MoneySwap Plc Notice of EGM and update re. suspension (8110A)
29/03/2017 7:02am
UK Regulatory
TIDMSWAP RNS Number : 8110A MoneySwap Plc 29 March 2017 The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. 29 March 2017 MoneySwap plc ("MoneySwap" or the "Company") Posting of circular, notice of EGM and update regarding suspension Posting of circular Further to the announcement on 21 March 2017, the Company will today post to its shareholders a circular (the "Circular") containing a notice convening an extraordinary general meeting (the "EGM") to be held at 10:00 a.m. on 20 April 2017 at the offices of Allenby Capital Limited, 3 St. Helen's Place, London, EC3A 6AB. The purpose of the EGM is to approve, inter alia: i. the subscription for new ordinary shares in the Company by Wraith Holding B.V. ("Wraith"), together with certain options to be granted to Wraith to subscribe for additional new ordinary shares; ii. the grant of the fee conversion options to an existing director, a former director and a substantial shareholder; iii. the waiver of certain existing options held by the board and a former director of the Company; and (together the "Proposals"). Extracts from the Circular are set out below and a copy of the Circular, along with the proposed amendments to the Company's articles of association, will shortly be available on the Company's website, www.moneyswapholdings.com. Update regarding suspension The Company's ordinary shares (the "Ordinary Shares") are currently suspended from trading on AIM pending the Company putting in place a new depository interest ("DI") facility representing the Company's Ordinary Shares. The Company submitted the requisite legal opinions and other necessary documents to Euroclear (the entity which administers the DI facility) on 24 March 2017. The Company anticipates that the new DI facility will be in place on or about 10 April 2017. Once a new DI facility has been established, the Board anticipates that trading in the Ordinary Shares on AIM will be restored. Shareholders who previously traded their Ordinary Shares in uncertificated form through the previous DI facility will have received a share certificate in respect of their Ordinary Shares when the DI facility was cancelled. An update will be provided in due course on the process for enabling the electronic trading of Ordinary Shares through the new DI facility. For further information, please contact: EXTRACTS FROM THE CIRCULAR The following has been extracted without amendment from, and should be read in conjunction with, the Circular to Shareholders dated 28 March 2017, available from the Company's website, www.moneyswapholdings.com. EXPECTED TIMETABLE OF PRINCIPAL EVENTS SUBSCRIPTION STATISTICS *Assuming no other new Ordinary Shares are issued prior to Completion Moneyswap (LSE:SWAP)
Historical Stock Chart
From Jun 2019 to Jun 2024 iv. the adoption of new articles of association of the Company.
MoneySwap Plc Allenby Capital Limited Interim Chief Executive Nominated Adviser Craig Niven Nick Naylor / James Reeve +44 7767 497400 +44 20 3328 5656
Publication of this Circular 28 March 2017 Latest time and date for receipt 10.00 a.m. on 17 of Forms of Direction April 2017 Latest time and date for receipt 10.00 a.m. on 18 of Forms of Proxy April 2017 Extraordinary General Meeting 10.00 a.m. on 20 April 2017
Issue Price GBP0.001 Existing Ordinary Shares 1,197,755,282 Initial Subscription Shares* 2,443,420,775 Enlarged Share Capital* 3,641,176,057 Gross aggregate proceeds of the GBP2,443,421 Initial Subscription* Maximum number of new Ordinary Shares that could be issued pursuant to the Subscription Option assuming no other new Ordinary Shares are issued prior to the exercise of the Subscription Option 1,149,845,071 Maximum number of Ordinary Shares that can be issued to Wraith assuming no other new Ordinary Shares are issued other than the Subscription Shares and the Wraith Further Option is not exercised 3,593,265,846 Maximum number of Fee Conversion Shares that could be issued pursuant to the Fee Conversion Options 224,634,147 Number of Management Options being waived 19,666,081 Existing Options 41,312,800 Fully Diluted Share Capital** 5,854,808,916
**Assuming exercise in full of the Subscription Option, the Fee Conversion Options, all Existing Options and the Wraith Further Option, and assuming no other new Ordinary Shares are issued
LETTER FROM THE CHAIRMAN OF MONEYSWAP PLC
1. Introduction
Further to the discussions with Wraith, as announced by the Company on 6 March 2017, the Board announced on 21 March 2017 that MoneySwap had entered into a conditional Subscription Agreement with Wraith to raise approximately GBP2.44 million (before expenses) for the Company by way of the Initial Subscription. In addition, the Company has granted Wraith the Subscription Option and the Wraith Further Option. Wraith is a privately-owned company incorporated in the Netherlands, controlled by Gilbert Armenta, that has been incorporated for the purpose of investing in MoneySwap. Further details on Wraith are set out in paragraph 4 below.
The purpose of this Circular is to set out the background to and reasons for the Proposals and why the Board considers them to be in the best interests of the Company and its Shareholders as a whole.
