Medilink Global UK : Update - Proposed cancellation and notice of EGM.PDF (format PDF / 261 KB)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

15 May 2017

MEDILINK-GLOBAL UK LIMITED

("Medilink-Global", the "Company" or the "Group")

Update re proposed cancellation and notice of EGM

Medilink-Global UK Limited (AIM: MEDI), the electronic health card network service provider, today provides an update on the Company's proposed cancellation from trading on AIM ("Cancellation").

As previously announced by the Company, the Directors consider that it is in the best interest of shareholders of Medilink for the Company to seek Cancellation. On 9 November 2016, the Company announced that one of its major shareholders had indicated that it would not be supportive of the Cancellation, however, the Directors understand that this is no longer the case. The Directors have therefore concluded that the Company should proceed with the Cancellation.

The Company will today post to its shareholders a circular (the "Circular") containing a notice convening an extraordinary general meeting (the "EGM") to be held at 9:00 a.m. on 06 June 2017 at Suite C-16-3, Level 16, Tower C, Wisma Goshen, Plaza Pantai, No. 5, Persiaran Pantai Baru, Off Jalan Pantai Baru, 59200 Kuala Lumpur, Malaysia.

Extracts from the Circular, which sets out the reasons for seeking Cancellation, are set out below and a copy of the Circular will shortly be available on the Company's website, www.medilink-global.com.

For further information contact:

MediLink-Global UK Limited Shia Kok Fat, Chief Executive Officer www.medilink-global.com	Tel: + 603 2296 3028
Allenby Capital Limited (Nominated Adviser and Broker) Nick Athanas, James Reeve, Liz Kirchner	Tel: [phone]

EXTRACTS FROM THE CIRCULAR

The following has been extracted without amendment from, and should be read in conjunction with, the Circular to Shareholders dated 15 May 2017, available from the Company's website, www.medilink- global.com.

EXPECTED TIMETABLE OF EVENTS

Dispatch of this document	15 May 2017
Latest time for receipt of Form of Proxy	9.00 a.m. on 04 June 2017
Extraordinary General Meeting to be held	9.00 a.m. on 06 June 2017
Expected last day for dealings in Ordinary Shares on AIM	13 June 2017
Expected time and date that admission of Ordinary Shares to trading on AIM will be cancelled with effect from	7.00 a.m. on 14 June 2017

LETTER FROM THE CHAIRMAN

1. Introduction

   The Company announced on 27 July 2016 that it intended to seek Shareholders' approval to cancel the admission of the Company's Shares to trading on AIM ("Cancellation"). The Company subsequently announced on 9 November 2016 that one of the Company's shareholders, who holds in excess of 20 per cent. of the Ordinary Shares, had indicated that they would not be supportive of the proposed Cancellation. The Directors, in consultation with the shareholder, have subsequently been considering various options in relation to the Company's future strategy. This exercise resulted in the sale of the Company's interest in Medilink China in April 2017. Having concluded this exercise the Company considers that Cancellation remains the best option for the Company, for the reasons set out in paragraph 2 below. The Directors understand that it is no longer the case that the major shareholder remains unsupportive of the proposed Cancellation and the Directors have therefore decided to proceed with Cancellation.

   This letter sets out the background and reasons for the proposed Cancellation.

   The Company has had its shares admitted to trading on AIM since November 2008. One of the primary objectives of seeking such admission was to provide the Company with access to further equity capital in the UK, should it be required. Over the past three years it has become apparent to the Directors that it has not been possible to raise the funds the Company requires for working capital from the UK investor community and has instead been required to seek alternative funding. As a result, the Directors have agreed that it is in the best interests of the Company and its Shareholders as a whole if the admission of the Ordinary Shares to trading on AIM is cancelled. Pursuant to Rule 41 of the AIM Rules, the Directors have notified the London Stock Exchange of the date of the proposed Cancellation.

   Any Shareholders wishing to sell their Ordinary Shares in the Company following Cancellation should contact the Company using the details set out in paragraph 7 of this Circular. The Company will use its reasonable endeavours to find purchasers for any Ordinary Shares post Cancellation.

   The AIM Rules provide that Cancellation be conditional upon the approval of the Special Resolution set out as special resolution 1 in the notice convening the EGM, enclosed with this document, by not less than 75 per cent of the votes cast, whether in person or by proxy, by Shareholders in a general meeting. The Company has received irrevocable undertakings to vote in favour of the Special Resolution in respect of 42.72 per cent of the issued share capital of the Company.

   The purpose of this document is to explain why the Directors consider the proposal to be in the best interests of the Company and its Shareholders as a whole and to recommend that Shareholders vote for the Special Resolution required to implement the proposal at the EGM, scheduled to take place at

   9.00 a.m. (4.00 p.m. Malaysia time) on 06 June 2017, notice of which is enclosed at the end of this document.

2. Reasons for the proposed Cancellation

   The Directors' rationale for seeking the original admission of the Company's Ordinary Shares to trading on AIM in 2008 included, inter alia, access to equity capital markets to fund business opportunities and provide working capital. The Directors have reached the view that it is not possible to raise funds through the issue of equity in the UK at a price that would be acceptable to the Directors or the Company's Shareholders. As a result, the Company has been required to secure additional funding through the support of the Directors, management and key shareholders, as well as the strategic disposal of certain operating assets of the business, including the disposal of the Company's 49 per cent. interest in Medilink China, which was completed in April 2017.

   There are significant costs, management time and legal and regulatory burden associated with the Company's Ordinary Shares being admitted to trading on AIM. The costs include fees payable to the London Stock Exchange, nominated adviser fees, shareholder communication time and costs, and other professional fees. Cancellation will, accordingly, reduce the Company's recurring administrative

   costs significantly, in which such expenses can be better spent in running the business in a private capacity.

