Datalex plc (DLE) Earnings Call Transcript & Summary

Good morning. This is an extraordinary general meeting of Datalex plc held at 11:00 a.m. on Thursday, the 1st of July 2021. Ladies and gentlemen, I would like to welcome you to this meeting, which is an extraordinary general meeting of the company. The Secretary has -- a quorum is present, so I declare the meeting open. 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. As a consequence of the COVID-19 emergency measures introduced by the Irish government, which require people to stay at home and restrict public gatherings, we've asked that shareholders refrain from attending this AGM, and we thank you for your cooperation on this matter. So to the background of this meeting. This meeting has been convened for the specific purpose of considering resolutions relating to the proposed capital raise by way of a cornerstone placing, firm placing and placing an open offer, otherwise known as the capital raise and the related proposed cancellation of the listing of the company's existing ordinary shares on the official list of Euronext Dublin, and of trading on the regulated market of the Euronext Dublin and the application for admission of the existing ordinary shares and new ordinary shares to trading on Euronext Growth. This proposed transaction was announced on the 4th of June 2021. The notice of the meeting, together with an explanatory circular setting out details of the capital raise and associated resolutions was posted to shareholders on 8 June, 2021. Accordingly, the requisite notice of the meeting has been given, and I propose that with your consent, the notice of the meeting should be read taken as read. Completion of the capital raise will deliver on a long-standing ambition to arrange an equity fundraising to strengthen the group's balance sheet and liquidity position. The capital raise will provide the group with financial stability and give it a firm platform to implement its business plan and strategic repositioning. Your Board considers the capital raise to be in the best interest of the company and its shareholders. As outlined in the circular and as detailed below, Resolution 5, the Waiver Resolution; Resolution 6, the IIU-related party resolution; and Resolution 7, the Tireragh-related party, ultimately owned by Mr. Dermot Desmond under the cornerstone placing an open offer. The poll of this resolution will be held at the end of this meeting. Are you taking this? Or am I taking this one?