The Proposals comprise:
(i) Wraith's subscription (assuming no other new Ordinary Shares are issued by the Company prior to Completion) for 2,443,420,775 Initial Subscription Shares, raising approximately GBP2.44 million and which will result in Wraith acquiring an interest equivalent to 67.1 per cent. of the Company's Enlarged Share Capital;
(ii) the grant of the Subscription Option, which gives Wraith the option to subscribe for, at the Issue Price, new Ordinary Shares in such number as would enable Wraith to increase its interest to up to a total of 75 per cent. of the Increased Share Capital;
(iii) the grant of the Wraith Further Option, which gives Wraith the option to subscribe for, at the Issue Price, three times the number of any new Ordinary Shares issued to any person other than Wraith in the period between Completion and 12 August 2021, so as to ensure that Wraith has the right to subscribe for up to 75 per cent. of the Fully Diluted Share Capital;
(iv) the grant of the Fee Conversion Options by the Company to the Current Director, the Former Director and the Substantial Shareholder;
(v) the waiver of the Management Options;
(vi) the resignation of the Current Director and the appointment of the Proposed Directors to the Board; and
(vii) the adoption of the New Articles.
As part of the negotiations relating to the Subscription, the Company has agreed to grant the Fee Conversion Options to certain individuals in respect of the outstanding fees owed to them by MoneySwap. The Fee Conversion Options will, on Completion, be granted by the Company to the Fee Conversion Option Holders, pursuant to which the Fee Conversion Option Holders will agree not to demand repayment of the unpaid fees due to them by the Group (which total approximately GBP224,635) for a period of 15 months following Completion. During that 15-month period following Completion, those unpaid fees can, on exercise of the Fee Conversion Options by the Fee Conversion Option Holders, be used to satisfy the Fee Conversion Exercise Price for the issue of the Fee Conversion Shares to them (and as a result the outstanding fees will be treated as having been paid in full). In addition, the Management Option Holders have agreed, conditional on Completion, that all outstanding Management Options issued to them will be waived. Further details on the Fee Conversion Options and waiver of the Management Options are set out in paragraph 7 below.
Conditional on Completion, Emma Xu, a Non-Executive Director, will resign from the Board and William Morro and Calvin Yan will be appointed to the Board. Further details on the proposed Board Changes are set out in paragraph 6 below.
The Subscription, the grant of the Fee Conversion Options, the waiver of the Management Options, the Board Changes and the adoption of the New Articles are conditional on, inter alia, Completion and the passing of the Resolutions at the Extraordinary General Meeting, which is to be held at the offices of Allenby Capital Limited at 3 St Helen's Place, London EC3A 6AB on 20 April 2017 at 10.00 a.m. Further details of the Resolutions are set out below and a Notice of Extraordinary General Meeting is contained at the end of this Circular.
The Company has received irrevocable undertakings from Shareholders owning 927,586,494 Existing Ordinary Shares (being 77.44 per cent. of the Existing Ordinary Shares) to vote in favour of the Resolutions at the Extraordinary General Meeting. Details of those irrevocable undertakings are set out in paragraph 15 below.
Having spent a significant amount of time seeking additional funding, the Board believes that the Subscription is the only option available to the Company at the current time that will provide the Company with sufficient working capital to continue as a going concern. Should the Resolutions not be passed at the Extraordinary General Meeting, the Board considers there to be a significant chance that the Directors would need to take actions to protect the interest of creditors, which may result in the ultimate winding up of the Company.
Your attention is drawn to the Notice of Extraordinary General Meeting contained at the end of this document and paragraphs 13 and 14 below, which explain the purpose of the Extraordinary General Meeting and action to be taken by you in relation to the Notice of Extraordinary General Meeting.
2. Details of the Subscription
On 20 March 2017, the Company and Wraith entered into a conditional Subscription Agreement that contains a number of conditions, further details of which are set out below, and provides for:
i) an initial investment by Wraith of approximately GBP2.44 million through the issue of the 2,443,420,775 Initial Subscription Shares at the Issue Price;
ii) the grant to Wraith of the Subscription Option, exercisable at the Issue Price, to acquire (when taken together with the Ordinary Shares held by Wraith pursuant to the Initial Subscription) up to 75 per cent. of the Increased Share Capital. The Subscription Option would result (assuming that the Company does not issue Ordinary Shares to anyone other than Wraith in the interim period and assuming exercise in full) in the issue of a further 1,149,845,071 Subscription Option Shares to Wraith, which would raise approximately an additional GBP1.15 million for the Company. The Subscription Option is exercisable (in whole or in part) by Wraith at any time during the two years following Completion; and
iii) the Wraith Further Option, whereby, if any Ordinary Shares are issued to any person other than Wraith, at any time between Completion and 12 August 2021, Wraith has the right (but not the obligation) to subscribe for three times the number of Ordinary Shares issued to that person at the Issue Price (to ensure that Wraith's shareholding is not diluted as a result of those issue(s) of shares, provided that the Wraith Further Option shall not be used by Wraith to enable Wraith to hold more than 75 per cent. of the issued share capital of the Company).
