TIDMAFS
RNS Number : 3205E
Amiad Water Systems Ltd
27 February 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH
AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES
AT THE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
For immediate release
27 February 2020
Amiad Water Systems Ltd.
("Amiad" or the "Company")
Update on Potential Investment, Proposed Directorate Change and
Notice of Extraordinary General Meeting
Further to the Company's announcements of 2 September 2019, 11
September 2019 and 22 November 2019, Amiad (AIM: AFS), a leading
global producer of water treatment and filtration solutions, is
pleased to confirm that it has entered into a conditional
subscription agreement (the "Subscription Agreement") with FIMI for
an investment of up to GBP17,600,000 in the Company through a
subscription for new Ordinary Shares by FIMI (the "Subscription")
and an open offer to Qualifying Shareholders (the "Proposed Open
Offer"). In addition, there are proposed director changes to the
Board, which include two representatives of FIMI joining the Board,
as set out further below.
The Board gives notice that an Extraordinary General Meeting of
the Company is to be held at 11.00 am (UK time) on 2 April 2020 at
the offices of Bryan Cave Leighton Paisner LLP, Adelaide House,
London Bridge, London, EC4R 9HA, United Kingdom to seek the
requisite shareholder approvals as described below.
Further details on the proposals are set out in the Circular.
Investors are encouraged to read the Circular in its entirety as it
contains important information in relation to the proposals. Unless
the context otherwise requires, capitalised terms used in this
announcement shall have the meanings given to them in the
Circular.
Details of the Capital Raising
The Subscription Agreement provides that FIMI will subscribe for
up to 7,652,174 Subscription Shares at the Offer Price of GBP2.30
per Ordinary Share.
The Company intends to give all Qualifying Shareholders an
opportunity to participate in the Capital Raising via the Proposed
Open Offer for up to 856,556 Proposed Open Offer Shares at the
Offer Price. Valid applications by Qualifying Shareholders will be
satisfied by clawback of the Subscription Shares from FIMI (which
will therefore reduce its subscription amount).
FIMI and HaChoshlim have also irrevocably undertaken not to take
up their entitlements under the Proposed Open Offer to provide
other Qualifying Shareholders with the opportunity to apply for
additional Proposed Open Offer Shares pursuant to an excess
application facility to mitigate the dilutive effect of the
Subscription. The Subscription and the Proposed Open Offer are
conditional on (i) the requisite resolutions being passed at the
Extraordinary General Meeting and (ii) receipt of approval by the
Director General of the Competition Authority in Israel. As
described below, the Proposed Open Offer will only be formally
launched, should these conditions be satisfied.
In addition, as announced on 22 November 2019, FIMI has entered
into a conditional agreement with HaChoshlim , to acquire, subject
to the completion of the Capital Raising, a further 1,109,918 new
Ordinary Shares pursuant to the HaChoshlim/FIMI Share Purchase
Agreement .
Following completion of the Capital Raising and the
HaChoshlim/FIMI Share Purchase Agreement, FIMI will hold between
approximately 39.56% and 42.38% of the Enlarged Share Capital
depending on the level of participation from Qualifying
Shareholders in the Proposed Open Offer while HaChoshlim (together
with Kibbutz Amiad) would hold 32.91% of the Company's Enlarged
Share Capital.
Benefits of the Capital Raising
It is expected that the Capital Raising will assist the Company
in delivering its five-year strategic plan. This includes the
funding of its organic growth through further investment in
research and development of new products and solutions in both the
irrigation and industrial segments. The investment will also allow
the Company to scale up its production through the automation of
certain processes resulting in improved efficiency. Aside from
assisting in the Company's expected organic growth through research
and development and scaled up production, the investment will
support the Company's aspiration of extending its water filtration
solutions portfolio and its access to new markets through the
acquisition of new technologies and channels to market. Finally,
the Company will benefit from the extensive experience of FIMI
Investment Funds, who following the investment will be the
Company's largest shareholder, in improving the performance of
global industrial companies.
In recent years, the Company has not been able to access
external capital and in 2019 suspended its dividend for that year
in order to invest in its business. The Independent Directors
believe that the external capital and expertise provided by FIMI
will enable the Company to invest in its five-year strategic plan,
achieve its growth ambitions and provide it with a stable footing
in a globally competitive marketplace.
