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Caribbean Inv. Hldgs (CIHL)

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Friday 05 June, 2020

Caribbean Inv. Hldgs

Merger with Normandy Limited

RNS Number : 0414P
Caribbean Investment Holdings Ltd
05 June 2020
 

 

 

Caribbean Investment Holdings Limited

5 June 2020

 

This announcement contains inside information

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 

CARIBBEAN INVESTMENT HOLDINGS LIMITED - MERGER WITH NORMANDY LIMITED

Road Town, Tortola, British Virgin Islands, 5 June 2020 -- (London - AIM:  CIHL; Bermuda - CIHL) (the "Company" or "CIHL").

The Company today announces that agreement has been reached on the terms of the proposed acquisition of the entire issued share capital of Normandy Limited (Bermuda - NORL.BH) ("Normandy") by the Company. The acquisition will be implemented pursuant to the terms of the Merger. It is anticipated that the Merger will become effective on or around 9 June 2020 (the "Effective Date").

Completion of the Merger is conditional on the Articles of Merger being registered with the Registrar of Corporate Affairs in the British Virgin Islands (the "Registrar"), which will occur once CIHL and Normandy have received approval from the Bermuda Stock Exchange ("BSX") for the cancellation of admission to trading on the BSX of the Normandy shares, and approval from AIM and the BSX for the admission of the New CIHL Shares to trading on AIM and the BSX. CIHL Shares will continue to be admitted to trading on AIM and the BSX following the Merger.

The Company will be dispatching a circular to CIHL Shareholders today containing further details of the Merger and the New CIHL Shares.

THE MERGER

The acquisition of Normandy will be implemented pursuant to the terms of the Merger as set out in the Plan of Merger.

Following completion of the Merger, Normandy Shareholders will collectively hold up to 35,774,443 New CIHL Shares equivalent to approximately 36.1 per cent. of the existing issued share capital of CIHL and approximately 26.6 per cent. of the Enlarged CIHL Share Capital. The balance of 98,967,443 CIHL Shares, equivalent to approximately 73.4 per cent. of the Enlarged CIHL Share Capital, will be held collectively by the Existing CIHL Shareholders.

Lord Ashcroft, KCMG PC holds approximately 82.78 per cent. of the current issued share capital of Normandy and approximately 78.33 per cent. of the current issued share capital of CIHL and will hold approximately 79.5 per cent. of the Enlarged CIHL Share Capital following completion of the Merger.

By way of consideration for the Merger, Normandy Shareholders will be allotted and issued 2 New CIHL Shares for every 11 Normandy Shares registered in their name as at 5.00 p.m. (British Virgin Islands time) on the Record Date.

Based on the average middle market middle market closing price of CIHL on 4 June 2020, being 38 pence, the Merger values each Normandy Share at 6.9 pence and the existing issued share capital of Normandy at approximately £13.58 million in aggregate.  At June 4, 2020 (being the last Business Day prior to the announcement of the potential transaction), the value of Normandy's cash deposits amounted to approximately £13.5 million, representing Normandy's sole asset.

 

New CIHL Shares will be issued credited as fully paid to Normandy shareholders and will rank pari passu in all respects with the CIHL Shares in issue at the time that the New CIHL Shares are allotted and issued, including the right to receive and retain dividends and other distributions declared, made or paid after the Effective Date.  Application will be made for the New CIHL Shares to be admitted to AIM and the BSX, and admission is expected to take place on 10 June 2020. A further announcement will be made confirming the exact number of CIHL Shares in issue following completion of the Merger.

Normandy Shareholders have the right to dissent to the Merger. The dissenting Normandy Shareholders may within one month of receipt of the written resolutions for signing apply to the Bermuda Court to appraise the fair value of their shares.  However, the only remedy for the dissenting shareholders is to be paid the fair value for their Normandy Shares.

TERMS OF THE MERGER

The Merger will be effected under the BVI Companies Act 2004 (as amended) and the Bermuda Companies Act 1981 (as amended) (the "Bermuda Act") and it is anticipated that the Merger will become effective on the Effective Date.

The Merger is conditional on the Normandy Delisting becoming effective prior to the Effective Date. If the Normandy Delisting does not become effective before the Effective Date, the Articles of Merger will not be filed and registered with the Registrar and Bermuda Registrar of Companies on the anticipated Effective Date.

The Plan of Merger was approved by written resolution of the majority shareholder of Normandy on 4 June 2020. The Merger was also approved by written resolution of the majority shareholder of CIHL on 4 June 2020.

Subject to completion of the Merger, it is expected that on or about 10 June 2020, the New CIHL Shares will be admitted to trading on AIM and that dealings in the New CIHL Shares will commence on that date.

INFORMATION ON NORMANDY

Normandy is an exempted company limited by shares incorporated in Bermuda under the Bermuda Act with registration number 50626. Normandy is a strategic investment company admitted to trading on the BSX.  For the twelve months ended 31 March 2019 Normandy reported net profit of £700 and earnings per share of £nil. At 31 March 2019, Normandy's sole asset comprised interest bearing cash deposits with banks amounting to approximately £13.5 million. Since that date, Normandy has continued to hold the cash deposits earning interest at market rates.

At June 4, 2020 (being the last Business Day prior to the announcement of the potential transaction), the value of Normandy's cash deposits amounted to approximately £13.5 million.

Further information on Normandy, including audited financial statements for the period from 21 September 2015 (the date of incorporation of Normandy) to 31 March 2019, can be found on the BSX website at bsx.com.

