zamano PLC (AIM:ZMNO, ESM:ZAZ), has today announced results for the 12 months ended 31 December 2017.
These audited results for the year ended 31 December 2017 reflect six months operating activities and zamano’s status as a cash shell investing company since 30 June 2017.
In my Acting Chairman’s statement issued in conjunction with the release of zamano plc’s audited accounts for the year ended 31 December 2016, I highlighted the significant negative impact on the Group’s ongoing premium rate business activities as a result of changes introduced by the mobile network operators to the subscriber sign-up process during the last quarter of 2016. These changes in the subscriber acquisition process caused the Board to take immediate action to protect the interests of all stakeholders culminating in the sale of all of zamano’s operating business and assets to Kilavan Holdings Ltd with effect from 30 June 2017. The transaction was completed on 8 September 2017 following shareholder approval at an extraordinary general meeting on 30 August 2017.
As a result of this transaction, zamano is classified as a cash shell under AIM Rule 15 and an investing company under the ESM rules. The Group’s audited results for the year ended 31 December 2017 therefore reflect six months operating activities and zamano’s status as a cash shell investing company since 30 June 2017. Additionally, on 6 March 2018, we announced that as zamano had not completed a transaction which would enable it to restart trading within a period of six months following completion of the disposal of its trading activities, the Company’s shares would be suspended on both the AIM market of the London Stock Exchange and the ESM market of the Irish Stock Exchange. The suspension took effect from 7.30am on 9 March 2018 and will continue until the Company completes an appropriate transaction. In the event that the Company’s shares remain suspended for six months the admission of the Company’s securities to trading on AIM and ESM will be cancelled.
For financial reporting purposes the entire business operations of the Group represent a discontinued operation and all results are displayed as such in the income statement and cash flow statements for the year ended 31 December 2017. As part of the disposal of operations effective on 30 June 2017, net liabilities of €982,000 were transferred together with cash and cash equivalents of €1,537,000 giving a loss on disposal of €555,000. Adding direct transaction costs associated with the disposal of €253,000 resulted in a total loss on the disposal of operations of €808,000.
Since 27 September 2017, the date of the Group’s interim results announcement, the Board, in conjunction with the Company’s legal, accounting and other advisers has continued the process of preparing the Company to be in a position to return the largest possible amount of cash to shareholders and to minimise the amount of cash, if any, that would be required to be retained to meet any unknown liabilities that could arise on a liquidation of the group.
Whilst this process has been ongoing the Board has also received a number of proposals regarding possible investment opportunities that would involve a retention of the Company’s listing. The Board did not consider the large majority of such approaches to be in the best interest of Shareholder’s; however, more detailed discussions have continued with one party and the Company has recently signed a memorandum of understanding with that party to acquire certain operating assets in return for the issue of new shares in the Company which will constitute a reverse takeover transaction. Alongside the reverse takeover transaction the new group will also raise new capital via an underwritten issue of new shares to a new investor. zamano shareholders will be offered an opportunity to participate in the new placing pursuant to the proposed reverse takeover transaction and it is intended that the funds from such a placing will be used to develop the new business. Under the arrangement referred to above, zamano shareholders will also be offered an opportunity to tender up to 100% of their current shareholding in the company for cash in a share tender programme.
The proposed reverse takeover transaction referred to above would require the approval of shareholders at an extraordinary general meeting. Details of the shares to be issued to the counterparty and the new investors in conjunction with the reverse takeover and capital raise referred to above, together with any return of cash to shareholders, will be communicated to shareholders by the end of June 2018 at the latest.
In this regard, we would advise shareholders that should the transaction contemplated in the signed memorandum of understanding not proceed for any reason, that the Board will immediately seek to obtain approval from shareholders for a cash distribution. We will, of course, keep shareholders fully appraised of all ongoing developments as they arise while we seek to provide stakeholders with the optimal commercial outcome.