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2018-09-21 16:59:33 CEST 2018-09-21 16:59:33 CEST REGULATED INFORMATION Afarak Group Plc - Notice to general meetingINVITATION TO THE EXTRAORDINARY GENERAL MEETING16:00 London, 18:00 Helsinki, September 21, 2018 - Afarak Group Plc ("Afarak" or "the Company") INVITATION TO THE EXTRAORDINARY GENERAL MEETING Afarak Group Plc invites shareholders to the Extraordinary General Meeting to be held on 12 November 2018, starting at 10:00 a.m. (Finnish time) at Union Square Auditorium (Floor K1) Unioninkatu 22, 00130 Helsinki, Finland. A. MATTERS ON THE AGENDA OF THE EXTRAORDINARY GENERAL MEETING:
The General Meeting will address the authorisation to the Board of Directors to decide on the repurchase of Afarak Group Plc’s own shares on the grounds of the request of shareholder LNS Ltd (formerly known with the name Kermas Resources Ltd), owning shares representing more than one tenth of all the shares and votes of the Company, pursuant to Chapter 5, Section 4 of the Companies Act to convene a General Meeting. LNS proposes that Afarak’s Extraordinary General Meeting would resolve to authorise the Board of Directors of Afarak (“Board”) to plan, decide and to execute the swap of Afarak’s shares by a voluntary takeover bid to be made by Afarak to Afarak’s shareholders in accordance with the Finnish Securities Markets Act (“Takeover Bid”) as proposed below. Background of the proposal In LNS’s view, there is not enough liquidity in the Helsinki and London Stock Exchanges to allow larger shareholders to exit, hence LNS proposes that Afarak’s Extraordinary General Meeting would resolve to authorise the Board to plan, decide and to execute the Takeover Bid in order to create a window of opportunity to those shareholders who would like to exit from Afarak. After the execution of the Takeover Bid Afarak Group would have only those shareholders remaining who either have decided to continue as current shareholders in Afarak or who alternatively have decided to transfer to be new shareholders in Afarak Holdings Ltd. LNS’s view is that after the execution of the Takeover Bid Afarak Group would be in a better position due to the fact that the remaining shareholders would be committed and interested in the long-term development of Afarak Group. Currently some shareholders of the Company have had difficulties to find common understanding in various issues involving the Company, and in the long run the Company’s businesses might suffer because of this. LNS also believes that the current share price in the market is at least partially based on factors that are not directly related to the Company’s business performance, but nevertheless suggests to use it as a basis for the Takeover Bid. Therefore in LNS’s justified view, the reasonable price offered per share to the shareholders in the potential Takeover Bid would be at least EUR 0.90 per share and not more than EUR 1.15 per share. The cash consideration in the Takeover Bid of at least EUR 0.90 per share and not more than EUR 1.15 per share corresponds to a premium of approximately 15.4 percent to the closing price of the shares of Afarak (EUR 0.78) on Nasdaq Helsinki on 18 September 2018. Alternatively, Afarak would be able to pay the consideration in securities i.e. shares of Afarak Holdings Ltd owned by Afarak; with an exchange ratio of 1:1 in such a way that against one (1) Afarak share the consideration would be one (1) existing share in Afarak Holdings Ltd currently owned by Afarak. In order to ensure equal treatment of Afarak’s shareholders, the Takeover Bid should naturally be directed to all of the shareholders of Afarak. In the event of the General Meeting’s decision in accordance with the this proposal, Afarak would have to, inter alia, draw up a prospectus in accordance with the Finnish Securities Markets Act and have it approved by the Financial Supervisory Authority in order to carry out the Takeover Bid. The prospectus for the Takeover Bid would contain, inter alia, the detailed terms of the Takeover Bid and instructions to shareholders, in accordance with which the shareholders could, if they so wished, offer their Shares to Afarak for acquisition. LNS states its support to proposal and additionally state that it undertakes to use its right to offer its shares for acquisition by Afarak in the possible Takeover Bid in such a way that against one (1) Afarak share the consideration shall be one (1) existing share in Afarak Holdings Ltd. The willingness expressed and support given by LNS naturally significantly reduces the amount of funds required for the potential acquisition of the shares in the possible Takeover Bid. Proposal for a conditional authorisation given to the Board of Directors LNS proposes that the Afarak Group Plc’s General Meeting would decide to conditionally authorise Afarak Group Plc’s Board to acquire Afarak Group Plc’s shares as follows: Content of the authorisation The Board of Directors of Afarak Group Plc (“Afarak”) is authorised to decide on the acquisition of a maximum of 31,500,000 own shares (“Shares”) by a voluntary takeover bid (“Takeover Bid”) made to Afarak’s shareholders in accordance with the Finnish Securities Markets Act so that:
Each shareholder of Afarak shall also have the right not to participate in the Takeover Bid and to continue as a shareholder in Afarak.
The decision concerning the authorisation requires a qualified majority of at least two thirds of the votes cast and shares represented at the meeting. Conditionality of the authorisation The authorisation granted to the Board is conditional on the fulfilment of all of the following conditions:
The General Meeting will address the dismissal of the Board of Directors on the grounds of the request of shareholders Joensuun Kauppa ja Kone Oy, Markku Kankaala, Esa Hukkanen, Petri Suokas, Tomi Hyttinen, Taloustieto Incrementum Ky, Juhani Lemmetti, Kari Kakkonen, Antti Kivimaa, AJ Elite Value Hedge Fund, Aarne Simula and Timo Kankaala, owning shares representing more than one tenth of all the shares and votes of the Company, pursuant to Chapter 5, Section 4 of the Companies Act to convene a General Meeting. The Company has received notifications that shareholders Atkey Ltd and LNS Ltd (formerly known with the name Kermas Resources Ltd), who hold more than 56 % of the shares and votes of the Company, will vote against the presented proposal.
The General Meeting will address the election of a new Board of Directors, independent of the Company's main shareholder Danko Koncar and his controlled corporations on the grounds of the request of shareholders Joensuun Kauppa ja Kone Oy, Markku Kankaala, Esa Hukkanen, Petri Suokas, Tomi Hyttinen, Taloustieto Incrementum Ky, Juhani Lemmetti, Kari Kakkonen, Antti Kivimaa, AJ Elite Value Hedge Fund, Aarne Simula and Timo Kankaala, owning shares representing more than one tenth of all the shares and votes of the Company, pursuant to Chapter 5, Section 4 of the Companies Act to convene a General Meeting. According to the request, the proposal for the composition of the Board of Directors will be presented later when it is available and the candidates have given their consent to the appointment. The Company has received notifications that shareholders Atkey Ltd and LNS Ltd (formerly known with the name Kermas Resources Ltd), who hold more than 56 % of the shares and votes of the Company, will vote against the presented proposal.
B. DOCUMENTS OF THE GENERAL MEETING
The notice shall be at the Company before the deadline of the notice to attend. Afarak Group Plc has at the date of invitation, 21 September 2018, in total 263,040,695 shares in issue and of which 263,040,695 have voting rights. The company holds in total 2,854,161 shares in treasury. IN HELSINKI, ON 21 September 2018. The Board of Directors For additional information, please contact: Guy Konsbruck, CEO, +356 2122 1566, guy.konsbruck@afarak.com Financial reports and other investor information are available on the Company's website: www.afarak.com. Afarak Group is a specialist alloy producer focused on delivering sustainable growth with a Speciality Alloys business in southern Europe and a FerroAlloys business in South Africa. The Company is listed on NASDAQ Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK). Distribution: www.afarak.com |
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