   After careful consideration, the Directors have therefore concluded that the commercial disadvantages and costs of maintaining a listing at this point in the Company's development outweigh the potential benefits and that it is therefore no longer in the Company's or its Shareholders' best interests to maintain its quotation. Particular consideration has been given by the Directors to the very low liquidity of trading in the Company's shares. As at 12 May 2017, the last business day prior to the publication of this document, the mid-market price of the Ordinary Shares was 1.25 pence providing a market capitalisation of approximately £1.5 million, which the Directors consider to be materially below the true value of the Company.

   The Directors believe that it would be better for the Company to operate as an unquoted company as further capital can be more easily raised within the Company's local markets in South East Asia when funding is considered necessary, thus enabling the Company to succeed in its long-term objective of developing its operations in Malaysia and within the South-East Asia region.

   Pursuant to AIM Rule 41, the Cancellation can only be effected by the Company after securing a resolution of Shareholders passed by a requisite majority being not less than 75 per cent of the votes cast by Shareholders (in person or by proxy) at a general meeting. Under the AIM Rules, the Cancellation can only take place after the expiration of a period of twenty Business Days from the date on which notice of the Cancellation is given. In addition, a period of at least five Business Days following the Shareholder approval of the Cancellation is required before the Cancellation may be put into effect.

   The Company, through its nominated adviser, has notified the London Stock Exchange of the proposed Cancellation and it is expected that trading in the Shares on AIM will cease at the close of business on 13 June 2017, with Cancellation taking effect at 7.00 a.m. on 14 June 2017.

3. Current trading and outlook

   For the year ended 31 December 2016, Medilink Malaysia, the Group's primary operating subsidiary, registered a turnover of £1,196,777 (2015: £998,058) and a net profit before tax of £104,309 (2015:

   £103,548), based on the unaudited financial statements for the period. 2017 has started positively for Medilink Malaysia and the Directors anticipate an improved performance during the financial year 2017 in terms of revenue and profit.

   Medilink Singapore continued to experience declining revenue in 2016 and, as such, is expected to remain unprofitable for the financial year ended 31 December 2016. This decline is expected to continue during 2017.

   Medilink China, an associate company in which the Company had a 49 per cent. shareholding as at 31 December 2016, continued to register losses during the financial year 2016 with stagnated growth in revenue and membership. The Company completed the sale of its remaining interest in Medilink China in April 2017.

   Overall, Group revenue for the year ended 31 December 2016 is expected to be marginally behind that recorded in 2015 and profit before tax is expected to be broadly in line with 2015, based on unaudited financial statements.

   The Directors expect continued growth in revenue for Medilink Malaysia in FY 2017 and Cancellation, should it proceed, would result in a significant reduction in corporate expenses, which should lead to improved profitability for the Group.

   As at 30 April 207, the Group's cash position was £440,000 and it had total liabilities of £2,985,000, including loans outstanding to a director and other parties. Further details of the loan outstanding to Mr Shia Kok Fat can be found in the Company's announcement of 22 December 2016.

4. Future strategy of the Company

   The Company shall continue to conduct its regular business in providing third party administration to insurance companies and corporate organisations in the South-East Asia region, with special focus in Malaysia, whilst continuing to explore business opportunities in licensing its Healthcare Claims System in emerging markets.

5. Effect of Cancellation

   The principal effect of the proposed Cancellation is that there would no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM or any other recognised market or trading exchange. The underlying liquidity in the Ordinary Shares is low and, in the opinion of the Directors, likely to remain that way for the foreseeable future. As described below, the Company will seek to facilitate any trades should Shareholders wish to buy or sell Ordinary Shares following Cancellation. However, such a facility is likely to offer a substantially lesser degree of liquidity and potentially less attractive share prices than are currently available via the Company's admission to AIM. The Company intends to maintain its existing CREST facility following Cancellation. Shareholders will continue to be able to hold their Ordinary Shares in dematerialised form (or alternatively to be issued share certificates in respect of their Shares), and the Ordinary Shares will continue to be transferable through CREST in accordance with the applicable procedures.

   Shareholders should also be aware that the Company will no longer be bound by the AIM Rules or be subject to the Takeover Code and that, as a consequence, certain previously prescribed corporate governance procedures may not be adhered to in the future and the Company will no longer be required to announce material events or transactions including releasing interim results or final results. As the Company will no longer be subject to the AIM Rules, Shareholders will no longer be required to vote on certain matters as provided in the AIM Rules. However, following Cancellation, the Company will continue to maintain a website at www.medilink-global.com for the foreseeable future, providing information on any significant events or developments of the Company.

   Upon Cancellation, the Company will cease to have a nominated adviser. The Company is currently required under the AIM Rules to consult with its nominated adviser on, for example, transactions constituting "related party transactions" under those rules, and to inform the nominated adviser of key decisions such as any proposed changes to the Board. Following Cancellation, the Shareholders will no longer benefit from the protection afforded by the nominated adviser.

   Accordingly, as a result of the Cancellation, the protections available to Shareholders are likely to be limited to those available under Jersey law, certain details of which are summarised in paragraph 6 below.

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

   The Company will continue to be bound by its articles of association following the Cancellation.

   The above considerations are non-exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

6. Takeover Code

The Takeover Code currently applies to the Company and as such the Shareholders currently benefit from a number of protections contained in the Takeover Code. Following Cancellation, the Company's place of central management and control will not be in the United Kingdom, the Channel Islands or the