Back to all announcements

DJ Lombard Capital PLC Notice of GM

 
TIDMLCAP 
 
LOMBARD CAPITAL PLC 
 
Notice of General Meeting 
 
Lombard Capital plc ("Lombard" or the "Company") announces that notice has been 
sent to shareholders of the Company convening a general meeting ("GM") of the 
Company to be held at 11.30 a.m. on 5 October 2017 at Middletons Hotel, 
Skeldergate, York YO1 6DS. 
 
The Company is proposing to raise funding of up to GBP3,000,000 by way of the 
offering to subscribe for 7.5 per cent convertible unsecured loan notes 2020 
("Convertible Notes").  The Convertible Notes carry the right of conversion 
into Ordinary Shares at the rate of 10p per share.  The Convertible Notes will 
be issued together with warrants that entitle the holder to subscribe for 
Ordinary Shares at 10p per share.  The warrants will be issued for a number of 
shares that corresponds to the number of shares to be issued on conversion of 
the Convertible Notes in relation to which the warrants are granted.   The 
funding to be raised by the issue of the Convertible Notes is to be used as 
working capital for the Company and for the strategic objectives that have been 
adopted by the Board of Directors of the Company. 
 
The Company has been pursuing its objective of identifying investments that 
provide relatively high levels of returns combined with a strong measure of 
security.  To this end the Directors have been assessing particular markets 
that specialise in financial instruments that carry returns that are 
substantially greater than the cost of acquisition where the realisation of the 
return is secured by reinsurance provided by suitably rated insurers.  The 
Directors have given consideration to a number of financial products that fall 
within these broad criteria, including those that are of an innovative nature, 
with the emphasis on the use of reinsurance. 
 
In the course of pursuing this investment strategy, the directors have 
identified a particular opportunity that has the capacity, in their opinion, to 
be designed to create a source of investment products that carry the prospect 
of relatively high rates of returns, both by fixed returns and the generation 
of additional gains, combined with security, including reinsurance, to match 
the repayment of principal. 
 
The particular form of investment product that the Directors have been 
assessing involves the introduction of reinsurance to be provided by suitably 
rated insurance providers to remove the main risks that otherwise affect 
investments secured on Senior Life Settlement Policies ("SLS Policies").  These 
investment products address the risks that have affected SLS Policies by using 
the reinsurance security issued by the reinsurance provider to ensure that the 
amount to be recovered on each SLS Policy is paid on maturity if the 
policyholder survives beyond that date.  The reinsurance provider assumes the 
risks that the amount payable under the SLS Policies will not become due prior 
to the maturity date of the investment product. 
 
Apart from the security provided by reinsurance, the Directors have reason to 
believe that the proposition that the Company could offer to those who hold and 
manage portfolios of SLS policies would include relatively high periodic rates 
of interest and the prospect of significant additional returns that are capable 
of being earned from the management of portfolios of SLS Policies. 
 
The nature and terms of the investment products that the Company would be able 
to accept to satisfy its objective in this context have not been finalised. 
The directors have indicated the criteria that they wish to apply in 
considering investment products of this kind in order to satisfy the Company's 
strategic objectives.  The Directors have reason to believe that an opportunity 
exists to take advantage of the innovative effect of the use of reinsurance to 
support the value of SLS Policies and to enable the Company to acquire 
investment products that are to be devised to meet the Company's investment 
objectives. 
 
The proceeds of the offering will be used to acquire investment products that 
are to be devised to meet the Company's requirements.  In addition to the fixed 
rates of interest and the repayment of the principal amount of the Convertible 
Notes, the investment products to be acquired by the Company ought to be 
capable of providing additional returns in order to provide earnings for the 
Company. 
 
At present the issued ordinary share capital of the Company consists of 
3,400,514 ordinary shares.  In addition to the Ordinary Shares in issue, the 
Company has granted options which carry the right to subscribe for up to 
350,000 Ordinary Shares at an exercise price of 4.5p per share and the Company 
has granted warrants that carry the right to subscribe for 1,275,000 Ordinary 
Shares at an issue price of 10p per share 
 
The total number of Ordinary Shares that would be capable of being issued if 
all of the GBP3,000,000 of Convertible Notes are issued by the Company would be 
30,000,000 Ordinary Shares, which would represent about 90 per cent of the 
issued ordinary shares of the Company as enlarged by the issue of new Ordinary 
Shares on conversion of the Convertible Notes.   The Warrants that are to be 
issued to accompany the Convertible Notes will also carry the right to acquire 
Ordinary shares at an issue price of 10p per share.   If all of the Convertible 
Notes are issued, the Warrants issued in addition will carry the right to have 
issued a further 30,000,000 Ordinary Shares.    Accordingly the fully enlarged 
issued ordinary share capital of the Company, taking account of existing 
convertible notes and warrants, combined with the new Convertible Notes and 
Warrants that may be issued under the proposed offering, would amount to 
65,025,514 Ordinary Shares.   The existing ordinary shares that are in issue 
would represent about 5 per cent of the fully enlarged share capital. 
 
