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Proposed Capital Reduction, Withdrawal of Admission on LSE and Termination of JSE Listing , Circular General Meeting
London Finance & Investment Group PLC
(Incorporated in England with registered number 00201151)
LSE code: LFI
JSE code: LNF
ISIN: GB0002994001
("Lonfin" or the "Company")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO
OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF
THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF UK
MARKET ABUSE REGULATION.
Proposed return of cash to Shareholders by means of a Capital Reduction
Withdrawal of admission to trading on the London Stock Exchange
Termination of listing on JSE Limited
and
Distribution of Circular and Notice of General Meeting
The Board has, after considerable analysis and consideration decided that it is in the best interests
of Shareholders to cease LonFin's investment activities and to return surplus capital in the
Company to Shareholders by way of a Return of Capital. It is proposed that the Return of Capital
will result in Shareholders receiving an estimated 71 pence in cash for each Ordinary Share held
at the Capital Reduction Record Date.
A circular is being sent to Shareholders shortly setting out the background to, and the reasons
for, the proposed Return of Capital, the withdrawal of admission to trading on the London Stock
Exchange and termination of the listing on JSE Limited and a notice of a General Meeting at
which Resolutions will be proposed to approve the Proposals which will be held at Central
Court, 25 Southampton Buildings, London WC2A 1AL at 11.00 a.m. on 28 March 2025 (the
"Circular"). The Circular will also contain details of how Shareholders can vote at the General
Meeting. In addition, the Circular will be available on the Company's website at
https://www.city-group.com/london-finance-investment-group-plc/
as well as submitted to the National Storage Mechanism
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Circular is being sent to Shareholders given that their approval is required both for the
Return of Capital and for the cancellation of trading in the Company's Ordinary Shares in
accordance with UK Listing Rule 21. Extracts from the Circular are set out at Appendix Two
below, with the Expected Timetable of Events set out at Appendix One.
Capitalised terms in this announcement have the same meaning as defined in the Company's Circular as
described above.
The Independent Directors accept responsibility for the contents of this announcement.
For further enquiries:
London Finance & Investment Group PLC Tel: +44 (0) 20 3709 8740
Beaumont Cornish Limited Tel: +44 (0) 207 628 3396
Questco Corporate Advisory PTY Ltd Tel: +27 (0) 82 786 3537
APPENDIX ONE
EXPECTED TIMETABLE OF PRINCIPAL EVENTS:
Each of the date references set out below are to 2025.
Record date for the purpose of determining which SA Shareholders of Friday, 14 February
the Company are entitled to receive the Circular
Publication and despatch of the Circular Wednesday, 26 February
Publication and dispatch of the Circular announced on SENS Thursday, 27 February
Last day to trade for SA Shareholders to be able to participate and vote at Thursday, 20 March
the General Meeting
Last day to trade for UK Shareholders to be able to participate and vote Monday, 24 March
at the General Meeting
Latest date for receipt of Forms of Proxy for the General Meeting at Wednesday, 26 March
11.00 a.m. (12.00 p.m. SA time) on:
Voting Record Date for the General Meeting at 6.00 p.m. (UK & SA time) Wednesday, 26 March
General Meeting at 11.00 a.m. (12.00 p.m. SA time) on Friday, 28 March
Result of General Meeting announced via RIS and on SENS Friday, 28 March
Last day to file claim form and witness statements at High Court Tuesday, 8 April
Directions hearing at High Court Wednesday, 16 April
Advertisement of Capital Reduction posted in newspaper, as directed by Tuesday, 22 April
the High Court
Open court hearing at High Court Tuesday, 29 April
Announce Finalisation information, Capital Reduction Payment amount Tuesday, 29 April
and currency conversion rate on SENS
Last day to trade in the Company's Ordinary Shares on the London Wednesday, 30 April
Stock Exchange
Suspension of trading of the Company's Ordinary Shares on the London Thursday, 1 May
Stock Exchange
Cancellation of trading of the Company's Ordinary Shares on the London Friday, 2 May
Stock Exchange at 8.00 a.m. UK time
Last day to trade in the Company's Ordinary Shares on the JSE Limited Friday, 2 May
Register the Capital Reduction at Companies House UK Friday 2 May
Capital Reduction Record Date at 6.00 p.m. UK time Friday, 2 May
Effective Date for the Capital Reduction Friday 2 May
Suspension of trading of the Company's Ordinary Shares on the JSE Monday, 5 May
Limited at 9.00 a.m. SA time
Capital Reduction Record Date at 6.00 p.m. SA time Wednesday, 7 May
Distributions made to relevant Shareholders under the Return of Capital Thursday, 8 May
from the Effective Date with the last date for payment being
Earliest date for termination of listing of the Company's Ordinary Shares Friday, 9 May
on the JSE Limited
Notes:
(1) All of the above timings refer to London time unless otherwise stated.
