PARAGON RESOURCES PLC If you are in any doubt about the contents of this document, or the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant, independent financial advisor or other person duly authorised under the Financial Services and Markets Act 2000 if you are taking advice in the United Kingdom, under the Financial Services (Jersey) Law 1998 if you are taking advice in Jersey, or from an appropriately authorised independent financial advisor if you are in a territory outside the United Kingdom and Jersey.
If you have sold or transferred all of your holding of shares in Paragon Resources plc please forward this document, the attached Notice and accompanying Form of Proxy to the purchaser or agent through whom the sale was effected for transmission to the purchaser or transferee.
The distribution of this document and/or the accompanying Form of Proxy in jurisdictions other than the UK may be restricted by law and therefore persons into whose possession this document and/or the accompanying Form of Proxy comes should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.
PARAGON RESOURCES PLC(incorporated and registered in Jersey under number 95036)NOTICE OF EXTRAORDINARY GENERAL MEETING
Your attention is drawn to the enclosed letter from the Chairman of the Company which sets out further details and an explanation as to why the Board is proposing the Resolution at the Extraordinary General Meeting. Before deciding on what voting action to take, you should fully consider all the information in this document.
Notice of the Extraordinary General Meeting, scheduled for 22 June 2015 at midday, which will be held at the offices of Mourant Ozannes, 22 Grenville Street, St Helier, Jersey, JE4 8PX, Channel Islands, is enclosed with this document and a Form of Proxy for use at the Extraordinary General Meeting is also enclosed. To be valid, the Form of Proxy should be completed in accordance with the instructions in the Notice of the meeting and printed thereon and returned to Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, B63 3DA as soon as possible but, in any event, so as to be received no later than midday on 20 June 2015. A person who is not a member of the Company but is beneficially interested in Ordinary Shares held on their behalf by a broker or other intermediary should complete and send the form in accordance with the instructions provided to them by such broker or other intermediary.
If you hold your Ordinary Shares in uncertificated form you may use the CREST proxy voting service in accordance with the procedures set out in the CREST Manual (please also refer to the accompanying notes to the Notice of Extraordinary General Meeting set out at the end of this document). Proxies submitted via CREST (under CREST ID 7RA11) must be received by the Company's Transfer Agent, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, B63 3DA no later than midday on
20 June 2015 or, in the case of any adjournment or postponement, not later than 48 hours before the time fixed for the holding of
the adjourned or postponed meeting.
Completion and return of a Form of Proxy, or the appointment of a proxy through CREST, will not preclude Shareholders from attending and voting in person at the Extraordinary General Meeting or any adjournment or postponement thereof in person if they so wish and are entitled to do so.
A copy of this document is available at the Company's website www.paragon-‐resources.com. Neither the content of the Company's
website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this document.IMPORTANT NOTICE Cautionary note regarding forward-‐looking statementsThis document includes statements that are, or may be deemed to be, 'forward-‐looking statements'. These forward-‐looking
statements can be identified by the use of forward-‐looking terminology, including the terms 'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects', 'intends', 'may', 'will', or 'should' or, in each case, their negative or other variations or comparable terminology. These forward-‐looking statements include matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Group's financial condition, liquidity, prospects, growth and strategies.
By their nature, forward-‐looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-‐looking statements.
Forward-‐looking statements may and often do differ materially from actual results. Any forward-‐looking statements in this document are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating (amongst other things) to the Group's growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law, the Company undertakes no obligation to publicly release the results of any revisions to any forward-‐looking statements in this document that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this document.References to defined termsCertain terms used in this document are defined and certain technical and other terms used in this document are explained at Part
IV of this document entitled 'Definitions'.