Following the issue of the Initial Subscription Shares, Wraith will hold a 67.1 per cent. interest in the Enlarged Share Capital (provided no other new Ordinary Shares are issued by the Company before Completion). If Wraith exercises the Subscription Option in full, it would hold 3,593,265,846 new Ordinary Shares, equivalent to 75 per cent. of the Company's Increased Share Capital (noting the Wraith Further Option described above, and assuming no other new Ordinary Shares are issued by the Company following the Initial Subscription).
The Subscription is conditional on satisfaction or waiver by Wraith of the Conditions.
3. Use of proceeds of the Initial Subscription
The subscription amount of the Initial Subscription of approximately GBP2.44 million will be settled as to:
(a) the extinguishment of the amount due to Wraith under the Loan Agreement (details of which were announced on 6 March 2017), which, as at the date of this document totals a principal amount of USD 435,000;
(b) the extinguishment of additional amounts due to Wraith, totalling USD 1.425 million (and which arose as a result of certain loan assignments which were announced on 6 March 2017); and
(c) cash to meet the transaction costs not already funded from monies advanced by Wraith under the Loan Agreement, trade and other creditors and the general working capital requirements of the Company.
4. Information on Wraith
Wraith is a Netherlands based investment company wholly owned by Gilbert Armenta and incorporated for the purpose of investing in MoneySwap. It has not traded to date and has been funded by Gilbert Armenta and other affiliated entities under his control. Gilbert Armenta has considerable experience in the payments sector and is the founder and chief executive officer of Fates Group, a family office management enterprise created to bring traditional venture capital operating methodologies and private equity financial sophistication to mid-market investments. Fates Group is focused on investment in three core market segments: (i) real estate and towers for telecommunications infrastructure; (ii) renewable energy; and (iii) process management systems in the financial services sector.
Following Completion, Wraith will work closely with MoneySwap to assist MoneySwap in developing its payment process business, both by providing technical and business development assistance and in introducing opportunities for new business. The Company and Wraith intend to enter into commercial agreements on terms to be agreed detailing the nature and terms of such assistance, further details of which will be announced in due course.
The directors of Wraith are Gilbert Armenta and William Morro.
5. Relationship Agreement
Wraith, Allenby Capital and the Company will enter into the Relationship Agreement on Completion, which will regulate the ongoing relationship between the Company and Wraith to ensure that the Company is at all times capable of carrying on its business independently of Wraith and its respective associates and that any future transactions between the Company and Wraith and its respective associates are conducted on an arm's-length basis.
Under the Relationship Agreement, Wraith has the right to nominate one person to be a director of the Company for so long as it (together with its associates) holds 10 per cent. or more of total voting rights in the Company, and to nominate two persons to be directors of the Company for so long as it (together with its associates) holds 30 per cent. or more of total voting rights in the Company. William Morro, who is proposed to be appointed as a director of MoneySwap with effect from Completion, is the sole nominee of Wraith to be appointed to the Board pursuant to its rights under the Relationship Agreement. Notwithstanding the foregoing, Wraith has the right to replace William Morro as one of its nominee directors and to nominate a second director following Completion, subject to the satisfactory completion of regulatory due diligence.
Further details of the Relationship Agreement are set out in the Appendix to the Circular.
6. Board Changes
Conditional on Completion, the following changes to the composition of the Board will be effected:
i) Emma Xu will resign from her position as a Non-Executive Director on the Board;
ii) Calvin Yan, the Company's existing financial controller, will join the Board as Chief Financial Officer; and
iii) William Morro will be appointed as a Non-Executive Director on the Board. William Morro is a nominee director of Wraith.
Following Completion, the Board composition will be as follows:
Craig Niven Chairman and Interim Chief Executive Calvin Yan Chief Financial Officer Javier Amo Fernandez Non-Executive Director de Avila William Morro Non-Executive Director
It is intended that a new full-time Chief Executive will be identified and appointed in due course.
Biographies of the Proposed Directors
Calvin Yan
Since 2013, Calvin Yan (aged 45) has been the Chief Financial Officer (non-Board) of the Company and is responsible for the overall financial management of the Group.
Previously, Calvin Yan was group chief financial officer of Greenwood Financial PR and prior to that he had spent 13 years with The Nielsen Company, the worldwide leader in market research, where he worked across finance, operations, client-facing, IT & systems development, facility, and legal divisions, covering Greater China and Asia Pacific. His last position at Nielsen was finance director and chief financial officer for China, based in Shanghai. Earlier in his career, Mr Yan worked with Schneider Electric and The Clorox Company.
