TIDMELCO
RNS Number : 3093K
Eleco PLC
23 June 2014
Eleco plc
("Eleco" or the "Company")
Subscription to raise up to GBP3.95 million at 20.75p per share;
new Bank Refinancing facilities of up to GBP5 million and Notice of
General Meeting
The Company announces proposals to raise up to GBP3.95 million
through a Subscription of New Ordinary Shares at 20.75p per share
and that it has also entered into a Bank Refinancing agreement with
Barclays of up to GBP5 million, comprising a GBP3 million term loan
repayable by quarterly instalments over 4 years and an overdraft
facility for up to GBP2 million renewable in June 2015.
Approximately GBP3.32 million of the Subscription of up GBP3.95
million is conditional, inter alia, on the passing by Shareholders
of a special resolution to be proposed at a General Meeting
convened for 10.00 a.m. on 9 July 2014 2014. Firm subscription
applications have already been received for approximately GBP2.3
million of new Ordinary Shares at 20.75p per share. Shareholders
holding 25,517,699 shares, representing 42.07 per cent. of the
Existing Ordinary Shares, have irrevocably undertaken to vote in
favour of the special resolution.
The First Subscription Shares, consisting of 3,028,405 new
ordinary shares have been issued and allotted by the Company and
the relevant application has been made to AIM for these shares to
be admitted to trading on AIM, which is expected to occur at 08.00
a.m. on 24 June 2014.
A circular containing the details of the Subscription, Bank
Refinancing and Re-Banking(the "Circular") has today been posted to
Shareholders of Eleco and will be available to view shortly on the
Company's website at: www.eleco.com
The same definitions apply throughout this announcement as are
applied in the Circular.
Commenting, John Ketteley, Executive Chairman of Eleco said,
"Eleco's profitable software interests in the UK, Germany and
Sweden are leading providers of innovative state of the art
software solutions and tools to the construction industries they
serve in the UK, Sweden and Germany and, increasingly, in other
markets worldwide.
I would like to say on behalf of the Board of Eleco and of all
our highly skilled and creative employees, that we are truly
delighted to be able to announce the Subscription to raise new
equity, and the Bank Refinancing arrangements that we have entered
into with Barclays today, which we are confident will provide a
sound financial base for Eleco's further expansion. "
Enquiries:
For further information please
contact:
Eleco plc http://www.eleco.com
John Ketteley, Executive Chairman Tel: 0207 422 0044
Peckwater PR
Tarquin Edwards Tel: 07879 458 364 / 0207 808
7340
Cenkos Securities plc
Nicholas Wells Tel: 0207 397 8900
Introduction
On 4 June 2014, the Company released its preliminary
announcement of results for the year ended 31 December 2013 and
Shareholders have either been sent the Annual Report and Accounts
for the year ended 31 December 2013, together with the notice of
the Company's annual general meeting, or have been notified that
they are available on the Company's website. These report a pre-tax
profit of GBP1 million attributable to the Group's continuing
operations (being its Software Businesses) and a loss of GBP11.1
million attributable to the Group's discontinued operations (being
its ElecoBuild and ElecoPrecast Businesses).
As a consequence, the net assets of the Company as at 31
December 2013 had been reduced to GBP1.3 million, being less than
half of its paid-up share capital. The Directors are therefore
convening a General Meeting of the Company pursuant to section 656
of the Act, to consider whether any, and if so what, steps should
be taken to remedy the situation.
The actions that have already been taken to deal with this
situation thus far, together with the actions referred to in the
accompanying Resolution, are steps that are intended to remedy this
situation and, the Directors consider that conditional upon
Shareholders approving the Resolution, no further action will be
necessary to do so. Shareholders have today been sent a Notice of
General Meeting to be held at 10.00 am on 9 July 2014 at the
offices of Bates Wells & Braithwaite, London LLP, Scandinavian
House, 2-6 Cannon Street, London, EC4M 6YH.
