Langbar International Limited

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If
you are in any doubt about the contents of this document or about what action to take, you are
recommended immediately to seek your own professional advice from your stockbroker, solicitor,
accountant or other appropriately qualified independent financial adviser authorised under the
United Kingdom Financial Services and Markets Act 2000 if you are in the United Kingdom or, if
not, from another appropriately authorised independent financial adviser.
If you have sold or otherwise transferred all of your Common Shares, please forward this document and
the accompanying New Bye-laws, Form of Proxy, Financial Statements and any related documents at
once to the purchaser or transferee or the stockbroker, bank or other agent through whom the sale or
transfer was effected, for transmission to the purchaser or transferee. However, these documents should
not be forwarded or transmitted into any Restricted Jurisdiction. If you have sold or otherwise
transferred only part of your holding of Common Shares, you should retain these documents and contact
immediately the bank, stockbroker or other agent through whom the transfer or sale was effected.
____________________________________________________________________________________________
Langbar International Limited
(formerly Crown Corporation Limited, a company incorporated and registered in Bermuda under the
Companies Act 1981 with registered number EC33737)
Consolidation and Confirmation of Share Capital
Pre-Consolidation Subscription
Re-purchase of Restricted Shares
Adoption of New Bye-laws
Rights Issue
and
Annual General Meeting
____________________________________________________________________________________________
Neither the Pre-Consolidation Subscription nor the Rights Issue is being made, nor will be made, directly or
indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national, state or other
securities exchange of, any Restricted Jurisdiction and participation in the Pre-Consolidation Subscription or the
Rights Issue will not be permissible by any such use, means, instrumentality or facility or from within any Restricted
Jurisdiction.
Accordingly, unless otherwise determined by Langbar and permitted by applicable law and regulation, neither this
document nor any Application Form nor any related document, is being, will be or may be, directly or indirectly,
mailed, transmitted or otherwise forwarded, distributed, or sent in, into or from any Restricted Jurisdiction and
persons receiving this document, the accompanying New Bye-laws, Form of Proxy, Financial Statements and/or any
related document (including without limitation, trustees, nominees or custodians) must not mail or otherwise
forward, distribute or send it in, into or from such Restricted Jurisdiction, including to Shareholders with registered
addresses in Restricted Jurisdictions. Any person (including, without limitation, trustees, nominees or custodians)
who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this document
together with the accompanying New Bye-laws, Form of Proxy, Financial Statements and/or any related documents
to any jurisdiction outside Bermuda, should seek appropriate advice before taking any action.
You should read the whole of this document, but your attention is drawn, in particular, to the letter to Shareholders
from David Buchler, the Chairman of Langbar. This letter explains the background to and reasons for the Proposals
and the Resolutions to be proposed at the Annual General Meeting. Your attention is also drawn to the section
entitled “Risk Factors” in Part II of this document.
Further copies of this document can be downloaded from the Company Website at www.langbar.com.
The Pre-Consolidation Subscription will close at 5:00 p.m. (London time) on Friday 5 February
2010 unless extended by means of an announcement via the Company Website and will only be
available to PCS Qualifying Shareholders on Langbar’s register of members on the PCS Record
Date. The action required to be taken by PCS Qualifying Shareholders who wish to participate in the
Pre-Consolidation Subscription is set out on page18.
Set out at the end of this document is notice of the Annual General Meeting of Langbar International Limited to be
held at 10:00 a.m. on 14 December 2009 at The Chesterfield Hotel, 35 Charles Street, London W1J 5EB, England.
Shareholders will find enclosed a Form of Proxy for use at the Annual General Meeting. Forms of Proxy, completed
in accordance with the instructions thereon, should be returned as soon as possible but, in any event, so as to be
received by the Company Secretary, Langbar International Limited, 12 Curzon Street, London W1J 5HL, United
Kingdom not later than 48 hours before the time of the Annual General Meeting.
CONTENTS
Page
Expected Timetable of Principal Events
2
Definitions
3
Part I
Letter from the Chairman
8
Part II
Risk Factors
11
Part III
Further information regarding the Proposals
13
Part IV
Details of the Pre-Consolidation Subscription
16
Part V
Details of the Repurchase of Restricted Shares
19
Part VI
Summary of the amendments to the Existing Bye-laws
20
Part VII
Details of the Resolutions
22
Part VIII
Additional Information
24
Notice of Annual General Meeting
29
1
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Date and despatch of this document
18 November 2009
Last date for receipt of proxies by the Company
10:00 a.m. (London time) on
Saturday 12 December 2009
AGM
10:00 a.m. (London time) on
Monday 14 December 2009
Proposed despatch of Final Demands pursuant to
Bye-law 53 of the New Bye-laws
Despatch of notice of Completion Date to
holders of New Bye-law 53 Shares
Monday 14 December 2009
Thursday 31 December 2009
Completion of repurchase of Restricted Shares
(if any) pursuant to New Bye-law 53 procedure
Monday 11 January 2010
Record Date for Pre-Consolidation Subscription
5:00 p.m. (London time) on
Tuesday 12 January 2010
Despatch of personalised Application Forms in
relation to the Pre-Consolidation Subscription
Wednesday 13 January 2010
Latest time and date for receipt of Application
Forms in relation to the Pre-Consolidation
Subscription, unless extended by means of an
announcement via the Company Website (the
PCS Closing Date)
5:00 p.m. (London time) on
Friday 5 February 2010
Share Consolidation Date
5:00 p.m. (London time)
Monday 15 February 2010
Despatch of new share certificates
Week commencing Monday
1 March 2010
Despatch of remittances in lieu of fractional
entitlements arising on Share Consolidation
By 19 March 2010
The dates and times given are based on Langbar’s current expectations and may be subject to
change. Any changes to the expected timetable will, if necessary, be announced via the
Company Website.
