Placing
October 12 2009 - 2:00AM
UK Regulatory
TIDMCYAN
RNS Number : 5797A
Cyan Holdings Plc
12 October 2009
Cyan Holdings plc
("Cyan" or "the Company")
Proposed Placings
Notice of General Meeting
Cyan Holdings Plc (AIM:CYAN.L), announces details of proposed placings
("Placings") by Cenkos Securities plc to raise approximately GBP2 million before
expenses (approximately GBP1.84 million after expenses) and a General Meeting
("GM"), to be held at 10.30am on 30 October 2009. It is intended that the net
proceeds from the Placings will be used for general working capital requirements
and will provide the Company with the resources to execute its strategy and to
take it through to profitability. A document containing the Notice of the GM has
been posted to all shareholders in the Company and is available to view on the
Company's website at: www.cyantechnology.com.
Background to and reasons for the Placings
Cyan is a fabless semiconductor company focusing on the design, sale and support
of a range of low power, richly featured 16-bit general-purpose microcontroller
chips ("MCU"). Through 2007 and early 2008 Cyan developed a range of products
that demonstrated the cost and power reduction capabilities of these MCUs in
wireless communication. These products enabled the Company to enter a
partnership with Micrel Inc which has now resulted in Cyan offering wireless
products across the full range of frequencies required to address the global
industrial control market. Later in 2008, in response to customer demand, Cyan
further developed these products for wireless monitoring of utility meters and
control of streetlights. In 2009 these metering and lighting products enabled
the Company to enter a partnershipship with Future Electronics, one of the three
largest electronic component distributors in the world with 169 offices in 44
countries and a focus on both lighting and metering markets.
During 2009 Cyan has taken the first steps in its aim of becoming a major
supplier to the global automated/smart metering market and the global street
lamp control market and becoming a leading supplier of gateways (access points)
in these markets as well as a supplier of a wide range of industrial wireless
networks. In addition, Cyan has in place contract manufacturing partners capable
of supporting a rapid increase in orders and shipments of these products.
Cyan has already secured working relationships with established suppliers of
meters and street lamps and has actively engaged in multiple field trials across
a range of applications. One such trial with an established gas meter
manufacturer in China has led to a performance breakthrough that has had
significant impact on the competitiveness of Cyan's wireless metering solutions.
Cyan had been asked to develop a battery operated mesh networking gas meter that
uses conventional AA batteries rather than very expensive lithium batteries.
Through a series of design modifications implemented in July 2009 and August
2009 the battery life has been increased to 60 months with western alkaline
batteries which comfortably exceeds the 12-month target even using the lower
performance and lower cost batteries available in China. Cyan believes that this
is the only such meter where networking and metering functions are carried out
by a single 16bit MCU. As a result, in the Board's opinion, Cyan now has the
lowest power, wireless mesh networking, metering solution currently available
anywhere in the world. Low power operation is a common requirement globally and
the combination of lowest power, lowest cost and robust wireless networking
makes this a very competitive product.
In September 2009 Cyan demonstrated the first 470MHz version of this meter,
based on a new product from Micrel that completes coverage of all global
metering bands. This frequency has been specified as a future requirement for
all meters in China. Cyan now has a 470MHz product to address electricity
metering opportunities in China as well as gas and water meter opportunities in
all Chinese provinces. The availability of 470MHz versions increases the size of
the Chinese gas meter market for Cyan products, and then doubles this again by
providing access to the Chinese electricity meter market.
In July 2009 Cyan revisited prospective customers in India, first visited in
January 2009, and demonstrated metering products, developed with Micrel to meet
the frequency requirements of the Indian market. One such prospect has already
progressed to a trial and a further four visited in September this year have
indicated their intention to commence trials using this product.