(2) The dates and timing of the events in the above timetable and in the rest of the Circular are indicative only and may
be subject to change.
(3) If any of the above times or dates should change, the revised times and/or dates will be notified by an
announcement through an RIS and an announcement on SENS.
(4) Ordinary Share certificates on the South African register may not be Dematerialised or re-materialised between
Monday, 5 May 2025 and Wednesday, 7 May 2025, both days inclusive and Ordinary Shares may not be
transferred between the registers in London and South Africa from Tuesday, 29 April 2025 to Friday, 2 May
2025.
APPENDIX TWO
INFORMATION EXTRACTED FROM PART 1 OF THE CIRCULAR
1. Introduction
On 5 November 2024, the Company announced that its liquid investments had been sold
and, as at 4 November 2024, the Company had cash balances of £23,226,000. Further information
on the Company's remaining assets and liabilities are set out below at Section 3.
On 18 December 2024, the Company's announced that it proposed to cease the Company's
investment activities early in the New Year and to effect a return of cash (the total being net asset
value, less closure costs) of approximately 70p per share to shareholders.
It is proposed that the Return of Capital be effected by means of a court approved Capital
Reduction. Accordingly, the proposed Return of Capital will be implemented in two stages with
the General Meeting to approve the Resolutions followed by an application to the High Court to
approve the reduction in the Company's issued share capital.
The Company's major shareholder, Lynchwood Nominees Limited (which holds its Ordinary Shares
on behalf of Tennyson Sterling Investments Limited which is controlled by the Marshall Family)
("Tennyson"), is fully supportive of the Proposals but as it is not considered independent it has
undertaken not to vote its holding of 12,885,472 Ordinary Shares in the Company (41.2 per cent.
of the Company's issued ordinary share capital) in favour of the Resolutions at the General
Meeting. Both the Board and Tennyson consider it prudent to put the Proposals to the
independent shareholders of the Company, that is to say, shareholders excluding Tennyson and
Warwick Marshall, as it is intended that Tennyson retain a vestigial interest in shares in the
Company as explained below. Warwick Marshall is a director of Tennyson and has similarly
undertaken not to vote his holding of 288,552 Ordinary Shares in the Company (0.9 per cent. of
the Company's issued Ordinary Share capital) in favour of the Resolutions at the General
Meeting.
The Company is in receipt of irrevocable undertakings from 5 other significant shareholders
holding in aggregate 6,232,500 Ordinary Shares in the Company (19.9 per cent. of the
Company's issued ordinary share capital) to vote their holdings in favour of the Resolutions at
the General Meeting.
LonFin requires that at least 1,000,000 Ordinary Shares of £0.05p each be retained by
Shareholders following the Return of Capital in order to meet the requirement that public
companies shall have issued share capital with a value of at least £50,000 as required by
Section 761 of the Companies Act 2006. Accordingly, the Company has arranged that
Tennyson, conditional on the approval of the Proposals by shareholders at the General
Meeting, has committed by way of an irrevocable undertaking to retain 1,000,000 Ordinary
Shares (the "Retained Shares") in order to meet this requirement of the Companies Act. Following
completion of the Return of Capital, Tennyson will own 100 per cent. of the issued Ordinary Share
capital of the Company.