Calvin Yan has bachelor's and master's degrees in Business Administration and Accounting from the University of Southern California. He is a fellow of the Hong Kong Institute of Certified Public Accountants.
There are no known disclosures needed to be made at this time under Schedule 2(g) of the AIM Rules in respect of Calvin Yan's proposed appointment.
William Morro
William Morro (aged 63) has three decades of senior executive and board experience with more than 20 companies, both public and private, in which he has been a direct investor. In February 2014, he joined the board of BlueNRGY Group Ltd, a US listed technology-based solutions provider focused on renewable energy and energy-efficiency sectors, and was appointed managing director and chairman in Jan 2015. William Morro is a managing partner of the InterAmerican Group, a U.S. investment, strategic consulting and advisory firm focused primarily on middle-market businesses with cross-border operations in North America and/or Latin America.
Prior to joining InterAmerican in 2001, William Morro headed private equity business units for BMO Group and Heller Financial and was a principal and shareholder of the international management consulting firm, Cresap, McCormick & Paget until shortly after its acquisition by Towers, Perrin.
William Morro holds an undergraduate degree in engineering and chemistry from Dartmouth College and a master's degree with concentrations in finance and economics from the Kellogg Graduate School of Management at Northwestern University.
William Morro currently holds, or has held within the previous five years, directorship or partnership positions with the entities set out in the table below:
Current directorships/partnerships Directorships/partnerships held within previous five years InterAmerican Advisors Eco-Kinetics Group Pty LLC Ltd* InterAmerican Acquisition Eco-Kinetics Pty Ltd* Group Inc. Eco-Kinetics NSW Pty Ltd* InterAmerican Capital Partners Eco-Kinetics Victoria Pty II LLC Ltd* BlueNRGY Group Ltd (prev. Eco-Kinetics Northern Territory CBD Energy Ltd) Pty Ltd* IHL Acquisition Co Pty Eco-Kinetics Energy Systems Ltd Pty Ltd* BlueNRGY LLC Remote Area Power Systems BlueNRGY Renewable Solutions Pty Ltd* Pty Ltd (formerly Westinghouse CBD Solar Labs Pty Ltd* Solar Pty Ltd) KI Solar Pty Ltd* Draker Corporation Boardman Molded International Parmac Air Conditioning LLC & Mechanical Services Pty Ltd Green Earth Developers LLC CNC Development Limited Sing Kung Limited ZGL XII Limited Air Desert Rose Limited Calenmore Limited ESOL B.V. EO Asset Management B.V. Wraith Holding B.V. Orpheus B.V. WHI, Inc. OMS Program Management LLC iCARD1 Inc Zala Group Limited AEE Power Corporacion S.A. (Spain) AEE Acquisition Holdings LLC IAG Sportsman's Card LLC Sportsman's Card Program Management LLC
Fibrex Cordage LLC (formerly, Wellington Cordage LLC), a company for which William Morro served as a director, filed for bankruptcy protection under Chapter 11, as a result of which its assets were sold and distributed to secured creditors in full satisfaction of their debt. Following the sale, the insolvency proceedings of that company were converted to a Chapter 7 and discharged in 2015 with an indeterminate amount payable to unsecured creditors.
On 14 November 2014, while William Morro was serving as a director, an administrator was voluntarily appointed by CBD Energy Ltd (now BlueNRGY Group Ltd) that resulted in the adoption of a deed of company arrangement for the company and its subsidiary, Westinghouse Solar Pty Ltd. that was effective as of 27 January 2015. After conclusion of the administration, no obligations remained outstanding to pre-administration creditors of CBD Energy Ltd. and Westinghouse Solar Pty Ltd. Certain other subsidiaries, including those marked with an asterisk (*) in the table of past directorships above, were liquidated as part of this administration process.
7. Fee Conversion Options and the waiver of the Management Options
Outstanding fees in respect of unpaid salary and consultancy services are currently owed by the Group to each of the Former Director, the Current Director and the Substantial Shareholder. On Completion, the Company will enter into option agreements with each of these individuals, granting each of these individuals the right to subscribe for the Fee Conversion Shares at the Fee Conversion Exercise Price. The right to subscribe for the Fee Conversion Shares will be capable of being exercised by each relevant individual (at the discretion of each individual) during the period commencing three months after Completion, and ending after 15 months following Completion. The subscription price for the Fee Conversion Shares due on exercise of the Fee Conversion Options is equal to the amount of the outstanding fees currently owed to each of the relevant individuals, such that upon the exercise of the Fee Conversion Options by each individual, the amount of the fees owed to the relevant individual by the Group will be set-off against the relevant individual's obligation to pay the subscription price for the Fee Conversion Shares.
