Circ re. Intention to withdraw from the NEX exchange


Proposed withdrawal of Securities from the NEX Exchange Growth Market

Proposed reregistration as a private limited company

Proposals to facilitate a return of capital of 250.125p in cash to shareholders, other than Mr Wilf Boardman, by means of a proposed solvent liquidation of Mandicon PLC


Notice of General Meeting

The Board of Mandicon announces today the intention to withdraw the Company’s securities from trading on the NEX Growth Exchange, and to begin the process of members voluntary liquidation, which will see cash returned to shareholders.

Today the company has also sent out a circular to shareholders explaining the process, and relevant parts of the circular have been reproduced in this announcement, and should be read in conjunction with the announcement of the Company’s unaudited preliminary statement of accounts for the year ended 31 December, 2017, also made today.

Commenting Chairman of the Company, Wilf Boardman said “We feel the time is right to complete our process of seeking to return cash to shareholders. Since listing on the original OFEX the Company has performed well, and paid regular dividends to shareholders, showing that it is possible as a smaller listed company to meet the expectations of the market. Our shareholders have been very supportive over time so it is only right that we seek to ensure that they benefit in the final event.”

Extracts from Circular

Letter from The Independent Directors of Mandicon PLC

18 April 2018

Dear Shareholder,

Proposals to facilitate a return of capital of 250.125p in cash to shareholders other than Mr Wilf Boardman by means of a proposed solvent liquidation of Mandicon PLC

The principal purpose of this Circular is to set out the background to the resolutions to be considered at a General Meeting of the Company to be held at the offices of the Company’s accountants at 11 a.m. on 17 May 2018, namely that:

a) the Directors are instructed to pursue preparations to return capital to shareholders by way of a solvent liquidation;

b) the Company withdraws its securities from the NEX Exchange Growth Market; and

c) the Company is reregistered as a private limited company;

Unaudited Results for the year ended 31 December 2017 and Current Trading

The Company has today issued its unaudited preliminary statement of accounts for the year ended 31 December, 2017. A copy of the statement can be found in Part II on page 9 of this document. The unaudited consolidated results for the Mandicon Group (including a net profit on disposal of the business and assets of Mechan Controls and the liquidation of PJO Industrial of approximately £875,000) showed unaudited profit after taxation of £1.39m (2016 Audited: Loss of £214,000) on unaudited revenues on £2.76m (2016 Audited: £3.99m). Nirvana Engineering, the Group’s remaining trading subsidiary, recorded an unaudited profit before taxation of £554,130 (2016 Audited: £416,844) on unaudited revenues of £1.99 million (2016 Audited: £1.70 million).

While Nirvana Engineering has had a slow beginning to 2018, order levels and sales have started to pick up. The Board believes that the best course of action is to continue to pursue its strategy to realise value for Shareholders by way of a return of capital and therefore does not propose recommending a dividend.

Proposed Solvent Liquidation of Mandicon

As you will be aware, your Board decided, following the end of a formal sales process for the Group in April 2016, to pursue alternative strategies to realise value for Shareholders. To date this process has resulted in two share buybacks and, in June 2017, the sale of the business and assets of Mechan Controls to management. Your Board believes that a solvent liquidation is now the most efficient method of returning capital to all shareholders and proposes to pursue this course of action with the approval of shareholders.

As at close of business on 17 April 2018, the latest practicable date before the issue of this circular, the mid market price of a Mandicon Share was 253p. There are 2,000,000 Mandicon Shares in issue of which 341,200 are held by the Company pending cancellation, leaving 1,658,800 Mandicon Shares eligible for distributions and to vote in a General Meeting, of which Mr Boardman was the beneficial owner of 1,022,500 Mandicon Shares representing 61.64% of the Voting Shares.

As at 15 April 2018, Mandicon had cash at bank and in hand of £2.09 million and the prospect of a maximum additional payment of £400,000 in deferred consideration in relation to the sale of business and assets of Mechan Controls, of which £50,000 is due in August 2018. In addition Mandicon owns the entire issued share capital of Nirvana Engineering. The Independent Directors of Mandicon, believe that the current valuation of Nirvana Engineering does not exceed £1.5 million. The Company has received an offer to purchase Nirvana for £1.1m, but this current offer has not been accepted.

As there remains no guarantee that the sale of Nirvana Engineering will occur for some time, your Board has decided to pursue a policy, which, subject to shareholder approval, will result in Mandicon being placed in solvent liquidation by the end of June 2018 with a distribution of 250.125p per share in cash to all Shareholders other than the Chairman, Wilf Boardman.

Mr Boardman will receive the balance of cash after all costs of the liquidation have been paid and a distribution in specie of the entire issued share capital of Nirvana Engineering together with the right to receive any deferred consideration in respect of the sale of the business and assets of Mechan Controls.