2
DEFINITIONS
The following definitions apply throughout this document and the Application Form unless the
context requires otherwise:
“AGM”
the Annual General Meeting of the Company referred to in the
AGM Notice
“AGM Notice”
the notice of Annual General Meeting set out at the end of this
document
“Adoption of New Bye-laws”
the proposed adoption of the New Bye-laws as detailed in this
document and in the Resolutions
“AIM”
the market of that name operated by the London Stock
Exchange plc
“Application Form”
any form of application, subscription form, provisional
allotment letter or similar document relating to the PreConsolidation Subscription or the Rights Issue
“Bermuda”
the Islands of Bermuda
“Board”
the board of Directors
“Bye-law 54 Notice”
a notice issued to certain persons pursuant to Bye-law 54 of
the Existing Bye-laws
“Common Share”
a common share in the capital of Langbar (whether before or
after the Share Consolidation)
“Company”
Langbar International Limited (formerly Crown Corporation
Limited), a company incorporated and registered in Bermuda
with registered number EC33737
“Company Website”
www.langbar.com
“Confirmation of Share
Capital”
the proposed confirmation of the share capital of the
Company as detailed in this document and in the Resolutions
“Connected Persons”
means, in respect of a person (“A”), any other person whose
interest in Shares A is taken to be interested in pursuant to
Part 22 of the United Kingdom Companies Act 2006 and
related regulations
3
“Consolidated Share”
a common share of 5 par value in the capital of Langbar
following the Share Consolidation taking effect
“Court”
the High Court of Justice in England and Wales
“DBC”
DB Consultants SA, a company with which David Buchler is
connected, incorporated in Switzerland and whose registered
address is Immeuble Continental - CP 108 Crans-Montana 2
CH-3963 Switzerland
“DB Consultants”
DB Consultants Limited, a company with which David
Buchler is connected, incorporated in England and Wales and
whose registered office is at 12 Curzon Street, London W1J
5HL, United Kingdom
“Directors”
the directors of Langbar, whose names are set out on page 8
of this document
“EBT”
the Langbar Employee Benefit Trust established by the
Company by trust deed dated 23 January 2009 as amended by
a deed dated 16 February 2009
“Excluded Person”
has the meaning given in the Explanatory Statement
“Existing Bye-laws”
the Bye-laws of the Company at the date of this document
“Existing Share”
a Common Share of 0.001 par value in the capital of Langbar
prior to the Share Consolidation
“Explanatory Statement”
the explanatory statement dated 8 September 2006 in respect
of the Scheme of Arrangement required to be furnished
pursuant to section 426 of the United Kingdom Companies
Act 1985, a copy of which is available on the Company
Website
“Financial Statements”
the Directors’ Report and financial statements of the
Company for the year ended 31 December 2008
“Form of Proxy”
the form of proxy accompanying this document for use at the
AGM
“Langbar”
the Company
“New Bye-laws”
the new Bye-laws of the Company, a copy of which
accompanies this document, proposed to be adopted pursuant
to the Resolutions
4
“New Bye-law 52 Notice”
a notice issued to certain persons pursuant to Bye-law 52 of
the New Bye-laws
“New Bye-law 53 Shares”
Shares in respect of which the compulsory purchase procedure
has been invoked pursuant to Bye-law 53 of the New Byelaws
“Non-Qualifying Shares”
Shares that are not Qualifying Shares
“Opt-Out Group”
certain Shareholders representing the majority of Shareholders
who opted out of the Scheme of Arrangement and who
subsequently instigated legal proceedings against the
Company
“Overseas Shareholder”
a Shareholder (or nominees of, or custodians or trustees for, a
Shareholder) who is a citizen or national of or resident in a
jurisdiction outside Bermuda
“PCS Closing Date”
5:00 p.m. (London time) on Friday 5 February 2010, the time
and date by which Application Forms in respect of the PreConsolidation Subscription must be received by the Company,
unless extended by means of an announcement via the
Company Website
“PCS Qualifying
Shareholder”
a holder of less than 5,000 Qualifying Shares who is not a
holder of Non-Qualifying Shares in each case on Langbar’s
register of members on the PCS Record Date
“PCS Record Date”
5:00 p.m. (London time) on Tuesday 12 January 2010
“PCS Share”
a Common Share of 0.001 par value in the capital of Langbar
issued or to be issued pursuant to the Pre-Consolidation
Subscription
“Pre-Consolidation
Subscription”
the proposed invitation by Langbar to PCS Qualifying
Shareholders to subscribe PCS Shares substantially on the
terms and subject to the conditions set out or referred to in this
document
“Proposals”
The Share Consolidation, Confirmation of Share Capital, PreConsolidation Subscription, Re-purchase of Restricted Shares,
Adoption of New Bye-laws and Rights Issue referred to in this
document
“Provisional Allotment
Letter”
the non-renounceable provisional allotment letter to be issued
by the Company in respect of new Consolidated Shares to be
provisionally allotted pursuant to the Rights Issue
5
“Qualifying Shares”
Common Shares in the capital of the Company other than
Common Shares:
(a)
held by Overseas Shareholders with a registered or
mailing address in a Restricted Jurisdiction or
Shareholders who are citizens or nationals of, or
resident in, a Restricted Jurisdiction;
(b)
held by Excluded Persons (or nominees of, or
custodians or trustees for, Excluded Persons);
(c)
held by Connected Persons of Excluded Persons; or
(d)
in respect of which the ultimate beneficial and other
interests have not been identified to the full
satisfaction of the Board
“Repurchase of Restricted
Shares”
the proposed repurchase by the Company of Restricted Shares
as detailed in this document and pursuant to the New Byelaws
“Resolutions”
the resolutions set out in the AGM Notice
“Restricted Jurisdiction”
the United States, Canada, Australia, Japan and South Africa
and any other jurisdiction determined by the Board to be a
jurisdiction where local laws or regulations may be violated
by information concerning the Pre-Consolidation Subscription
and/or the Rights Issue being sent or made available to
Shareholders in that jurisdiction
“Restricted Shares”
Shares in respect of which a sufficient response to a Bye-law
54 Notice or a New Bye-law 52 Notice has not been received
by the Company within the period stated in such notice and
the rights in respect of which have been suspended in
accordance with the Existing Bye-laws or the New Bye-laws
“Rights Issue”
the proposed offer by way of rights of new Consolidated
Shares referred to in this document
“Rybak Defendants”
has the meaning set out in the Tender Offer Circular
“Scheme Creditor”
has the meaning given in the Explanatory Statement
“Scheme of Arrangement”
the scheme of arrangement under section 425 of the United
Kingdom Companies Act 1985 made between Langbar and its
Scheme Creditors approved by Scheme Creditors on 6
October 2006 and sanctioned by the Court on 9 November
2006, with or subject to any modification, addition or
condition approved or imposed by the Court
6
“Share”
a common share in the capital of Langbar
“Share Consolidation Date”
5:00 p.m. (London time) on Monday 15 February 2009
“Share Consolidation”
the proposed consolidation of the share capital of the
Company as detailed in this document and in the Resolutions
“Shareholder”
a holder of Common Shares
“Special Payment”
the payment made to Scheme Creditors pursuant to the
Scheme of Arrangement details of which are set out in the
Tender Offer Circular
“Tender Offer”
the invitation by Langbar to Tender Offer Qualifying
Shareholders to tender some or all of their Tender Offer
Qualifying Shares for purchase by Langbar and the purchase
by Langbar of such shares in each case as set out in the
Tender Offer Circular
“Tender Offer Circular”
the circular dated 13 May 2009 issued by the Company to
Shareholders setting out details of the Tender Offer
“Tender Offer Qualifying
Shareholders”
Shareholders qualifying for the Tender Offer as defined in the
Tender Offer Circular
“Tender Offer Qualifying
Shares”
Common Shares qualifying for the Tender Offer as defined in
the Tender Offer Circular
“Transfer of the Settlement
Shares”
the transfer to the Company, for cancellation or (to the extent
permitted by Bermuda law and the Bye-laws as amended from
time to time) to be held as Treasury Shares, of the Shares of
the members of the Opt-Out Group as part consideration for
the obligations of the Company pursuant to the settlement
referred to in paragraph 4 of Part III of this document
“£” and “pence”
pounds and pence sterling, the lawful currency of the United
Kingdom
“”
Euros, the lawful currency of the member states in the
Eurozone
7
PART I
LETTER FROM THE CHAIRMAN
LANGBAR INTERNATIONAL LIMITED
Incorporated and registered in Bermuda, registered number EC33737
Registered Office: 101 Front Street, Hamilton HM12, Bermuda
Directors
London Office
David Buchler (Chairman)
Paul Bobroff (Managing Director)
Larry Jobsz (Director)
Rt. Hon. Sir Jeremy Hanley K.C.M.G. (Non-executive
Director)
12 Curzon Street
London
W1J 5HL
United Kingdom
18 November 2009
To Shareholders
Dear Shareholder
Consolidation and Confirmation of Share Capital
Pre-Consolidation Subscription
Re-purchase of Restricted Shares
Adoption of New Bye-laws
Rights Issue
and
Annual General Meeting
Since I last wrote to you in May your Company has continued its progress from being solely
occupied with recoveries and litigation to preparing itself to become an investment company
with the primary intention of creating value for shareholders. As a prelude to this we announced
in May a share buy-back by way of Tender Offer and a Special Payment pursuant to the Scheme
of Arrangement. I am pleased to report that the share buy-back by way of Tender Offer was
satisfactorily completed allowing those who wished to realise cash for their Shares to do so. I
am also pleased to report that the Special Payment was made in accordance with the Scheme of
Arrangement.
