REG - Kingswood Holdings - Conversion of Convertible Preference Shares

Kingswood HoldingsAnnouncement

31/05/2024 07:00

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RNS Number : 5507Q  Kingswood Holdings Limited  31 May 2024

Kingswood Holdings Limited

("Kingswood", the "Company" or the "Group")

 

Conversion of Convertible Preference Shares

 

Total Voting Rights

 

Kingswood Holdings Limited (AIM:KWG), the international, vertically integrated
wealth and investment management group, refers to its announcement of 29
December 2023 and is pleased to announce that, following the grant of the
anticipated approvals by the applicable regulatory authorities in the US, UK
and the Republic of Ireland, the Convertible Preference Shares are converting,
at the agreed conversion price of 16.5 pence per Ordinary Share, into a total
of 469,263,291 new Ordinary Shares in the Company ("Conversion").

On completion of Conversion:

·      the Company's enlarged issued share capital will be 686,184,011
Ordinary Shares, all of which will be admitted to trading on AIM; and

·      HSQ Investment Limited ("HSQ"), a wholly owned indirect
subsidiary of funds managed and/or advised by Pollen Street Capital Limited
("Pollen Street"), will be beneficially interested in a total of 469,263,291
Ordinary Shares representing approximately 68.4 per cent of the enlarged
issued share capital of the Company.

The Company and HSQ are in discussions in relation to the treatment and
settlement of the accrued dividends on the Convertible Preference Shares and a
further announcement will be made in due course.

Maintenance of AIM listing and new Relationship Agreement

HSQ has indicated to the Company that its current intention is to maintain the
listing of the Company on AIM and has entered into a relationship agreement
with the Company, which provides that any dealings between the Company and HSQ
will be at arms' length and that the Company will continue to have at least
two independent directors (being directors independent of HSQ). The
relationship agreement with HSQ is similar in effect in these respects to the
equivalent relationship agreement entered into between the Company and KPI
(Nominees) Limited ("KPI") in July 2017, which continues in force.

In accordance with the arrangements approved by shareholders at the General
Meeting of the Company on 30 September 2019 in relation to the waiver of any
future application of Rule 9 of the Takeover Code, the Conversion of the
Convertible Preference Shares will not trigger an obligation on HSQ to make an
offer for the Company under the Takeover Code.

Guaranteed minimum return to HSQ

In accordance with the provisions of the articles of incorporation of the
Company, the Deferred Contingent Value Share has also been issued to HSQ -
further details of the Deferred Contingent Value Share (and of the Make Whole
Instrument, which the Deferred Contingent Value Share is designed to underpin)
are set out in the circular issued by the Company on 13 September 2019 (the
"Circular").

The Circular notes that the Make Whole Instrument is to deliver a minimum two
times return to HSQ on its investment in the Convertible Preference Shares
(i.e. on the amount subscribed by HSQ for the Convertible Preference Shares).
With the agreement of HSQ, the Make Whole Instrument was subsequently modified
on 28 December 2021 (as announced by the Company on 31 December 2021) to
provide that the level of return for monies invested by HSQ on or after 28
December 2021 was a minimum of 1.5 times rather than a minimum of two times.

This means that the aggregate level of return to HSQ guaranteed by the Company
under the Make Whole Instrument (as so modified) is £140,056,886, being:

·      £95,656,886 (being the aggregate amount subscribed by HSQ for
Convertible Preference Shares ahead of 28 December 2021 multiplied by 2); plus

·      £44,400,000 (being the aggregate amount subscribed by HSQ for
Convertible Preference Shares on or after 28 December 2021 multiplied by 1.5).

This aggregate level of return will be assessed once HSQ has disposed of the
Ordinary Shares it has acquired as a result of its investment in the
Convertible Preference Shares.

The Circular also notes that the Company's obligations under the Make Whole
Instrument extend to the value sharing payment summarised on page 27 of the
Circular.

KPI agreement with HSQ

KPI, which is wholly owned by Gary Wilder, Non-Executive Director of
Kingswood, and Jonathan Massing, Non-Executive Deputy Chairman of Kingswood,
additionally holds an economic interest in a portion of each of (i) the
dividends relating to the Ordinary Shares held by HSQ (the "HSQ Ordinary
Shares"), (ii) the proceeds resulting from a sale of the HSQ Ordinary Shares;
and (iii) certain additional amounts, if paid, under the Make Whole Instrument
relating to the HSQ Ordinary Shares. HSQ is currently entitled to exercise all
legal rights in relation to such Ordinary Shares.