The Directors consider that the economic effect on the value of the Company of 
the Convertible Notes and Warrants, each of which carry the right to acquire 
shares at a rate of 10p per share, would justify the extreme measure of 
dilution that would apply should all of the Convertible Notes and Warrants be 
issued and then applied to the issue of new Ordinary Shares.  To take account 
of the measure of potential dilution, the Directors are proposing that the 
offering of Convertible Notes and Warrants will be extended to all of the 
existing shareholders of the Company on the footing that the existing 
shareholders will be offered a measure of priority if there is competition for 
the Convertible Note. Those existing shareholders who are subject to 
constraints affecting their ability to receive such offerings, for example as a 
result of their residence in a restricted jurisdiction, would not be able to 
receive the offering of Convertible Notes 
 
The Directors intend to issue further rounds of securities carrying comparable 
rights to shares in the future in order to continue the strategy of investment 
in securities derived from this sector. 
 
At present the Directors have authority to issue up to 2,975,510 Ordinary 
Shares to which the statutory pre-emption rights would not apply.  In order to 
accommodate the full amount of the Ordinary Shares that are capable of being 
issued under the Convertible Notes and their accompanying warrants, together 
with additional amounts of shares that may be allocated to be issued under 
further rounds of securities carrying comparable rights to shares, the 
Directors are seeking authority for the issue of up to GBP70,000 in nominal value 
of new shares, representing a total of 70,000,000 Ordinary Shares, which would 
not be subject to the statutory pre-emption rights. 
 
The business of the GM is set out in the Notice of GM.  It is proposed to grant 
the Directors authority to allot further Ordinary Shares in accordance with the 
Act. Resolutions 1 and 2 deal with the proposals. 
 
Resolution - To authorise the directors pursuant to Section 551 of the Act 
 
The Act requires that the authority of the Directors to allot shares in the 
Company or grant rights to subscribe for or to convert any security into shares 
in the Company should be subject to the approval of Shareholders in General 
Meeting or to an authority set out in the Company's Articles of Association. 
 
Resolution 1 will be proposed at the GM, as an ordinary resolution to authorise 
the Directors to allot unissued shares of the Company up to a total nominal 
value of GBP70,000, such authority to expire on whichever is the earlier of the 
conclusion of the annual general meeting of the Company to be held in 2018 or 
the date falling eighteen months after the passing of this resolution. 
 
Resolution 2 - To disapply the statutory pre-emption rights under Section 561 
of the Act 
 
The Act requires that any equity securities issued wholly or partly for cash 
must be offered to existing Shareholders in proportion to their existing 
holdings unless otherwise approved by Shareholders in general meeting or 
excepted under the Company's Articles of Association.  Accordingly, a special 
resolution (resolution 2) will be proposed at the GM, subject to the passing of 
resolution 1, to vary the Directors' authority to allot equity securities for 
cash other than on a pro rata basis.  The disapplication of statutory 
pre-emption rights is subject to limitations.  In the case of shares to be 
issued or in respect of which options and other rights may be granted to 
employees and officers of the Company the number of Ordinary Shares that may be 
allotted without invoking the statutory pre-emption rights is up to an 
aggregate nominal amount of GBP10,000, i.e. up to 10,000,000 Ordinary Shares.  In 
the case of shares to be issued or for which rights might be granted for 
placings and other issues, the shares that may be allotted without being 
offered by way of rights to existing shareholders under the statutory pre? 
emption rights is to be up to an aggregate nominal amount of GBP60,000 which 
would provide for up to 60,000,000 new Ordinary Shares.  This authority will 

(MORE TO FOLLOW) Dow Jones Newswires

September 19, 2017 02:00 ET (06:00 GMT)

DJ Lombard Capital PLC Notice of GM -2-

expire on the date falling eighteen months after the passing of this resolution 
or the date of the annual general meeting to be held in 2018, whichever is the 
earlier. 
 
A copy of the full notice of GM will be available on the Company's website. 
 
The directors of Lombard Capital Plc accept responsibility for this 
announcement. 
 
For further information please contact: 
 
Brent Fitzpatrick 
 
Tel:  07718 883813 
 
NEX Exchange Corporate Adviser: 
 
Alfred Henry Corporate Finance Limited 
 
Nick Michaels:  020 7251 3762 
 
 
 
END 
 

(END) Dow Jones Newswires

September 19, 2017 02:00 ET (06:00 GMT)