Since May the Company has been able to effect a settlement on satisfactory terms with almost all
of the Shareholders who chose not to participate in the Scheme of Arrangement. Litigation is
continuing against the Rybak Defendants over certain issues relating to the sale of a property in
Monaco and the Company is also continuing to take action to recover monies from other parties.
The Board’s best estimate is that the Company is likely to be engaged in litigation to recover
8
monies for some considerable time, but that the Company should also be in a position to enable
the Board to consider investment opportunities during the first half of 2010.
The result of the Tender Offer has been particularly gratifying to your Board as an overwhelming
number of shareholders have remained invested in the Company. Details of the result of the
share buy-back are given in Part VIII of this document. The Board believes that the very small
denomination of each share at 0.001 (one tenth of a euro cent) is an unnecessary burden and no
longer appropriate now that the Company is preparing itself to undertake investment activities.
As a consequence your Board is making proposals for a share consolidation on the basis of every
5,000 Existing Shares (of 0.001 each) being consolidated into 1 Consolidated Share of 5.00, as
more fully described in paragraph 2 of Part III of this document. The Board appreciates that
there are a number of Shareholders who currently hold less than 5,000 Shares and who would
otherwise lose their shareholding as a result of the Share Consolidation. Therefore, in order to
ensure that all shareholders who wish to do so can remain invested in the Company, the Board is
also proposing a pre-consolidation subscription so that shareholders who hold less than 5,000
Existing Shares can subscribe for such number of new Existing Shares as will bring their
holdings up to the minimum required to receive a Consolidated Share on completion of the Share
Consolidation, thus enabling them to continue to participate in the Company. Further details of
the Pre-Consolidation Subscription are as set out in Part IV of this document.
During the past year a number of Shareholders have asked about the possibility of being able to
invest further in Langbar. Until now the Board has not felt that a new share issue was necessary
or appropriate, but it has kept the level of working capital available for the Company’s litigation
recovery activities and its proposed commencement of investment activities under constant
review. The Board is particularly conscious of the increasingly high costs likely to be incurred
in pursuing future recovery litigation and the time-scale involved and has also noted the effect of
exchange rate movements. For these reasons the Board has concluded that a rights issue in the
near future would be in the best interests of the Company and its present intention therefore is for
the Company to seek to raise further funds by way of a rights issue to strengthen its capital base.
I will, of course, be fully supporting any such issue in respect of the Shares held by DBC. Full
details of the proposed rights issue will be sent to Shareholders in the early part of 2010.
In the Tender Offer Circular in May I referred to “qualifying shareholders” and the Board’s
determination that none of those parties responsible for the previous operation of Langbar should
be able to benefit from the proposals then being brought forward. In particular I referred to
Notices sent out under Bye-law 54 requiring those shareholders to identify the ultimate
beneficial ownership behind their holdings. I regret to report that no satisfactory responses were
received to the Bye-law 54 Notices sent out in May 2009. Your Board is not prepared to stand
by and allow a situation to persist where these unidentified holdings remain on the register to the
detriment of all other Shareholders.
Included in the Proposals, therefore, are proposals to adopt new bye-laws of the Company that
contain provisions allowing the Company to compulsorily purchase these shareholdings for a
nominal sum. Details of these provisions are set out in Part V of this document.
The proposed New Bye-laws also contain new provisions to take into account recent changes to
Bermuda company law. A summary of the changes consequent on the adoption of the New Byelaws is set out in Part VI of this document.
9
The Board believes that all the proposals outlined above are necessary steps in the process of
transforming your Company so that it is able to take advantage of the opportunities that lie
ahead. Notice of the Annual General Meeting of the Company is set out at the end of this
document and contains the Resolutions that will need to be passed in order to implement the
Proposals. The Board considers that all the Proposals and the Resolutions are in the best
interests of the Company and all Shareholders are urged to support the Proposals and vote in
favour of the Resolutions.
Set out at the end of this document is notice of this year’s annual general meeting. In accordance
with the Bye-laws, I am due to retire as a director of the Company by rotation, but I am eligible
for re-election and a resolution proposing this is included in the AGM Notice. I am also pleased
to announce that Mr Paul Bobroff was appointed as Managing Director on 13 October 2009.
Because Paul’s appointment occurred since the last AGM, his appointment also will be put to the
Company at the forthcoming AGM.
A copy of the Directors’ Report and financial statements of the Company for the year ended 31
December 2008 accompanies this document and will be laid before Shareholders at the AGM.
I look forward to seeing you at the Annual General Meeting on 14 December at which time I will
update Shareholders with the latest developments. I would like to take this opportunity on behalf
of all the Directors of thanking you for continued support.
Yours faithfully
David Buchler
Chairman
10
PART II
RISK FACTORS
Shareholders should consider carefully all of the information set out in this document
including, in particular, the risks described below, as well as their own personal
circumstances, prior to making any decision as to whether or not to participate in the PreConsolidation Subscription and/or the Rights Issue.
If you are in any doubt about the action you should take, you should obtain professional
advice from your stockbroker, solicitor, accountant or other appropriately qualified
independent financial adviser authorised under the United Kingdom Financial Services
and Markets Act 2000 if you are in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
The Directors believe that the risks described below are particularly significant for a
holding of Common Shares in the Company. However, the risks listed do not necessarily
comprise all those associated with an investment in the Company. In particular, the
Company’s performance may be affected by changes in market or economic conditions and
in legal, regulatory and tax requirements.
If any of the risks described below were to materialise, the Company’s business, financial
conditions, results or future operations could be materially adversely affected. In such
cases, the value of the Company could decline and an investor may lose part or all of his
investment. Additional risks and uncertainties not presently known to the Directors, or
which the Directors currently deem immaterial, may also have an adverse effect upon the
Company.
The list below is not exhaustive, nor is it an explanation of all the risk factors involved in
investing or maintaining a shareholding in the Company and nor are the risks set out in any order
of priority.
1.
The outcome of current and future litigation remains uncertain and there can be no
assurance that current or any future litigation will be successful.
2.
The funding of recent litigation by the Company was made possible by the provision of a
guarantee from DBC. There can be no certainty that such a guarantee will be provided
again should the Company be required to fund future litigation. Whilst the Directors
continue to use their best estimates as to the costs and timing of future litigation, both
factors remain uncertain and unforeseen circumstances may arise that could result in the
Company not having sufficient funds in the future to finance such litigation.
3.
It should be noted that the value of the Net Assets of the Company (as defined in the
Explanatory Statement and as measured for the purposes of the Special Payment) is not
necessarily a true representation of shareholder or market value since, in accordance with
the terms of the Scheme of Arrangement, the Company is obliged to pursue litigation in
order to recover funds. Such litigation may result in an increase or a net decrease in net
11
asset value. In addition, certain claims against the Company may be resurrected if there
is an Insolvency Event (as defined in the Explanatory Statement) prior to the Common
Shares being relisted (you are recommended to refer to the Explanatory Statement for
details). Accordingly, the subscription price per Qualifying Share payable under the PreConsolidation Subscription and/or the Rights Issue may be higher or lower than the true
value or the market value of the Common Shares.