On the basis of a future sale price for Nirvana Engineering of £1.5 million being achieved, and the maximum additional deferred consideration of £400,000 being received in respect of the sale of the business and assets of Mechan Controls the Independent Directors believe that Mr Boardman will eventually receive a cash consideration being the equivalent of approximately 236p per Mandicon Share held by Mr Boardman, which is 14p per Voting Share less than the outcome proposed for minority Shareholders.

Mr Boardman has proposed the arrangement for Shareholders, other than himself, to receive 250.125p per Voting Share from the liquidation, as this price reflects the last price at which Mandicon Shares were last purchased by the Company in the market. Additionally he believes that this provides certainty for shareholders as the likely outcome for smaller shareholders of a pro rata distribution under the liquidation would otherwise be uncertain in both quantum and timing.

Because of Mr Boardman’s interest in this proposal, he has undertaken not to vote on Resolution 1 but will vote in favour of Resolutions 2 and 3 which are conditional on Resolution 1 passing.

Implementation of the Solvent Liquidation

The liquidation of Mandicon will be undertaken by way of a “Members’ Voluntary Liquidation” pursuant to the Insolvency Act 1986 (as amended). This requires the directors of the Company to swear a statutory declaration of solvency, that is that they believe that the company will be able to pay its debts in full within 12 months from the start of the winding-up. The directors will then write to shareholders convening a General Meeting to consider and if in agreement, pass a resolution to place the Company in Members Voluntary Liquidation. The appointed liquidators will then be responsible for winding up the affairs of the Company, paying any outstanding creditors, including their own costs, and returning any surplus assets to shareholders either in cash or “in specie”, that is in the form of shares and any other non-cash assets of the Company.

The Company currently intends to have completed preparatory work for the proposed liquidation by the end of May 2018 with a view to seeking shareholder approval as soon as practicable thereafter. Preparatory work will include, inter alia, settling any outstanding actual or potential liabilities of the Company; putting in place revised arrangements in respect of the deferred consideration payable in respect of Mechan Controls Limited and preparing new articles of association for Mandicon to allow the distribution as envisaged in by the Board and to make the distribution as straightforward as possible for the liquidators. The new articles of association will not be voted on by shareholders until immediately prior to the solvent liquidation, thus ensuring that Mr Boardman will not obtain any unanticipated financial benefit from the arrangements.

Withdrawal of Securities from the NEX Exchange Growth Market

The first step in implementing the solvent liquidation is to seek shareholder permission to delist the Company’s shares from the NEX Exchange and re-register as a limited company. This will reduce the Company’s operating costs going forward, conserving cash for distribution to shareholders. If Resolution 2 is passed at the General Meeting, your Board anticipates that dealings in the Company’s shares on the NEX exchange will cease at close of business on Friday 18 May 2018.

Currently Shareholders can buy or sell Voting Shares on the NEX Exchange via a bank or stockbroker. Following Cancellation this trading facility will cease and the Company does not propose to make an alternative trading mechanism available to Shareholders. You will still be able to buy or sell your shares privately, as per the amended Memorandum and Articles of Company. Your shares will remain registered in CREST and be transferable via the Company’s Registrars.

The Directors have been advised that the earliest date for the first return of capital to shareholders following Liquidation is likely to be during July 2018. If you are likely to need to realise cash from your shareholding in Mandicon prior to that date then you should consider selling in the market prior to cancellation of the dealing facility.

Following cancellation of its dealing facility, the Company will remain subject to the City Code on Takeovers and Mergers for a period of 10 years or until liquidation and we will continue to keep Shareholders informed by letter or electronically of key developments,

Consequences of reregistration as a private limited company

The Board believes that, pending liquidation, the Company would benefit from the reduced regulatory requirements applicable to private limited companies, which will lower regulatory costs, and provide greater flexibility for future arrangements for the Company permitted under the Companies Act for private companies. Resolution number 3 at the General Meeting seeks Shareholder approval for the reregistration.

Shareholders are not expected to experience any material differences in practice as a result of the reregistration. At present there is no intention to reduce the size or change the composition of the Board following the Re-registration and, specifically, the Company will maintain the presence of independent directors on the Board.

Public companies (whether listed or otherwise) are subject to a greater number of restrictions under legislation than are private companies, and these extra restrictions will cease to apply to Mandicon upon the Re-registration taking effect. The restrictions which will cease to apply include the following:

  • a public company, unlike a private company, may not purchase or redeem its own shares out of its capital, nor can a public company and/or its subsidiaries give financial assistance for the acquisition of the public company's shares (for example by granting security over the assets of the public company);
  • a public company may not dis-apply statutory pre-emption rights on the allotment of new shares for cash permanently in its Articles of Association;
  • there are additional restrictions which apply on the ability of, and administrative requirements for, a public company to pay dividends; and
  • a public company may not issue shares for non-cash consideration unless it first obtains an independent expert's valuation and report in relation to such non-cash consideration.

