WMC Retail Partners Plc
(“the Company” and "WMC")
Loan stock agreements
Funding package for the development of Cornish Market World
Notice of General Meeting
In my Chairman’s statement detailing the interim results to the six months ending 30th June 2016 I referred to our continuing dialogue with our landlord, the Council, and prospective tenants to deliver a more profitable and certain future at Cornish Market World ("CMW"). I am now very pleased to report a successful outcome to these protracted negotiations and would like to pay tribute to both our landlord and the Council for their helpful and constructive approach. The net result is that our lease will be extended on more acceptable and certain terms and new planning permissions mean that we can commence an important new retail development at the front of our market. Negotiations are at an advanced stage with a number of retailers.
A notice of a General Meeting to be held on 21st October 2016 has been sent to shareholders and details of which are set out below.
I pay tribute to our Chief Executive, Malcolm Ball, who has worked tirelessly on this situation. However the costs of the new developments are beyond WMC’s existing resources thus a new financing package is necessary. I am delighted to report that both our major shareholders, Michael Chadwick and Simons & Co Limited, have responded to our need, as has our bank, and the separate notice and documents recording our coming GM set out the details of this financial package below. Failure to secure this would mean that our developments at CMW could not proceed and the future profitability of the Company would be materially less certain.
Lord Lee of Trafford D.L., F.C.A.
Introduction and Background
The Company has today announced that a company in which its director Michael Chadwick is interested and a company in which its director Sarah Hewett is a director have agreed on terms which are very favourable to the Company to subscribe £200,000 each, conditional on the approval of shareholders, for a new five year interest free secured convertible loan stock ("Loan Stock") pursuant to a Loan Stock Deed (the "Loan Stock Deed") and that it has convened a general meeting, a notice of which is set out at the end of this announcement. The subscription proceeds for the Loan Stock will replace the short term loans totalling £400,000 made to the Company by Michael Chadwick and Simons & Co Limited. The Loan Stock subscription is part of a larger funding package amounting to £1.96 million, which has been established as to £1.8 million to fund the development of our Cornish Market World ("CMW") site at St Austell, Cornwall and as to the balance to provide working capital.
The Ordinary Shares in the capital of the Company have a nominal value of 50p. The UK Companies Act prevents a company issuing shares for less than their nominal value and as the current market price of the Company's Ordinary Shares is around 20p, subject to the approval by Ordinary Shareholders at the forthcoming General Meeting, the nominal value of the Ordinary Shares will be reduced to 5p by converting each Ordinary Share in the capital of the Company in to one Ordinary Share of 5p and one Deferred Share of 45p. The Deferred Shares will have no value and share certificates will not be issued in relation to them. The existing share certificates for the Ordinary Shares will remain valid.
Cornish Market World
The CMW site consists of a large indoor market and a leisure attraction which we hold under a lease which ends in 2031.
Although CMW has made losses during the past few years, since the low point of 2010 which saw extensive flooding, with the support of the landlord of the CMW property, considerable progress has been made and this has included the reconfiguration of the market, the introduction of an additional trading day, the obtaining of planning permission for additional retailing and a restaurant and a growth in visitors at CMW’s Kidzworld attraction. I am also pleased to report that the Company is at an advanced stage of negotiations with a number of retailers to take space at the CMW site.
However, the board believes that a significant investment is essential to deliver a profitable and more certain future for our site.
The CMW site buildings were constructed some 25 years ago and were originally devoted to operating a market open only on weekends and on ten Wednesdays each year, primarily throughout the summer.
In 2015, the Company obtained planning approval for 7 day market trading. Due to the fragility of the markets’ industry, it was considered appropriate to reduce the space devoted to CMW’s market operation and to increase the space devoted to our Kidzworld (family attraction) and use some of the remaining space for retail and restaurant facilities.
The proposed £1.8m investment will be used to fund new cladding and glazing and a prominent lobby/canopy entrance, leisure retailing, new market stalls, with new heating, ventilation and extractors and new equipment in Kidzworld to double our daily capacity and allow for an increase in annual visitor numbers to around 150,000, from its current level of 105,000.
In parallel to working up these redevelopment proposals, we have had helpful and constructive discussions with our landlord at CMW and have agreed revised terms with him which are beneficial to the Company and achieve in particular significant reductions to rental payments.