The Company today announces that it intends to raise up to
approximately GBP3.95 million (before fees and expenses) through
the issue and allotment of the First Subscription Shares and the
Second Subscription Shares. The Second Subscription Shares comprise
8,069,844 Second Firm Subscription Shares to be subscribed by the
Subscribers at a subscription price of 20.75 pence per Ordinary
Share and up to 7,937,891 Excess Subscription Shares in respect of
which the Company is also prepared to receive expressions of
interest from Shareholders. Accordingly, any Shareholder wishing to
express an interest in subscribing for any Excess Subscription
Shares should contact the Company Secretary at
ivor.barton@eleco.com by no later than 10 am on 7 July 2014. The
Company has set out in its latest Annual Report and Accounts the
background and reasons for the refinancing of Eleco by way of the
Subscription for new ordinary shares and the proposals for
re-banking with Barclays Bank. The First Subscription Shares were
allotted and issued today, conditional on their Admission, which is
expected to occur on 24 June 2014. A General Meeting of the company
will be held at 10.00 a.m. on 9 July 2014, at which a Resolution
will be proposed and, if approved, would enable the Second
Subscription to be completed. It should be noted that the First
Subscription and the Second Subscription are not
inter-conditional.
General Meeting pursuant to section 656 of the Act
The substantial loss of capital incurred by Eleco in the year
ended 31 December 2013 was due to the substantial impairment of its
investment in its Building Products and Precast Concrete
subsidiaries as a consequence of the substantial losses sustained
by those subsidiaries during 2013 together with the effect of
enforced sale by those subsidiaries of their of their assets and
businesses during the year. Accordingly, a loss of GBP 21.7 million
was sustained by the Eleco, which was reflected in its profit and
loss account and had the effect of reducing the capital employed by
Eleco from GBP23.0 million at 1 January 2013 to GBP1.3 million at
31 December 2013.
As a consequence of the necessary disposals by Eleco of its loss
making UK Building Products and Precast Concrete interests in 2013,
the Eleco Group's operations now solely comprise its profitable
construction Software Businesses, the prospects for which the Board
considers would be excellent and would also be enhanced following
the implementation of the proposed equity raising by way of
Subscription and also following the implementation of the new
banking arrangements with Barclays, which the Company believes will
encourage the profitable expansion of its international software
interests as well as those in the UK.
Accordingly, the Directors consider that no further action will
be necessary to deal with the situation, which the directors have
drawn to shareholders attention pursuant to Section 656 of the
Act.
The Re-Banking and Bank Refinancing
Eleco is pleased to report that the Company has reached an
agreement with Barclays for the New Facilities, comprising a GBP3
million term loan repayable by quarterly instalments over four
years and an overdraft facility for up to GBP2 million.
The New Facilities, when drawn down, which the Board anticipates
will take place immediately following Second Admission, will be
used to repay the outstanding borrowings from the Company's
existing bankers.
Eleco is most gratified to have secured the new arrangements
with Barclays with whom it looks forward to having a lasting and
constructive relationship. It became apparent during its
discussions with Barclays that it had a clear understanding of the
dynamics and potential of the Group's continuing operations, which
now comprise only its Software Businesses, which operate
principally in the UK, Sweden and Germany but also in other
international markets, and have historically been consistently
profitable and cash generative.
Eleco agreed with Barclays during its initial discussions that
it would be desirable for the Company to raise additional equity
capital at the same time as the New Facilities were put into place.
Accordingly, Barclays specified a minimum amount of additional
funding that it required to be raised when the New Facilities were
to be utilised. It was also a requirement of Barclays that the new
equity funding should be raised in a manner which provided clarity
as to the minimum amount and timing of the equity to be raised in
order to facilitate repayment of the Company's existing bank
borrowings as soon as practicable. Accordingly, the Company and the
Subscribers have entered into the Subscription arrangements
detailed below with a view to achieving these objectives with
certainty.
The Subscription
On 23 June 2014, the Company entered into a Subscription Letter
with each of the Subscribers, pursuant to which they will subscribe
for the First Subscription Shares and, conditional on the
Resolution being passed, the Second Firm Subscription Shares. The
Subscribers' commitments under the Subscription Letters are
irrevocable, save in circumstances where a material adverse change
to the Group's business occurs.
The Company is proposing to raise up to approximately GBP3.95
million (before fees and expenses) by way of a Subscription of up
to 19,036,143 new Ordinary Shares at the Subscription Price. The
First Subscription Shares represent approximately 3.80 per cent. of
the Enlarged Share Capital and the Subscription Shares (comprising
the First Subscription Shares and the Second Subscription Shares,
assuming all Excess Subscription Shares are issued) will represent
approximately 23.88 per cent. of the Enlarged Share Capital. The
Subscription Price was the Closing Price of the Existing Ordinary
Shares at the closing date before the application forms for the
Subscription were entered into.