All times referred to in this document are, unless otherwise stated, references to London, UK time.PART I EXPECTED TIMETABLE OF PRINCIPAL EVENTSPublication of this document 28 May 2015
Latest time and date for receipt of Forms of Proxy Midday on 20 June 2015
Extraordinary General Meeting of Shareholders Midday on 22 June 2015
All times and dates are London, United Kingdom time.PART II LETTER FROM THE CHAIRMAN OF PARAGON RESOURCES PLC(Incorporated under the Companies (Jersey) Law 1991 (as amended) with Registered Number 95036)
Directors |
Registered Office |
| Simon Hunt (Executive Chairman) Daniel Cassiano-‐Silva (Non-‐Executive Director) Declan Anthony Sheeran (Non-‐Executive Director)
(the 'Directors') | Ingouville House Ingouville Lane, St. Helier, Jersey, Channel Islands
JE2 4SG |
28 May 2015
Dear Shareholder,
June 2015 at the offices of Mourant Ozannes, 22 Grenville Street, St Helier, Jersey, JE4 8PX, Channel Islands for the purpose of considering and, if thought fit, passing the Resolution. Full details of the Resolution are provided within this document.
The Company held its 2015 Annual General Meeting on 26 May 2015.The Directors had been advised by the Company's NOMAD, Allenby Capital Limited, that a consolidation of the Company's Ordinary Share capital was required for a successful re-‐admission of the Company's Ordinary Shares to trading on AIM. The Directors originally intended to put to the Shareholders at the AGM a special resolution to reorganise the Company's share capital, adopt new articles of association and dis-‐apply pre-‐emption rights to allow the Directors to allot new Ordinary Shares for cash. In light of discussions in the run-‐up to the AGM as to the basis upon which it was most likely to be advantageous for the Company to consolidate the Ordinary Shares, the Directors decided not to put that resolution to Shareholders at the AGM. Having now received further advice and held further discussions, it is now proposed, as set out in the Resolution included in the enclosed Notice of EGM, that the consolidation is on the basis of one Ordinary Share of £0.05 for every one hundred Ordinary Shares of £0.0005. The Directors have concluded that the interests of the Company are best served with this revised consolidation.
Further details are provided below.2. The proposed acquisition of MRE Mining (Mauritius) Limited and re-‐admission to AIMPlease refer to the explanation given in paragraph 2 of Part II of the AGM Circular (a copy of which is also available on the
Company's website, www.paragon-‐resources.com).The Resolution proposed at the EGM is required to provide the Board with the authorities and flexibility needed to pursue this strategy without which, in all likelihood, the Company will cease to be a going concern. 3. Approval of the Share Consolidation, the adoption of the new Articles and the disapplication of pre-‐emption rights to permit the Directors to allot Ordinary Shares for cash 3.1 The Share ConsolidationAt the date of this circular and based on the number of Ordinary Shares in issue and the Company's market capitalisation at the date that trading in its Ordinary Shares was suspended on AIM, the Directors expect that the market price of the Company's Ordinary Shares on re-‐admission to AIM will be below one penny unless action is taken to reduce the number of Ordinary Shares in issue. Accordingly, it is proposed that the Company's Ordinary Shares are consolidated through the Share Consolidation, the principal purpose of which is to increase the per share market price of the Company's Ordinary Shares once the Company's Ordinary Shares are re-‐admitted to trading on AIM and to reduce the number outstanding. The Board is of the opinion that increasing the market price per Ordinary Share will generate greater investor interest in the Company and, in particular, facilitate trading and liquidity in the Company's Ordinary Shares; enhance the prestige of the Company's Shares; and better enable the Company to raise funds to finance its planned operations. These advantages of the consolidation reflect the fact that brokerage commissions on low-‐priced securities (as a percentage of the total transaction value) tend to be higher for such securities and also that institutional investors (other than those which focus on small-‐capitalisation companies or low-‐priced securities) are less likely to invest in low-‐priced securities.