In addition, a private company is not subject to a number of additional statutory procedural requirements which apply automatically to public companies, including the requirements to hold annual general meetings, to lay accounts before a general meeting, to appoint auditors on an annual basis (for private companies auditors are automatically deemed to be re-appointed), to have a company secretary and to have at least two directors (a private company may have a sole director).

If Resolution 3 is passed by Shareholders, application will be made to the Registrar of Companies for the Company to be reregistered. Reregistration will take effect when the Registrar of Companies issues a certificate of incorporation on reregistration. The Registrar of Companies is unlikely to issue the certificate of incorporation on reregistration until they are satisfied that no valid application under the Companies Act can be made to cancel Resolution 3. Accordingly, it is not possible to provide Shareholders with a date upon which it is expected that the Company will change status to a private limited company.

General Meeting

You will find attached to this letter, notice of the General Meeting to be held at the offices of Montpelier Professional (Lancs) Ltd, Charter House, Pittman Way, Fulwood, Preston PR2 9ZD at 11.00 a.m. on 17 May 2018, to consider and, if thought fit, pass the resolutions listed in the attached notice of General Meeting.

Actions to be taken

A Form of Proxy for use at the General Meeting is enclosed with this Document.

Shareholders holding Ordinary Shares in certificated form should complete and sign the Form of Proxy and return it to Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA as soon as possible but in any event to be received not later than 11.00 a.m. on 15 May 2018 or 48 hours before any adjourned meeting.

The return of a Form of Proxy will not, however, prevent a Shareholder from attending the General Meeting and voting in person, should he/she wish to do so. Shareholders who wish to attend in person should bring photographic identification with them.


The Independent Directors, who have been so advised by Exeter Capital Limited, consider the proposals set out in this document to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Independent Directors unanimously recommend you to vote in favour of the resolutions to be proposed at the General Meeting, as they intend to do in respect of their own beneficial shareholdings of 330,500 Ordinary Shares, representing 19.92 per cent, of the Voting Shares.

Mr Wilf Boardman has undertaken not to vote on Resolution 1, but intends to vote in favour of Resolutions 2 and 3, which are both conditional on the passing of Resolution 1, in respect of his beneficial shareholding of Shares representing 61.64 per cent of the Voting Shares.

Yours faithfully

John Faulkner


Additional Share Information

Issued shares and total voting rights

As at 6:00 p.m. on 17 April 2018, the Company’s issued share capital comprised 2,000,000 ordinary shares of 2.5p each, of which 341,200 are held by the Company. Each ordinary share not held by the company carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at 6:00 p.m. on 17 April 2018 is 1,658,800. There are no warrants or options outstanding in respect of Mandicon Shares.

Interests of the Directors and Significant Shareholdings

As at the date of this document, the beneficial interests of the Directors and persons connected to them (within the meaning of section 252 of the Companies Act), and other shareholders holding over 3% of the share capital of the Company, the existence of which is known to or could with reasonable diligence be ascertained by the Directors, is as follows:


  Number   % of Voting Shares held
Wilfred A Boardman 1,022,500 61.64
John A Faulkner 73,500 4.43
Peter C Knowles 257,000 15.49
Robert Parkinson 74,000 4.46
Jayne Elms 57,500 3.46

There are no outstanding loans granted or guarantees provided by the Company to or for the benefit of any of the Directors. There are no outstanding loans or guarantees provided by the Directors to or for the benefit of the Company. No Director has any interest, whether direct or indirect, in any transaction which is or was unusual in its nature or conditions or significant to the business of the Mandicon Group taken as a whole and which was effected by the Company during the current or immediately preceding financial year, or during any earlier financial year and which remains in any respect outstanding or unperformed.

Save as otherwise disclosed in this document, none of the Directors nor any member of their respective families nor any person connected with the Directors (within the meaning of section 252 of the Act) has any holding, whether beneficial or otherwise, in the share capital of the Company and none of the Directors nor any member of their respective families is dealing in any related financial instrument whose value in whole or in part is determined directly or indirectly by reference to the price of the Ordinary Shares, including a contract for differences or a fixed odds bet.

As at the date of this document and save as disclosed above, the Company is not aware of any interest in the Company’s ordinary share capital, which amounts 3 per cent. or more of the Company’s Voting Shares.

Share Price and Recent Dealings

As at 6.00 pm on 17 April 2018, the closing mid market share price for Mandicon Shares on the NEX Growth Market was 253p.

The following dealings in Mandicon Shares have been undertaken by the Company and the Directors in the 12 months immediately preceding the date of this document:

Date   Amount   Price (p)   Type of Transaction
18/08/2017 142,300 250.125 Purchase by the Company
11/08/2017 10,000 250 Purchase by Mr Wilf Boardman

The Directors of Mandicon PLC accept responsibility for this announcement.

Short Name: MECP
Category Code: CIR
Sequence Number: 645260
Time of Receipt (offset from UTC): 20180418T114225+0100


Mechan Controls Plc


Mechan Controls Plc