The Fee Conversion Options will be issued as follows:
Fee Conversion Outstanding Fee Conversion Option Holder fees (GBP) Options Emma Xu 81,301 81,300,813 Kung Min Lin 45,772 45,772,358 Henry Lin 97,561 97,560,976 TOTAL 224,634 224,634,147
Under the terms of the Fee Conversion Options, each individual will agree that, during the period of the Fee Conversion Options, he or she will not be entitled to make any demand of the Group for outstanding fees, but if any individual does not exercise the Fee Conversion Options before the end of 15 months following Completion, at the end of that period the fees owed by the Group to that individual will be payable on demand.
On Completion, the Management Option Holders will enter into deeds of waiver in favour of the Company pursuant to which each Management Option Holder will waive in full and cancel the Management Options.
The Management Option Holders, and the number of Management Options that they will each be waiving is set out in the table below:
Management Option Holder Management Options being waived Craig Niven 2,994,159 Emma Xu 5,428,927 Javier Amo Fernandez de Avila 5,083,967 Kung Min Lin 6,159,028 TOTAL 19,666,081 8. Significant shareholders' and Directors' shareholdings
Assuming the passing of the Resolutions at the Extraordinary General Meeting and following Completion, insofar as the Company is aware, the shareholdings of the Directors and the Company's significant Shareholders would be as follows:
Interest in Ordinary Shares Current following interest Interest Completion Current as a percentage in Ordinary as %age interest of the Shares of Enlarged in Ordinary Existing following Share Holder Name Shares Shares Completion Capital Wraith Holding B.V. - 0.00% 2,443,420,775 67.11% Broad Rivers International Limited 287,500,000 24.00% 287,500,000 7.90% LLV Company Ltd 227,483,488 18.99% 227,483,488 6.25% Ton Yuan Enterprise Limited 152,403,370 12.72% 152,403,370 4.19% Henry Lin(1) 132,828,136 11.09% 132,828,136 3.65% Kung Min Lin 63,170,055 5.27% 63,170,055 1.73% Emma Xu 11,891,187 0.99% 11,891,187 0.33% Javier Amo Fernandez de Avila 10,167,934 0.85% 10,167,934 0.28% Craig Niven 5,988,317 0.50% 5,988,317 0.16%
Notes
1: The figure for Henry Lin's shareholding includes the Ordinary Shares in which he is beneficially interested indirectly via his controlling interests in Kolarmy Technology Inc, Power Capital Exchange Corp, and Power Capital Forex Management Limited.
2. The above table takes no account of the Subscription Option or the Wraith Further Option or the Fee Conversion Options.
9. Lock-ins and orderly market arrangements
Wraith, Allenby Capital and MoneySwap will enter into the Lock-in Agreement on Completion. The Lock-in Agreement will contain clauses that govern the circ*mstances under which Wraith may sell the Subscription Shares. Further details of the Lock-In Agreement are set out in the Appendix to the Circular.
10. Admission and lifting of the Suspension
Conditional on, inter alia, the passing of the Resolutions and the satisfaction or waiver by Wraith of the Conditions, application will be made to the London Stock Exchange for the Initial Subscription Shares to be admitted to trading on AIM. It is currently anticipated that Admission will become effective and that dealings in the Initial Subscription Shares on AIM will commence by the end of June 2017.
The Ordinary Shares were suspended from trading on AIM on 21 September 2016 due to the Company's failure to publish its annual report and accounts for the year ended 31 March 2016 (the "2016 Results") within six months of the Company's year-end. In addition, the Company was required under the AIM Rules for Companies to publish the interim results for the six months to 30 September 2016 (the "Interim Results") before 31 December 2016.
Following the publication of the 2016 Results and the Interim Results on 21 March 2017, those Suspension conditions have now been addressed. However, the Company has recently been informed by the provider of its Depositary Interests that, as a result of unpaid fees due to the Company's working capital constraints, the Depositary Interest facility put in place at the time of the admission of the Company's Ordinary Shares to trading on AIM in 2011 has been cancelled. At this time all dematerialised interests were converted into certificated form, and Shareholders should have each received a share certificate in respect of their holdings of Ordinary Shares. As the Company is incorporated in Gibraltar, the Ordinary Shares are not eligible for electronic settlement in the UK. The DIs were put in place in order to provide holders of Ordinary Shares with a mechanism of electronic settlement using the CREST system.
The AIM Rules for Companies require that all AIM companies must ensure that their securities are eligible for electronic settlement, and the Company is currently unable to comply with its obligations under AIM Rule 36 in this regard. As a result, the Ordinary Shares will remain suspended from trading on AIM until such time as the Company has put in place a replacement DI facility. The Company submitted the requisite legal opinions and other necessary documents to Euroclear (the entity which administers the DI facility) on 24 March 2017. The Company anticipates that the new DI facility will be in place on or about 10 April 2017. Once a new DI facility has been established the Board anticipates that trading in the Ordinary Shares on AIM will be restored. An update will be provided in due course on the process for enabling the electronic trading of Ordinary Shares through the new DI facility. Shareholders who elect to dematerialise their shareholdings of Ordinary Shares prior to the EGM will find a Form of Direction included with this document in relation to the EGM.
