14 Oct 2014 10:04
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS..
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY NEW ORDINARY SHARES, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER WITH RESPECT TO THE PROPOSED PLACING.
Superglass Holdings PLC
("Superglass" or the "Group")
Proposed Placing of 125,000,000 New Ordinary Shares at 5 pence per share, Approval of waiver of Rule 9 of the City Code,
Capital Reorganisation and Notice of General Meeting
Introduction
Further to the announcement of 9 September, the Board of Superglass, the UK's leading independent insulation manufacturer, is pleased to announce that, subject to, inter alia, Shareholder approval, it has successfully completed a placing to raise £6.25 million through a proposed placing with institutional and sophisticated private investors of 125,000,000 New Ordinary Shares at a price of 5 pence per New Ordinary Share.
One of the Placees, Bronsstädet AB, has provisionally agreed to subscribe for 59,583,572 New Ordinary Shares, representing approximately 38.9 per cent. of the total number of New Ordinary Shares issued pursuant to the Capital Reorganisation and the Placing. Independent Shareholders are being asked to approve a resolution to allow Bronsstädet AB's participation in the Placing without triggering the requirement for Bronsstädet AB to make an offer to acquire the remaining New Ordinary Shares under Rule 9 of the Code.
In addition, the Board announces that new bank facilities of up to £4.8 million have been negotiated with Close Brothers and will be available for drawdown following Admission, with the available level largely determined by the balance of trade debtors from time to time. The New Facilities will replace the existing facilities with Clydesdale Bank, which will be repaid at a discount of 15 per cent. to the principal amount outstanding of £2.5 million.
As an alternative to the Placing, the Board has considered a number of options to improve shareholder returns, including a sale of the principal trading subsidiary. Following this detailed exercise, the Board believes that a programme of continued infrastructure investment financed through a further injection of capital will improve operational efficiency whilst enhancing customer and supplier confidence, and represents the best available strategy to create shareholder value.
The net proceeds of the Placing of £5.7 million are expected to be used to meet the capital costs associated with implementing the Board's strategy to further reduce operating costs, to finance projected working capital outflows and trading losses during the current financial year and to strengthen the Company's balance sheet in order to provide greater flexibility and headroom in view of the continuing volatility in trading highlighted below.
The Company has received irrevocable undertakings from Shareholders who together have an aggregate beneficial holding of 24,452,368 Existing Ordinary Shares amounting to approximately 87.3 per cent., in aggregate, of the Existing Ordinary Shares in issue as at the date of this letter to vote in favour of Resolutions 1, 2, 3 and 4.
The Company has received irrevocable undertakings from Independent Shareholders who together have an aggregate beneficial holding of 7,447,017 Existing Ordinary Shares amounting to approximately 68 per cent., in aggregate, of the Existing Ordinary Shares held by Independent Shareholders in issue as at the date of this letter to vote in favour of Resolution 5.
A circular (the "Circular") providing full details of the Proposals and incorporating a notice of the General Meeting will be posted to Shareholders today.
Summary of the proposals
· To raise up to £6.25 million (before expenses) through a placing by N+1 Singer of 125,000,000 Placing Shares at 5 pence per share
· To allow the Placing to take place, a reorganisation of the share capital of the Company by subdividing each Existing Ordinary Share into one New Ordinary Share of one penny and one Deferred 24p Share
· A resolution to allow Bronsstädet AB's participation in the Placing without triggering the requirement for Bronsstädet AB to make an offer to acquire the remaining New Ordinary Shares under Rule 9 of the Code
The Board stresses the importance of Shareholders voting in favour of the Resolutions at the General Meeting. As noted in paragraph 2 above, the Board has already explored alternative options to the Placing including a sale of the principal operating subsidiary and, as a result, the Board's judgment is that none of these options is likely to deliver any meaningful value to Shareholders.
Accordingly, the Directors strongly recommend that Shareholders vote in favour of Resolutions 1, 2, 3 and 4 and that Independent Shareholders also vote in favour of Resolution 5, as they intend to do in respect of their own interests amounting to 40,213 Existing Ordinary Shares (representing approximately 0.4 per cent., in aggregate, of the Existing Ordinary Shares held by Independent Shareholders in issue as at the date of this letter).