The Subscription is in three parts:
-- the First Subscription Shares (raising gross proceeds of
GBP628,394), have been allotted and issued to the Subscribers using
existing Shareholder authorities, conditional only on First
Admission;
-- on the passing of the Resolution:
o the Second Firm Subscription Shares (raising gross proceeds of
GBP1,674,493) will be allotted and issued to the Subscribers,
conditional only on Second Admission; and
o any Excess Subscription Shares (raising gross proceeds of up
to GBP1,647,112), for which the Company is seeking expressions of
interest from Shareholders, may be allotted and issued conditional
only on Second Admission. The allotment and issue of any Excess
Subscription Shares is at the discretion of the Directors.
As explained above, the raising of new equity by the allotment
and issue of the First Subscription Shares and the Second Firm
Subscription Shares will enable the Company to (i) to repay its
outstanding liabilities to its existing bankers and (ii) re-bank
with Barclays. In the opinion of the Directors, the proceeds of the
allotment and issue of any Excess Subscription Shares will
strengthen the Company's cash resources which would facilitate the
implementation of its future growth plan.
The Subscription Shares will be issued credited as fully paid
and will rank in full for all dividends and other distributions
declared, made or paid after their respective Admissions, and will
otherwise rank on Admission pari passu in all respects with the
Existing Ordinary Shares. The Subscription Shares are not, and will
not, be offered or sold in any jurisdiction where it would be
unlawful to do so.
Shareholders are being asked to approve the Resolution, so that
the Second Firm Subscription proceeds may be received by the
Company at the earliest opportunity and to give the Directors the
flexibility to raise additional equity capital by allotting and
issuing Excess Subscription Shares if they deem it appropriate.
In the event that the Resolution is not passed, the Company's
cash position will be constrained by a shortage of operational
headroom until such time as alternative arrangements are put in
hand by the Company to secure the additional funds, which the Board
has targeted to raise. In addition, further significant fees may be
incurred with the Company's existing bankers. This would be likely
have an adverse impact on the Group's operations.
The Directors believe that the Subscription is in the best
interests of the Company and Shareholders as a whole, and that the
timely receipt of proceeds raised via the Subscription is necessary
to give the Company the financial flexibility to benefit from the
New Facilities in early course and grow. If any Shareholder wishes
to express an interest in subscribing for any Excess Subscription
Shares, they should contact the Company Secretary at
ivor.barton@eleco.com by no later than 10 am on 7 July 2014.
General Meeting
The Circular, which was posted to Shareholders today, contains a
notice convening a General Meeting of the Company to be held the
offices of Bates Wells & Braithwaite London LLP, Scandinavian
House, 2-6 Cannon Street, London, EC4M 6YH at 10 a.m. on 9 July
2014, at which:
-- the Directors' proposals to deal with the loss of capital will be considered; and
-- a special resolution will be proposed to authorise the
Directors to allot new Ordinary Shares pursuant to the Second
Subscription on a non-pre-emptive basis.
Other matters under consideration by the Directors
Following Second Admission, the Board will consider, with its
advisors, proposals for consideration by Shareholders to reorganise
the Company's share capital and is likely to seek Shareholders'
approval (together with the approval of the Court) for the
cancellation of some of the Company's undistributable capital
reserves to allow for the declaration of dividends in the future.
The Directors intend to publish a circular to Shareholders setting
out a detailed proposal together with a further proposal to
implement a new employee share option plan.
Admission, Settlement and CREST
Application for Admission of the First Subscription Shares has
been made and it is expected that First Admission will become
effective on or around 24 June 2014 and that dealings in the First
Subscription Shares will commence at that time. Applications will
be made to the London Stock Exchange for the Admission of the
Second Subscription Shares to trading on AIM and that, subject to
the Resolution being passed, Second Admission will become effective
on or around 10 July 2014 and that dealings in the Second
Subscription Shares will commence at that time.