REASONS FOR THE MERGER

The board of CIHL believes that in the current uncertain economic climate, the acquisition of Normandy (and its main asset of approximately £13.5 million in cash) will strengthen the Company's balance sheet, and will enhance the Company's ability to execute its strategy of exploring further synergistic acquisition opportunities in the Caribbean region. The Directors intend to make this cash available to the Company to fund such expansion opportunities. The board of CIHL also believes that the current climate will create opportunities for the Company to explore, and that having readily available cash resources will mean that the Company is better positioned to take advantage of situations as they arise. The Company has been exploring potential acquisition opportunities, although as at the date of this announcement no agreement has been reached in relation to any such opportunities.

FRACTIONAL ENTITLEMENTS TO CIHL SHARES

Normandy Shareholders may be left with a fractional entitlement to New CIHL Shares under the Merger. All fractional entitlements to New CIHL Shares will be rounded down to the nearest whole share for the purposes of calculating each Normandy Shareholder's entitlement to New CIHL Shares.

NORMANDY DELISTING

As noted above, the Merger is conditional on the Articles of Merger being registered with the Registrar, which will occur once CIHL and Normandy have received approval from the Bermuda Stock Exchange for the cancellation of admission to trading on the BSX of the Normandy Shares, and approval from AIM and the BSX for the admission of the New CIHL Shares to trading on AIM and the BSX. Accordingly, Normandy has notified the BSX of its intention to seek the proposed cancellation of admission to trading on BSX of the Normandy Shares. The BSX has already pre-cleared the use of written resolutions pursuant to Regulation 2.31(2)(ii) of the BSX Listing Regulations.

Lord Ashcroft, KCMG PC, the majority shareholder in Normandy, has already voted to approve the Merger and has irrevocably undertaken to vote in favour of the Merger in respect of his aggregate holding of 162,880,568 Normandy Shares representing approximately 82.78 per cent. of the shares eligible to vote.  Consequently, the approval of the Normandy Resolution by the requisite majority has already been determined.

CIHL Shareholders do not need to take any action in relation to the Normandy Delisting.

As Lord Ashcroft, KCMG PC, is a substantial shareholder of both CIHL and Normandy, and Philip Osborne and Peter Gaze are directors of both CIHL and Normandy (as well as shareholders of Normandy holding approximately 1 million shares and 1.3 million Normandy shares, respectively), the Merger is deemed to be a related party transaction under the AIM Rules. The independent Directors, being Dr Euric Bobb, Lyndon Guiseppi, Dr Ydahlia Metzgen and Geraldine Davis-Young, having consulted with the Company's nominated adviser, Cenkos Securities plc, and consider that the terms of the Merger are fair and reasonable insofar as the CIHL shareholders are concerned.

Person releasing this information on behalf of CIHL: Philip Osborne, Company Secretary

 

For further information contact:

 

Caribbean Investment Holdings Limited

 

UK +44 (0)207 248 6700

 

Cenkos Securities plc

 

Nicholas Wells  +44 (0)207 397 8920

 

Note: This and other press releases are available at the Company's website: http://www.cihltd.co.

 

Background Information

 

Caribbean Investment Holdings Limited ("CIHL") is a parent holding company with no independent business operations or assets other than its investments in its subsidiaries, intercompany balances and holdings of cash and cash equivalents. CIHL's businesses are conducted through its subsidiaries. The Belize Bank Limited ("BBL") is incorporated and based in Belize and focuses on the provision of financial services and lending to domestic clients. Belize Bank International Limited is incorporated and based in Belize and focuses on the provision of financial services and lending to international clients. CIHL also owns an international corporate services business based in Belize, which operates as Belize Corporate Services Limited. Within Belize, BBL is one of the largest, full service commercial and retail banking operation with a head office in Belize City and eleven branches extended into each of the six districts of Belize. The principal operations of BBL are commercial lending, consumer lending, deposit taking and related banking activities. 

 

Definitions

 

AIM

AIM, the market of that name operated by London Stock Exchange plc;

AIM Rules

the AIM rules for companies as published by the London Stock Exchange from time to time;

Business Day

a day (other than a public holiday, Saturday or Sunday) on which AIM and the BSX are open for normal business;

BVI Companies Act

BVI Business Companies Act 2004 (as amended)

CIHL

Caribbean Investment Holdings Limited , a business company incorporated in the British Virgin Islands under the BVI Companies Act ) with registered number 2035271;

CIHL Shares

ordinary shares of no par value each in CIHL;

CIHL Shareholders

holders of CIHL Shares;

Enlarged CIHL Share Capital

the entire issued ordinary share capital of CIHL following completion of the Merger;

Financial Services Division

the financial services businesses of CIHL operated principally through The Belize Bank Limited and Belize Bank International Limited, both located in Belize;

Merger

the merger of CIHL and Normandy in accordance with Part IX of the BVI Companies Act (as amended) and Part VII of the Bermuda Companies Act 1981 (as amended);

New CIHL Shares

up to 35,774,443 new CIHL Shares to be allotted and issued to Normandy Shareholders pursuant to the terms of the Merger;

Normandy Delisting

the cancellation of admission to trading on the BSX of the Normandy Shares;

Normandy Shareholders

holders of Normandy Shares on the Record Date;

Normandy Shares

ordinary shares of £0.01 each in the capital of Normandy;

Plan of Merger

Plan of Merger containing the terms and conditions of the Merger

Record Date

9 June 2020.

 

Ends


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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