John Colley, Chairman, commented:
"We are pleased to announce the £6.25 million placing and details of the Company's new banking facilities with Close Brothers. We are delighted with the on going support from existing investors, as well as support from new investors including Mr Peter Gyllenhammar who, on completion, will have a meaningful stake in the Company. The Board believes that the placing will provide Superglass with a considerably strengthened and sustainable long term capital structure. The Company continues to be well placed to benefit from any resurgence in market volumes and the efficiencies from its on going capital investment programme. The Board looks forward to welcoming a representative of Mr Gyllenhammar to the Board in due course."
For further information, please contact:
Superglass Holdings Plc
Alex McLeod, Chief Executive Officer 01786 451170
Chris Lea, Finance Director
N+1 Singer
Sandy Fraser 020 7496 3176
A copy of the Circular will be available for inspection at the National Storage Mechanism which is located at www.morningstar.co.uk/uk/NSM. Copies of the Circular will also be available on the Company's website at www.superglass.co.uk and for collection, free of charge during normal business hours from the Company's registered office up to and including the date of Admission.
Nplus1 Singer Advisory LLP
Nplus1 Singer Advisory LLP, which is a member of the London Stock Exchange, is authorised and regulated in the UK by the Financial Conduct Authority, is acting as sponsor, financial adviser, nominated adviser and broker to Superglass Holdings plc in connection with the Proposals. It should be noted that, in connection with the Proposals, Nplus1 Singer Advisory LLP is acting exclusively for Superglass Holdings plc and no one else. Nplus1 Singer Advisory LLP will not be responsible to anyone other than Superglass Holdings plc for providing the protections afforded to clients of Nplus1 Singer Advisory LLP nor for advising any other person on the transactions and arrangements described in this announcement or the Circular. No representation or warranty, express or implied, is made by Nplus1 Singer Advisory LLP as to any of the contents of this announcement or the Circular. Apart from the liabilities and responsibilities, if any, which may be imposed on Nplus1 Singer Advisory LLP by the Financial Services and Markets Act 2000 or the regulatory regime established under it, Nplus1 Singer Advisory LLP accepts no responsibility whatsoever for the contents of this announcement or the Circular or for any other statement made or purported to be made by it or on its behalf in connection with Superglass Holdings plc, the Existing Ordinary Shares, the New Ordinary Shares or the Proposals. Nplus1 Singer Advisory LLP accordingly disclaims all and any liability whatsoever whether arising in tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or the Circular or any such statement.
Extracts from the Circular
1. Introduction
The Company has announced today that it is proposing to raise, in aggregate, approximately £6.25 million through a proposed placing with institutional and sophisticated private investors of 125,000,000 New Ordinary Shares at a price of 5 pence per New Ordinary Share. One of the Placees, Bronsstädet AB, has provisionally agreed to subscribe for 59,583,572 New Ordinary Shares, representing approximately 38.9 per cent. of the total number of New Ordinary Shares issued pursuant to the Capital Reorganisation and the Placing. Independent Shareholders are being asked to approve a resolution to allow Bronsstädet AB's participation in the Placing without triggering the requirement for Bronsstädet AB to make an offer to acquire the remaining New Ordinary Shares under Rule 9 of the Code.
The Board has concluded that the method of issue and Placing Price is appropriate to secure the investment necessary in the Company, having regard to its financial and trading position, with current cash balances eroded to the point where the Company may struggle to absorb any further material trading losses in the near term, and the importance therefore of further strengthening the Company's balance sheet without delay in the face of continuing volatility in trading conditions.
The Placing Price of 5 pence per share is at a discount to the nominal value of the Existing Ordinary Shares of 25 pence each. As the Act prohibits the issue of new shares at a price below their nominal value, the Company is also proposing the Capital Reorganisation, which will have the effect of reducing the nominal value of each Existing Ordinary Share, to avoid a contravention of the relevant provisions of the Act. Further details on the Capital Reorganisation are set out in paragraph 5 below.