4.
The Company’s future success will depend on the retention of its Directors, key
employees and any future management team, and on its ability to continue to attract and
retain highly skilled and qualified personnel. There can be no assurance that the
Company will retain the services of any of them.
5.
The Common Shares are not listed or traded on any stock exchange. An investment in
the Common Shares may thus be difficult to realise. The value of the Common Shares
may go down as well as up. Investors may therefore realise less than their original
investment, or sustain a total loss of their investment.
6.
Restricted availability of finance for businesses and a stagnant or recessionary global
economy may have an adverse effect on the prospects for the Company. The Company
may need to raise funds in the future, either to fund preliminary investigation and due
diligence, to invest in or acquire other companies or to raise further working or
development capital. Accordingly, the Company may need to engage in further equity or
debt financings to secure additional funds. There is no guarantee that the then prevailing
market conditions will allow for an equity fundraising or that new investors will be
prepared to subscribe for Common Shares at the same price or higher as the price paid by
an investor or a price considered by an investor to be a “fair value”. Shareholders may be
materially diluted by any further issue of Common Shares by the Company and any new
equity securities may not be the same class as the current Common Shares and could
have rights, preferences and privileges superior to those of current Shareholders. As
regards any debt financing, the current challenging economic conditions may continue for
some time and present significant difficulties in the Company’s attempts to obtain
funding. Any debt financing secured by the Company in the future could involve
restrictive covenants relating to its capital raising activities and other financial and
operational matters, which may make it more difficult for the Company to obtain
additional capital and to pursue business opportunities. In addition, the Company may
not be able to procure additional debt financing on terms favourable to it or at all. If the
Company is unable to obtain, when it requires, adequate financing or financing on terms
satisfactory to it, its ability to continue to support its business growth and to respond to
business challenges could be significantly and adversely weakened.
7.
The ability of Langbar to pay dividends will depend, amongst other things, on the
Company’s profitability and the extent to which, as a matter of law, it has available to it
assets and reserves sufficient to satisfy the requisite statutory tests under Bermuda law.
The Company gives no assurance that it will be in a position to pay a dividend in the
future.
12
PART III
FURTHER INFORMATION REGARDING THE PROPOSALS
1.
Background
As set out in the Tender Offer Circular, the stated objectives for Langbar were originally that it
would be an investment company with the primary objective of creating value for its
shareholders by making investments in companies in which, via its Directors, managers and
external advisers, it could assume an active role and have significant influence over the
management and strategic direction of such companies. The Board now intends to position the
Company to pursue those objectives. At this time, the Board has made no decisions about the
type and size of any investments, but believes it is important to prepare the Company so that it is
ready to attract new investment and is in a position to commence, at an appropriate time, its
investment activities once a suitable investment opportunity arises. The Board believes that it is
in the interests of the Company and its Shareholders as a whole that a re-structuring of the
Common Shares takes place. The Board therefore proposes that, subject to Shareholder
approval, the existing Shares be consolidated on the basis set out below.
2.
Basis of Share Consolidation
The Share Consolidation will be on the basis that Shareholders who are members on the Share
Consolidation Date will receive 1 Consolidated Share of 5 each in place of every 5,000 Existing
Shares they own on the Share Consolidation Date. The effect of the Share Consolidation will be
to reduce the number of issued Shares, but Shareholders will own the same proportion of the
Company as they did previously, subject however to the Pre-Consolidation Subscription and to
fractional entitlements (see below).
The Consolidated Shares will be equivalent in all material respects to the Existing Shares,
including their dividend, voting and other rights, save to the extent that the New Bye-laws amend
such rights (as to which, see Part VI of this document). Subject to the Resolutions being passed,
new share certificates will be issued following completion of the Share Consolidation. In order
to allow sufficient time for the Pre-Consolidation Subscription to be completed, the Share
Consolidation will not take effect until Monday 15 February 2010 and it is expected that, subject
to the Resolutions being passed, such certificates will be despatched during the week
commencing Monday 1 March 2010.
3.
Fractional entitlements to Consolidated Shares
Unless a holding of Existing Shares is exactly divisible by 5,000, a Shareholder will have a
fractional entitlement to a Consolidated Share following the Share Consolidation. So, for
example, a Shareholder having 14,000 Existing Shares would, after the Share Consolidation, be
entitled to 2 Consolidated Shares and a fractional entitlement to 4/5ths of a Consolidated Share.
The fractional entitlements of all Shareholders will be aggregated and, subject to satisfaction of
certain statutory tests, repurchased by the Company at £250 per Consolidated Share (i.e.
equivalent to 5 pence per Existing Share). The Shareholder would therefore receive £200 in
13
respect of his 4/5ths fractional entitlement. This represents the same effective price per Share as
was paid in the Tender Offer and details of the net asset value of the Company and how the price
was calculated can be found in the Tender Offer Circular. The purchase price will be distributed
pro rata to the relevant Shareholders. Subject to the Resolutions being passed and the Share
Consolidation being completed, payments in respect of the acquisition of fractional entitlements
are expected to be sent by telegraphic bank transfer direct to the relevant Shareholder’s bank
account by 19 March 2010 (or such other date as the Board may determine). In the event that the
Company suspects that an Excluded Person is interested in any fraction of a Consolidated Share
arising on the Share Consolidation, purchase monies in respect of such fractions will not be paid
to the former holder thereof without the prior consent of applicable anti-money laundering
authorities.
4.
Effect of Share Consolidation on the issued Share Capital of the Company
Following completion of the Tender Offer, the total number of Common Shares in issue was
132,696,802. Since then, the Company has settled the litigation with the Opt-Out Group (being
130 Shareholders) and the terms of the settlement included the Transfer of the Settlement Shares
to the Company, totalling 4,174,413 Shares. To date, the holdings of 95 of such Shareholders,
totalling 2,313,937 Shares, have been transferred to the Company and the transfer of the
remaining Shares is progressing towards completion. As at the date of this document, therefore,
the total number of Common Shares in issue is 130,382,865. Once the remaining 1,860,476
Shares of the Opt-Out Group have been transferred to the Company, the total number of
Common Shares in issue will be 128,522,389. It is expected that the Transfer of the Settlement
Shares will be completed prior to the Share Consolidation Date.
The likely take-up of the Pre-Consolidation Subscription is of course unknown at this stage,
particularly since institutional nominee shareholders are being invited to apply to have the
underlying beneficial owners of Shares registered in respect of their own shareholdings (so as to
help ensure that any such beneficial owners whose shareholdings are less than 5,000 Existing
Shares will be able to decide for themselves whether or not to participate in the PreConsolidation Subscription). However, assuming none of the PCS Qualifying Shareholders
participated in the Pre-Consolidation Subscription (and subject to the Resolutions being passed),
it is estimated that the total number of Consolidated Shares in issue following completion of the
Share Consolidation would be 25,819. If the Pre-Consolidation Subscription were taken up in
full, it is estimated that the total number of Consolidated Shares in issue following completion of
the Share Consolidation (subject to the Resolutions being passed) would be 26,148.
