Intention to list on AIM & Notice of GM

2 March 2021

Emmerson Plc

("Emmerson" or "the Company")

Proposed cancellation of the Company's Ordinary Shares from the Official List, proposed admission to trading on AIM and Notice of General Meeting

Highlights

·    Intention to list on AIM to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy

·    Proceeding with AIM Admission ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021

·    Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work

Emmerson Plc (LSE:EML), the Moroccan focused potash development company, announces proposals to cancel the admission of the Company's Ordinary Shares to listing on the UK Financial Conduct Authority's (the "FCA") Official List (standard segment) and to trading on the London Stock Exchange's main market for listed securities ("Delisting") and its intention to apply for admission of its Ordinary Shares to trading on the AIM market of the London Stock Exchange ("AIM" and "Move to AIM").  A circular containing detail of the proposed Cancellation and Admission together with a notice convening a general meeting of shareholders (the "Circular") is expected to be posted to shareholders later today.

The Board believes that AIM is a market and environment which is more suited to the Company's current size and strategy and will offer greater flexibility with regard to corporate transactions.  Listing on AIM should therefore enable the Company to agree and execute certain transactions more efficiently and cost effectively than a company on the Official List.

The proposed Delisting and Move to AIM will take effect simultaneously, utilising the AIM Designated Market Route.

The Listing Rules do not require a company wishing to cancel the admission of its shares to listing on the standard segment of the Official List, to seek shareholder approval at a general meeting. Notwithstanding this, the Directors believe that as a matter of good corporate governance the Shareholders should be consulted and accordingly have resolved that the Delisting should be subject to shareholder approval by way of an ordinary resolution (the "Delisting Resolution") to be proposed at a General Meeting, notice of which is set out in the Circular.   If approved by Shareholders, it is anticipated that the effective date of the Move to AIM will be 26 April 2021, being not less than 20 business days from the passing of the Cancellation and Admission Resolution.

The Circular contains a notice convening a General Meeting of Shareholders to be held at 55 Athol Street, Douglas, Isle of Man, IM1 1LA, on 25 March 2021 at 11 a.m.

The Circular will be made available shortly on the Company's website at www.emmersonplc.com and will be submitted to the National Storage Mechanism where it will shortly be available to view at www.morningstar.co.uk/uk/nsm.  

Unless otherwise stated, capitalised terms in this announcement have the same meaning as in the Circular.

Appendix 1 - Expected timetable of key events

Appendix 2 - Extracts from Circular

Background to and reasons for the Cancellation and Admission, and the £5.5m Placing

The Company took the decision to raise £5.5m to bolster its cash position during what is expected to be a pivotal year. It is preferable to negotiate with potential strategic partners from a position of strength. Not only is the cash balance shored up, but also the workstreams that form part of the construction capex can be continued without interruption or pause; both of these factors are to the advantage of the Company during negotiations. Moreover, the situation had the additional benefit of bringing new institutional investors on to the register for the first time, marking a new stage in the overall progress of Emmerson Plc.

As part of the same corporate strategy, the Board has carefully considered whether the continued admission of its Ordinary Shares to listing on the standard segment of the Official List and to trading of its Ordinary Shares on the Main Market is in the best interests of Shareholders. As a result of its consideration, the Board is proposing that the Company should move to AIM for, the following reasons:

•             AIM will offer greater flexibility with regard to corporate transactions and should therefore enable the Company to agree and execute certain transactions more quickly and cost effectively than a company on the Official List. AIM will also provide the Company with continuing access to the public equity capital markets should it be appropriate to obtain equity funding in the future. Should such opportunities or initiatives arise or become relevant to the Group, they could entail significant additional complexity and larger transaction costs if the Company were to remain on the Official List;

•             AIM, which is operated and regulated by the London Stock Exchange, has an established reputation with investors and analysts and is an internationally recognised market. It was launched in June 1995 as the London Stock Exchange's market specifically designed for smaller companies, with a more flexible regulatory regime. For smaller companies, such as the Company, AIM provides a more suitable market and environment that should simplify the ongoing administrative and regulatory requirements of the Company;