Pursuant to the Share Consolidation, each of the issued and unissued Ordinary Shares of £0.0005 each in the share capital of the Company will then be consolidated on the basis of one Ordinary Share of £0.05 for every one hundred Ordinary Shares of £0.0005. Where an individual shareholding is not divisible by one hundred, the number of Ordinary Shares to be issued will be rounded down to the nearest whole Ordinary Share. All fractional entitlements will be aggregated and dealt with by the Directors as they may resolve. At the date of this circular, it is expected that fractional entitlements will result in the Directors needing to deal with a limited number of Ordinary Shares arising as a result of fractional entitlements. The Directors intend to sell those shares as part of the proposed placing and subscription and retain any benefit for the Company. The Share Consolidation will not have any effect on any individual Shareholders' relative holding of Ordinary Shares, or voting rights, in the Company. As a preliminary step to the Share Consolidation, each of the unissued preference shares of £1 each in the Company's authorised share capital will be redesignated and subdivided into unissued Ordinary Shares of £0.0005. The redesignation of the preference shares is intended to simplify the Company's share capital structure as the Company no longer has any preference shares in issue.
While the Board expects that the Share Consolidation will increase the market price of the Company's Ordinary Shares the long-‐term consequences are less predictable. The price of the Ordinary Shares on AIM is likely to be affected by the Company's performance and by general market and economic conditions that cannot be predicted or evaluated by the Board at this time. Accordingly, even if the Share Consolidation is successful in achieving a higher price for the Company's Ordinary Shares in the short-‐term, there is no assurance that the market value of the Company's Ordinary shares will be greater after the Share Consolidation than it would be without ever effecting the Share Consolidation.3.2 Adoption of the new articles of associationThe Company's existing articles of association have evolved over the years and are now outdated and do not include updates incorporated into Jersey Law by various amendments to the Companies (Jersey) Law 1991. Accordingly, and to further improve the functioning of the Company, it is proposed that new articles of association are adopted. A summary of material provisions of the new articles of association is set out in Part VI. The full text of the proposed new articles of association (together with the memorandum of association of the Company as it will appear following the amendments proposed to be made pursuant to the Resolution) is available on the Company's website at www.paragon-‐resources.com.3.3 Disapplication of pre-‐emption rightsThe Company's available cash balances are insufficient to enable it to continue in operation for a period of 12 months from the date of this document or to fund its preliminary activities in connection with the Proposed Transaction. Accordingly and to remain a going concern, the Company will need to raise additional funding through the issue of New Ordinary Shares through a placing and subscription, as well as issue New Ordinary Shares in connection with the acquisition. The Resolution will, among other things, provide the Directors with new authorities to allot up to 75,000,000 New Ordinary Shares (after completion of the Share Consolidation) in connection with these fundraising activities and the acquisition.For the avoidance of doubt, if the Resolution is not passed at the EGM, the Board is of the opinion that the Company will, in all likelihood, cease to be a going concern. 4. The EGM ResolutionSet out at Part V of this document is a notice convening the EGM at which the EGM Resolution will be proposed. The Resolution will be proposed as a Special Resolution.
A Special Resolution requires a majority of 66.67 per cent. of the votes cast to be cast in favour for it to be passed.5. Action to be taken You will find enclosed with this letter a Form of Proxy for use by Shareholders at the EGM. Whether or not you intend to be present at the EGM, you are requested to complete and return the Form of Proxy in accordance with the instructions in the Notice and printed thereon. To be valid, completed Forms of Proxy must be received by Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, B63 3DA as soon as possible and in any event not later than midday on 20 June 2015 being 48 hours before the time appointed for holding the EGM. Completion of a Form of Proxy will not preclude you from attending the EGM and voting in person if you so choose. 6. RecommendationThe Board believes that the passing of the Resolution is in the best interests of the Company and its Shareholders as a whole. Accordingly the Board unanimously recommends that you vote in favour of the Resolution.
Yours faithfully,Simon HuntChairman,
Paragon Resources plc
To continue reading this noodl, please get the original version here.
|
distributed by
|