Yes, and just also note that John Bateson, as IIU's representative on the Board, has absented himself from the Board's deliberations on these resolutions and the related priority elements of the proposed transaction. Polling on the resolutions will be taken by poll to ensure that the voting requirements of the listing roles are satisfied, and I will outline this procedure to you. So given the restrictions on shareholder attendance at the meeting in accordance with the articles of association of the company, voting will be done today by waver poll, a written vote on the resolutions, and this allows shareholders the opportunity to participate in the decision-making of the company and have your votes recorded in proportion to the number of loans that we hold. We've appointed Computershare registrars to act as scrutineers. The poll will be held at the end of this meeting. The votes cast will be verified under the scrutiny of the registrars, Computershare, and will report total of the votes cast, for and against the resolutions and any extensions. As the vote will take some time to be conducted, we propose to close the meeting after taking up the votes, and the results of the poll will be announced as soon as possible by RNS and on the company's website, datalex.com. We will now proceed to the formal proposal of the resolutions to the meeting. The full text of each of the resolutions is set out in the notice of the meeting, a copy of which you will have received. I now propose resolution 1 to the meeting, as set out in full in the notice of the meeting. Resolution 1 is being proposed to authorize the directors to cancel the listing of the existing ordinary shares on the official list and to remove such existing ordinary shares for trading on the regulated market of Euronext Dublin, and to apply for admission of the existing ordinary shares and the new ordinary shares to trading on Euronext Growth. Resolution 1 is being proposed by the Board as a special resolution, meaning that it must be approved by 75% or more of the votes cast in person or by proxy to be passed. The poll on this resolution will be held at the end of the meeting. I now propose resolution 2 to the meeting, as set out in full in the notice of the meeting. Resolution 2 is being proposed as a special resolution to provide for an increase in the authorized ordinary share capital of the company and to provide for an alteration to clause 5 of the memorandum of association and Article 5A to the articles of association, to reflect the increase in the authorized share capital of the company. The poll on this resolution will be held at the end of the meeting. Resolution 3 is proposed to the meeting as set out in the notice. Resolution 3 is being proposed as an ordinary resolution to authorize the directors to allot relevant securities pursuant to and in accordance with Section 1,002 one of the company's act. In order to permit the company to proceed with capital raise and additionally, up to a maximum aggregate nominal value equal to approximately 1/3 of the enlarged issued ordinary share capital as it will be increased and completed on the capital release. Vote on this resolution will be held at the end of this meeting. I now propose resolution 4 as set out in the notice. Resolution 4 is being proposed as a special resolution to grant the directors authority to allot new ordinary shares in respect of the cornerstone placing, firm placing and placing without applying statutory preemption rights for shareholders to allot new ordinary shares in respect of the open offer and without applying statutory preemption rights for shareholders to allow ordinary shares by way of a rights issue or open offer at their discretion and without applying statutory preemption rights for shareholders. And otherwise to allow a limited amount of ordinary shares in respect of 10% of the large issued ordinary share capital at their discretion. And again, without applying statutory preemption rights for shareholders. The poll on this resolution will also be held at the end of the meeting. I now propose resolution 5 as set out in the notice. Resolution 5 is being proposed as an ordinary resolution for the independent shareholders to waive requirements that would otherwise arise under Rule 9 of the Irish takeover rules as a result of the issue of new ordinary shares to IIU nominees, a company ultimately controlled and owned by Mr. Dermot Desmond under the cornerstone placing an open offer. The poll on this resolution will be held at the end of this meeting. I now propose resolution 6 as set out in the notice. Resolution 6 is proposed as an ordinary resolution for the independent shareholders to approve for the purposes of the listing rules, IIU nominees' participation as described in the circular [indiscernible] and terms of the IIU-related party transaction. The IIU-related party transaction is a related party transaction for the purposes of the listing rules of Euronext Dublin. The poll on this resolution will be held at the end of the meeting. And now I propose resolution 7 to the meeting as set out in the notice. Resolution 7 is being proposed again as an ordinary resolution for the independent shareholders to approve for the purposes of the listing rule, the amendment and restatement of the company's facilities agreements with Tireragh Limited, a company ultimately beneficially owned by Mr. Desmond as described in detail in the circular dated 8 June, and terms of the Tireragh-related party transaction. The Tireragh-related party transaction is a related party transaction for the purpose of the listing rules in Euronext Dublin. The poll on this resolution will be held at the end of the meeting. Now let me turn to the poll voting procedures. The Chairman has directed that a poll will be taken on each of the resolutions, which has been put to the meeting. Votes may be given by the registered holders of ordinary shares present here, either in person or by proxy and entitled to vote. Every such holder has 1 vote for every ordinary share held. The Chairman will also vote on behalf of those shareholders who have sent proxy instructions to the company appointing the Chairman of the meeting to vote on their behalf. After the poll has been conducted, the votes cast will be certified under the scrutiny of Computershare by reference to the registered members and the list of authenticated proxies received by the company. Computershare will report the total of the votes cast for and against the resolutions and the number of withheld votes. Mr. Chairman, that concludes the formal proposals of the resolutions of the meeting.

Thank you, Company Secretary. It's to state that under the Irish takeover rules and the listing rules of Euronext Dublin, Mr. Dermot Desmond and his associates and persons acting in concert with him are not entitled to vote on these resolutions. I've also noted that John Bateson, as IIU's representative on the Board, has absented himself from the Board's deliberations on these resolutions and the related party elements of the proposed transactions. Now if we move on to the Q&A section. We did ask for written questions prior to the meeting. No written questions were received in advance of the meeting, and I would now like to invite questions from shareholders on the conference call. Please direct your questions to me, and I will either answer them or redirect them to one of my colleagues on the Board. [Operator Instructions] The line is now open, and we'll pause for a moment to allow everyone an opportunity to signal for questions. Okay. If there are no questions, I will now proceed to conclude the meeting. However, before we do so, I would like to address the company's announcement this morning of Lufthansa and the counterclaim to Datalex Ireland Limited's pending claim in the Regional Court of Frankfurt against Lufthansa commenced legal proceedings against Datalex Ireland Limited claiming damages of approximately EUR 9.7 million, and we're requesting a declaratory judgment for potential future damages. As we stated in our announcement, Datalex as the plaintiff in this big dispute intends to vigorously and robustly defend these claims. In the context of today's AGM, we consider the timing of the claims from Lufthansa to have been designed to attract publicity and cause disruption to the group's capital raising. Datalex rejects the allegation that have breached its obligations under the Lufthansa agreement, disputes the legality of the termination notice, and we are fully pursuing the outstanding amounts due to our ongoing legal procedures, which we believe that the group is entitled to recover from Lufthansa under the Lufthansa agreement. We will, of course, continue to keep shareholders informed of material developments. 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 I thank you for your attendance. We will publish the results of the polls by RNS and on the company's website as soon as possible today. Again, thank you all for your support and for joining us today, and I very much hope to have the opportunity to meet with you in the near future. Thank you, end of meeting.