The purpose of this arrangement is solely to facilitate the orderly winding up of the Company
following the Return of Capital and Tennyson will not benefit in any way from this arrangement.
2. Return of Capital
2.1 Background to and Reasons for the Return of Capital
The Company has not been consistently fulfilling its objective to generate value for
Shareholders over the medium to long term. The Directors have considered alternative means
to achieve the Company's strategic objective but have concluded after considerable
analysis that in the current regulatory environment the Company is:
- too small to meet the strategic objective while bearing the high, and ever increasing,
overhead costs associated with being a listed company,
- unable to raise additional share capital without significantly diluting the interests of
Shareholders,
- not an attractive acquisition target for other companies because of its long trading history;
and
- not an attractive reverse takeover target because of its long trading history and
requests from major shareholders for an exit.
The Directors are therefore proposing to return surplus capital to Shareholders by means of
a Capital Reduction. Following approval by the High Court, shareholders will be advised
in RNS and SENS announcements of the amount to be returned per share. However,
based on information currently available, the Directors estimate this at 71p per share, which
represents an increase of: 16 per cent. to the closing middle-market price of 61p per share
on 17 December 2024 being the Business Day prior to the Company's announcement that
it would be proposing a return of capital to shareholders
2.2 Structure and Conditions of the proposed Return of Capital
By undertaking the Capital Reduction, the Company will simultaneously return capital to
Shareholders and reduce the number of Ordinary Shares in issue.
A company must, as a matter of company law, treat all members of the same class of
shares in the same manner when undertaking a capital reduction. In order to ensure that all
Shareholders are treated the same, it is the view of the Independent Directors that all Ordinary
Shares, except for the Retained Shares, are cancelled and a cash payment is made to
Shareholders based on the number of Ordinary Shares held with the Company's share capital
being reduced commensurately. The Retained Shares need to remain in existence so that
the Company can continue to meet the requirement of the Companies Act that public
companies have an issued share capital of at least £50,000.
The Capital Reduction is structured as a cancellation and repayment of all Ordinary Shares
other than the Retained Shares. It is the Company's intention to undertake the Capital
Reduction via the court approval procedure pursuant to sections 645 to 649 of the
Companies Act.
2.3 Shareholders resident in South Africa
2.3.1 The Return of Capital Payment
Should the Capital Reduction be approved and implemented, the Company will fund
Computershare SA within 7 days of the Effective Date of the Capital Reduction with
sufficient funds representing the Return of Capital Payment to be paid to
Shareholders who hold their Ordinary Shares on the JSE. On completion of the
Return of Capital, Computershare SA will credit the accounts of the CSDPsvia Strate
for the benefit of the Shareholders who hold their Ordinary Shares on the JSE. The
CSDPs will distribute the Return of Capital Payment to such Shareholders in
accordance with the terms of their respective mandates, and net of applicable
withholding taxes, if any.
Any funds made available by Computershare SA to a Certificated Shareholder that
have not been claimed on or prior to the third anniversary of the Effective Date will be
cancelled and will cease to represent any claim or interest of any kind or nature
against the Company or Computershare SA and all funds then on deposit with
Computershare SA in respect of the Return of Capital will be returned to the
Company.
2.3.2 South African Exchange Control Provisions
The Return of Capital Payment made by the Company to Shareholders holding Ordinary
Shares on the South African branch of the Register of Members of the Company in
terms of the Return of Capital may be subject to South African Exchange Control
Regulations. South African Exchange Control Regulations regulate the flow of capital
into and out of South Africa. Currency and shares are not freely transferable from South
Africa to any jurisdiction outside the Common Monetary Area (encompassing Lesotho,
Namibia, Eswatini and South Africa). Such transfers must comply with the South
African Exchange Control Regulations. If you are in any doubt as to what action you
should take, you should consult with your broker, banker, legal advisor, accountant
or other professional advisor immediately.
