NRG Seeks Delisting
NORTHERN RECRUITMENT GROUP PLC says it is seeking Cancellation of admission of Ordinary Shares to the Official List and to trading on London Stock Exchange's market for listed securities as well as a Tender Offer by Charles Stanley Securities to purchase Ordinary Shares and Re-registration as a private limited company
The Company has called for an Extraordinary General Meeting to seek shareholder approval for:
* Tender Offer
* Opportunity for all shareholders to realise their investment in the Company for cash
* Offer price of 40 pence represents a premium of 23.1per cent. to yesterdays closing mid-market price of 32.5 pence
* Proposal to de-list the Company from the Official List and the main market of London Stock Exchange
*Re-registration as a private limited company
* The Board of Directors, representing approximately 57.17 per cent of the Total Voting Rights have undertaken to vote or procure votes be cast in favour of all Resolutions
1. Background to the Proposals
On 12 September 2008 the Company announced its preliminary annual results for the year ending 30 June 2008. The results for the year were sales revenue of 19.9 million (2007: 22.3 million) and profit before tax of 1.2 million (2007: 2.0 million). The Companys net cash position as at 30 June 2008 was 3.9 million (2007: 5.3 million). Despite a strong working capital position and profitability of the Company in difficult markets, which in the Boards opinion demonstrates the robustness of the Companys business model, the share price of the Ordinary Shares has continued to fall.
The Board has discussed this concern with its advisers, and whilst there are several factors affecting any companys share price, the key issue for NRG is the lack of demand for its shares and, in practical terms, a small free float and market capitalisation, which further reduces demand.
In the Boards opinion, it is unlikely that the Company will need to raise money through a new share issue or to issue more shares in connection with an acquisition and, therefore, the lack of shares in free float and small market capitalisation will continue. The Board are therefore of the opinion that Shareholders should be given the opportunity torealisetheir investment in the Company for cash.
The Board also believes that the ongoing costs and regulatory requirements of a listing on the Official List can no longer be justified in relation to the Company. Under the UKLA's Listing Rules, the De-listing can only be effected by the Company after securing a special resolution of Shareholders in general meeting, and the expiration of a period of not less than 20 business days from the date of the Shareholder approval. Under the London Stock Exchange's Admission and Disclosure Standards, the Company must advise the London Stock Exchange of the De-listing not less than 20 business days before the date it intends trading in the Ordinary Shares to be discontinued.
Following the De-listing, the Board intends to operate the Company's business in the same manner, and with the same objectives, as at present.
As NRG will be an unlisted company the Board feel that it will no longer require the services of the Non-Executive Directors and the Non-Executive Directors have agreed to resign as directors on conclusion of the De-listing. The Executive Directors all intend to continue serving the Company and to continue leading its direction.