•             companies whose shares trade on AIM are deemed to be unlisted for the purposes of certain areas of UK taxation. Following the move to AIM, individuals who hold Ordinary Shares may, be eligible for relief from inheritance tax under the business property relief provisions. The Board believes that this potential relief may be attractive for individuals who are Shareholders. Shareholders and prospective investors should however consult their own professional advisers on whether an investment in an AIM security (as defined in the AIM Rules for Companies) is suitable for them, or whether the inheritance tax benefit referred to above is available to them;

•             the Directors expect that the Company would continue to appeal to specialist institutional investors following a move to AIM (such as funds investing in AIM companies that qualify for IHT Business Property Relief) and, in light of the possible tax benefits mentioned above, the Directors hope that being admitted to AIM will make the Company's Ordinary Shares more attractive to certain retail investors. Since 5 August 2013, shares traded on AIM can be held in ISAs;  and

•             as stamp duty is not payable on the transfer of shares that are traded on AIM and not listed on any other market, this may help increase liquidity in the trading of the Ordinary Shares; and

The Directors consider that AIM is a more appropriate market for the Company. This judgement is focused on, in particular, the ability to agree and execute certain transactions more quickly and cost effectively than if it remained listed on the standard segment of the Official List. In addition, the Directors consider that AIM is a more appropriate market for companies with a market capitalisation of less than £100 million, such as the Company. The Directors, therefore, believe a move to AIM is in the best interests of the Company and its Shareholders as a whole.

Details of the Cancellation and Admission

As noted above, and notwithstanding that the Listing Rules do not oblige the Company to obtain shareholder approval for the Delisting, the Directors take the view that as a matter of good corporate governance the Delisting should be subject to shareholder approval by way of an ordinary resolution and accordingly the Delisting Resolution will be proposed at the General Meeting. The Delisting Resolution will authorise the Board to cancel the admission of the Company's Ordinary Shares to listing on the standard segment of the Official List and to trading on the Main Market and to apply for AIM Admission in respect of the Company's issued and to be issued Ordinary Shares.

Conditional on the Delisting Resolution having been approved by Shareholders at the General Meeting, the Company will apply to cancel the admission of the Ordinary Shares to listing on the Official List and to trading on the Main Market and give 20 Business Days' notice to the London Stock Exchange of its intention to seek AIM Admission under AIM's streamlined admission process for companies that have had their securities traded on an 'AIM Designated Market' (which includes the Official List).

It is currently anticipated that, subject to the passing of the Delisting Resolution:

a)    the last day of dealings in the Ordinary Shares on the Main Market will be 23 April 2021;

b)    cancellation of the listing of Ordinary Shares on the Official List will take effect at 8:00 a.m. on 26 April 2021, being not less than 20 Business Days from the date of the General Meeting; and

c)    AIM Admission will take place, and trading in the Ordinary Shares will commence on AIM, at 8:00 a.m. on 26 April 2021.

As the Ordinary Shares have been listed on the standard segment of the Official List for more than 18 months, the AIM Rules for Companies do not require an admission document to be published by the Company in connection with the AIM Admission. However, subject to the passing of the Delisting Resolution relating to the Delisting at the General Meeting, the Company will, following the General Meeting, publish an announcement which complies with the requirements of Schedule One to the AIM Rules for Companies comprising information required to be disclosed by companies transferring their securities from the Official List (being an 'AIM Designated Market') to AIM.

Although the Company intends to seek AIM Admission in respect of its Ordinary Shares, there can be no guarantee that the Company will be successful in achieving AIM Admission in respect of its Ordinary Shares.

Shareholders should note that, unless the Delisting Resolution is passed by Shareholders at the General Meeting, the Delisting and AIM Admission will not be implemented. In such circumstances, the Ordinary Shares will not be admitted to trading on AIM and the Ordinary Shares will continue to be admitted to listing on the standard segment of the Official List and to trading on the Main Market.

Consequences of the transfer to AIM

Following AIM Admission, the Company will be subject to the AIM Rules for Companies. Shareholders should note that AIM is self-regulated and that the protections afforded to investors in AIM companies are less rigorous than those afforded to investors in companies listed on the standard segment of the Official List.