I can also confirm that the Company has been able to secure funding of £1.96m for the proposed redevelopment works at CMW and for working capital as follows:
Additional loan from Bank of £1,260,000;
Loan from the landlord of the CMW property of £300,000;
Subscription by The DLMI Company, a company in which Michael Chadwick is interested and by Simons & Co Limited, a company in which Sarah Hewett is a director, for £200,000 each of the Loan Stock. At any time prior to the repayment date on 1 October 2021 the holders of the Loan Stock may convert the Stock into Ordinary Shares on the basis of 5 shares for every pound of Loan Stock. At the time of the subscription for the Loan Stock the Company will repay the existing short term loan of £200,000 from Michael Chadwick and the existing loans from Simons & Co Limited will be deemed to be prepaid and used by it to fund its loan stock subscription. Pursuant to the Loan Stock Deed the Company will grant a debenture over all of its assets in favour of The DLMI Company, which will act as security trustee for the holders of the Loan Stock from time to time.
Shareholder approval is being sought for the issue of up to £500,000 of the Loan Stock but it is only the directors' current intention to issue £400,000 of the Loan Stock.
Set out at the end of this announcement is a formal notice convening a General Meeting to be held at the offices of Dentons UKMEA LLP at One Fleet Place, London EC4M 7WS on Friday 21 October 2016 at 11.30 a.m. to consider, and if thought fit pass the following Resolutions:
Resolution 1 – an ordinary resolution to approve the form of the Loan Stock Deed;
Resolution 2 – an ordinary resolution to record the approval of the issue of up to £500,000 of Loan Stock including the issue as to £200,000 each to The DLMI Company, a company in which Michael Chadwick is interested and to Simons & Co Limited, a company in which Sarah Hewett is a director;
Resolution 3 – a special resolution to convert and re-designate each existing Ordinary Share of 50p in the capital of the Company into one Ordinary Share of 5p and one Deferred Share of 45p, to grant the directors authority to allot securities up to an aggregate nominal value of £125,000 pursuant to the terms of the Loan Stock Deed and to disapply the statutory pre-emption rights in relation thereto and to amend the Articles of Association of the Company to provide inter alia for the class rights of the Deferred Shares;
Resolution 4 – a special resolution conditional upon the passing of Resolution 3 and subject to confirmation of the High Court to cancel and extinguish the Deferred Shares.
Only Ordinary Shareholders are entitled to vote at the General Meeting.
For an ordinary resolution to be passed, more than half of the votes cast must be in favour of the resolution.
For a special resolution to be passed, at least three-quarters of the votes cast must be in favour of the relevant resolution.
Documents available for inspection
A copy of the Loan Stock Deed and the current Articles of Association of the Company will be available for inspection at any time during normal business hours on any week day (Saturdays and public holidays excepted) from the date of this notice until the date of the General Meeting and will also be available for inspection at the place of the General Meeting for not less than 15 minutes prior to such meeting until its conclusion.
Action to be taken by Shareholders
Shareholders will find enclosed with the notice of General Meeting document a Form of Proxy for use in connection with the General Meeting. Whether or not you propose to attend the General Meeting in person, you are requested to complete, sign and return the Form of Proxy in accordance with the instructions printed thereon. To be valid, completed Forms of Proxy must be received by the Company’s registrars, Neville Registrars Limited at 18, Laurel Lane, Halesowen, West Midlands, BD3 3DA as soon as possible but in any event not later than 48 hours before the time appointed for holding the General Meeting or any adjournment thereof. If you complete and return a Form of Proxy, you may still attend and vote at the General Meeting in person should you subsequently decide to do so.
Please read the notes to the formal notice of General Meeting and the accompanying Form of Proxy for detailed instructions. The attention of Shareholders is also drawn to the voting intentions of the Directors set out below.
As Michael Chadwick is interested in The DLMI Company and Sarah Hewett is a director of Simons & Co Limited, neither of them have voted on any resolutions relating to the Loan Stock at meetings of the directors and they will not vote on any of the resolutions at the General Meeting. The independent directors, being myself, Malcolm Ball and Andrew Sparrow believe that the proposals are in the best interests of the Company and its shareholders and recommend that shareholders vote in favour of the resolutions, as they intend to do in respect of their own shareholdings, which amount to 144,000 Ordinary Shares representing 2.4 per cent. of the Company's issued Ordinary Share Capital.