2.3.3 South African Taxation Considerations
The Company is not providing tax advice. South African Shareholders should consult
their own tax and/or accounting advisors regarding the South African taxation
implications of the Return of Capital Payment to be received by such Shareholders
pursuant to successful implementation of the Return of Capital.
3. Information on the Company
Prior to the announcement of the Proposals, the Company had, as at 31 December 2024, the
following net assets:
31 December 2024
Current Assets £'000
Cash and cash equivalents 22,401
Trade, other receivables and accrued interest 201
––––––––––––
22,602
––––––––––––
Current Liabilities 251
––––––––––––
Net Assets 22,351
––––––––––––––––––––––––
Note: Figures above have been extracted from unaudited interim accounts to 31 December 2024
At Friday, 21 February 2025 (the latest practical date prior to the issue ofthe Circular), the
Company had, cash and cash equivalents of c. £22,682,000 and tax payable, sundry creditors
and accruals of approximately £315,000.
The Company has 31,287,479 Ordinary Shares in issue (31,207,479 of which were admitted to
trading on the LSE and listed on the JSE and 80,000 of which are not listed on either exchange),
and has estimated net assets per share of approximately 71p. The final amount of the Return of
Capital will be announced in due course.
Following completion of the Return of Capital
Following completion of the Proposals, the Board intends to undertake an orderly winding up
of the Company.
Following completion of the Return of Capital, the Company is expected to have net assets
consisting of: cash balances net of creditors and accruals of approximately £750,000. Winding
up costs (including accounts preparation and submission of a final tax return) are expected to
be approximately £40,000 and the remaining £710,000 is the value of the Retained Shares ie the
amount that Tennyson is entitled to under the Return of Capital. The purpose of this arrangement
is solely to facilitate the orderly winding up of the Company following the Return of Capital and
Tennyson will not benefit in any way from this arrangement.
Furthermore, the Company's major Shareholder, Tennyson, has undertaken to provide additional
financing by way of an ex gratia payment if winding up costs exceed the resources available to
the Company.
If the Capital Reduction is approved, Chris Jousse, Frank Lucas and John Maxwell will resign from
the Board and the ongoing Board of LonFin will comprise two Directors, namely Warwick Marshall
and Edward Beale.
4. Related Party Transaction
Under UK Listing Rule 8, Tennyson, a substantial shareholder, together with Warwick Marshall, a
director of both Tennyson and LonFin, are related parties ("Related Parties") and accordingly the
arrangement in relation to the Retained Shares is a related party transaction ("Related Party
Transaction"). Under the class tests set out in the UK Listing Rules, the Related Party Transaction
relating to the Retained Shares, when aggregated with a transaction with the same related parties
in the last 12 months, has no test resulting in over 5 per cent. and therefore there are no
requirements under UK Listing Rule 8.2 which need to be followed.
Tennyson is a private investment company and is 100 per cent. owned by a family trust of which
Warwick Marshall is a trustee.
The Related Parties intend to support fully the Company's strategy to seek to cancel the
admission of the Ordinary Shares to trading on the London Stock Exchange and JSE Limited
and on the Official List and return surplus cash to its remaining Shareholders.
The Independent Directors and the Related Parties are of the view that the Proposals will
provide Shareholders with the opportunity to receive a full cash return for their investment and which
the Independent Directors believe is in the best interests of the Company and Shareholders.
5. Implementation of the Return of Capital
The proposed Return of Capital will be implemented in two stages:
First stage
The General Meeting will be held to approve the Withdrawal and the Capital Reduction.
Second stage
After the Capital Reduction has been approved by Shareholders at the General Meeting, the
Company will apply to the High Court for its approval. Prior to approving the capital repayment,
the court will need to be satisfied that the interests of the Company's creditors will not be
adversely impacted by the proposal. The Company anticipates being able to do so. The Capital
Reduction will only take effect once the court has made an order and that order has been
registered with the Registrar of Companies. Once this approval has been received notice will be
given to Shareholders of the intended date for delisting from the London Stock Exchange and JSE
Limited and from the Official List and the date of the Return of Capital. The final amount of the
Return of Capital will be announced at that time.