Proposed Directorate Change
As part of the Capital Raising, the Company has agreed to enter
into the Relationship Agreements with each of FIMI and HaChoshlim
to regulate the future relationship between each of them and the
Company. The Relationship Agreements are conditional on the
Admission. In accordance with the terms of the Relationship
Agreements and the HaChoshlim/FIMI Share Purchase Agreement, there
will be a number of changes to the Board as outlined below.
-- The following individuals will be appointed to the Board as
Representative Directors (as defined in the Relationship
Agreements) for FIMI:
o Ishay Davidi, the founder of FIMI and its CEO since 1996, with
effect from Admission; and
o Lilach Asher Topilsky, a senior partner at FIMI, with effect
from the conclusion of the Extraordinary General Meeting.
-- Ran Shahor will be appointed to the Board as an Independent
Director (as defined in the Relationship Agreements) with effect
from the conclusion of the Extraordinary General Meeting.
-- Jenny Cohen Derfler, Dori Ivzori and Zehava Simon shall each
resign from their positions as directors of the Company with effect
from Admission. Dori Ivzori will continue to serve as the CEO of
the Company.
The remuneration of each of the new directors shall be the same
as the remuneration of each of the current directors (excluding the
non-Israeli resident external directors) (details of the current
directors remuneration is included in the Company's financial
statements and annual report for the year ended 31 December
2018).
Each of Dori Ivzori and Avishay Afriat, being the executive
directors of the Company, have both undertaken to the Company that
although they will not be from Admission, or in the case of Avishay
Afriat has never been, a member of the Board, they will continue to
be responsible, along with the Board, for the compliance of the
Company with the AIM Rules and shall continue to provide the Board
with all information which the Company needs to comply with the AIM
Rules.
Further details on each of the proposed new directors are set
out below:
Ishay Davidi
Mr Davidi, aged 57, is the founder and has served as Chief
Executive Officer of FIMI since 1996. Prior to establishing FIMI,
Mr Davidi was the CEO of the Tikvah Fund, a private Israeli
investment fund founded by the late Sanford Bernstein. Mr Davidi
has also held senior management positions in a variety of leading
Israeli industrial and high-tech companies. Mr Davidi is the
Chairman of the Board of Directors of Hadera Paper (TASE-listed)
and Polyram Plastic Industries. He is a Director of Gilat Satellite
Networks (NASDAQ/TASE-listed), Ham-Let (TASE-listed), Bet Shemesh
Engines (TASE-listed), C.Mer Industries (TASE-listed), Kamada Ltd.
(NASDAQ/TASE-listed) and Rekah Pharmaceutical Industries
(TASE-listed).
Lilach Asher Topilsky
Ms Asher Topilsky (née Asher), aged 49, is currently a senior
partner at FIMI, having previously been the Chief Executive Officer
at Israel Discount Bank Ltd., the Chairman of Mercantile Discount
Bank Ltd. (a subsidiary of Israel Discount Bank Ltd.) and the Head
of the Retail Division of Bank Hapoalim BM. Ms Asher Topilsky is
the Chairman of the Board of Directors of G1 Secure Solutions
(TASE-listed) and director of Kamada Ltd. (NASDAQ/TASE-listed). Ms
Asher Topilsky has an MBA from Northwestern University and an
undergraduate degree in Economics and Management from Tel-Aviv
University.
Ran Shahor
Mr Shahor, aged 62, is the President and co-founder of
HolistiCyber. Prior to HolistiCyber, Mr Shahor served as the CEO of
BSI, a global provider of holistic (cyber, HR and physical)
security solutions, as well as the CEO& Co-Founder of Focal
Energy where he continues to serve as a board member. Mr Shahor was
also previously the Managing Partner of Star Ventures, a $1 billion
global venture capital group where he served as a board member in
Azimuth Technologies and Maayan Ventures (TASE-listed), Unity
(NASDAQ-listed) and a number of privately owned companies. Prior to
his time at Star Ventures, Mr Shahor had a long and decorated
career with the Israeli Defense Forces. He was the Commander of the
IDF's top Special Forces unit and also served as the acting
Military Secretary of the Israeli Defense Minister. Mr Shahor has a
Law degree and an MBA from Tel-Aviv University.