Shareholders should further note that the share price of AIM companies can be highly volatile, which may prevent Shareholders from being able to sell their Ordinary Shares at or above the price they paid for them. The market price and the realisable value for the Ordinary Shares could fluctuate significantly for various reasons, many of which are outside the Company's control. Further, there can be no assurance that an active or liquid trading market for the Ordinary Shares will develop or, if developed, will be maintained following AIM Admission. In addition, as the Ordinary Shares will no longer be admitted to the Official List, the Ordinary Shares may be more difficult to sell compared with the shares of companies listed on the Official List. Liquidity on AIM is in part provided by market makers, who are member firms of the London Stock Exchange and are obliged to quote a share price for each company for which they make a market between 8:00 a.m. and 4:30 p.m. on Business Days.

Whilst there are some similarities in the obligations of a company whose shares are traded on AIM to those of a company whose shares are listed on the standard segment of the Official List, there are also significant differences, including:

a)    There is no requirement under the AIM Rules for Companies for a prospectus or an admission document to be published for further issues of securities to institutional investors, except when seeking admission for a new class of securities or as otherwise required by law.

b)    Unlike the Listing Rules, the AIM Rules for Companies do not specify any required structures or discount limits in relation to further issues of securities.

c)    If AIM Admission occurs, the Company intends to maintain robust governance standards and will continue to adopt the QCA Corporate Governance Code. It will review its corporate governance procedures from time to time having regard to the size, nature and resources of the Company to ensure such procedures are appropriate.

d)    Institutional investor guidelines (such as those issued by the Investment Association, the Pensions and Lifetime Savings Association and the Pre-Emption Group), which provide guidance on issues such as executive compensation and share-based remuneration, corporate governance, share capital management and the issue and allotment of shares on a pre-emptive or non-pre-emptive basis, do not directly apply to companies whose shares are admitted to trading on AIM.

e)    Where the Company has a controlling shareholder (as defined in the Listing Rules), it will no longer be required to enter into a relationship agreement with such controlling shareholder and to comply with the independence provision at all times as is required under the Listing Rules.

f)     Whilst a company's appropriateness for AIM is, in part, dependent on it having free float in order that there is a properly functioning market in the shares, there is no specified requirement for a minimum number of shares in an AIM company to be held in public hands, whereas a company listed on the Official List has to maintain a minimum of 25 per cent. of its issued ordinary share capital in public hands.

g)    Certain securities laws will no longer apply to the Company following AIM Admission; for example, the Disclosure Guidance and Transparency Rules (save that Chapter 5 of the same in respect of significant shareholder notifications and MAR (relating to, inter alia, market abuse and insider dealing) will continue to apply to the Company) and certain of the Prospectus Regulation Rules. This is because AIM is not a regulated market for the purposes of the European Union's directives relating to securities.

h)    Shares traded on AIM can in some cases, attract beneficial treatment and be treated as unlisted for the purposes of certain areas of UK taxation. Following the Delisting and AIM Admission, individuals who hold Ordinary Shares may be eligible for relief from inheritance tax under the business property relief provisions. Given the make-up of the Company's register of members, the Board believes that this potential relief may be attractive for individuals who are Shareholders. Shareholders and prospective investors should consult their own professional advisers on whether an investment in an AIM security is suitable for them, or whether the inheritance tax benefit referred to above may be available to them.

i)     The Delisting may have implications for Shareholders holding shares in a Self-Invested Personal Pension ("SIPP"). For example, shares in unlisted companies may not qualify for certain SIPPs under the terms of that SIPP. Shareholders holding shares in a SIPP should therefore consult with their SIPP provider immediately. Following AIM Admission, the Company will be categorised for these purposes as unlisted.

The comments on the tax implications described in this Circular are based on the Directors' current understanding of tax law and practice, are not tailored to any individual circumstances and are primarily directed at individuals who are UK resident and domiciled. Tax rules can change and the precise tax implications for you will depend on your particular circumstances. If you are in any doubt as to your tax position, you should consult your own independent professional adviser.

Following AIM Admission, Ordinary Shares that are held in uncertificated form will continue to be held and settled through CREST. Share certificates representing those Ordinary Shares held in certificated form will continue to be valid and no new certificates will be issued in respect of such Ordinary Shares following a move to AIM. Accordingly, Shareholders should continue to be able to trade Ordinary Shares in the usual manner through their stockbroker or other suitable intermediary.