Immediately following Admission, the New Ordinary Shares issued pursuant to the Capital Reorganisation of the Existing Ordinary Shares will represent a maximum of 81.7 per cent. of the total number of New Ordinary Shares issued pursuant to the Capital Reorganisation and the Placing.
The Issue is conditional, inter alia, on Admission becoming effective, the Placing Agreement between the Company and N+1 Singer becoming unconditional and not being terminated (in accordance with its terms), and the passing of the Resolutions at the General Meeting, including a special resolution which will give the Directors the required authority to disapply statutory pre-emption rights in respect of the allotment of the New Ordinary Shares and an ordinary resolution (to be the subject of a poll) to approve a dispensation from the requirements of Rule 9 of the City Code in respect of Bronsstädet AB's participation in the Placing. Subject to all relevant conditions being satisfied (or, if applicable, waived), it is expected that the New Ordinary shares will be admitted to trading on AIM on or around 8.00 a.m. on 31 October 2014. The Placing is not underwritten.
The purpose of this document is to set out the reasons for the Placing, to seek your approval of the Resolutions which are required to be passed by Shareholders in order to allow the Placing to proceed and to explain why the Board considers the Resolutions to be in the best interests of the Company and Shareholders as a whole.
Notice of the General Meeting, to be held at the offices of Maclay Murray & Spens LLP, Quartermile One, 15 Lauriston Place, Edinburgh EH3 9EP at 12.00 p.m. on 30 October 2014, to consider and, if thought fit, to approve the Resolutions, is set out at the end of this document.
2. Background to and reasons for the Placing
As reported within the Company's announcement dated 9 September 2014, trading conditions in the UK insulation market have continued to be difficult, with a significant decline in demand for loft and cavity wall insulation resulting in excess manufacturing capacity, a highly competitive environment and continued pricing pressure. Demand from Government energy efficiency schemes, Green Deal and Energy Company Obligation, has remained at negligible levels and no near term pick up is anticipated. By contrast, demand from construction markets is showing good growth fuelled by new build housing activity and commercial construction. Responding to this ongoing trend the Company has been repositioned to focus on construction markets, with sales to that sector now accounting for 80 per cent. of UK revenues compared to 30 per cent. four years ago.
There was nonetheless an upturn in trading during the final quarter of the financial year ended 31 August 2014, driven by a step change in sales volume and this is a clear reflection of the progress that has been achieved. As well as recent increases in volumes, there have been improvements in product mix, with growing sales of higher margin products. The Board intends to continue to focus the Company's commercial strategy towards higher value added and higher margin products.
The Company has made significant operational progress in the period, driving down costs and improving manufacturing efficiencies. The Board is pleased to report that the business has delivered the planned annual cost savings originally targeted. However, in response to market conditions and continued over-supply in the market, which is expected to persist for some time, the Board's strategy is to further reduce operating costs. The Board has identified potential incremental annual cost savings of approximately £1.9 million, which would require capital investment of approximately £1.0 million to implement and would include a significant reduction in manufacturing capacity.
New bank facilities of up to £4.8 million have been negotiated with Close Brothers and will be available for drawdown following Admission, with the available level largely determined by the balance of trade debtors from time to time. The New Facilities will replace the existing facilities with Clydesdale Bank, which will be repaid at a discount of 15 per cent. to the principal amount outstanding of £2.5 million.
As a result of the settlement of Clydesdale Bank's outstanding liability, Clydesdale Bank would be entitled to convert the Convertible Shares into 2,800,757 Ordinary Shares, representing 1.8 per cent of the New Ordinary Shares. The New Facilities will provide the headroom required to meet the Company's currently foreseeable trading needs, but will not be adequate to fund the additional cost saving initiatives described above or further material trading losses.
As an alternative to the Placing, the Board has considered a number of options to improve shareholder returns, including a sale of the principal trading subsidiary. Following this detailed exercise, the Board believes that a programme of continued infrastructure investment financed through a further injection of capital will improve operational efficiency whilst enhancing customer and supplier confidence, and represents the best available strategy to create shareholder value.