11. Current trading and prospects
In the months prior to its suspension from trading, the Company's trading has been adversely affected by the lack of access to adequate working capital and the uncertainty surrounding the financial viability of the business and its ability to raise capital. The Company's trading has also been adversely affected by the departure of a number of employees. With the proceeds from the Subscription and the Board Changes, it is expected that progress can be made towards building increased revenue streams based on the platforms and licences currently held by the Company, but there can be no assurance that this will be sufficient for the Company to attain profitability or to preclude the necessity of raising further capital that could be dilutive to Shareholders' interests.
The Directors anticipate that, subject to passing the Resolutions and the satisfaction or waiver by Wraith of the Conditions, Completion will occur within three months following the EGM date. However, satisfaction of certain of the Conditions, such as the receipt of the letter of no objection to the changes of qualifying holding in the Company from the FCA, are outside the control of the Company and Wraith. There can therefore be no guarantee as to when Completion will occur, if at all. In the period between the Extraordinary General Meeting and Completion, the Company will continue to be funded by draw-downs pursuant to the Loan Agreement (further details of which can be found in the Company's announcement of 6 March 2017). As at the date of this document, the Company is indebted to Wraith in a total principal amount of USD 435,000 under the Loan Agreement. The Loan Agreement provides a secured loan facility to MoneySwap of USD 725,000. Amounts drawn down under the Loan Agreement by the Company carry interest at 10 per cent. per annum. Further draw-downs under the Loan Agreement may be made at the request of the Company and with the approval of Wraith, in order to meet the working capital needs of the Company prior to Completion.
12. New Articles
The Board considers it appropriate that the Company should adopt new articles of association to reflect certain updated statutory references and updated references to regulatory bodies that may have changed since the Company's existing articles of association were adopted. The New Articles are broadly similar to the Existing Articles but contain additional provisions relating to the conversion of Ordinary Shares into stock, in the event that the Company should resolve to do so in the future, and additionally permit the Shareholders to remove directors by ordinary resolution, rather than by special resolution.
A copy of the New Articles showing the changes to the Existing Articles has been posted to Shareholders along with this Circular and can be also found at www.moneyswapholdings.com.
13. Extraordinary General Meeting
The issue of the Subscription Shares is conditional on, inter alia, the passing of the Resolutions at the Extraordinary General Meeting. In the event that the Resolutions are not approved at the Extraordinary General Meeting, the Subscription will not proceed. If the Subscription does not proceed the Proposals will not complete.
Set out at the end of this Circular you will find a notice convening the Extraordinary General Meeting, to be held on 20 April 2017 at 10.00 a.m. at the offices of Allenby Capital Limited at 3 St Helen's Place, London EC3A 6AB, for the purpose of considering and, if thought fit, passing the following Resolutions:
Ordinary Resolutions
1. to receive and approve the audited consolidated financial statements for the year ended 31 March 2016;
2. to approve the Subscription; 3. to approve the waiver of the Management Options; 4. to grant the directors the authority to allot: (i) the Subscription Shares; (ii) the Fee Conversion Shares;
(iii) 119,776,000 additional Ordinary Shares under a general authority; and
Special Resolution
5. to adopt the New Articles. 14. Action to be taken
Shareholders will find enclosed with the document a Form of Proxy and a Form of Direction (for use in the event that any Shareholder is a Depositary Interest Holder on the date of the Extraordinary General Meeting), in each case for use in connection with the Extraordinary General Meeting. Whether or not you intend to be present at the Extraordinary General Meeting, you are requested to complete and sign:
(a) in the case of Shareholders, the Form of Proxy, which should be returned to Prime Secretaries, Prime Management Limited, 13/15 Giro's Passage, Gibraltar, GX11 1AA as soon as possible and, in any event, so as to arrive no later than 10.00 a.m. on 18 April 2017; and
(b) in the case of Depositary Interest Holders, the Form of Direction, which should be returned to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, so as to arrive no later than 10.00 a.m. on 17 April 2017.
If the Form of Proxy or Form of Direction is not received by the dates and times set out above, it will be rendered void. The completion and return of a Form of Proxy will not preclude you from attending the Extraordinary General Meeting and voting in person if you so wish. Depositary Interest Holders wishing to attend the EGM should contact the Depositary as per the instructions on the Form of Direction. Depositary Interests may be voted through the CREST Proxy Voting Service in accordance with the procedures set out in the CREST manual. The CREST message should be received not later than 10.00 a.m. on 17 April 2017.
15. Irrevocable undertakings
The Company has received indications from Shareholders, including the Directors, representing, in aggregate, approximately 77.44 per cent. of the Existing Ordinary Shares to vote in favour of the Resolutions.