Assuming none of the PCS Qualifying Shareholders participated in the Pre-Consolidation
Subscription (and subject to the Resolutions being passed) it is estimated that the total maximum
cost to the Company of the re-purchase of fractional entitlements pursuant to the Share
Consolidation at the rate of £250 per whole Consolidated Share would be £64,393.25.
5.
Rights Issue
The Board currently intends to implement a rights issue in the early part of 2010. Full details of
the Rights Issue, together with the terms and conditions to which the Rights Issue will be subject,
will be set out in a separate document to be sent to Shareholders in due course. Amongst other
14
terms and conditions, the Rights Issue will be conditional upon there having been no material
adverse change affecting the Company prior to the date on which the Company would otherwise
allot Shares pursuant to the Rights Issue.
6.
Taxation
The taxation implications of the repurchase of Shares by the Company following the Share
Consolidation will vary from Shareholder to Shareholder and will depend on the Shareholder’s
individual circumstances, including residence for tax purposes. All Shareholders are strongly
advised to consult their professional advisers immediately as to their own tax position.
15
PART IV
DETAILS OF THE PRE-CONSOLIDATION SUBSCRIPTION
1.
Background
One corollary of the Share Consolidation (subject to the Resolutions being passed) is that
Shareholders with fewer than 5,000 Existing Shares would not be entitled to receive a
Consolidated Share, but instead would, subject to compliance by the Company with certain
statutory tests, have all their fractional entitlements to a Consolidated Share acquired by the
Company at the rate of £250 per whole Consolidated Share (i.e. equivalent to 5 pence per
Existing Share).
Over the last three years the Board has had numerous discussions with Shareholders about the
future of the Company. It is clear from those discussions that although many Shareholders
wished to realise cash for their Shares, many others wish to remain invested in Langbar and
participate in its future development. The Board has once again been mindful of these differing
positions and wishes to ensure that Shareholders with smaller shareholdings of Qualifying Shares
who would prefer to retain a shareholding in the Company are not disadvantaged unduly by the
Share Consolidation. The Board therefore proposes, subject to the Resolutions being passed, to
give all PCS Qualifying Shareholders the opportunity to maintain a shareholding in the Company
if they so wish by allowing PCS Qualifying Shareholders to participate in the Pre-Consolidation
Subscription.
2.
Basis of Pre-Consolidation Subscription
Subject to the Resolutions being passed, the Board intends to send to each PCS Qualifying
Shareholder an Application Form inviting them to subscribe, at 5 pence per Common Share, for
such number of additional Shares as will bring their shareholding up to the minimum number of
5,000 Existing Shares required in order to receive one Consolidated Share on the Share
Consolidation. Instructions on how to complete and return the Application Forms will be
included on the Application Form itself or in an accompanying letter addressed to PCS
Qualifying Shareholders.
3.
Subscription Price
The Board considers that the price per Common Share of 5 pence at which PCS Qualifying
Shareholders will (subject to the Resolutions being passed) be invited to subscribe under the PreConsolidation Subscription, is fair and reasonable. This is the same price as the price at which
Shares were purchased by the Company pursuant to the Tender Offer.
4.
Restrictions on Transfer
Shareholders should be aware that there remain restrictions on the free transferability of
Common Shares in accordance with Bermuda law. In addition, there is no ready market in the
Common Shares as the Company’s shares were delisted some years ago.
16
5.
Risk Factors
Your attention is drawn to the Risk Factors set out in Part II of this document. Shareholders
should consider carefully the risks described in Part II of this document and consult with their
legal, tax and other professional advisers before making a decision on whether or not to
participate (if they are so invited in due course as PCS Qualifying Shareholders) in the PreConsolidation Subscription.
6.
Qualifying Shares, Excluded Persons and their Connected Persons
The Directors are mindful of the terms of the Scheme of Arrangement and consider that it would
not be appropriate for an Excluded Person or their Connected Persons to be afforded the
opportunity of participating, directly or indirectly, in the Pre-Consolidation Subscription. For
this reason, unless the ultimate beneficial ownership of, and the persons interested in, Common
Shares can be identified to the satisfaction of the Directors, such Common Shares will not fall
within the definition of Qualifying Shares and will not be eligible for participation in the PreConsolidation Subscription.
Qualifying Shares are defined in the Definitions section at the beginning of this document. In
order to assist the Directors in determining the ultimate beneficial owners of Shares, notices
under Bye-law 54 of the Existing Bye-laws have been sent to persons where the Company knows
or has reasonable cause to believe that such persons are or, at any time during the previous 3
years, have been interested in certain Common Shares and where details of the beneficial owners
or the persons interested in such Common Shares are not fully known to the Company. Such
notices required the relevant persons to inform the Company, inter alia, of all persons who are
interested in such Common Shares as at the date of the response to the Bye-law 54 Notice.
It will be a condition of the Pre-Consolidation Subscription that a Shareholder must complete the
declaration as to beneficial ownership contained in the Application Form that will be sent to PCS
Qualifying Shareholders.
7.
Terms of the Pre-Consolidation Subscription
Full terms and conditions of the Pre-Consolidated Subscription will be sent to Shareholders in
due course if the Resolution approving the Share Consolidation is passed.
The PCS Shares will, when issued and fully paid, rank pari passu in all respects with the
Existing Shares, including the right to receive all dividends or other distributions made, paid or
declared after the date of this document.
The Pre-Consolidation Subscription will close at 5:00 p.m. (London time) on Friday 5 February
2010 (the PCS Closing Date) and any Application Forms received after that time may be
rejected. However, the Pre-Consolidation Subscription may be extended beyond the PCS
Closing Date at the sole discretion of the Board and notice of any such extension will be posted
on the Company Website.
17
8.
Action to be Taken
If the Resolutions are passed, PCS Qualifying Shareholders will, shortly after the Record Date
for the Pre-Consolidation Subscription, be sent an Application Form to subscribe for such
number of Existing Shares as will bring their shareholdings in the Company up to the minimum
number of Existing Shares to result in their holding one Consolidated Share immediately
following the Share Consolidation. Instructions on how to complete and return such Application
Forms will be included on the Application Form itself or in an accompanying letter addressed to
PCS Qualifying Shareholders.
If at any time since 13 May 2009 you have received a Bye-law 54 Notice or if after the AGM
you receive a New Bye-law 52 Notice or a Final Demand pursuant to Bye-law 53 of the New
Bye-laws, it is essential that you complete and return the Bye-law 54 Notice and/or the New
Bye-law 52 Notice (or Final Demand) to the Company as a matter of urgency. Failure to
complete and return any such notice or Final Demand will mean that the rights attaching to the
Common Shares relating to that notice will continue to be suspended and, if the Resolutions are
passed, may ultimately result in such Common Shares being repurchased by the Company on the
terms set out in the New Bye-laws.
18
PART V
DETAILS OF THE REPURCHASE OF RESTRICTED SHARES
1.
As stated in the Tender Offer Circular, notices under Bye-law 54 of the Existing Byelaws were sent out in respect of certain shareholdings in order to assist the Directors in
determining the identity of the beneficial owners. Where a sufficient response to the
Bye-law 54 Notices was not received by the Company, the rights attaching to the relevant
shareholdings in the Company were suspended and continue to be suspended pursuant to
the power to do so in Bye-law 55 of the Existing Bye-laws.
2.
The Board considers that it is imperative, particularly in the light of current money
laundering regulations, that there are no shareholdings in the register of members in
respect of which details of the ultimate beneficial owners are not known to the Company.