3. Use of proceeds
The net proceeds of the Placing of £5.7 million are expected to be used to meet the capital costs associated with implementing the Board's strategy to further reduce operating costs, to finance projected working capital outflows and trading losses during the current financial year and to strengthen the Company's balance sheet in order to provide greater flexibility and headroom in view of the continuing volatility in trading highlighted below.
4. Current trading and prospects
As reported within the announcement dated 9 September 2014, the Company achieved positive EBITDA in both July and August but is not yet generating net cash on a monthly basis. Order patterns remain volatile and order visibility is expected to remain low for the foreseeable future. September order intake and sales volumes were slightly below overall FY14 run rates.
Whilst there are increasing signs of recovery and growth in construction markets, the poor uptake of Government energy efficiency schemes is expected to persist through the coming financial year and beyond. As a result, as also announced on 9 September, it is the Board's view that the scale and pace of revenue and earnings growth is likely to be more modest than previously anticipated.
The Board will carefully monitor market conditions as they evolve and will refine its operating strategy in the light of any material changes.
5. Capital Reorganisation
The Placing Price of 5 pence per Ordinary Share represents a discount of 80 per cent. to the current nominal value of the Existing Ordinary Shares. The Act prohibits the allotment of shares at a discount to their nominal value and it is therefore proposed to reorganise the share capital of the Company by subdividing each Existing Ordinary Share into one New Ordinary Share of one penny and one Deferred 24p Share.
Save for the dilution which will result from the issue of the Placing Shares, the economic interest and voting rights of existing Shareholders will not be diluted by the implementation of the Capital Reorganisation and each New Ordinary Share will have the same rights (including voting and dividend rights) as each Existing Ordinary Share has at present.
Resolution 2 will be proposed at the General Meeting for the purpose of the Capital Reorganisation and Resolution 3 will be proposed to approve the adoption of the New Articles as referred to below.
In order to effect the Capital Reorganisation, the Company proposes to adopt the New Articles which will consist of the existing articles of association of the Company amended to include the rights of the Deferred 24p Shares. These rights will be minimal, thereby rendering the Deferred 24p Shares effectively valueless.
No new share certificates will be issued following the subdivision and CREST accounts will not be credited as shareholders' total shareholding will not change.
The rights attaching to the Deferred 24p Shares can be summarised as follows:
· they do not entitle holders to receive any dividend or other distribution or to receive notice or speak or vote at general meetings of the Company;
· they have no rights to participate in a return of assets on a winding up;
· they are not freely transferable;
· the creation and issue of further shares will rank equally or in priority to the Deferred 24p Shares;
· the passing of a resolution of the Company to cancel the Deferred 24p Shares or to effect a reduction of capital shall not constitute a modification or abrogation of their rights; and
· the Company shall have the right at any time to purchase all of the Deferred 24p Shares for an aggregate consideration of £0.01.
No application will be made to the London Stock Exchange for the Deferred 24p Shares to be admitted to trading on AIM or any other stock exchange. No share certificates will be issued for any Deferred 24p Shares. There are no immediate plans to purchase or to cancel the Deferred 24p Shares, although the Directors propose to keep the situation under review.
A copy of the New Articles proposed to be adopted by Resolution 3 will be available for inspection at the General Meeting and will be made available free of charge on the Company's website at www.superglass.co.uk.
6. Information on the Placing
The Company is proposing to raise up to £6.25 million (before expenses) through a placing by N+1 Singer of 125,000,000 Placing Shares at 5 pence per share. If allotted, the Placing Shares will represent approximately 81.7 per cent. of the New Ordinary Shares.
Under the terms of the Placing Agreement, N+1 Singer has agreed to use its reasonable endeavours, as agents on behalf of the Company, to procure placees for the Placing Shares at the Placing Price and has conditionally placed the Placing Shares with institutional and other investors.