In the lighting markets Cyan has had similar experiences with one trial nearing
completion in China and a second Chinese trial successfully completed in July
this year. Three other prospects in China have tested Cyan products and
indicated an intention to move to field trials in the near future. These
lighting projects are all for outdoor installations including street and tunnel
lighting where the Cyan product uses a single 16bit MCU to implement both
wireless control and dimming functions. These functions are required to realise
energy savings, such energy saving reducing running costs but also triggering
incentive payments by the Chinese government intended to stimulate rapid
deployment.
Future Electronics already supply a substantial portion of the global
in-building LED lighting market through their Future Lighting Solutions ("FLS")
division. As a result of the relationship with Future Electronics, Cyan is
currently working on wireless lighting control to be incorporated into a new
product that is expected to be released to production early in 2010 and offered
to current and prospective customers of FLS.
In 2009 Cyan has engaged in six field trials and is in the process of scheduling
five further trials. On a monthly basis new prospects are entering the sales
pipeline that leads to such trials. None of these trials has resulted in Cyan
being rejected or the customer selecting another supplier, some have triggered
requests for incremental features and some have completed successfully, others
are ongoing. Cyan's customers incorporate Cyan products into their own to offer
new features to their target markets. Successful trials lead to incorporation of
Cyan products but substantial orders on Cyan depend on the demand subsequently
generated from our customers target markets. Timing of these orders is difficult
for Cyan to predict.
Current trading and prospects
The breadth and range of customer engagements has increased significantly in the
last quarter helped by the recently established partnerships with Future
Electronics and Micrel. The Directors believe that the nature of the customers
with which Cyan is engaged is encouraging, and that Future Electronics is able
to add financial and operational credibility, as the majority of the prospective
customers are corporations substantially larger than Cyan.
The Directors believe that Cyan has now entered a phase where it has delivered
what its potential customers have asked for in terms of cost and performance.
These customers have either confirmed, or are conducting trials to confirm, that
Cyan's products meet their requirements. Every month more customers start this
process and the Board believes that the Company will start to see the fruits of
its endeavours with evidence of firm volume orders although the exact timing of
such remains difficult to predict.
The rate at which customers can fund the purchase and deployment of the
Company's products determines how soon Cyan will achieve profitability and the
Directors remain mindful that in the current economic climate customers cannot
predict timing with any certainty.
The prospects for 2010 are exciting particularly given the number of companies
where Cyan is currently actively engaged in product evaluation and since the
Company's AGM statement made in May this year the number of such prospects has
increased and none have been lost. Cyan has a readily identifiable market for
its products and an existing and new product range that, the Directors believe,
has key attractions for customers. With a strong sales pipeline and the fact
that, following the Placing the Directors expect the Company to have sufficient
funds to support the business through the period required to secure orders from
many of the prospective customers, the Directors are excited about Cyan's
prospects and view the future with confidence.
Details of the Placings
The Company intends to raise approximately GBP1.84 million, net of expenses,
through the issue of 95,238,095 new Ordinary Shares at the Placing Price
pursuant to the Placings.
The Placing Price represents a discount of approximately 10.7 per cent. to the
closing mid-market price of 2.33 pence per Ordinary Share as at October 2009,
the latest practicable date prior to the announcement of the Placings. The
Placing Shares will, when issued, rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive dividends and other
distributions declared following Admission.
The Placing Shares will represent approximately 14.6 per cent. of the Enlarged
Share Capital.
The Placings are being made on a non pre-emptive basis as the time and costs
associated with a pre-emptive offer are considered by the Directors to be
excessive. The making of a pre-emptive offer would require the production of a
prospectus which would have to comply with the Prospectus Rules and be
pre-vetted and approved by the FSA.
Application will be made by the Company for the Placing Shares to be admitted to
trading on AIM. Subject to completion of the Placings, it is expected that the
Placing Shares will be admitted to trading on AIM and that dealings will
commence at 8.00 a.m. on 2 November 2009 in respect of the Placing Shares.