16. Recommendation
Having spent a significant amount of time seeking additional funding, the Board believes that the Subscription is the only option available to the Company at the current time that will provide the Company with sufficient working capital to continue as a going concern. Should the Resolutions not be passed at the Extraordinary General Meeting, the Board considers there to be a significant chance that the Directors would need to take actions to protect the interest of creditors, which may result in the ultimate winding up of the Company. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting as they intend to do in respect of their own holdings of Ordinary Shares.
Yours sincerely,
Craig Niven
Chairman and Interim Chief Executive
DEFINITIONS
The following definitions apply throughout this document, unless the context requires otherwise:
Admission admission of the Initial Subscription Shares to trading on AIM, such admission becoming effective in accordance with the AIM Rules; AIM AIM, a market operated by the London Stock Exchange; AIM Rules for Companies the rules of AIM as set out or AIM Rules in the publication entitled AIM Rules for Companies published by the London Stock Exchange from time to time; Allenby Capital Allenby Capital Limited, the Company's nominated adviser and broker for the purposes of the AIM Rules; Board the board of directors of the Company from time to time; Board Changes the proposed resignation of the Current Director from the Board, and the appointment
of the Proposed Directors to the Board, further details of which are set out in paragraph 6 of the letter from the Chairman of the Company; certificated or in the description of a share certificated form or other security which is not in uncertificated form (that is not in CREST); Circular or this document this document dated 28 March 2017; Company or MoneySwap MoneySwap plc, a company incorporated in Gibraltar with registered number 96229 and whose registered office is 13/15 Giro's Passage, Gibraltar; Completion completion of the issue of the Initial Subscription Shares to Wraith, pursuant to the Subscription Agreement between MoneySwap and Wraith; Conditions the conditions to the Initial Subscription occurring in accordance with the Subscription Agreement, being in summary that: (i) the financial statements of the Company for the financial year ended 31 March 2016 have been duly audited on an unqualified basis (but modified as to an emphasis of matter); (ii) the Ordinary Shares are restored to trading and continue to be admitted to trading on AIM, and Allenby Capital continues to be engaged as the Company's nominated adviser; (iii) the FCA has provided a letter of no objection to the changes of qualifying holding in the Company; (iv) the Resolutions have been passed; (v) there has been no breach of certain of the warranties contained in the Subscription Agreement; and (vi) there has been no material adverse change in any major financial market in the US, the UK, Hong Kong or the EU; CREST the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations); Current Director Emma Xu, a Director of the Company; Depositary Capita IRG Trustees Limited, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU; Depositary Interests the depositary interests in or DIs uncertificated form representing Ordinary Shares; Directors the directors of the Company at the date of this document, as set out on page 10 of this document; Enlarged Share Capital the Company's issued share capital as enlarged by the issue of the Initial Subscription Shares; EU the European Union; Euroclear Euroclear UK & Ireland Limited; Existing Articles the Company's articles of association, in effect as at the date of this document; Existing Options the share options granted by the Company prior to the date of this Circular to any person other than pursuant to: (i) the Subscription; (ii) the Fee Conversion Options; and (iii) the Management Options to be waived; Existing Ordinary Shares the 1,197,755,282 Ordinary Shares in issue as at the date of this document, having a nominal value of GBP0.001 per Existing Ordinary Share; Extraordinary General the extraordinary general meeting Meeting or EGM of the Company, notice of which is set out at the end of this Circular, and including any adjournment(s) thereof; FCA the UK's Financial Conduct Authority; Fee Conversion Exercise an amount equal to the aggregate Price outstanding fees currently owed by the Group to each of the Current Director, the Former Director and the Substantial Shareholder, respectively, such that upon the exercise of the Fee Conversion Options by each individual, the amount of the fees owed to the relevant individual by the Group will be set-off against the relevant individual's obligation to pay the subscription price for the Fee Conversion Shares; Fee Conversion Options a proposed option to be granted to each of the Current Director, the Former Director and the Substantial Shareholder to subscribe for the Fee Conversion Shares at the Fee Conversion Exercise Price (further details of which are set out in paragraph 7 of this document below); Fee Conversion Option the Current Director, the Former Holders Director and the Substantial Shareholder; Fee Conversion Shares the 224,634,147 new Ordinary Shares to be issued at the Fee Conversion Exercise Price to the Fee Conversion Option Holders on exercise of the Fee Conversion Options; Form of Direction the form of direction for DI holders accompanying this document relating to the Extraordinary General Meeting; Form of Proxy the form of proxy accompanying this document relating to the Extraordinary General Meeting; Former Director Kung Min Lin, a former director of the Company who resigned on 30 December 2015; FSMA the UK Financial Services and Markets Act 