Notice of EGM

RNS Number : 8325N
MTI Wireless Edge Limited
12 September 2013

12 September 2013

MTI Wireless Edge Ltd


("MTI" or the "Company")

Notice of EGM


The board of MTI (the "Board") announces an EGM will be held at 15.00 (London time) on October 23, 2013 at the offices of Allenby Capital Limited, 3 St Helen's Place, London, EC3A 6AB for the purpose of approving a Guaranty Agreement (the "Guaranty Agreement") between the Company and MTI Computers & Software Services (1982) Ltd. ("MTI Computers").     



MTI Computers has entered into an agreement with a commercial bank (the "Lender") whereby the Lender has agreed to extend a loan of up to an aggregate amount of US$1,000,000 (the "Loan Amount") and MTI Computers has approached the Company to request that the it provide a guarantee to the Lender for the Loan Amount pursuant to the terms of the Guaranty Agreement. The key terms of the Guaranty Agreement include: 


1.      The Guarantee


1.1     Within 60 days of the execution of the Guaranty Agreement, the Company will provide the Lender with a guarantee (in a form acceptable to the Lender) in the aggregate amount of the Loan Amount (the "Guarantee").


1.2     MTI Computers will pay for all of the costs and expenses incurred, and which will continue to be incurred, by the Company in connection with the Guarantee for the duration of its term.


2.      Consideration


2.1     In consideration of the provision of the Guarantee by the Company, MTI Computers will pay the Company an amount equal to 2.5 per cent. of the Loan Amount per year of the Term (as defined below). Such amount shall be paid quarterly in advance based on the amount covered by the Guarantee at the beginning of each period.


3.      Undertaking of MTI Computers


MTI Computers undertakes to apply any dividend that it may receive from the Company in order to reduce the outstanding amount of the Loan Amount prior to the use of any such dividend sum (or part thereof) for any other purpose.


4.      Term and Termination


5.1     The term of the Guaranty Agreement shall remain in effect for a period of 3 years unless terminated earlier in accordance with the provisions of the Guaranty Agreement (the "Term").


5.2     During the Term, the Company may terminate the Guaranty Agreement without cause at any time by providing six month's written notice to MTI Computers.


5.3     The Company may terminate the Guaranty Agreement immediately upon written notice to MTI Computers if:  (a) MTI Computers adopts a resolution or in effect ceases to carry on its business; or (b) a receiver or similar officer is appointed for MTI Computers and is not discharged within thirty (30) days; or (c) MTI Computers becomes insolvent, admits in writing its inability to pay debts as they mature, or is adjudicated bankrupt, or makes assignment for the benefit of its creditors; or (d) proceedings under bankruptcy or insolvency laws are commenced by or against MTI Computers and are not dismissed within thirty (30) days; (e) MTI Computers materially breaches the Guaranty Agreement.


5.4     MTI Computers may terminate the Guarantee Agreement at any time giving the Company 3 months notice.



Related party transactions


As at the date of this announcement, MTI Computers holds 27,031,897 Ordinary Shares, representing approximately 52.4 per cent. of the issued share capital of the Company. Accordingly, the matters contemplated by the Guaranty Agreement are classified as a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies.


The Company's directors (with the exception of Zvi Borovitz, Moni Borovitz and Zvi Kanor, who are directors in MTI Computers) having consulted with the Company's nominated adviser, Allenby Capital Limited, consider that the terms of the Guaranty Agreement are fair and reasonable insofar as the Company's shareholders are concerned.


Since listing on AIM the Company has pursued a progressive dividend policy and has paid out $3.8m in dividends. Subject to the availability of sufficient funds and the working capital needs of the Company from time to time, the board intends to continue to pay dividends in line with the Company's existing dividend policy and, as mentioned above, MTI Computers has undertaken to use the proceeds from the receipt of future dividends to repay the bank loan which will reduce the outstanding amount of the Loan Amount prior to the use of any such dividend sum (or part thereof) for any other purpose. The Board anticipates that this will have the effect of reducing any inherent risk to the Company in giving the Guaranty.



Voting requirements


Under Israeli companies law (the "Companies Law") the approval of the Guaranty Agreement requires a resolution to be passed by a special majority vote in favour of it. Under the Companies Law, a resolution concerning an exceptional transaction of a public company with its "controlling shareholder" or with another person in whom the controlling shareholder has a personal interest requires the approval of the company's audit & remuneration committee, its board of directors and its shareholders in general meeting provided that, in the case of the latter approval, either of the following conditions is satisfied:

(a)        the majority of votes in favour includes more than 50% of the shares shareholders who have no "personal interest" in the approval of the resolution and who vote on the resolution; or

(b)        the total number of shares of shareholders who have no "personal interest" and who vote against the resolution does not exceed 2 per cent. of the issued share capital of the Company.


For further information please contact:


MTI Wireless Edge

Dov Feiner, CEO

Moni Borovitz, Financial Director

+972 3 900 8900

Allenby Capital Limited

Nick Naylor

Alex Price

+44 20 3328 5656


Newgate Threadneedle

Graham Herring

Robyn McConnachie

+44 207 653 9850



About MTI Wireless Edge

MTI is engaged in the development, production and marketing of High Quality, Low Cost, Flat Panel Antennas for Commercial & for Military applications. Commercial applications such as: WiMAX, Wireless Networking, RFID readers &, Broadband Wireless Access. With over 40 years experience, supplying antennas 100KHz to 90GHz including directional antennas and Omni directional for outdoor and indoor deployments including Smart Antennas for WiMAX, Wi-Fi, Public Safety, RFID and for Base Stations and Terminals  - Utility Market. Military applications includes a wide range of broadband, tactical and specialized communications antennas, antenna systems and DF arrays installed on numerous airborne, ground and naval, including submarine, platforms worldwide.




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