Following the Return of Capital and application for Withdrawal from the LSE, the JSE will take
steps to remove all the Ordinary Shares from the official list of the JSE, to which the Company has
already confirmed it will not object, on the basis that, following completion of the Return of Capital,
the Company will no longer comply with the public spread requirements pursuant to paragraph
4.28(e) of the JSE Listing Requirements as detailed in paragraph 6 below.
6. Withdrawal of Admission to the London Stock Exchange and from the Official
List and Termination of JSE Listing
Withdrawal of Admission to the London Stock Exchange and from the Official List
In order for the Company to implement the Return of Capital, the Company will need to cancel the
admission of its Ordinary Shares to trading on the London Stock Exchange and to the Official
List. The Company's withdrawal from the Official List is conditional, pursuant to Chapter 21 of
the UK Listing Rules, upon the approval of not less than 75 per cent. of the votes cast by all
Shareholders and 50 per cent. of the votes cast by Independent Shareholders (whether present
in person or by proxy) at a General Meeting
The Company intends to apply for cancellation and the resolution to approve the Withdrawal will
be put to Shareholders at the General Meeting.
In accordance with the UK Listing Rules, the Company has announced its proposed withdrawal
from admission to trading on the London Stock Exchange and from the Official List and has
provided not less than 20 Business Days' notice of its intended withdrawal of securities from
admission to trading on the London Stock Exchange and from the Official List. If the resolution to
approve the Withdrawal from admission to trading on the London Stock Exchange and the Official
List is passed at the General Meeting, it is proposed that the last day of trading in Ordinary Shares
on the London Stock Exchange will occur no earlier than Wednesday, 30 April 2025 and that the
Withdrawal from the London Stock Exchange and from the Official List will take effect at 8.00
a.m. UK time no earlier than Friday, 2 May 2025. The actual date, when confirmed, will be
announced.
If Shareholders wish to buy or sell Ordinary Shares on the London Stock Exchange or the JSE
Limited they must do so prior to the Withdrawal becoming effective.
Termination of JSE Listing
Following the Return of Capital and the Company's Withdrawal from the London Stock
Exchange, the Company will have only one Shareholder. As a result, the Company will no longer
be in compliance with the JSE's spread requirements as set out in paragraph 4.28(e) of the JSE
Listings Requirements and will no longer be eligible for listing on the JSE.
The Company has no intention to take any other steps towards re-establishing its public spread
requirement and its eligibility for a listing on the JSE.
Accordingly, the JSE will take steps to suspend trade in the Company's Ordinary Shares with
effect from Monday, 5 May 2025 and to remove the Company from the JSE's list in accordance
with sections 1.12 and 1.13 of the JSE Listing Requirements with effect from Friday 9 May 2025,
on the basis that the Company will no longer comply with the public spread requirements
pursuant to section 4.28(e) of the JSE Listings Requirements and on the basis that the Company
has already confirmed to the JSE that it does not intend to object to the JSE taking such steps.
7. General Meeting
A General Meeting will need to be held to approve the Withdrawal and the Capital Reduction.
The General Meeting will be held at the offices of City Group at Central Court, 25 Southampton
Buildings, London WC2A 1AL on Friday, 28 March 2025. At that meeting Shareholders will be
asked to approve the following actions:
1. subject to the passing of Resolution 2, the Withdrawal of the admission of the Ordinary
Shares to trading on the London Stock Exchange and from the Official List; and
2. subject to the passing of Resolution 1, the Capital Reduction subject to High Court approval.
