TIDMTMT
RNS Number : 5771P
TMT Investments PLC
25 October 2012
25 October 2012
TMT INVESTMENTS PLC
("TMT" or the "Company")
Proposed consulting role to assist manager of a new fund
The Board of TMT announces that it has signed a consultancy
agreement (the "Agreement") to assist the investment manager of a
proposed new unquoted fund (the "Fund") which will invest in the
technology, media and telecommunications sector.
The directors of the Fund will include German Kaplun, who is
Head of Strategy at TMT (but not a Director) and who, jointly with
Alexander Morgulchik, owns 16.23% of TMT's issued share capital.
The proposed Fund's investment manager is a wholly-owned subsidiary
of Menostar Holdings Limited, which owns 22.38% of TMT.
Under the Agreement, TMT will act as the exclusive consultant to
the Fund's investment manager and perform, inter alia, the
following services:
-- assist the investment manager to identify, structure and
execute approved investment opportunities for the Fund and to
assist the investment manager in its management of the Fund's
portfolio companies;
-- advise and make recommendations in respect of the investment
manager's ongoing management of the investments of the Fund;
and
-- assist the investment manager in preparing regular reports to the Fund.
TMT will not be responsible for general administration of the
Fund.
The Fund is conditional, inter alia, on the Fund's raising a
minimum of US$30 million. There can be no guarantee of this
occurring.
The investment manager's remuneration in respect of the Fund
will be an annual fee of 2% per annum of the Fund's net asset
value, plus a performance fee of 20% of the appreciation in the net
asset value above a hurdle rate, which will be a non-cumulative
2.5% per calendar quarter. In turn, TMT's remuneration will be 75%
of the investment manager's fees related to the management of the
Fund, net of certain deductions.
The investment criteria of TMT and the Fund are very similar.
The directors of TMT are satisfied that TMT's role in relation to
the Fund will not create conflicts of interest with TMT's existing
business. All investment opportunities, both for TMT and the Fund,
will come through TMT, on the basis that TMT will have the right to
co-invest up to 50% of the total investment. In turn, TMT will be
obliged to offer investment opportunities to the Fund if they are
in excess of US$500,000, and then on at least a 50/50 co-investment
basis.
Given that the Fund would be larger than TMT, the Company's
co-investment right would increase the investment opportunities for
TMT as well as providing recurring revenue for the Company.
In view of the relationships between TMT and the Fund set out
above, the signature of the Agreement represents a related party
transaction under the AIM Rules. The directors of the Company
consider, having consulted the Company's Nominated Adviser ZAI
Corporate Finance Ltd., that the terms of the Agreement are fair
and reasonable insofar as the Company's shareholders are
concerned.
A further announcement will be made when the outcome of the
fundraising for the Fund is known.
For further information contact:
TMT Investments Plc +44 1534 281 843
Mr. Alexander Selegenev alexander.selegenev@tmtinvestments.com
www.tmtinvestments.com
ZAI Corporate Finance Ltd.
NOMAD and Broker
Marc Cramsie/Irina Lomova +44 20 7060 2220
Kinlan Communications Tel. +44 20 7638 3435
David Hothersall davidh@kinlan.net
About TMT Investments
TMT Investments PLC invests in high-growth, internet-based
companies across a variety of sectors with the potential to become
multinational businesses. Founded in 2010 and with capital
firepower of USD26m, TMT has invested in 21 companies to date. The
company's objective is to generate an attractive rate of return for
shareholders, predominantly through capital appreciation. The
company is traded on the AIM market of the London Stock Exchange.
www.tmtinvestments.com
The Investment Policy & Strategy
The Company's objective is to generate an attractive rate of
return for Shareholders, predominantly through capital
appreciation, by taking advantage of opportunities to invest in the
TMT Sector. The Company aims to provide equity and equity-related
investment capital, such as convertible loans, to private companies
which are seeking capital for growth and development, consolidation
or acquisition, or as a pre-IPO financing.
In addition, the Company intends to invest in publicly traded
equities which have securities listed on a stock exchange or
over-the-counter market. These investments may be in combination
with additional debt or equity-related financing, and in
appropriate circumstances in collaboration with other value added
financial and/or strategic investors.
The Company is not geographically restricted in terms of where
it will consider making investments. It will consider any
geographical area, to the extent that the investment fits within
the Company's investment criteria. The Directors and Consultants
have expertise in emerging markets and, in particular, in Russia
and the Commonwealth of Independent States. The Company will not be
subject to any borrowing or leveraging limits.
Private Companies
The Company will target small and mid-sized companies and will
seek to secure at least blocking stakes and board representation,
where it considers that the Company and/or an investee company
would benefit from such an appointment. The Company will consider
making equity investments in lower than blocking stakes only where
it sees ways to increase the stakes to blocking or controlling
stakes at a later date. Each investment is expected to be at least
US$250,000.
The investments targeted by the Company will aim to support
rapidly-growing private companies to increase market share and
achieve long-term shareholder value. It is envisaged that if the
Company invested in a private company prior to that company listing
on a stock market, the Company would retain a part of its
investment in the listed entity going forward. The Company intends
to work closely with the management of each investee company to
create value by focusing on driving growth through revenue
creation, margin enhancement and extracting cost efficiencies, as
well as implementing appropriate capital structures to enhance
returns.
Public Companies
When investing in public equities, the Company will seek to
select companies with a dominant market share or strong growth
potential in their respective segments. No restrictions will be
placed on the size of public companies in which the Company may
make an investment. The Directors intend to make investments in
companies or businesses with attractive valuation, growth
potential, with competent and motivated management, which enjoy
brand recognition, have scalable business models, have strong
relationships with customers and have in place transparent
accounting policies.
Realisation of Returns
The Directors will, when appropriate, consider how best to
realise value for Shareholders whether through a trade sale,
flotation or secondary refinancing of the investee companies. The
proposed exit route will form a key consideration of the initial
investment analysis.
The Company expects to derive returns on investments principally
through long-term capital gains and/or the payment of dividends by
investees. The primary ways in which the Company expects to realise
these returns include: (a) the sale or merger of a company; (b) the
sale of securities of a company by means of public or private
offerings; and (c) the disposal of public equity investments
through the stock exchanges on which they are listed.
For private investee companies the Company believes that its
typical investment holding period should provide sufficient time
for investee companies to adequately benefit from the capital and
operational improvements resulting from the Company's investment.
The targeted holding period shall be reviewed on a regular basis by
the Company, but it is expected that this will typically be between
two to four years. For public equities the Company's objective is
to maximise capital appreciation. Following the acquisition, the
Company will continue to conduct extensive research and monitoring
of the investment. Importance will be placed on the timing of any
disposal which will follow a thorough review of market conditions
and those reports and sources that are available to investors.
Should the Company consider that the capital appreciation of a
particular public equity investment has reached its peak or is
likely to or has begun to decline, then the Company will consider
the sale of that investment.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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