The Placing is conditional upon the Placing Agreement becoming unconditional and not being terminated in accordance with its terms, on Admission and on the Resolutions being approved. The Placing Agreement contains provisions entitling N+1 Singer to terminate the Placing Agreement at any time prior to Admission in certain circumstances that are customary for an agreement of this nature. If this right is exercised, the Placing will lapse. The Placing has not been underwritten by N+1 Singer or any other party.
Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. The Placing Shares will rank pari passu in all respects with the other New Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the ordinary share capital of the Company following Admission.
7. Related Party Transaction
River and Mercantile Asset Management and Ennismore Fund Management are related parties of the Company for the purposes of the AIM Rules as they have existing shareholdings in the Company that are greater than 10 per cent. of the Existing Ordinary Shares, being 14.9 per cent. and 21.8 per cent., respectively. It is proposed that River and Mercantile and Ennismore will participate in the Placing in respect of 20,000,000 and 10,000,000 Placing Shares, respectively.
The Directors, having consulted with the Company's Nominated Adviser, N+1 Singer, consider that the terms of the Related Party Transaction are fair and reasonable insofar as the Company's shareholders are concerned.
John Colley and Alex McLeod, respectively Chairman and Chief Executive of the Company, are unable to participate in the Placing because the Company is currently in a close period, pending release of audited financial statements for the financial year ended 31 August 2014. Both John Colley and Alex McLeod have intimated that it is their present intention to buy further shares in the Company as soon as they are permitted to do so.
8. Dilution resulting from the Placing
The Board has concluded that the method of issue and Placing Price is appropriate to secure the investment necessary in the Company, having regard to its financial and trading position, with current cash balances eroded to the point where the Company may struggle to absorb any further material trading losses in the near term, and the importance therefore of further strengthening the Company's balance sheet without delay in the face of continuing volatility in trading conditions.
The Placing is being undertaken with a small number of institutional and sophisticated private investors, including certain Existing Shareholders. The Placing will result in dilution of 81.7 per cent. of the holdings of Existing Shareholders who have not been invited to participate in the Placing.
9. The City Code
The proposed Placing gives rise to certain considerations under the Code. Brief details of the Panel, the Code and the protections they afford are described below.
The Code applies to all offers for companies which have their registered offices in the United Kingdom if any of their securities are admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom. The Existing Ordinary Shares are admitted to trading on AIM, being a multilateral trading facility, and therefore Shareholders are entitled to the protections afforded by the Code.
Under Rule 9 of the Code, where any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which persons acting in concert with him or her are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the Code, that person is normally required to make a general offer to all the holders of any class of equity share capital, whether voting or non-voting, or other transferable securities carrying voting rights in that company to acquire the balance of their interests in the company.
Additionally, under Rule 9 of the Code, when any person, together with persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested, that person is normally required to make a general offer to all the holders of any class of equity share capital, whether voting or non-voting, or other transferable securities carrying voting rights in that company to acquire the balance of their interests in the company.
An offer under Rule 9 must be in cash (or with a cash alternative) and at the highest price paid within the preceding 12 months to acquire any interest in shares in the Company by the person required to make the offer or any person acting in concert with him or her.
Following completion of the Placing, Bronsstädet AB's interest in shares carrying voting rights of the Company will be approximately 38.9 per cent., which, without a waiver of the obligations under Rule 9, would oblige Bronsstädet AB to make a general offer to Shareholders under Rule 9 of the Code. Bronsstädet AB does not currently have an interest in Existing Ordinary Shares.
Dispensation from General Offer
Under Note 1 on the Notes on the Dispensations from Rule 9 of the Code, when the issue of new securities in consideration for an acquisition or a cash subscription would otherwise result in an obligation to make a general offer under Rule 9 of the Code, the Panel would normally grant a waiver of the obligation if, inter alia, the shareholders of the company who are independent of the person and any person acting in concert him or it who would otherwise be required to make an offer and do not have an interest in the proposed transaction which may compromise independence, in this case being the Independent Shareholders, pass an ordinary resolution on a poll at a general meeting approving the proposals giving rise to the obligation to make an offer and the waiver of such obligation by the Panel.