The proposed resolutions to achieve this are as follows:
Resolution 1 – Withdrawal of the admission of the Ordinary Shares to trading on the
London Stock Exchange and the Official List – Special Resolution
The resolution is to approve the Withdrawal of the Ordinary Shares from admission to trading on
the London Stock Exchange and to cancel the Company's listing. This is a special resolution and
will require approval from not less than 75 per cent. of the votes cast by all Shareholders and 50
per cent. of the votes cast by Independent Shareholders at the General Meeting in person or by
proxy in accordance with UK Listing Rule 21. Holders of 19.9 per cent. of the Ordinary Shares in
issue have undertaken to vote in favour of this resolution. If this resolution is not passed, the
Proposals will not proceed. Shareholders will not be asked to vote on the remaining resolution.
The Directors will then consult with Shareholders on the future of the Company.
Resolution 2 – Capital Reduction – Special Resolution
The resolution will be to approve the Capital Reduction, subject to the approval of the High Court,
and will be a Special Resolution which will require approval from more than 75 per cent. of
those voting at the General Meeting in person or by proxy.
If either of the resolutions are not passed, the Proposals will not proceed. The Directors will then
consult with Shareholders on the future of the Company.
8. Irrevocable Voting Undertakings
Tennyson has given an irrevocable undertaking not to vote its holding of 12,885,472 Ordinary
Shares in the Company (representing 41.2 per cent. of the Company's issued ordinary share
capital) in favour of Resolutions 1 and 2 at the General Meeting. In addition, Warwick Marshall
has given an irrevocable undertaking not to vote his holding of 288,552 Ordinary Shares in the
Company (0.9 per cent.) in favour of Resolutions 1 and 2 at the General Meeting.
The Company is also in receipt of irrevocable undertakings from 5 other significant Shareholders
holding in aggregate 6,232,500 Ordinary Shares (representing 19.9 per cent. of the Company's
issued ordinary share capital) to vote their holdings in favour of the Resolutions at the General
Meeting.
9. Action to be taken
Voting at the General Meeting
The Notice of the General Meeting is set out in Part III of the Circular and this letter explains the
items to be transacted at the General Meeting.
A Form of Proxy for use at the General Meeting is enclosed with the Circular.
If you, as a Shareholder on the UK branch of the Register of Members of the Company, wish to validly
appoint a proxy, the Form of Proxy should be completed and signed in accordance with the
instructions printed thereon, and returned by post so as to be received by Neville Registrars
Limited not later than 11.00 a.m. on Wednesday, 26 March 2025 for the General Meeting.
If you, as a Shareholder on the South African branch of the Register of Members of the Company,
wish to validly appoint a proxy, the Form of Proxy for South African Shareholders, attached to the
Circular, should be completed and signed in accordance with the instructions printed thereon, and
returned by e-mail, hand or post so as to be received by Computershare SA not later than 12.00
p.m. on Wednesday, 26 March 2025 for the General Meeting.
The Company has made provision for Shareholders (or their proxies) to participate in the General
Meeting by joining a Microsoft Teams virtual meeting room. Shareholders or their duly appointed
proxies who wish to participate in the General Meeting via electronic communication, must apply
to Computershare SA at proxy@computershare.co.za by not later than 12.00 p.m. on
Wednesday, 26 March 2025.
10. Consent
Beaumont Cornish has given and not withdrawn its consent to the issue of the Circular with the
inclusion of the recommendation in it and of references to its name in the form and context in
which they appear.
11. Recommendation
The Board, having been advised by Beaumont Cornish on the Proposals, recommend that
Shareholders vote in favour of the Resolutions at the General Meeting given that the Proposals
are, in the opinion of the Board, in the best interests of Shareholders as a whole and as the
Independent Directors intend to do or procure to be done in respect of their own beneficial
shareholdings.
Warwick Marshall, who is a director of Tennyson and therefore considered not to be independent,
has taken no part in the Board's consideration of the Proposals or the recommendation.
United Kingdom
27 February 2025
Financial Adviser and Sponsor to London Finance & Investment Group PLC
Beaumont Cornish Limited
JSE Sponsor to London Finance & Investment Group PLC
Questco Corporate Advisory Proprietary Limited
Date: 27-02-2025 07:30:00
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