As at the date of this announcement, none of Mr Davidi, Ms Asher
Topilsky or Mr Shahor have any direct personal interest in any
ordinary shares of the Company. However, FIMI currently holds
4,101,758 ordinary shares of the Company and following the
completion of the Capital Raising and the HaChoshlim/FIMI Share
Purchase Agreement will hold up to 12,863,850 ordinary shares of
the Company, representing up to 42.38% of the enlarged issued share
capital of the Company. Mr Davidi is the founder and chief
executive officer and Ms Asher Topilsky is a senior partner of FIMI
Opportunity Funds.
The matters required to be disclosed in relation to the
appointments of Mr Davidi, Ms Asher Topilsky and Mr Shahor pursuant
to paragraph (g) of Schedule Two to the AIM Rules for Companies
will follow in due course.
Relationship Agreements
FIMI Relationship Agreement
As mentioned above, immediately following Admission, FIMI will
be entitled to exercise or control voting rights in the Company of
approximately 42.38 per cent. of the enlarged share capital of the
Company (assuming none of the Qualifying Shareholders takes up
their entitlements under the Proposed Open Offer) giving it the
ability to exercise a controlling influence on the business of the
Company and to cause or take actions that are not in, or may
conflict with, the best interests of the Shareholders as a
whole.
Accordingly, the Company and FIMI have agreed in the
Subscription Agreement that FIMI will, upon Admission, enter into
the FIMI Relationship Agreement which will regulate the
relationship between FIMI and the Company in order to ensure that
the Company is capable of carrying on its business at an arm's
length from FIMI and on normal commercial terms.
The FIMI Relationship Agreement will continue for so long as the
Ordinary Shares are admitted to trading on AIM and, for so long as
FIMI is the beneficial holder of in aggregate, 25 per cent. or more
of the issued shares of the Company.
Along with the HaChoshlim/FIMI Shareholders' Agreement and the
HaChoshlim Relationship Agreement (details of which are provided
below), the FIMI Relationship Agreement contains provisions setting
out how the parties may exercise their voting rights in relation to
the appointment of directors, namely:
a) for so long as Yariv Avisar is a director of the Company, the
Board shall comprise two FIMI Representative Directors, one
Independent Director proposed by FIMI (and whose identity has been
approved by the Audit Committee), Yariv Avisar, two external
directors appointed in accordance with the Companies Law and (for
so long as HaChoshlim holds any shares in the Company) one
HaChoshlim Representative Director;
b) if Yariv Avisar ceases to be a director of the Company, the
Board shall comprise two FIMI Representative Directors, one
Independent Director proposed by FIMI (and whose identity has been
approved by the Audit Committee), two external directors appointed
in accordance with the Companies Law and (for so long as HaChoshlim
holds any shares in the Company) one HaChoshlim Representative
Director;
c) HaChoshlim shall have one non-voting observer in relation to the Board;
d) the terms of reference of the Audit Committee shall require
that the identity of every proposed Independent Director be
approved by a majority of members of the Audit Committee; and
e) (subject to compliance with relevant statutory requirements,
the AIM Rules and the Market Abuse Regulation), the management of
HaChoshlim shall be entitled to receive information relating to the
Company, its business and its assets and liabilities which is
similar to that provided to the management of FIMI.
For so long as the FIMI Relationship Agreement is effective, the
provisions of the FIMI Relationship Agreement regarding how the
parties exercise their voting rights in relation to the appointment
of directors shall take precedence over the provisions of the
HaChoshlim/FIMI Shareholders' Agreement setting out HaChoshlim and
FIMI's respective rights to propose candidates to the Board if the
Company ceases to be listed on a Reputable Securities Exchange.
FIMI has also agreed to procure that:
a) all transactions between FIMI or any of its Associates and
any member of the Group (including trading arrangements) will be
conducted at arm's length and on normal commercial terms; and
b) except in connection with any sale or merger of the Company
or a listing of the Company's shares in any other Reputable
Securities Exchange, it shall not take any action or omit to take
any action which would be likely to result in, or to otherwise
seek, cancellation of the Company's shares from trading on AIM
without the prior written approval of a majority of each of (i) the
board of directors of the Company; and (ii) the Independent
Directors of the Company.
HaChoshlim Relationship Agreement
Immediately following the completion of the sale of the
HaChoshlim Shares under the HaChoshlim/FIMI Share Purchase
Agreement, HaChoshlim will enter into the HaChoshlim Relationship
Agreement with the Company which is on substantially the same terms
as the FIMI Relationship Agreement set out above.
