Datalex plc (DLE) Earnings Call Transcript & Summary

Okay. We'll move to the Extraordinary General Meeting of Datalex plc. It's the 24th of September 2020, and it's just after 11:25 a.m. Ladies and gentlemen, I would like to welcome you to this meeting, which is an EGM of the company. The Secretary has informed me that a quorum is present, so I declare the meeting open. For any shareholders joining who had not attended the AGM, I'm David Hargaden, the company's Chairman. Your full Board are on an open conference line along with certain of the senior management of the company. The purpose of this meeting is to consider one resolution, to approve the entry by the company into an amendment and restatement agreement with Tireragh Limited, a company associated with IIU Nominees Limited, which is ultimately beneficially owned by Mr. Dermot Desmond. The notice of meeting, together with an explanatory circular setting out details of the proposed transaction, was posted to shareholders on the 7th of September 2020. Accordingly, the requisite notice of the meeting has been given, and I propose that, with your consent, the notice of the meeting should be taken as read. Voting on the resolution will be taken by poll, and I will outline the procedure in due course. I propose to start by briefly summarizing the background to the proposal and then to take -- I propose to start by briefly summarizing the background to the proposal. The proposed amendment and restatement agreement with Tireragh will amend and restate the facility agreement that was approved by you, our shareholders, on the 15th of November 2019. Under the terms of the amended and restated facilities agreement, the repayment date for all amounts owing under the facility agreement will be extended from 1st of November 2020 to 1st of November 2021, and the facility available to the company will be increased by EUR 10 million. The details of the refinancing is included in the circular. Interest will be charged on amounts drawn down under the refinancing facility agreement by the company at a rate of 10% per annum, accruing from the date of drawdown, compounding monthly and to be rolled up until maturity. In consideration of Tireragh's agreement to provide and maintain the funding provided under the amended and restated facilities agreement, to extend the term of the existing facility and to increase the facility available under the facility agreement by 10 million; the company will pay Tireragh financing, facility extension and arrangement fees in an aggregate amount of EUR 2.74 million on the repayment date, 1st of November 2021, together with all other amounts then due and payable. Since publication of the circular, the company has engaged with shareholders in relation to the terms of the proposed transaction, which the company believes to be in the best interest of the company and its shareholders. As Mr. Desmond is classed as a related party, the transaction is classed as a related-party transaction for the purposes of the listing rules of Euronext Dublin. So the obligations of the parties under the loan are conditional upon the approval of the company's shareholders, with Mr. Desmond and his associates not being entitled to vote. Voting will be conducted by way of a poll to ensure that the voting requirements of the listing rules have been satisfied. I also note that John Bateson, as IIU's representative on the Board, has absented himself from the Board's deliberation of the arrangements. I'll now set out the reason for the arrangements. In recommending the proposed transaction to shareholders, the Board considered the company's current obligation to repay all amounts to Tireragh under the facility agreement on 1 November 2020. The Board has been actively exploring options to fund the repayment of these loan facilities and the group's working capital requirements. We have previously stated, most recently in the group's 2019 annual report, that we intend to arrange an equity fundraising for this purpose. We have great confidence in the business, which has been reset and stabilized. And as we noted on publication on the 27th of August 2020 of the group's half year 2020 results, we have retained the confidence of our customers, rightsized our cost base and have an ambitious growth strategy. As a key step to an equity fundraising, the suspension of trading in the company's shares on Euronext Dublin was lifted in July 2020. However, after much deliberation, the Board considers that now is not the appropriate time to complete an equity fundraising. The group continues to face financial challenges, exacerbated by the adverse effect of COVID-19 pandemic has had and continues to have on the aviation industry generally, and which has caused significant dislocation in the equity capital markets. Accordingly, given the significance of the potential funding requirement and the imminence of the repayment obligations under the facility agreement, the Board in the first half of this year opened discussions with Tireragh, which confirmed its willingness to extend the repayment date under the facility agreement and increased the facility available under the facility agreement by EUR 10 million. In addition, the Board, together with its financial and legal advisers, considered a number of alternative funding options to meet the group's short-term funding requirements, including the taking of finance from other lenders. The Board is keeping the issue of funding under ongoing review, but for all of the reasons that I set out in the circular, we conclude that Tireragh was able to offer the best available finance option to the group under the current circumstances. The Board considers, as explained in the circular, that the proposed transaction, which was actively negotiated, represents the best available option to the company to resolve its near-term funding requirements and believes the proposed transaction is in the best interest of the company. Now I'm going to hand over to Neil, our company's secretary to explain the poll procedure. Neil, over to you.

Thank you, David. Given the restrictions on shareholder attendance at the meeting and in accordance with the Articles of Association of the company, voting will be done by way of a poll or a written vote on the resolution. This allows you, our shareholders, the opportunity to participate in the decision-making of the company and have your votes recorded in proportion to the number of shares that you hold. As with the AGM, we've appointed Computershare, the company's registrars, to act as scrutineers, and the poll will be held at the end of this meeting with the poll on the resolution proposed at the Annual General Meeting. The votes cast will be verified under the scrutiny of the registrars, Computershare, who will report the total of the votes cast for and against the resolutions and any abstentions. As the poll will take some time to be concluded, we propose to close the meeting after the taking of votes on this resolution, and the results of the poll will be announced as soon as possible by RIS and on the company's website, datalex.com. I now propose the resolution to the meeting, as set out in full in the notice of the meeting, to approve the proposed related party transaction between the company and Tireragh Limited, an associate of IIU Nominees Limited, pursuant to and on the terms and conditions contained in the amendment and restatement agreement, as entered into between the company and Tireragh that is described in the circular for shareholders, and to approve the granting by the company and subsidiaries of the company of the refinancing security on the terms described in the circular. The poll on this resolution will be held at the end of the meeting. I'll hand back over to David.

Thank you, Neil. Subject to publication of the poll results, that concludes the business of the meeting. With your approval, I declare the meeting and the polls closed, and thank you for your attendance. We will publish the results of the polls by RIS and on the company's website as soon as possible today. Finally, thank you all for your support and for your continued support, indeed, and for joining us today. And I very much hope to have the opportunity to meet with you in the near future. Thank you very much.