The Panel has agreed to waive the obligation to make a general offer that would otherwise arise as a result of Bronsstädet AB's participation in the Placing, subject to the approval of the Independent Shareholders. Accordingly, the Whitewash Resolution is being proposed at the General Meeting under which Independent Shareholders are being asked to approve a resolution to allow Bronsstädet AB's participation in the Placing without triggering the requirement for Bronsstädet AB to make an offer to acquire the remaining New Ordinary Shares under Rule 9 of the Code. The Whitewash Resolution will be taken on a poll. A representative of each of the Placees may attend the General Meeting but, as the Placees are deemed to have an interest in the proposed transaction, none of the Placees (nor any nominee or representative of them) will be entitled to vote on the Whitewash Resolution. Save for the Placees, there are no other conflicted parties excluded from voting on the Whitewash Resolution.
Bronsstädet AB has confirmed that, if the Resolutions are approved, it has no intentions to influence the Board or make any changes in respect of:
· the continued employment of employees and management of the Company and its subsidiaries, nor any material change in conditions of employment, save for the right to appoint a representative to the Board of the Company as a Non-Executive Director;
· its strategic plans for the Company;
· the location of the Company's place of business;
· employer contributions into any of the Group's pension schemes, the accrual of benefits for existing members, nor the admission of new members;
· redeployment of the Company's fixed assets; or
· the continuation of the Company's shares being admitted to trading on AIM.
Bronsstädet AB is financing its participation in the Placing through available existing cash resources. Completion of the Placing is not expected to have a material impact on the operations of Bronsstädet AB or its key stakeholders.
Bronsstädet AB has further indicated that, following completion of the Placing, it intends to request the appointment of a representative to the Board of the Company as a Non-Executive Director.
10. Information on Bronsstädet AB and Peter Gyllenhammar AB
Bronsstädet AB
Bronsstädet AB is an investment company incorporated in Sweden and a holding company for the business interests of Mr Peter Gyllenhammar. The entire share capital of Bronsstädet AB is held by Peter Gyllenhammar AB. Mr Peter Gyllenhammar is executive chairman (sole director) and beneficial owner of Bronsstädet AB.
In the year ended 30 June 2013, Bronsstädet AB earned revenue and profit after tax of 1,438 million SEK (2012: 1,524 million SEK) and 70 million SEK (2012: 57 million SEK) respectively, equivalent to £124.3 million and approximately £6.1 million respectively at the date of publication of this document.
For the financial year ended 30 June 2014 Bronsstädet AB expects to report an increase in profitability compared to the prior year. The statutory accounts for the years ended 30 June 2012 and 30 June 2013 are available on the Company's website - www.superglass.co.uk.
Peter Gyllenhammar AB
Peter Gyllenhammar AB is an investment company which owns 100 per cent. of Bronsstädet AB, and also provides strategic and other management services to various entities within the Peter Gyllenhammar-group. Mr Peter Gyllenhammar owns the entire share capital of Peter Gyllenhammar AB. Mr Peter Gyllenhammar is executive chairman and sole director of Peter Gyllenhammar AB.
In the year ended 30 June 2013, Peter Gyllenhammar AB earned revenue and profit after tax of 1,438 million SEK (2012: 1,524 million SEK) and 71 million SEK (2012: 57 million SEK) respectively, equivalent to £124.3 million and £6.1 million respectively at the date of publication of this document.
For the financial year ended 30 June 2014 Peter Gyllenhammar AB expects to report an increase in profitability compared to the prior year. The statutory accounts for the years ended 30 June 2012 and 30 June 2013 are available on the Company's website - www.superglass.co.uk.
Peter Gyllenhammar
Mr Peter Gyllenhammar is domiciled in Stockholm, Sweden and has a background as a stockbroker, corporate finance advisor to a number of major Swedish industrial companies and as an investor in various assets and businesses, predominantly in Sweden, the UK and the US.
For the purposes of the Code, neither Bronsstädet AB, Peter Gyllenhammar AB nor Mr Peter Gyllenhammar is acting in concert with any party, including but not limited to, the Directors, the Placees or Shareholders.