HaChoshlim/FIMI Shareholders' Agreement
Conditional upon, inter alia, completion of the Subscription
Agreement and the HaChoshlim/FIMI Share Purchase Agreement, FIMI
and HaChoshlim have entered into the HaChoshlim/FIMI Shareholders'
Agreement which will regulate their future relationship, including
in relation to certain economic arrangements as described in the
Circular.
The HaChoshlim/FIMI Shareholders' Agreement includes provisions
setting out the parties' rights to propose and nominate directors
to the Board that will apply only if the FIMI Relationship
Agreement and HaChoshlim Relationship Agreement are terminated
according to their terms (e.g. if the Company's Ordinary Shares are
no longer admitted to trading on AIM ). The HaChoshlim/FIMI
Shareholders' Agreement provides that FIMI shall be entitled to
propose five candidates to the Board. For so long as the Company is
listed on a Reputable Securities Exchange, HaChoshlim shall be
entitled to propose two candidates to the Board and, after the
Company ceases to be listed on a Reputable Securities Exchange,
HaChoshlim shall be entitled to propose and nominate one-third of
the members of the Board.
However, (a) if HaChoshlim sells more than 75 per cent. of the
number of shares held by it following Admission, HaChoshlim will be
entitled to propose only one candidate to the Board; and (b) if
HaChoshlim sells the remainder of the shares held by it following
Admission, HaChoshlim shall not have a right to propose candidates
to the Board. In addition, as long as the Company is listed on a
Reputable Securities Exchange, FIMI will have the right to propose
the two external directors which will be elected and appointed by
the Shareholders according to the Companies Law. The above
provisions relating the rights of FIMI and HaChoshlim to propose
and nominate directors are subordinate to the terms of the FIMI
Relationship Agreement and the HaChoshlim Relationship Agreement
and shall not apply for so long as these agreements are
effective.
Under the terms of the FIMI Relationship Agreement and the
HaChoshlim Relationship Agreement, FIMI and HaChoshlim are
precluded from voting in favour of any resolution resulting in a
cancellation of the Company's admission to trading on AIM, unless
this is in conjunction with the transfer of the Company's listing
to another Reputable Securities Exchange. FIMI and HaChoshlim will
therefore be able to support a transfer of the Company's listing
and following such transfer of listing they will be able to vote to
alter the Board composition as set out above.
Notice of Extraordinary General Meeting and Shareholder
Circulars
Certain matters relating to the Subscription, namely the entry
into the Subscription Agreement, the Relationship Agreements, the
appointment of Ishay Davidi and Lilach Asher Topilsky, the approval
of their remuneration and the entry into of the indemnification and
exemption agreements, are, for the purposes of the Israeli
Companies Law 5759-1999, related party transactions and therefore
require Shareholder approval. An Extraordinary General Meeting of
the Company is therefore being convened for 2 April 2020 at the
offices of Bryan Cave Leighton Paisner LLP, Adelaide House, London
Bridge, London, EC4R 9HA, United Kingdom.
Further details on the resolutions to be considered at the
Extraordinary General Meeting, as well as on the Subscription and
associated matters, can be found in the Circular that will be
published today on Amiad's website (www.amiad.com) by no later than
11.00am (UK time) and will be made available to the Shareholders as
an electronic communication.
The details of the Proposed Open Offer will be contained in a
separate circular that will be sent to Qualifying Shareholders
following the receipt of approval of the Subscription by the
Director General of the Competition Authority in Israel or, if
later, the approval by the Shareholders of the resolutions at the
Extraordinary General Meeting.
Related Party Transaction
As FIMI is a substantial shareholder (as defined in the AIM
Rules) of the Company, for the purposes of the Subscription, the
Subscription is classified as a related party transaction under the
AIM Rules. The Board considers, having consulted with the Company's
Nominated Adviser, Stifel Nicolaus Europe Limited, that the terms
of the Subscription Agreement are fair and reasonable insofar as
the Shareholders are concerned.
Yariv Avisar, Non-Executive Chairman, commented:
"We are pleased to have secured equity funding from our
supportive shareholder, FIMI, which will enable us to invest in our
growth and deliver on our strategy and vision of being the premier
producer of water treatment and filtration solutions. We are always
mindful of our other shareholders and look forward to providing
them with the opportunity to participate in an equity fundraising,
via an open offer on the same terms, and thank them for their
continued support."