To this end, the Board is proposing certain changes to the Bye-laws of the Company
(which will be included in the New Bye-laws) in order to enable the Company, after
following a specified procedure, to repurchase the Common Shares of Shareholders who
have not provided full details of the ultimate beneficial owner of such shares in response
to a Bye-law 54 Notice (or New Bye-law 52 Notice, as applicable).
3.
Part VI of this document provides a summary of the proposed changes to the Existing
Bye-laws, including the proposed procedure to repurchase such Shares, which is set out
in Bye-law 53.8 of the New Bye-laws.
19
PART VI
SUMMARY OF THE AMENDMENTS TO THE EXISTING BYE-LAWS
1.
Background
As part of preparing the Company for further investment and for commencing its investment
activities, it is proposed that the Company adopt New Bye-laws to reflect more appropriately its
private company status, to reflect the fact that the Common Shares are no longer traded on AIM
and to reflect certain changes in Bermuda law. The principal changes introduced in the New
Bye-laws are summarised below. A copy of the New Bye-laws is enclosed with this document
and will also be published on the Company’s website: http://www.langbar.com.
The resolution to adopt the New Bye-laws will be proposed as a special resolution.
2.
Summary of certain of the changes
The following represents a summary only of certain of the changes from the Existing Bye-laws
of the Company that are included in the New Bye-laws. It is not a complete list of changes and
is not intended as a substitute for reading the proposed New Bye-laws in their entirety.
References herein to Bye-law numbers are to Bye-law numbers in the New Bye-laws unless
otherwise stated.
•
Given that shares are no longer held as depositary interests or traded on AIM, the changes
include the removal from the Bye-laws of references to the UK Uncertificated Securities
Regulations 2001, the relevant system, UK Listing Authority and provisions
contemplating uncertificated shares and transfers thereof.
•
Provisions allowing the Company to acquire shares and hold them as treasury shares are
to be introduced as that is now permitted by changes to Bermuda law (Bye-laws 2.12,
11.2 and 16.1).
•
The amendments will increase the maximum number of directors from 6 to 9 and provide
for one-third of the Board to retire by rotation every two years rather than every year as is
presently the case (Bye-law 2.13).
•
The requirements of Bermuda law for companies to have officers in place and to have
such officers in Bermuda have changed. Various changes are proposed to the Bye-laws
to reflect the arrangements now permitted by Bermuda law (Bye-laws 2.18.3, 6.1, 6.4 and
8.10).
•
The proposed new Bye-law 7 replaces and expands the indemnities and waivers given to
directors and officers of the Company and permits moneys to be advanced to them on
account of expenses to the extent now permitted by Bermuda law.
20
•
The new Bye-laws will provide that special general meetings of members may be
convened on five days notice (Bye-law 8.7).
•
The proposed new Bye-law 15.3 makes particular provision for the Company to acquire
fractions of shares arising, for example, on a consolidation of shares (as is proposed in
relation to the Share Consolidation to be considered at the AGM).
•
Given the history of the Company, the Board proposes that the discretion to refuse to
register transfers of shares be extended to all shares of the Company (Bye-law 26.1).
•
The provision calling for a special resolution of members (as opposed to a resolution by
simple majority) in order to alter the Bye-laws is to be removed (Bye-law 49).
•
It is proposed that the restriction in Bye-law 52 (presently Bye-law 54), which permits
the Company to look back only up to three years in investigating interests in shares of the
Company, be removed, thus allowing the Company to investigate interests in shares held
at any time.
•
The Board is proposing that Bye-law 53 (formerly Bye-law 55), which is the Bye-law
which gives the Board powers to take action in respect of members who do not comply
with their obligations to provide information to the Company requested in accordance
with Bye-law 52 (formerly Bye-law 54), be amended and expanded to allow the
Company, following a member’s non-compliance with a further and final notice served
by the Company, to purchase such members’ shares at an aggregate price of Euro 10
(Bye-laws 53.7 to 53.9).
•
Bermuda law now makes sealing of company documents by common seal optional (Byelaws 19.1, 46 and 47).
•
It is proposed that Bye-laws 8.28 and 8.34 be amended to clarify voting arrangements
where members attend a meeting other than physically.
•
Bermuda law permits notices and other documents to be delivered to members by
publication on a company’s web-site where members are sent a notice giving details of
the website and particulars of how a member may elect to receive the document in
physical form. Bye-laws 43.1 and 44.2 are proposed to be amended to accommodate that
and the provisions of the former Bye-law 56 are to be deleted.
21
PART VII
DETAILS OF THE RESOLUTIONS
Notice of the 2009 Annual General Meeting, which is to be held at 10:00 a.m. on Monday 14
December 2009, is set out on pages 29 to 31 of this document. Unlike last year, the business to
be conducted at the AGM is rather complex.
Resolution 1 - 2008 Report and Accounts
Under Resolution 1, it is proposed that the Directors’ Report and financial statements of the
Company for the year ended 31 December 2008, be received.
Resolution 2 – Re-Appointment of David Buchler as Director
David Buchler retires by rotation pursuant to the Bye-laws and is eligible for re-election as a
Director.
Resolution 3 - Appointment of Paul Bobroff as Director
Paul Bobroff was appointed by the Board as a Director on 13 October 2009. Because such
appointment was made since the last annual general meeting of the Company, a resolution is
proposed to appoint Paul Bobroff as a Director.
Resolution 4 – Re-Appointment of Auditors
Under Resolution 4, it is proposed that Donald Jacobs & Partners be re-appointed as auditors.
Resolution 5 – Auditor’s Remuneration
Resolution 5 is to authorise the directors to establish the auditor’s remuneration.
Resolution 6 - Share Capital
The Directors note that the audited accounts of the Company have for many years stated that the
authorised share capital is 500,100. However, no record of a resolution increasing the
authorised share capital from 200,100 to 500,100 can be found either amongst the Company’s
records or at the Bermuda Companies Registry. Resolution 6 therefore seeks to remove this
possible discrepancy and to clarify the position by providing that the Share Capital of the
Company be confirmed as being 500,100 divided into 500,100,000 Common Shares of 0.001
each. It should be noted that at no time has the issued share capital of the Company ever
exceeded 200,100.
Resolution 7 – Adoption of New Bye-laws
Resolution 7 is a special resolution to adopt the New Bye-laws of the Company in the form
enclosed with this document (and available for inspection on the Company Website). The New
Bye-laws contain the provisions that, amongst other things, will enable the Company to
repurchase the Restricted Shares if information as to beneficial ownership continues not to be
provided to the Company.
22
Resolution 8 - Consolidation of Share Capital
This resolution sets out the basis on which the Share Consolidation will take place.
All Shareholders entitled to vote at the AGM are urged to complete the enclosed Form of
Proxy and return it in accordance with the instructions printed on it to arrive at Langbar
International Limited, 12 Curzon Street, London W1J 5HL, United Kingdom as soon as
possible and in any event no later than 10:00 a.m. (London time) on 12 December 2009.
23
PART VIII
ADDITIONAL INFORMATION
1.
The Company
1.1
The Company was incorporated in Bermuda on 4 June 2003 under the Companies Act
1981 of Bermuda as a company limited by shares with the name Crown Corporation
Limited. The Company changed its name on 9 August 2005 to Langbar International
Limited.
1.2
The Company’s registered office is located at 101 Front Street, Hamilton HM12,
Bermuda.
2.
