Nanoco shareholders to receive up to £40m following successful Samsung litigation
Nanoco has started moves to redistribute up to £40m of funds to its shareholders.
The University of Manchester spin-out, which develops materials used in the manufacture of monitors and TV screens, achieved a $150m payout from South Korean electronics giant Samsung in February, which was criticised in some quarters as below forecasts. Nanoco will retain around $90m after litigation costs.
Today (June 20), the Runcorn-based company, posted details of a Proposed Capital Reduction to create distributable reserves to facilitate future returns to shareholders.
The company is currently restricted from returning capital to its shareholders as it does not have distributable reserves.
The board intends to initiate a return of between £33m and £40m – or approximately 10p to 12p per share – using the second tranche of the proceeds of the Samsung litigation ($75m) which is expected to be received during February 2024. No final decision has yet been taken as to the method of any such return of capital.
Nanoco said it intends to retain approximately £20m of cash, following the return to shareholders, to invest in R&D and commercial activities, a proactive IP licensing programme, payment of debt obligations, and to provide working capital through to the self-financing position that is expected to be achieved during 2025.
It said the board is confident the near term opportunities for commercial production of sensing materials, together with the current interest in the group’s display materials following the successful IP litigation and the growing display market for CFQD cadmium free quantum dots, fully merit the allocation of funds.
Non-executive chair, Christopher Richards, said: “The proposals in relation to a Capital Reduction and the proposed return to shareholders are consistent with our stated intention to balance the investment needs of Nanoco’s growing organic business whilst delivering a material return of capital to shareholders following the Samsung litigation.
“The board considers the resolutions to cancel the company’s share premium account and capital redemption reserve to be in the best interests of the company and its shareholders as a whole and the board unanimously recommend that shareholders vote in favour of the resolutions to be proposed at the general meeting.”
Following the Samsung settlement the company has been the target of disgruntled shareholders.
A shareholder group, led by Tariq Hamoodi, claimed the company gave misleading information relating to settlement prospects in its intellectual property litigation with Samsung.
The group has called for chief executive Brian Tenner and chief financial officer Liam Gray to step down.