Lord Lee of Trafford D.L., F.C.A
Notice of General Meeting
NOTICE is hereby given that a General Meeting of the Company will be held at the offices of Dentons UKMEA LLP at One Fleet Place, London EC4M 7WS on Friday 21 October 2016 at 11.30 am to consider and, if thought fit, (and subject in the case of resolution 4 to the passing of resolution 3) pass the following resolutions which will be proposed as ordinary resolutions (in the case of resolutions 1 and 2) and as a special resolution (in the case of resolutions 3 and 4).
1 THAT the Secured Convertible Loan Stock Deed 2021 (the "Loan Stock Deed") in the form produced to the meeting and summarised in the Chairman's letter to the Company's Ordinary Shareholders dated 4th October 2016 be and is hereby approved.
2 THAT this meeting records its approval to the issue of up to £500,000 of loan stock pursuant to the terms of the Loan Stock Deed including the issue as to £200,000 each to The DLMI Company, a company in which Michael Chadwick, a director of the Company has an interest and to Simons & Co Limited a company in which Sarah J Hewett, a director of the Company, is a director.
3.1 every ordinary share of 50p each in the capital of the Company in issue be and is hereby converted and redesignated as one ordinary share of 5p each and one deferred share of 45p each ("Deferred Shares"), such ordinary shares and Deferred Shares having attached to them the respective rights and being subject to the respective restrictions set out in the Articles of Association of the Company as amended by sub-paragraph 3.5 of this Resolution;
3.2 in addition to all existing authorities, pursuant to Section 551 of the Companies Act 2006 (the "Act") the Directors be and are generally and unconditionally authorised to exercise all powers of the Company to allot Relevant Securities comprising equity securities (as defined in Section 560(1) of the Act) up to an aggregate nominal amount of £125,000 pursuant to the terms of the Loan Stock Deed this authority shall expire (unless previously renewed, varied, or revoked by the Company in general meeting) on 30 September 2021, save that the Company may before such expiry make an offer or agreement which would or might require Relevant Securities to be allotted after such expiry and the Directors may allot Relevant Securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired;
3.3 in addition to all existing powers under section 570 of the Act the Directors be and are hereby empowered pursuant to Section 570 of the Act to allot equity securities (within the meaning of Section 560 of the Act) ("Equity Securities") for cash pursuant to the authority conferred by sub-paragraph 3.2 of this resolution as if sub-section (1) of Section 561 of the Act did not apply to any such allotment, such power shall expire on 30 September 2021 save that the Company may before such expiry make an offer or agreement which would or might require Equity Securities to be allotted after such expiry and the Directors may allot Equity Securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
3.4 In this resolution, "Relevant Securities" means:
3.4.1 shares in the Company other than shares allotted pursuant to (i) an employees' share scheme (as defined in section 1166 of the Act); (ii) a right to subscribe for shares in the Company where the grant of the right itself constituted a Relevant Security; or (iii) a right to convert securities into shares in the Company where the grant of the right itself constituted a Relevant Security; and
3.4.2 any right to subscribe for or to convert any security into shares in the Company other than rights to subscribe for or convert any security into shares allotted pursuant to an employees' share scheme (as defined by section 1166 of the Act). A reference to the allotment of Relevant Securities includes the grant of such a right; and a reference to the nominal amount of a Relevant Security which is a right to subscribe for or convert any security into shares in the Company is to the nominal amount of the shares which may be allotted pursuant to that right.
3.5 the following amendments be and are hereby made to the Articles of Association of the Company:-
3.5.1 in Article 2:
(a) the insertion of the following new definitions after the definition of "Communication Provisions".
(i) "Court" means the High Court of Justice in England and Wales;
(ii) "Deferred Shares" means deferred shares of 45p each in the capital of the Company;
(b) the insertion of the following new definition after the definition "Office":-
"Ordinary Shares" means ordinary shares of 5p each in the capital of the Company;
(c) the insertion of the following new definition after the definition "paid":-
"Preference Shares" means Preference Shares of 50p each in the capital of the Company;
(d) the existing Article 8 (1) be deleted and the following new Article 8 (1) be inserted in its place:-
The share capital of the Company is divided into Ordinary Shares of 5p each, Deferred Shares of 45p each and Preference Shares of 50p each.
