This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

8 August 2024

HERMES PACIFIC INVESTMENTS PLC

("Hermes" or the "Company")

Proposed cancellation of admission to trading on AIM of the Ordinary Shares

and

Notice of General Meeting

Hermes Pacific Investments plc (AIM: HPAC) announces that it has today posted a circular together with the respective notice convening a General Metting to seek approval of its shareholders for the proposed cancellation of its ordinary shares to trading on AIM ("Cancellation"), together with the form Form of Proxy.

The General Meeting will be held at First Floor, 1 Chancery Lane, London WC2A 1LF on 2 September 2024 at noon.

Background to and reasons for the Cancellation

The Company became an investing company in 2012 adopting an investing policy of making investments in the financial services sector with a focus on South East Asia. Having made a few small investments, the Company was unable to find other investments that met its investment criteria. Therefore, in December 2021, the Company changed its investment policy to focus primarily on the property sector. In May 2022 the Company acquired a residential property in Westcliff-on-Sea. During 2022 and 2023 interest rates increased significantly making property investments less attractive relative to holding cash and therefore since then the Company has made no further investments.

In light of this, the Board reviewed its current status and future options including the benefits and drawbacks to the Company retaining its admission on AIM. The Board has concluded that the Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Board has considered the following key factors: 

·      the permanent cost savings to be achieved by the Cancellation;

·      the Directors do not believe that the Company's  share price  reflects the  underlying value of the company's assets. As at 7 August 2024 the Company's share price was 52.5 pence per share compared with an underlying net asset value of 147 pence per share as at 30 September 2023;

·      the free float of the Company is only 20.95 per cent. and trading volumes in respect of the Shares are very low and this illiquidity prevents Shareholders from trading in meaningful volumes or with any frequency;

·      the Company has not utilised its admission on AIM to raise fresh capital or issue paper consideration to fund acquisitions since 2013;

·      the management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM is, in the Directors' opinion, disproportionate to the benefits to the Company; and

·      the Directors believe that Admission significantly inhibits flexibility of the business

Effect of the Cancellation on Shareholders

The principal effects that the Cancellation would have on Shareholders are as follows:

•           there will not be a formal market mechanism enabling the Shareholders to trade Ordinary Shares;

•           while the Ordinary Shares will remain freely transferable, it is possible that the liquidity and marketability of the Ordinary Shares will, in the future, be more constrained than at present and the value of such Ordinary Shares may be adversely affected as a consequence;

•           in the absence of a formal market, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

•           the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply and the Company will no longer be subject to the Market Abuse Regulation regulating inside information or the Disclosure and Transparency Rules and so will therefore no longer be required to disclose significant shareholdings in the Company;

•           Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events, AIM Rule 26 (requirement to provide certain information on the Company's website), and the requirement that the Company seek Shareholder approval for certain corporate actions, where applicable, including substantial transactions, reverse takeovers, related party transactions and fundamental changes in the Company's business;

•           the levels of transparency and corporate governance within the Company may not be as stringent as for a company quoted on AIM;

•           WH Ireland will cease to be the Company's nominated adviser and the Company will cease to have a broker;

•           whilst the Company's CREST facility will remain in place immediately post the Cancellation, the Company's CREST facility may be cancelled in the future. Although the Ordinary Shares will remain transferable, they may cease to be transferable through CREST. In this instance, Shareholders who hold Ordinary Shares in CREST will receive share certificates;

•           stamp duty will be payable on transfers of Ordinary Shares as the Ordinary Shares will no longer be traded on AIM; and

•           the Cancellation may have personal taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

Shareholders should also note that the Takeover Code may continue to apply to the Company following the Cancellation for a period of ten years, provided the Company continues to have its place of central management and control in the UK, Channel Islands or Isle of Man. However, in the event that, subsequent to the Cancellation further Board changes result in the Company's place of central management and control being outside the UK, Channel Islands or Isle of Man, then the Company may not be subject to the Takeover Code. Shareholders should also note that the Panel has recently issued a public consultation regarding possible changes to the Takeover Code which, if adopted, would amongst other things shorten the period during which the Takeover Code potentially continues to apply to a company following its delisting. If these rule changes are adopted in the form and broadly in the timescale proposed, the Company would cease to be subject to the Takeover Code three years after the date of implementation of such changes.

The Company will continue to be bound by its Articles and the Companies Act (each of which requires shareholder approval for certain matters) following the Cancellation.

The above considerations are not exhaustive, and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

Following the Cancellation becoming effective, the Board intends to provide certain facilities and services to Shareholders, including:

•           holding general meetings in accordance with the applicable statutory requirements; and

•           providing access to and/ or provide copies of the Company's audited accounts in accordance with the applicable statutory requirements.

Shareholders should be aware that if the Cancellation takes effect, they will at that time cease to hold Shares in a Company whose shares are admitted to trading on AIM and the matters set out above will automatically apply to the Company from the date of the Cancellation.

Shareholders who are in any doubt about their taxation  position should consult their own independent professional adviser.

Process for the Cancellation

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of its intention to cancel Admission subject to Shareholders' approval and giving 20 Business Days' notice. In addition, a period of at least five clear Business Days following Shareholders' approval of the Resolution is required before the Cancellation may become effective. Under the AIM Rules, it is a requirement that the Cancellation is approved by the requisite majority of Shareholders voting at the General Meeting (being not less than 75 per cent. of the votes cast, whether in person or by proxy). Accordingly, the Resolution seeks Shareholders' approval of the Cancellation. Subject to the Resolution being passed, it is anticipated that trading in the Ordinary Shares on AIM will cease at the close of business on 9 September 2024 with the Cancellation taking effect at 7.00 a.m. on the following business day, 10 September 2024.

Ordinary Share dealing following the Cancellation

If a Shareholder retains their Ordinary Shares following the Cancellation, although the Ordinary Shares will remain freely transferable, they will no longer be tradeable on AIM. The Board is aware that following the Cancellation (should the Resolution be approved by Shareholders at the General Meeting) liquidity in, and marketability of, the Ordinary Shares will be very limited and holdings of Ordinary Shares will be difficult to value and to trade. Therefore, whilst there will be no formal dealing facility, Shareholders seeking to buy or sell Ordinary Shares can contact the Company Secretary, who will seek to facilitate contact between potential buyers and sellers of Ordinary Shares. Shareholders should also be aware that the arrangements set out above could be withdrawn at a later date.

Current trading and prospects

There have been no further material developments since the Company announced its interim results for the six months ended 30 September 2023, on 15 December 2023. At that time, the Company reported revenues of £14,000, a gain in the period of £9,000 and net assets of £3,441,000. 

A copy of the circular convening the general meeting on 2 September 2024, the Notice of General Meeting, the Form of Proxy and the Form of Instruction will be available on the Company's website at www.hermespacificinvestments.com/.