This announcement contains inside information for the purposes
of the Market Abuse Regulation (596/2014/EU). Upon the publication
of this announcement, this inside information is now considered to
be in the public domain and such persons shall therefore cease to
be in possession of inside information. The person responsible for
arranging for the release of this announcement on behalf of the
Company is Dori Ivzori.
Enquiries
Amiad Water Systems Ltd.
Dori Ivzori, Chief Executive
Officer
Avishay Afriat, Chief Financial
Officer +972 4 690 9500
-----------------
Stifel Nicolaus Europe Ltd.
-----------------
Stewart Wallace, Ben Maddison +44 20 7710 7600
-----------------
Luther Pendragon Ltd.
-----------------
Harry Chathli, Claire Norbury,
Rachel So +44 20 7618 9100
-----------------
About Amiad
Amiad Water Systems (AIM: AFS) is a leading global producer of
automatic, self-cleaning water treatment and filtration products
and systems. Through its engineering skills and ability to
innovate, Amiad provides cost-effective "green" solutions for the
irrigation and industrial purposes. In these markets, its unique
and high-quality products are being integrated into the core of
systems for filtration and water treatment, micro irrigation and
membrane protection, wastewater and potable water treatment,
cooling systems and sea water filtration.
Headquartered in Israel, Amiad provides these solutions through
ten subsidiaries and a comprehensive network of distributors to
customers in more than 80 countries.
For additional information or product details, please visit
www.amiad.com .
Important Notices
This announcement is not for release, publication or
distribution outside the United Kingdom except to the extent that
it would be lawful to do so. The release, publication or
distribution of this announcement (in whole or in part) in or into
or from jurisdictions other than the United Kingdom may be
restricted by the laws of those jurisdictions and therefore persons
into whose possession this announcement comes should inform
themselves about, and observe, any such restrictions. Failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction.
This announcement does not constitute an offer to sell or an
invitation to subscribe for, or solicitation of an offer to
subscribe for or buy, Capital Raising Shares to any person in any
jurisdiction to whom it is unlawful to make such offer or
solicitation. In particular, this document must not be taken,
transmitted, distributed or sent, directly or indirectly, in, or
into, the United States of America, Canada, Australia, Japan or the
Republic of South Africa or transmitted, distributed or sent to, or
by, any national, resident or citizen of such countries.
Accordingly, the Capital Raising Shares may not, subject to certain
exceptions, be offered or sold, directly or indirectly, in, or
into, or from the United States of America, Canada, Australia,
Japan or the Republic of South Africa or in any other country,
territory or possession where to do so may contravene local
securities laws or regulations. The Capital Raising Shares have not
been, and will not be, registered under the Securities Act or under
the securities legislation of any state of the United States of
America, any province or territory of Canada, Australia, Japan or
the Republic of South Africa and they may not be offered or sold,
directly or indirectly, within the United States of America,
Canada, Australia, Japan or the Republic of South Africa or to or
for the account or benefit of any national, citizen or resident of
the United States of America, Canada, Australia, Japan or the
Republic of South Africa or to any US person (within the definition
of Regulation S made under the Securities Act).
Stifel, which is authorised and regulated by the FCA, is acting
as nominated adviser and broker to the Company and for no-one else
in connection with the matters described in this announcement and
will not regard any other person (whether or not a recipient of
this Circular) as a client in relation to the matters set out in
this announcement and will not be responsible to anyone other than
the Company for providing the protections afforded to its clients
or for providing advice on the contents of this announcement or any
other transaction or matter referred to in this announcement.
Stifel has not authorised the contents of, or any part of, this
announcement and no liability whatsoever is accepted by Stifel for
the accuracy of any information or opinion contained in this
announcement or for the omission of any information. Its
responsibilities as the Company's nominated adviser under the AIM
Rules are owed to the London Stock Exchange and the Company and not
to any other person. No representation or warranty, express or
implied, is made by Stifel as to any of the contents of this
announcement.
Except as expressly referred to in this announcement, neither
the contents of the Company's website, nor any website directly or
indirectly linked to the Company's website, are incorporated in, or
form part of, this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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