The Articles permit the Company to issue shares in
uncertificated form in a computerised paperless share transfer and
settlement system which allows shares and other securities to be
held in electronic rather than paper form. The Ordinary Shares are
already admitted to CREST and therefore the Subscription Shares
will also be eligible for settlement in CREST. CREST is a voluntary
system and Shareholders who wish to retain certificates will be
able to do so upon request. The Subscription Shares due to
uncertificated holders are expected to be delivered in CREST on 28
June in respect of the First Subscription and, subject to the
Resolution being passed, on 14 July in respect of the Second
Subscription.
Action to be taken by Shareholders in respect of the General
Meeting
Shareholders will find enclosed with the Circular a Form of
Proxy for use at the General Meeting. Whether or not you propose to
attend the General Meeting in person, you are strongly encouraged
to complete, sign and return your Form of Proxy in accordance with
the instructions printed on it as soon as possible, but in any
event so as to be received, by post or, during normal business
hours only, by hand, at Capita Asset Services, The Registry, 34
Beckenham Road, Beckenham BR3 4TU, by no later than 10 a.m. on 7
July 2014 (or, in the case of an adjournment of the General
Meeting, not later than 48 hours before the time fixed for the
holding of the adjourned meeting (excluding any part of a day that
is not a Business Day)).
If you hold your Ordinary Shares in uncertificated form (that
is, in CREST) you may vote using the CREST Proxy Voting service in
accordance with the procedures set out in the CREST Manual (please
also refer to the accompanying notes to the Notice of the General
Meeting set out at the end of the Circular). Proxies submitted via
CREST must be received by the Company's agent by no later than 10
a.m. on 7 July 2014 (or, in the case of an adjournment, not later
than 48 hours before the time fixed for the holding of the
adjourned meeting (excluding any part of a day that is not a
Business Day)).
Appointing a proxy in accordance with the instructions set out
above will enable your vote to be counted at the General Meeting in
the event of your absence. The completion and return of the Form of
Proxy or the use of the CREST Proxy Voting service will not prevent
you from attending and voting at the General Meeting, or any
adjournment thereof, in person should you wish to do so.
Directors' participation in the First Subscription and the
Second Firm Subscription
Number Percentage Number of Number of Aggregate Percentage
of Ordinary of issued First Second Number of issued
Shares ordinary Subscription Subscription of Ordinary ordinary
as at the capital Shares Shares Shares capital
date of immediately *
this following
announcement Second
Admission *
Directors:
------------------------ ---------------------- ------------------------ ------------------------ ----------------------- ----------------------
John
Ketteley 8,423,255 13.89 170,683 455,882 9,049,760 11.36
------------------------ ---------------------- ------------------------ ------------------------ ----------------------- ----------------------
Jonathan
Cohen 118,208 0.19 13,129 35,063 166,400 0.21
------------------------ ---------------------- ------------------------ ------------------------ ----------------------- ----------------------
* These numbers and percentages are calculated assuming that all
the maximum number of Excess Subscription Shares is issued and none
are subscribed by John Ketteley or Jonathan Cohen.
Irrevocable Undertakings
In total, the Company has received irrevocable undertakings and
undertakes to procure that votes will be cast in favour of the
Resolution in respect of holdings totaling, in aggregate,
25,517,699 Ordinary Shares, representing approximately 42.07 per
cent. of the Existing Ordinary Shares.
Recommendation
The Directors believe that the Resolution to be proposed at the
General Meeting is in the best interests of the Company and
Shareholders as a whole and unanimously recommend that you vote in
favour of the Resolution as they have irrevocably undertaken to do
in respect of their own beneficial holdings totaling 9,244,407
Ordinary Shares, representing approximately 15.24 per cent. of the
Existing Ordinary Shares of the Company as at the date of this
announcement.
Expected timetable of principal events
First Admission 8.00 a.m. on 24 June
2014
Crediting of CREST accounts with the First 28 June 2014
Subscription Shares
Last time and date of receipt for Forms
of Proxy 10 a.m. on 7 July 2014
General Meeting 10 a.m. on 9 July 2014
Second Admission 8.00 a.m. on 10 July
2014
Crediting of CREST accounts with the Second 14 July 2014
Subscription Shares
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCPGUAGQUPCGAW
Eleco Public (LSE:ELCO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Eleco Public (LSE:ELCO)
Historical Stock Chart
From Jul 2023 to Jul 2024