general authority to allot shares

Resolution 2 - grant of authority to allot shares for cash, disapplying statutory pre-emption rights

Resolution 3 - re-appointment of Christopher Johnson as a Director

Resolution 4 - re-appointment of James Dubois as a Director

Resolution 5 - re-appointment of Norman Lott as a Director

Resolution 6 - to adopt the New Articles

Resolution 7 - to change the name of the Company

Resolution 8 - to terminate the ISDX Relationship Agreement.  Christopher Johnson and Shareholders associated with him will not vote on this resolution

Resolution 9 - to affirm the disposal of the Edenbridge Property to the Combe Bank Homes Pension Fund.  Christopher Johnson and Alexander Johnson will not vote on this resolution.

Shareholders are recommended to vote in favour of the Resolutions, as the Directors intend to do (other than in respect of any Resolution relating to his own appointment or on which he is required to abstain from voting, as stated above in relation to Resolutions 8 and 9) so that the Placing and Admission can proceed. 

Extracts from the Circular, providing further details on the Resolutions, are set out below. 

Grant of authorities to allot shares

The Company currently has an issued share capital of £214,375.19 divided into 214,375,190 Ordinary Shares.  The Board intends to seek to raise further funds by means of the Placing as part of the proposed admission to AIM.

Accordingly, resolutions will be proposed at the General Meeting for the purpose of (i) granting the Directors general authority to allot securities up to an aggregate nominal amount of £1,328,000 (132,800,000 Ordinary Shares), which includes authority to allot the Placing Shares and Ordinary Shares arising on the exercise of a warrant to be issued to Allenby Capital Limited (as described in the Admission Document) and also shares as consideration for any acquisition opportunities that may arise; and (ii) disapplying the statutory pre-emption rights in connection with the allotment of shares for cash pursuant to the foregoing authority, up to an aggregate nominal amount of £528,176 (52,817,600 Ordinary Shares).  The authorities conferred upon the Directors will also include authority to allot shares or other securities for cash in connection with a rights issue or open offer, where the entitlements of Shareholders are in proportion (as nearly as may be practicable) to their then holdings of Ordinary Shares.

Re-appointment of Directors

The Existing Articles provide that Directors appointed by the Board should be re-appointed at the first annual general meeting following their appointment.  The re-appointment of Christopher Johnson, James Dubois and Norman Lott was not dealt with at the last annual general meeting and accordingly the notice of General Meeting contains resolutions for their re-appointment now.

New Articles of Association

The opportunity is being taken to adopt new Articles of Association, in connection with the proposed admission to AIM.  The Existing Articles already reflect the provisions of CA 2006, being the Model Articles provided for generic use under the CA 2006.  However, the Directors consider that it would be more appropriate now to adopt new long form Articles of Association in the terms usually followed by AIM companies. 

Change of Name

It is proposed to change the name of the Company from Trafalgar New Homes Public Limited Company to "Trafalgar New Homes plc". 

Termination of relationship agreement

When the Company was readmitted to the ISDX Growth Market in November 2011 following the acquisition of Combe Bank Homes, Christopher Johnson became the principal Shareholder, holding approximately 87% of the issued share capital of the Company.  Accordingly, to ensure that the business of the Group could be carried on independently in the interests of Shareholders as a whole, he entered into a relationship agreement ("ISDX Relationship Agreement") with the Company and its corporate adviser SVS Securities plc.  As part of the move to AIM, it is proposed to terminate the ISDX Relationship Agreement.  Under the terms of the ISDX Relationship Agreement, termination must be effected by the passing of a special resolution of Shareholders who are independent of Christopher Johnson.  Accordingly, a resolution will be proposed at the General Meeting to terminate such agreement with effect from the date upon which the issued share capital of the Company ceases to be traded on the ISDX Growth Market.  A new relationship agreement in similar terms will be entered into by Christopher Johnson with the Company and the Company's nominated adviser with effect from the admission of the share capital of the Company to trading on AIM.  In light of the interest of Christopher Johnson in the proposed termination of the ISDX Relationship Agreement such proposal has been considered by the other members of the Board.

Disposal of Edenbridge Property

In January 2013, the Edenbridge Property was purchased for £100,000 by the Combe Bank Homes Pension Fund.  Because Christopher Johnson and Alexander Johnson are beneficiaries of the pension fund, this is a related party transaction.  In addition, the disposal of the Edenbridge Property requires the affirmation of Shareholders in General Meeting for the purposes of section 190 of CA 2006.  In the light of their interests, Christopher Johnson and Alexander Johnson have abstained from the Board's deliberations on the disposal of the Edenbridge Property.