(e) the insertion after Article 8 (2) of the following new Article to be numbered 8 (3)
"The special rights and restrictions attaching to the Deferred Shares are as follows:
The holders of the Deferred Shares shall not be entitled to participate in the profits of the Company.
Subject to the rights of the holders of the Preference Shares set out in Article 8 (2) (b) in the event of the winding up of the Company or other return of capital the assets of the Company available for distribution amongst the members shall be applied in the following manner and order of priority:
(i) first, in paying to the holders of the Ordinary Shares the sum of £100,000 per Ordinary Share;
(ii) second, in paying to the holders of the Deferred Shares the amounts paid up or credited as paid up on such shares (excluding any premium paid on subscription);
(iii) third, in distributing the balance amongst the holders of the Ordinary Shares in proportion to the amounts paid up or credited as paid up (excluding any premium paid on subscription) on the Ordinary Shares held by such holders respectively.
(c) VOTING AND ATTENDANCE AT GENERAL MEETINGS
The Deferred Shares shall not at any time confer on the holders thereof any right to attend or vote at any General Meetings of the Company or to receive notices thereof.
Notwithstanding any other provision of the Articles of Association of the Company and unless specifically required by the provisions of the Act, the Company shall not be required to issue any certificates in respect of any Deferred Shares.
(e) AUTHORITY OF THE COMPANY IN RELATION TO TRANSFERS
The Company shall have irrevocable authority at any time:
(i) to appoint a person on behalf of any and all holder(s) of Deferred Shares to enter into an agreement to transfer, and to execute a transfer of, the Deferred Shares, for no consideration, to such person (whether or not an officer of the Company and including the Company itself) as the Directors may determine without the sanction or consent of the holder(s) in question; and
(ii) pending any such transfer to retain any share certificate relating to such shares.
(f) CANCELLATION OF DEFERRED SHARES
Neither the passing by the Company of any Special Resolution for the cancellation of the Deferred Shares for no consideration whether or not by means of a reduction of capital requiring the confirmation of the Court nor the obtaining by the Company nor the making by the Court of any Order confirming any such reduction of capital nor the becoming effective of any such Order shall constitute a variation, modification or abrogation of the rights attaching to the Deferred Shares and accordingly the Deferred Shares may at any time be cancelled for no consideration by means of a reduction of capital effected in accordance with the Act without sanction or consent on the part of the holders of the Deferred Shares.
4 That, subject to and conditional upon the Resolution numbered 3 set out in the notice convening this General Meeting having been passed as a Special Resolution and subject to confirmation by the High Court of Justice in England and Wales:
4.1 the share capital of the Company be reduced by cancelling and extinguishing all of the Deferred Shares of 45p each arising pursuant to Resolution 3; and
4.2 subject to and upon the reduction of the share capital of the Company referred to in paragraph (a) becoming effective the Articles of Association of the Company as amended by Resolution 3 be altered by:-
(a) deleting Article 8 (3) thereof;
(b) deleting in Article 8 (1) the words "and Deferred Shares of 45p each";
(c) deleting the definitions of "Court" and "Deferred Shares" in Article 2 (1).
|Registered Office:||By Order of the Board|
|21 Market Street|
|4th October 2016||Joseph Kenneth Michael Riley|
1 Only those members registered on the Company's register of members at:
(a) 6.00 pm on Wednesday 19 October 2016; or,
(b) if this meeting is adjourned, at 6.00 pm on the day two days prior to the adjourned meeting,
shall be entitled to attend and vote at the meeting.
2 As at 17:00 on 3rd October 2016, the Company's issued share capital comprised 5,999,449 ordinary shares of 50 pence each and 730,574 preference shares of 50 pence each. Each ordinary share carries the right to one vote at a general meeting of the Company and unless the general meeting includes consideration of a resolution to wind up the Company or vary the rights of the holders of preference shares or the dividend on the preference shares is more than six months in arrears the preference shares carry no right to vote at a general meeting, therefore, the total number of voting rights in the Company as at 17:00 on 3rd October 2016 is 5,999,449.
3 A member entitled to attend and vote at the General Meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote instead of him/her. A proxy need not be a member of the Company. Forms of proxy which are enclosed must be lodged with the Company’s registrars, Neville Registrars Limited at Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA not later than 48 hours before the time fixed for the meeting.
4 The completion and return of a form of proxy will not preclude a member from attending and voting at the meeting in person.