Issue of Equity and Total Voting Rights

Application has been made to the London Stock Exchange for 469,263,291 new
Ordinary Shares to be admitted to trading on AIM ("Admission") and it is
expected that Admission will be effective and dealings will commence in
respect of the new Ordinary Shares at 8.00 a.m. on or around 4 June 2024.

Following Admission, the Company's issued share capital will consist of
686,184,011 Ordinary Shares. The Company does not hold any Ordinary Shares in
Treasury, therefore on Admission the total number of voting rights in the
Company will be 686,184,011. This figure may be used by shareholders as the
denominator for the calculation by which they may determine if they are
required to notify their interest in, or change to their interest in, the
Company under the FCA's Disclosure Guidance and Transparency Rules.

David Lawrence, Kingswood Group CEO commented:

"This conversion substantially completes the funding structure entered into
with Pollen Street Capital in 2019. The financial and broader support of
Pollen Street has enabled a transformative period for the business from 2019
to date, and this conversion makes for a clearer, simpler capital structure
which we hope will be welcomed by investors."

 

Lindsey McMurray, Managing Partner of Pollen Street Capital commented:

"Kingswood continues to go from strength to strength with the wealth
management sector presenting attractive opportunities for both organic growth
and the consolidation of accretive bolt-on acquisitions. We look forward to
continuing to work with the business to achieve its growth ambitions."

 

Defined terms used in this announcement shall (unless defined herein) bear the
meaning ascribed to those terms in the circular issued by the Company on 13
September 2019 (the "Circular"), which will continue to be available on the
investor section of the Company's website at
https://www.kingswood-group.com/wp-content/uploads/2020/01/Circular_and_Notice_of_General_Meeting.pdf
(https://www.kingswood-group.com/wp-content/uploads/2020/01/Circular_and_Notice_of_General_Meeting.pdf)

 

ENDS

 

For further details, please contact:

 Kingswood Holdings Limited                                +44 (0)20 7293 0730
 David Lawrence (CEO)                                      www.kingswood-group.com (http://www.kingswood-group.com/)
 Cavendish Capital Markets Limited (Nomad & Broker)        +44 (0)20 7220 0500
 Simon Hicks / Abigail Kelly
 Greentarget (for Kingswood media)                         +44 (0)20 7324 5498

 Jamie Brownlee / Ellie Basle                              Jamie.Brownlee@greentarget.co.uk (mailto:Jamie.Brownlee@greentarget.co.uk)

 

About Kingswood

Kingswood Holdings Limited (trading as Kingswood) is an AIM-listed (AIM: KWG)
international fully integrated wealth management group with circa £12
billion of assets under advice and management. It services circa 19k clients
from a growing network of offices across the UK with overseas offices
in Ireland, South Africa and the US.

Kingswood offers a range of trusted investment solutions to its clients, which
range from private individuals to some of the UK's largest universities and
institutions, including investment advice and management, personal and company
pensions and wealth planning. Kingswood is focused on building on its position
as a leading player in the wealth and investment management market through
targeted acquisitions, creating a global business through strategic
partnerships.

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (596/2014/EU) as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018.

 

 

Notification and public disclosure of transactions by persons discharging
managerial responsibilities and persons closely associated with them.

  1    Details of the person discharging managerial responsibilities / person closely
       associated
 a)    Name                                                           HSQ Investment Limited, a wholly owned indirect subsidiary of funds managed
                                                                      and/or advised by Pollen Street Capital Limited
 2     Reason for the notification
 a)    Position/status                                                Pollen Street Capital Limited is a PCA of Lindsay McMurray and Duncan Gerard,
                                                                      Non-Executive Directors of Kingswood Holdings Limited
 b)    Initial notification /Amendment                                Initial notification
 3     Details of the issuer, emission allowance market participant, auction
       platform, auctioneer, or auction monitor
 a)    Name                                                           Kingswood Holdings Limited
 b)    LEI                                                            213800DX97OROHY26686
 4     Details of the transaction(s): section to be repeated for (i) each type of

     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
       place where transactions have been conducted
 a)    Description of the financial instrument, type of instrument    Ordinary shares of 5p

       Identification code

                                                                      ISIN: GG00BKY4K072
 b)    Nature of the transaction                                      Conversion of Convertible Preference Shares to Ordinary Shares
 c)    Price(s) and volume(s)                                         Price(s)  Volume(s)
                                                                      16.5p     469,263,291

 
 d)    Aggregated information                                         See 4 (c)

       - Aggregated volume

       - Price
 e)    Date of the transaction                                        30 May 2024
 f)    Place of the transaction                                       Off market transaction

 

d)

Aggregated information

- Aggregated volume

- Price

See 4 (c)

e)

Date of the transaction

30 May 2024

f)

Place of the transaction

Off market transaction

 

 

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