The Directors have received independent confirmation from a leading firm of valuers that the purchase consideration for the Edenbridge Property is, in their opinion, equal to the consideration paid.  The aggregate purchase consideration was settled in cash and was applied principally towards reducing existing bank indebtedness.

Action to be taken

Shareholders will find enclosed with this document a form of proxy for use at the General Meeting.  Whether or not you intend to be present at the meeting, you are requested to complete, sign and return the form of proxy to the Company's registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA, as soon as possible but, in any event, so as to arrive by no later than 10.30 a.m. on 13 July 2013.  The completion and return of a form of proxy will not preclude you from attending the meeting and voting in person should you wish to do so.

Recommendation

The Directors consider that Resolutions 1 to 7 to be proposed at the General Meeting of the Company to be in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend that Shareholders vote in favour of those Resolutions, as they intend to do in respect of the 186,871,671 Ordinary Shares beneficially owned by them in aggregate (save for Resolutions 3, 4 or 5 as it relates to them).  The Directors (excluding Christopher Johnson and Alexander Johnson, for the reasons explained above) consider Resolutions 8 and 9 to be in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend that Shareholders vote in favour of Resolutions 8 and 9.

In accordance with the above, irrevocable undertakings have been given by Christopher Johnson in respect of 186,815,803 Ordinary Shares, representing approximately 87 per cent. of the Company's issued share capital, to vote in favour of Resolutions 1, 2 and 4 to 7, and by Alexander Johnson in respect of 1,868 Ordinary Shares, representing approximately 0.001 per cent. of the Company's issued share capital, to vote in favour of Resolutions 1 to 3 and 5 to 7.

Formalisation of loan from Director

In connection with the proposed admission to trading on AIM, on 27 June 2013 the Group signed two loan agreements with Chris Johnson, CEO of the Company, to formalise loans previously provided to the Group by Mr Johnson. The details of the agreements are as follows:

1.   A loan agreement between Combe Bank Homes (Oakhurst) Limited (1) and Christopher Johnson (2), whereby Christopher Johnson agreed to loan the amount of £1,421,255 to that company for the acquisition and development of properties at Oakhurst Lodge and Oakhurst Manor. The loan is repayable (after the repayment of bank loans made in relation to those properties) out of the net proceeds of sale of those properties, and carries interest at the rate of 5 per cent. per year with effect from 1 April 2013;

2.   A loan agreement between Combe Bank Homes (1) and Christopher Johnson (2), whereby Christopher Johnson agreed to loan the amount of £2,614,136 to that company for working capital purposes. The loan is repayable (after the repayment of any bank loans to which it may be subordinated) on or before 31 March 2015, and carries interest at the rate of 5 per cent. per year with effect from 1 April 2013;

Director participation in Placing

Conditional upon admission, James Dubois has agreed to subscribe for 1,500,000 Ordinary Shares under the Placing, equivalent to 0.66% of the Company's issued share capital as enlarged by the Placing, and Norman Lott has agreed to subscribe for 500,000 Ordinary Shares under the Placing, equivalent to 0.22% of the Company's issued share capital as enlarged by the Placing.  Neither James Dubois nor Norman Lott held any Ordinary Shares prior to the Placing.

For further information please contact:

Trafalgar New Homes Plc Christopher Johnson	[phone]
ISDX Corporate Adviser and Broker Jeremy Porter/James Reeve	[phone]
Financial PR Yellow Jersey PR Limited Dominic Barretto/Anna Legge	[phone]

For further information please visit the Company's website at: www.trafalgar-new-homes.co.uk

Definitions from the Circular:

"Admission"	the admission of the ordinary share capital of the Company, issued and to be issued, to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules for Companies
"AIM"	the AIM market operated by London Stock Exchange plc
"Board" or "Directors"	the board of directors of the Company
"CA 2006"	the Companies Act 2006, as amended
"Company"	Trafalgar New Homes Public Limited Company
"Combe Bank Homes"	Combe Bank Homes Limited, a subsidiary of the Company
"Edenbridge Property"	the shop property at 67 High Street, Edenbridge, Kent
"Existing Articles"	the Company's existing articles of association
"form of proxy"	the form of proxy accompanying this document for use by Shareholders at the General Meeting
"General Meeting"	the general meeting of the Company to be held on 15 July 2013, notice of which is set out at the end of this document
"Group"	the Company and its subsidiaries
"Ordinary Shares"	the ordinary shares of 1p each in the capital of the Company
"ISDX"	ISDX Securities & Derivatives Exchange Limited
"ISDX Growth Market"	the ISDX Growth Market operated by ISDX
"ISDX Rules"	the ISDX Rules for Issuers published by ISDX
"Resolutions"	the resolutions set out in the notice of General Meeting at the end of this document
"Shareholders"	holders of Ordinary Shares

 

END

 

 

NOELFFLVRRIDFIV