Subsidiaries
The Company has no subsidiaries other than its wholly-owned subsidiary Langbar
Capital Limited.
3.
Share capital of the Company
3.1
The audited accounts of the Company have for many years stated that the authorised
share capital is 500,100. However, no record of a resolution increasing the authorised
share capital from 200,100 to 500,100 can be found either amongst the Company’s
records or at the Bermuda Companies Registry. A resolution confirming the position is
to be proposed at the AGM. At no time has the issued share capital of the Company
exceeded 200,100.
3.2
The issued share capital of the Company as at the date of the Scheme of Arrangement
was 173,192.525 (approximately £164,900) divided into 173,192,525 Common Shares
of 0.001 each.
3.3
No further shares have been issued since the date of the Scheme of Arrangement other
than as referred to in paragraph 3.4 of this Part VIII.
3.4
Pursuant to the Termination Agreement referred to in paragraph 5.1 of this Part VIII (as
amended by the letter of extension referred to in paragraph 5.4 of this Part VIII), the
Company issued 17,319,252 Common Shares to DBC on 14 May 2009.
3.5
Pursuant to the Tender Offer, a total of 57,814,975 Shares were repurchased by the
Company and were treated as cancelled, following which the issued share capital of the
Company was 132,697 (approximately £120,634) divided into 132,696,802 Common
Shares of 0.001 each.
3.6
If the Repurchase of Restricted Shares is completed, then (assuming the Transfer of the
Settlement Shares is completed) the issued share capital of the Company would be
24
94,117 (approximately £86,346) divided into 94,117,068 Common Shares of 0.001
each.
3.7
If the Pre-Consolidation Subscription is taken up in full, then (assuming the Repurchase
of Restricted Shares is completed and the Transfer of the Settlement Shares is completed)
the issued share capital of the Company would be 95,110 (approximately £87,257)
divided into 95,109,903 Common Shares of 0.001 each.
3.8
If the Share Consolidation is approved and is put into effect, including the repurchase by
the Company of fractional entitlements, then (assuming the Repurchase of Restricted
Shares is completed, the Transfer of the Settlement Shares is completed and the PreConsolidation Subscription is taken up in full), the authorised share capital of the
Company would be 500,100 (approximately £458,807) divided into 100,020 Common
Shares of 5.00 each and the issued share capital of the Company would be 94,470
(approximately £86,670) divided into 18,894 Common Shares of 5.00 each.
3.9
On 31 March 2009, all holdings of Common Shares held in the form of depositary
interests (“DIs”) were cancelled and the underlying Common Shares were registered on
Langbar’s share register in the name of those DI holders recorded on the DI register as at
30 March 2009. Since such registration, it has been possible for Shareholders to transfer
legal title to the Common Shares subject to (i) the Company’s registration procedures (as
set out in the Existing Bye-laws) and (ii) where required the approval of that transfer by
the Bermuda Monetary Authority.
3.10
On 16 April 2009, the Common Shares expired from the CREST system. This involved
the physical removal of the security from CREST and the deletion of any open and
unsettled transactions. Further information regarding the collapse of the DI register is set
out in the letter dated 17 April 2009 from David Buchler (a copy of which can be found
on the Company Website).
4.
Directors’ Interests
4.1
DBC is a Connected Person of David Buchler, who is therefore interested in the
17,319,252 Common Shares issued to DBC as detailed in paragraph 3.4 of this Part VIII.
4.2
Other than the interests of David Buchler pursuant to the contract referred to in paragraph
4.1 of this Part VIII, none of the Directors is interested in any shares in the capital of the
Company.
4.3
As part of the ongoing review of the Company’s position and potential future investment
activity, the Board concluded that it would be desirable to establish arrangements
whereby present and future employees could be incentivised to remain with or attracted
to join the Company and which, in relation to any possible future corporate or business
acquisitions, would make the Company a more attractive proposition for the employees
and directors of such companies and businesses. By a trust deed dated 23 January 2009,
as amended by a deed dated 16 February 2009, the Company established the Langbar
Employee Benefit Trust principally for the benefit of the employees and close family of
Langbar or any of its subsidiaries, but excluding certain persons (including, in particular,
25
those persons declared Excluded Persons in the Scheme of Arrangement). Current or
future employees who leave employment (and their close families) may also be
beneficiaries. The purpose of the trust is to encourage or facilitate the holding of shares
in Langbar by or for the benefit of beneficiaries. The trustee of the EBT is Fiduciaire
FIDAG SA of Martigny, Switzerland.
5.
Material Contracts
Other than as set out below there are no contracts (not being in the ordinary course of business)
entered into by the Company or its subsidiary within the 2 years preceding the date of this
document that are or may be material or that contain any provision under which the Company or
its subsidiary has any obligation or entitlement that is material to the Company or its subsidiary
as at the date of this document.
5.1
An agreement attached to an order made by Mr Justice Blackburne dated 21 April 2008,
details of which are set out in paragraph 6.1 of this Part VIII.
5.2
A termination agreement dated 23 January 2009 between (1) DBC and (2) the Company
terminating the consultancy agreement dated 11 May 2006 between the Company and
DB Consultants. The consultancy agreement was assigned to DBC in February 2008 and
related, inter alia, to the management and the pursuit and defence of any litigation
relating to the recovery of assets and provided for a monthly retainer of £8,000 plus VAT
and a further fee (payable in either cash or share options) calculated as a percentage of
the gross recovered sums and assets (10% up to £25m and 5% for all amounts above
£25m). The consultancy agreement also provided for a termination payment payable on a
sliding scale dependent on the year of termination by the Company (the “Termination
Payment”). Pursuant to the termination agreement, DBC agreed to waive all its rights
and interests under the consultancy agreement (including the right to receive the retainer
and further fees and a Termination Payment of £400,000 that would otherwise have been
due under the consultancy agreement) in consideration of the Company implementing the
provisions of the termination agreement, including an undertaking by the Company:
5.2.1
to use its best endeavours to procure the transfer to DBC (or as DBC directs) of
17,319,252 Common Shares made available pursuant to Proceedings or
Assigned Claims (each as defined in the Explanatory Statement);
5.2.2
to the extent that it is unable to fulfil the obligations referred to in paragraph
5.2.1 above, to use its best endeavours to allot to DBC (or as DBC directs)
17,319,252 Common Shares.
The termination agreement provides that if the total number of the 17,319,252 Common
Shares are not transferred or allotted pursuant to the above provisions by 31 March 2009
(or such later date as the parties may mutually agree in writing (the “Consideration
Date”), the Company shall pay to DBC (or as DBC may direct) by way of substituted
consideration for the waiver of the Termination Payment a sum calculated as a
percentage of the gross recovered sums and assets (10% up to £25m and 5% for all
amounts above £25m). The Consideration Date was extended as noted in paragraph 5.4
of this Part VIII and the Common Shares were issued on 14 May 2009.
26
5.3
An agreement for the provision of support and office services dated 23 January 2009
between (1) DB Consultants and (2) the Company pursuant to which the Company
engaged DB Consultants to provide certain office support services and office
infrastructure services and such other similar services as may be agreed from time to time
between the parties. The charge for such services is the base cost of providing the
services plus 20% of the base cost plus VAT. The agreement is terminable by either
party on 3 months’ notice expiring on or after 23 January 2010. The Company may
terminate the agreement at any time if DB Consultants, inter alia, becomes insolvent or
commits a material breach of the agreement. The agreement contains an indemnity from
the Company in favour of DB Consultants against all losses, liabilities or claims which
may be suffered or incurred by DB Consultants and which arise directly or indirectly in
connection with the provision of the services.