The issue of the Placing Shares, is conditional, inter alia, upon:
(a) the approval of the Resolutions at the GM;
(b) the Placing Agreement becoming unconditional in all respects and not having
been terminated in accordance with its terms; and
(c) Admission,
in each case by no later than 8.00 a.m. on 2 November 2009 (or such time and
date as the Company and Cenkos Securities plc may agree, being not later than 16
November 2009).
Pursuant to the terms of the Placing Agreement, Cenkos Securities plc has
conditionally agreed to use its reasonable endeavours, as agent to the Company,
to place the Placing Shares at the Placing Price with certain institutional and
other investors. The above obligations are subject to certain conditions
including those listed above. The Placings are not underwritten.
The Placing Agreement contains warranties given by the Company with respect to
its business and certain matters connected with the Placings. In addition, the
Company has given certain indemnities to Cenkos Securities plc in connection
with the Placings and Cenkos Securities plc's performance of services in
relation to the Placings. Cenkos Securities plc is entitled to terminate the
Placing Agreement in specified circumstances.
Directors' Shareholdings
The beneficial and non-beneficial interests of the Directors in Ordinary Shares
(not including Ordinary Shares held by the Cyan Employee Benefit Trust) on the
date of this document and following the Placings are set out below:
+---------------+------------+--------------+------------+--------------+
| | Existing | Following the Placings |
+---------------+---------------------------+---------------------------+
| | Existing | Percentage | Number of | Percentage |
| | Number | of Ordinary | Ordinary | of Ordinary |
| | of | Issued Share | Shares | Issued Share |
| | Ordinary | Capital | | Capital |
| | Shares | | | |
+---------------+------------+--------------+------------+--------------+
| Director | | | | |
+---------------+------------+--------------+------------+--------------+
| David | 1,250,000 | 0.22% | 1,250,000 | 0.19% |
| Gutteridge | | | | |
+---------------+------------+--------------+------------+--------------+
| Kenneth Lamb | 7,000,000 | 1.25% | 7,476,000 | 1.14% |
+---------------+------------+--------------+------------+--------------+
| Dr. John | 4,113,636 | 0.74% | 4,351,636 | 0.67% |
| Read | | | | |
+---------------+------------+--------------+------------+--------------+
The following Ordinary Shares held by the Cyan Employee Benefit Trust are
beneficially owned by the following Directors to the extent the share price
exceeds 2.5p per Ordinary Share:
+----------------------------+---------------------------------------+
| Director | Number of Ordinary Shares |
+----------------------------+---------------------------------------+
| Kenneth Lamb | 30,000,000 |
+----------------------------+---------------------------------------+
| Dr. John Read | 1,000,000 |
+----------------------------+---------------------------------------+
Save as stated above, the Directors have no interest in the share capital of the
Company.
Expected Timetable of Events
Latest time for receipt of Forms of Proxy 10:30 a.m. on 28 October 2009
General Meeting 10:30 a.m. on 30 October 2009
Admission and commencement of dealings in the Placing Shares 8:00 a.m. on 2
November 2009
Enquiries:
+--------------------------------------+--------------------------------------+
| Cyan Holdings plc | www.cyantechnology.com |
+--------------------------------------+--------------------------------------+
| Kenn Lamb, CEO | Tel: +44 (0) 1954 234 400 |
+--------------------------------------+--------------------------------------+
| Cenkos Securities plc | |
+--------------------------------------+--------------------------------------+
| Stephen Keys / Adrian Hargrave | Tel: +44 (0) 20 7397 8900 |
+--------------------------------------+--------------------------------------+
| Media - Hansard Group | |
+--------------------------------------+--------------------------------------+
| John Bick | Tel: +44(0) 20 7245 1100 |
+--------------------------------------+--------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEILFEDIRLAIIA
Cyanconnode (LSE:CYAN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Cyanconnode (LSE:CYAN)
Historical Stock Chart
From Jul 2023 to Jul 2024