2000, as amended; Fully Diluted Share the aggregate of the then issued Capital share capital of the Company and any Ordinary Shares the subject of any options or rights to subscribe granted by the Company which are capable of exercise from time to time (including the Existing Options, the Subscription and the Fee Conversion Options); GBP or GBP pound sterling, the legal currency of the United Kingdom; Group the Company and its subsidiary undertakings at the date of this document; Increased Share Capital the issued share capital of the Company as at the date of exercise of the Subscription Option as increased to take into account the Subscription Option Shares to be issued pursuant to the Subscription Option and any other Ordinary Shares that the Company has an unconditional obligation to issue as at that date; Initial Subscription the issue of the Initial Subscription Shares at Completion to Wraith pursuant to the terms of the Subscription Agreement; Initial Subscription the 2,443,420,775 new Ordinary Shares Shares proposed to be issued to Wraith pursuant to the Initial Subscription at Completion (or such higher number of Ordinary Shares as would entitle Wraith to hold at least 51 per cent. of the Enlarged Share Capital
on Completion); Issue Price GBP0.001 per new Ordinary Share to be paid by Wraith pursuant to the Initial Subscription and the Subscription Option; Loan Agreement the loan facility dated 6 March 2017 between the Company and Wraith, further details of which were announced by the Company on 6 March 2017; Lock-in Agreement the lock-in agreement to be entered into between Wraith, Allenby Capital and the Company on Completion, further details of which are set out in the Appendix to the Circular; Lock-in Period the period commencing on the date of Admission and expiring on the date falling 12 months after Admission; London Stock Exchange the London Stock Exchange Group plc; Management Options the existing options granted to the Management Option Holders by the Company over 19,666,081 unissued Ordinary Shares pursuant to (i) certain employee share option schemes and rights to subscribe for Ordinary Shares and (ii) certain employee and non-executive long-term incentive plans put in place by the Company; Management Option Holders the Directors and the Former Director; New Articles the proposed new articles of association of the Company; Notice of Extraordinary the notice of Extraordinary General Meeting General Meeting, set out at the end of this document; Ordinary Shares the ordinary shares of GBP0.001 each in the capital of the Company in issue from time to time; PRC or China the People's Republic of China; Proposals the Subscription, the waiver of the Management Options, the grant of the Fee Conversion Options and the adoption of the New Articles; Proposed Directors William Morro and Calvin Yan; Prospectus Rules the Prospectus Rules published by the FCA; Registrars Capita Registrars (Guernsey) Limited, The Registry, Mont Crevelt House, Bulwer Avenue, St Sampson, Guernsey GY2 4LH; Relationship Agreement the agreement to be entered into on Completion between the Company, Allenby Capital and Wraith, details of which are set out in the Appendix to the Circular; Resolutions the resolutions to be proposed at the Extraordinary General Meeting, as set out in the Notice of Extraordinary General Meeting; Shareholders holders of Ordinary Shares; Subscription the conditional subscription by Wraith for the Subscription Shares comprising, together, the Initial Subscription, the Subscription Option and the Wraith Further Option, on the terms of the Subscription Agreement between Wraith and the Company and further described in this document; Subscription Agreement the agreement dated 20 March 2017 between the Company and Wraith relating to the Subscription, as amended by a deed of variation dated 28 March 2017, details of which are set out in the Appendix of the Circular; Subscription Option the option granted to Wraith pursuant to the terms of the Subscription Agreement by which, if exercised, Wraith has the right to be issued and allotted further new Ordinary Shares at the Issue Price such that its total shareholding in the Company may increase to up to 75 per cent. of the Increased Share Capital; Subscription Option the new Ordinary Shares that Shares may be issued to Wraith pursuant to the Subscription Option; Subscription Shares the Initial Subscription Shares, the Subscription Option Shares and any new Ordinary Shares to be issued pursuant to the Wraith Further Option; Substantial Shareholder Henry Lin, a substantial shareholder (under the definition of the AIM Rules) of the Company's Existing Ordinary Shares and the brother of the Former Director; Suspension the suspension of the Ordinary Shares from trading on AIM in accordance with the AIM Rules; uncertificated shares recorded on a register of securities maintained by Euroclear in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST; UK or United Kingdom the United Kingdom of England, Scotland, Wales and Northern Ireland; US$ or $ US dollars, the legal currency of the United States; Wraith Wraith Holding B.V., a company incorporated in the Netherlands with Company number 67229581 and whose registered address is Startbaan 8, 1185 XR, Amstelveen, the Netherlands; and Wraith Further Option the option granted to Wraith pursuant to the terms of the Subscription Agreement by which Wraith will have the right, but not the obligation, from Completion to 12 August 2021 to subscribe for three times the number of any new Ordinary Shares issued to any other person, with that option being exercisable at the Issue Price for each Ordinary Share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
NOGOKFDPABKDQNB
(END) Dow Jones Newswires
March 29, 2017 02:02 ET (06:02 GMT)