5.4
A letter of agreement dated 7 May 2009 signed by the Company and by DBC agreeing to
extend the Consideration Date referred to in paragraph 5.2 above from 31 March 2009 to
30 June 2009.
6.
Litigation
6.1
In April 2008, following a five month hearing, the Court made an agreed order pursuant
to which the Company settled its civil proceedings against the Rybak Defendants.
Pursuant to the terms of that agreement, and in full and final settlement of the civil claims
brought by the Company against the Rybak Defendants in England and in Singapore, it
was agreed, amongst other things (including the transfer to the Company or as the
Company may direct of some 34,100,892 Common Shares owned by Rybak Defendants),
that the Rybak Defendants would provide warranties as to the accuracy of their previous
asset disclosure and would pay to the Company a sum amounting to approximately £30
million, with such amount representing substantially the whole of the assets of the Rybak
Defendants after payment of their legal costs. Some £30.4m in cash has so far been
collected from the Rybak Defendants, but there remains a dispute as to whether other
monies are owed under the terms of the settlement. Proceedings have now been issued in
the Court in relation to that dispute and the Company intends rigorously to pursue its
claim to those further monies. Subject to the outcome of those proceedings, further sums
may be recovered from the Rybak Defendants.
6.2
In addition, in January 2009 the Company obtained judgement in default against the other
parties to the proceedings before the Court, namely Mr Abraham Arad Hochman,
Lambert Financial Investments Limited and Jean Pierre Regli. The Company is now
considering taking steps to enforce that judgement. The Company has been informed of
the apparent death of Mr Hochman and is seeking to verify this information.
6.3
A number of persons who had acquired an interest in the Common Shares of Langbar
opted out of the Scheme of Arrangement (the Opt-Out Group) and issued proceedings in
the Court against the Company and others. In those proceedings, the Opt-Out Group
sought damages for misrepresentation which (together with accrued interest) amounted to
approximately £3.5 million. The claim was settled by agreement in July 2009 on terms
that the Board considers satisfactory.
27
6.4
Save as set out at paragraphs 6.1, 6.2 and 6.3 above, Langbar is not a party to any current
litigation. However, in accordance with the terms of the Scheme of Arrangement, the
Company is continuing to comply with its obligations to pursue the Company Claims and
the Assigned Claims (each as defined in the Explanatory Statement). The Board believes
that the Company is likely to be engaged in litigation for some time, but that since the
timing and outcome of such litigation remain uncertain and are commercially sensitive, it
would be inappropriate for the Company to comment on the potential for or scope of
further litigation recoveries.
7.
General
7.1
The accounting reference date of the Company is 31 December.
7.2
The Common Shares are registered and are not bearer shares.
7.3
The Common Shares are not admitted to dealings on any recognized investment
exchange nor has any application for such admission been made nor are there any present
intentions for any other arrangements for dealings in the Common Shares.
Dated: 18 November 2009
28
LANGBAR INTERNATIONAL LIMITED
(FORMERLY KNOWN AS CROWN CORPORATON LIMITED)
INCORPORATED IN BERMUDA UNDER NUMBER EC33737
(THE “COMPANY”)
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of the members of the Company will be
held at The Chesterfield Hotel, 35 Charles Street, London W1J 5EB, England on 14 December
2009 at 10:00 a.m. (London time) for the following purposes:
1.
To receive the Directors’ Report and financial statements for the year to 31 December
2008.
2.
To re-appoint David Buchler as a Director, who retires at the AGM by rotation as
required by the Existing Bye-laws and is seeking re-election, for such term as is
provided for in the Bye-laws of the Company (as amended from time to time).
3.
To appoint Paul Bobroff as a Director of the Company to hold office for such term as is
provided for in the Bye-laws of the Company (as amended from time to time).
4.
To re-appoint Donald Jacobs & Partners as auditor of the Company.
5.
To authorise the Board to establish the auditor’s remuneration.
6.
To confirm that the share capital of the Company be and hereby is (and to the extent
necessary is hereby increased to) 500,100 divided into 500,100,000 Common Shares of
0.001.
7.
To consider and if thought fit pass as a special resolution a resolution to adopt New
Bye-laws of the Company in the form enclosed with this notice of meeting (the “New
Bye-laws”).
8.
To consider and if thought fit pass the following resolution:
THAT:
(i)
in respect of each holding of common shares of par value Euro 0.001 (the
“Existing Common Shares”) in issue as shown on the Company’s register of
members as at 5:00 p.m. (London time) on Monday 15 February 2010 (the
“Share Consolidation Date”), every 5,000 Existing Common Shares shall,
effective at the Share Consolidation Date and without further action, be
consolidated into one new common share of par value Euro 5.00 each (a “New
Common Share”), provided that no fractional entitlements to New Common
Shares arising from such consolidation (the “Share Consolidation”) shall be
issued to any shareholders but shall be acquired by the Company on terms
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determined at the discretion of the Directors in accordance with the provisions of
Bye-law 15 of the Bye-laws of the Company;
(ii)
any issue as to what constitutes a “holding” and the relevant entitlements arising,
for these purposes shall be determined by the Directors in their absolute
discretion and using, without limitation and as they may deem relevant, the
powers conferred on the Board under Bye-law 15 of the Bye-laws of the
Company;
(iii)
every 5,000 authorised but unissued Existing Common Shares as at and with
effect from the Share Consolidation Date be consolidated into one New
Common Share and any fraction of an authorized but unissued New Common
Share arising therefrom shall be consolidated with fractions of a New Common
Share acquired by the Company from existing shareholders as a result of the
Directors dealing with fractional entitlements pursuant to the Share
Consolidation into one or more New Common Shares; and
(iv)
the Directors be and are hereby authorised and instructed to do or procure all
such acts and things as may be required to effect the Share Consolidation and to
deal with fractional entitlements in such manner as they may decide (including,
without limitation, having the Company acquire the same on such terms as they
may determine).
By the order of the Board
Mahesh Desai
Company Secretary
Registered office:
101 Front Street
Hamilton HM12
Bermuda
Date: 18 November 2009
Notes
1. A MEMBER WHO IS ENTITLED TO ATTEND AND VOTE AT THE MEETING
MAY APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE ON HIS OR
HER BEHALF, PROVIDED THAT ONLY ONE PROXY MAY BE APPOINTED BY
A MEMBER IN RESPECT OF A PARTICULAR SHARE HELD BY HIM/HER.
Please indicate on the proxy the number of shares in relation to which the proxy is
appointed. A PROXY NEED NOT BE A MEMBER OF THE COMPANY. A FORM
OF PROXY IS ENCLOSED WITH THIS NOTICE.
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2. To be effective, a completed and signed proxy (and any power of attorney or other authority
under which it is signed) must be deposited at or posted so as to arrive at Langbar
International Limited, 12 Curzon Street, London, W1J 5HL, United Kingdom by no later
than 48 hours before the time fixed for the meeting or any adjourned meeting. Completion
and return of a proxy will not preclude a member from attending and voting at the meeting in
person, in which event the proxy shall be automatically revoked.
3. In the case of joint holders of common shares of the Company, the vote of the senior holder
shall be accepted to the exclusion of the votes of the other joint holder(s). For this purpose,
seniority will be determined by the order in which the names appear in the Company’s
register of members.
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