Notice of General Meeting
17 May 2021
("Tern" or the "Company")
Notice of General Meeting
Tern Plc (AIM:TERN), the investment company specialising in the Internet of Things ("IoT"), announces that it will send a circular today to shareholders containing a notice convening a general meeting of the Company which is to be held at 10.30 a.m. on 2 June 2021 at the Company's offices at Gridiron, One Pancras Square, London N1C 4AG (the "General Meeting"). The circular will be available shortly on the Company's website at https://www.ternplc.com/aim-rule-26.
The General Meeting is being convened following the withdrawal of certain resolutions from the Company's Annual General Meeting ("AGM") held on 4 May 2021. The resolutions to be proposed at the General Meeting (the "Resolutions") relate to the authority to be granted to the directors of the Company (the "Directors") to issue new ordinary shares of 0.02p in the capital of the Company ("Ordinary Shares") and the disapplication of pre-emption rights in relation to such an issue of Ordinary Shares. Following consultation with a number of the Company's larger shareholders and feedback kindly submitted by others, the resolutions have been revised to permit a lower number of Ordinary Shares to be authorised for potential issue by the Directors than was originally sought in the resolutions which were withdrawn at the AGM.
Background and reasons for the Resolutions
As previously announced, although a majority of the votes received in advance of the AGM were in favour of the resolutions authorising the Directors to issue new Ordinary Shares and disapply pre-emption rights, the Chairman of the AGM, Ian Ritchie, after consultation with the Board, decided to withdraw these resolutions from being voted on at the AGM. The resolutions were withdrawn due to the low number of shareholder votes received and given that, on the basis of the proxy votes cast, resolution numbered 6 (to grant the Directors the authority to issue new Ordinary Shares for cash) would not have achieved the requisite number of votes to be passed.
Following the withdrawal of these resolutions at the AGM, the Directors do not currently have the authority to issue any new Ordinary Shares for cash or generally.
The Directors believe that having the authority to issue new Ordinary Shares is important for an investment company such as Tern as it:
● provides the Company with the flexibility to support its portfolio companies as required;
● gives the Company negotiating leverage when dealing with potential third-party investors in discussions about the portfolio companies;
● enables the Company to participate at short notice in potential fundraisings by its portfolio companies. If this is not possible, the Company could find its shareholdings in its portfolio companies are diluted and/or a lower valuation might be achieved in any such fundraise, which may then adversely impact upon the Company; and
● allows the Company to react quickly should an appropriate need for additional capital arise, particularly given the anticipated development pathways of many of the Company's portfolio companies and any appropriate potential investment opportunities that may arise.
The Resolutions would permit the Directors to issue up to 50 million new Ordinary Shares (representing approximately 15 per cent. of the Company's existing issued ordinary share capital) generally and for cash whilst disapplying the pre-emption rights of existing shareholders in relation to such an issue.
Should the Company seek to raise funds utilising the authorities that would be granted by the Resolutions through the issue of new Ordinary Shares it would use reasonable endeavours to utilise a platform such as PrimaryBid, as part of any offering, to allow retail shareholders the opportunity to participate in such fundraisings at the same price as other participants.
General Meeting arrangements
In light of the prevailing guidance from the UK Government in relation to the COVID-19 pandemic and specifically the restrictions on unnecessary travel and large gatherings, the General Meeting will be convened with the minimum quorum of shareholders (which will be facilitated by the Company's management) in order to conduct the business of the meeting. Entry to the General Meeting will be refused to any shareholder, proxy or corporate representative (other than those required for a quorum to exist) who attempt to attend the General Meeting in person.
The Company will continue to closely monitor the developing impact of COVID-19, including the latest UK Government guidance. Should it become appropriate to revise the current arrangements for the General Meeting, any such changes will be notified to shareholders through the Company's website and, where appropriate, by announcement made by the Company to a Regulatory Information Service. Voting on each resolution at the General Meeting will be by poll and will include all valid proxy votes received.
Al Sisto (CEO)
Sarah Payne (CFO)
via IFC Advisory
Allenby Capital Limited
(Nominated Adviser and Broker)
David Worlidge / Alex Brearley (Corporate Finance)
Matt Butlin / Kelly Gardiner (Sales and Corporate Broking)
Tel: 0203 328 5656
(Financial PR and IR)
Tel: 0203 934 6630