11. General Meeting
Set out at the end of this document is a notice convening the General Meeting of the Company to be held at the offices of Maclay Murray & Spens LLP, Quartermile One, 15 Lauriston Place, Edinburgh EH3 9EP at 12.00 p.m. on 30 October 2014, at which the Resolutions summarised below will be proposed:
Resolution 1 - disapplication of pre-emption rights
A special resolution to disapply statutory pre-emption rights in relation to the issue of the 125,000,000 New Ordinary Shares pursuant to the Placing.
Resolution 2 - approval of the Capital Reorganisation
A special resolution to approve the Capital Reorganisation.
Resolution 3 - adoption of the New Articles
A special resolution to approve the adoption of the New Articles containing, amongst other things, provisions relating to the Deferred 24p Shares.
Resolution 4 - authority to allot
An ordinary resolution to authorise the Directors to allot New Ordinary Shares in connection with the Placing.
Resolution 5 - waiver of mandatory offer provisions set out in Rule 9 of the City Code
An ordinary resolution, which will be taken on a poll as required by the Panel, to waive the requirement which would otherwise arise on Bronsstädet AB to make a general offer to Shareholders under Rule 9 of the City Code on the receipt by Bronsstädet AB of Placing Shares which would result in Bronsstädet AB holding, in aggregate, approximately 38.9 per cent. of the Enlarged Share Capital (immediately following completion of the Placing).
12. Action to be taken in respect of the General Meeting
Please check that you have received the following with this document:
· a Form of Proxy for use in respect of the General Meeting; and
· a reply-paid envelope for use in connection with the return of the Form of Proxy (in the UK only).
Whether or not you propose to attend the General Meeting in person, you are strongly encouraged to complete, sign and return your Form of Proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received, by post or, during normal business hours only, by hand, to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF, by no later than 12.00 p.m. on 28 October 2014 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)).
If you hold your shares in the Company in uncertificated form (that is, in CREST) you may vote using 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 the General Meeting set out at the end of this document). Proxies submitted via CREST must be received by the Company's agent (RA10) by no later than 12.00 p.m. on 28 October 2014 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)).
Appointing a proxy in accordance with the instructions set out above will enable your vote to be counted at the General Meeting in the event of your absence. The completion and return of the Form of Proxy or the use of the CREST Proxy Voting service will not prevent you from attending and voting at the General Meeting, or any adjournment thereof, in person should you wish to do so.
13. Irrevocable undertakings
The Company has received irrevocable undertakings from Shareholders who together have an aggregate beneficial holding of 24,452,368 Existing Ordinary Shares amounting to approximately 87.3 per cent., in aggregate, of the Existing Ordinary Shares in issue as at the date of this letter to vote in favour of Resolutions 1, 2, 3 and 4.
The Company has received irrevocable undertakings from Independent Shareholders who together have an aggregate beneficial holding of 7,447,017 Existing Ordinary Shares amounting to approximately 68 per cent., in aggregate, of the Existing Ordinary Shares held by Independent Shareholders in issue as at the date of this letter to vote in favour of Resolution 5.
14. Recommendation and voting intentions
The Directors, who have been so advised by N+1 Singer, consider that the Placing including the approval of the Whitewash Resolution and the associated Capital Reorganisation, are in the best interests of the Shareholders as a whole. In providing advice to the Directors, N+1 Singer has taken account of the Directors' commercial assessments.
The Board stresses the importance of Shareholders voting in favour of the Resolutions at the General Meeting. As noted in paragraph 2 above, the Board has already explored alternative options to the Placing including a sale of the principal operating subsidiary and, as a result, the Board's judgement is that none of these options is likely to deliver any meaningful value to Shareholders.
Accordingly, the Directors strongly recommend that Shareholders vote in favour of Resolutions 1, 2, 3 and 4 and that Independent Shareholders also vote in favour of Resolution 5, as they intend to do in respect of their own interests amounting to 40,213 Existing Ordinary Shares (representing approximately 0.4 per cent., in aggregate, of the Existing Ordinary Shares held by Independent Shareholders in issue as at the date of this letter).