In addition, the Isle of Man Companies Act 2006, the UK Companies Act 2006, the Financial Services and Markets Act 2000, certain of the Prospectus Regulation Rules, Market Abuse Regulations and the City Code on Takeovers and Mergers will continue to apply to the Company following AIM Admission, as the Company is a public limited company incorporated in the Isle of Man whose shares have been traded on a UK regulated marker in the last 10 years.

Shareholders should note that AIM listed issuers are not eligible for FTSE Indexation (with exception of the FTSE AIM Indexes).

Irrevocable Undertakings

Certain Directors and members of key management have given irrevocable undertakings to the Company to vote in favour of the Resolutions to be proposed at the General Meeting (and, where relevant, to procure that such action is taken by the relevant registered holders if that is not them) in respect of their entire beneficial holdings totalling in aggregate 61,828,672 Ordinary Shares, representing approximately 7.5 per cent. of the Ordinary Shares.

Recommendation

Shareholders should note that, if the Delisting Resolution is not passed by Shareholders at the General Meeting the Delisting and Admission to AIM will not be implemented.

In such circumstances, the Ordinary Shares will not be admitted to trading on AIM and the Ordinary Shares will continue to be admitted to listing on the standard segment of the Official List and to trading on the Main Market.

Accordingly, the Directors consider that the Transactions and the passing of Resolutions 1 to 3 are in the best interests of the Company and its Shareholders as a whole and unanimously recommend that Shareholders vote in favour of all of the Resolutions, as they intend to do in respect of their beneficial holdings of an aggregate of 47,414,316 Ordinary Shares, representing approximately 5.76 per cent. of the Ordinary Shares.

IMPORTANT INFORMATION

The distribution of this announcement in or into certain jurisdictions other than the United Kingdom may be restricted by law. Therefore, persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

This announcement contains (or may contain) certain forward‐looking statements with respect to the Company and certain of its goals and expectations relating to its future financial condition and performance which involve a number of risks and uncertainties. No forward‐looking statement is a guarantee of future performance and actual results could differ materially from those contained in any forward‐looking statements. All statements, other than statements of historical facts, contained in this announcement, including statements regarding the Group's future financial position, business strategy and plans, business model and approach and objectives of management for future operations, are forward‐looking statements. Generally, the forward‐looking statements in this announcement use words such as "aim", "anticipate", "target", "expect", "estimate", "plan", "goal", "believe", "will", "may", "could", "should", "future", "intend" "opportunity", "potential", "project", "seek" and other words having a similar meaning. By their nature, forward‐looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of changes in interest rates and foreign exchange rates, changes in legislation, changes in customer habits and other factors outside the control of the Company, that may cause actual results, performance or achievements to be materially different from any results, performance or achievements expressed or implied by such forward‐looking statements. All forward looking statements contained in this announcement are based upon information available to the Directors at the date of this announcement and access to this announcement shall not give rise to any implication that there has been no change in the facts set forth herein since such date. The forward‐looking statements in this announcement are based on the relevant Directors' beliefs and assumptions and information only as of the date of this announcement, and the forward‐looking events discussed in this announcement might not occur. Therefore, Shareholders should not place any reliance on any forward‐looking statements. Except as required by law or regulation (including, without limitation, as a consequence of the Prospectus Rules, EU Market Abuse Regulation, Listing Rules, the AIM Rules and/or the Disclosure Guidance and Transparency Rules), the Directors undertake no obligation to publicly update any forward‐looking statements, whether as a result of new information, future earnings or otherwise.

Shore Capital and Corporate Limited ("Shore Capital"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and will not be responsible to any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or any matter, transaction or arrangement referred to therein. Shore Capital has not authorised the contents of, or any part of, this announcement, makes no representation or warranty, express or implied, as to the contents of this announcement, and Shore Capital does not accept any liability whatsoever for the accuracy or completeness of the information or opinions contained in this announcement (or for the omission of any material information) and shall not be responsible for the contents of this announcement. Shore Capital expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement.