TIDMFOX
RNS Number : 7802A
Fox Marble Holdings PLC
03 January 2018
AIM: FOX 3 January 2018
Fox Marble Holdings plc
("Fox Marble" or the "Company")
Proposed Issue of Equity and Notice of General Meeting
-- Capital raise of approximately GBP3 million with new and
existing shareholders through a combination of shares and
convertible loan notes
-- Proceeds to be used to retire existing debt of the Company
and increase production at the quarries and processing factory
-- The Issue is subject to the approval by Shareholders at a General Meeting of the Company
Fox Marble (AIM:FOX), the AIM quoted company focused on marble
quarrying in Kosovo and the Balkans region, is pleased to announce
its intention to issue 7,235,712 new Ordinary Shares at a price of
10.5 pence per share ("Issue Price") by means of a Placing through
Brandon Hill Capital Limited to raise GBP759,750 before expenses
and to issue a further 19,047,619 new Ordinary Shares at the Issue
Price by means of a Subscription to raise GBP2 million before
expenses. The Company also plans to issue GBP235,000 of convertible
loan notes. The net cash proceeds of the fund raising are expected
to be approximately GBP2.89 million.
The subscriber under the Subscription Agreement is Kesari Tours
PVT Limited.
The transfer of the subscription funds to the Company is subject
to receipt by Kesari Tours PVT Limited of the requisite Indian
regulatory approvals which are expected to be forthcoming prior to
the General Meeting. As announced earlier today, the Company has
entered into a sale and purchase agreement with Mr Shailesh Patil
for the sale of processed slabs across the Fox Marble range. Mr
Patil is the founder and CEO of Kesari Tours Pvt Ltd, which is one
of India's most reputed travel companies, with branches across
India and the GCC.
The Issue Price represents a discount of 2 per cent. to the 10.7
pence closing price of the Company's shares on 2 January 2018,
being the latest practicable date prior to this announcement
Proceeds from the Placing and Subscription are intended to be
used to fund the expansion of production capabilities at Fox
Marble's quarries and factory, retire existing debt obligations and
provide the Company with additional working capital as demand
increases as it continues to develop sales channels.
In addition, the Company intends to discharge GBP783,000 of the
Company's outstanding loans and other liabilities by the issue of a
further 7,457,140 new Ordinary Shares to certain Directors and to
Brandon Hill Capital at the Issue Price.
A circular, convening the General Meeting to be held at the
offices of CMS Cameron McKenna Nabarro Olswang LLP at Cannon Place,
78 Cannon Street, London EC4N 6AF at 9.00 a.m. on 19 January 2018
to grant the Board authority to allot the Issue Shares for cash on
a non pre-emptive basis, will be sent to Shareholders today and
will be available for download from the Company's website at
www.foxmarble.net.
In the event that the relevant resolutions are passed at the
General Meeting, application will be made for the total of
33,740,471 new Ordinary Shares to be admitted to trading on
AIM.
Chris Gilbert, CEO commented: "I am pleased to announce this
Placing and Subscription, and would like to take this opportunity
to thank our existing and new Shareholders for the support
shown.
"Fox Marble's long-term strategy is to become a major
international supplier of high quality marble blocks and processed
marble products from the Company's own processing facility based in
Lipjan, Kosovo.
"The funds raised will considerably strengthen our position,
enabling us to deliver on our plans for sustained growth, as we
look to accelerate the development of our quarries and processing
capabilities. We now enter 2018 well-placed to meet the expected
demand for our products and look forward to updating the market in
due course."
For more information on Fox Marble please visit
www.foxmarble.net or contact:
Fox Marble Holdings plc
Chris Gilbert, Chief Executive Tel: +44 (0)
Officer 20 7380 0999
Fiona Hadfield, Finance Director Tel: +44 (0)
20 7380 0999
Brandon Hill Capital (Joint
Broker)
Oliver Stansfield Tel: +44 (0)
20 3463 5000
Cairn Financial Advisers LLP
(Nomad)
Liam Murray / Sandy Jamieson Tel: +44 (0)
20 7213 0880
Beaufort Securities Limited
(Joint Broker)
Elliott Hance Tel: +44 (0)
207 382 8300
Yellow Jersey
Georgia Colkin Tel: +44 (0)
Katie Bairsto 7825 916 715
Tel: +44 (0)
7946 424 651
Definitions in this announcement are the same as those included
in the Company's circular to be posted to shareholders today, dated
3 January 2018, available on the Company's website at
www.foxmarble.net.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Notes to Editors:
Fox Marble (AIM:FOX), is a marble production, processing and
distribution company in Kosovo and the Balkans region.
Its marble products, which include Illyric White, Illirico
Selene, Grigio Argento are gaining traction globally both to
international wholesale companies as well as being supplied
directly into luxury residential properties. In the UK these
include among others St George's Homes and Capital and Counties
Plc's Lillie Square development. In Sydney, Australia Rosso Cait,
Alexandrian White and Breccia Paradisea marble have been used in
what is expected to be Australia's most expensive property. These
sales serve to demonstrate the desirability of Fox's premium marble
products as the stone of choice in some of the most prestigious and
expensive residential developments around the world.
Fox Marble holds 40 year mining licences for six separate marble
quarries with a maiden JORC resource indicating an in-situ
valuation of approximately Euro 16.5 billion. Fox has taken three
of the six sites into production (the Drini and Maleshevë quarries,
both in Kosovo and from the Prilep Quarry in Macedonia) and
continues to increase production. Notably, Fox has access to over
300 million cubic metres (over 1bn tons) of premium quality
marble.
Marble demand continues to grow with stable pricing,
predominantly driven by the construction and real-estate
industries, on which Fox is looking to capitalise.
Introduction
The Company is pleased to announce its intention to raise
GBP2,759,750 (before expenses) by an Issue of 26,283,331 new
Ordinary Shares at a price of 10.5 pence per share and a further
GBP235,000 through the issue of convertible loan notes. In addition
the Company intends to discharge GBP783,000 of the Company's
outstanding loans and liabilities by the issue of a further
7,457,140 new Ordinary Shares.
The Placing is conditional upon, among other things, Shareholder
approval at the General Meeting, the Placing Shares being admitted
to trading on AIM ("Admission") and the Placing Agreement not being
terminated in accordance with its terms prior to Admission. The
Subscription is conditional on the Resolutions being passed at the
General Meeting and Admission. The passing by Shareholders of the
Resolutions at the General Meeting will give the Directors the
required authority to allot the Issue Shares (including the Placing
Shares) and the Convertible Loan Notes and will disapply statutory
pre-emption rights. Subject to all relevant conditions being
satisfied (or, if applicable, waived), it is expected that the
Issue Shares will be issued and admitted to trading on AIM at 8.00
a.m. on 22 January 2018.
A circular will shortly be sent to Shareholders setting out the
background to and reasons for the Issue and provide notice of the
General Meeting to be held at 9.00 a.m. on 19 January 2018. The
General Meeting is being convened for the purpose of proposing the
Resolutions described below. The passing of the Resolutions is a
condition to completion of the Placing and the Subscription. The
Directors intend to vote (or procure a vote) in favour of all of
the Resolutions in respect of their own beneficial holdings
totalling 21,474,685 Ordinary Shares, representing approximately
11.84 per cent. of the Existing Ordinary Shares.
Background to and reasons for the Placing
Fox Marble's long-term strategy is to become a major
international supplier of high quality marble blocks and processed
marble products from the Company's own processing facility based in
Lipjan, Kosovo. The Company has made significant progress in the
period since admission to AIM in August 2012. The Company's factory
near Pristina is complete and operational and the Company's four
quarries are approaching maturity and are capable of producing high
quality marble blocks. Furthermore, it has established demand for
its materials, with significant progress particularly in India,
Turkey and the United States. The Company is carrying out the Issue
to expand production capabilities at Maleshevë and to retire
existing debt obligations, thereby putting Fox Marble on a secure
footing to meet the demand for its products expected in 2018 and
beyond.
Current Trading
Fox Marble's quarries at Cervenilla, Syriganë, Maleshevë and
Prilep are capable of producing high quality block marble across
nine varieties of stone. Total production for the 2017 year is
expected to be approximately 8,800 tonnes (2016 4,631 tonnes), with
processing operations in the current year focused on Maleshevë and
Prilep quarries. Marble production is due to recommence once the
quarries are operational, after the usual planned winter shutdown.
Whilst fully developed, the Company decided in 2016 to pause
quarrying in Syriganë and Cervenilla so as to focus its resources
and efforts on the Maleshevë and Prilep quarries due to the greater
demand for the material in those quarries and the need to
accelerate their development. In 2018 the Company intend to restart
production at Syriganë and Cervenilla as demand for material from
those quarries increases. In addition, the Company currently has
six further quarries under licence or operating agreements.
The processing facility became fully operational in September
2017. The factory has the capacity to produce up to 440,000 square
metres per annum of cut and polished slabs. The factory has been
stockpiled with a large number of blocks, which can be cut and
processed during our planned quarry winter shutdown to fulfil
orders for processed marble. In 2017 the factory processed over
15,000 square metres of material. The factory brings significant
advantages to the Company including a reduction in the cost of
processing which will improve margins on the sale of processed
marble; access to the local Balkan market where the Company will be
the only domestic supplier of slabs and tiles; entry into the
international tile market helped by the lower cost base the factory
will afford and improvements in quarry yields as blocks
unattractive to the international block market can be processed
locally.
The Company's cash balance at 15 December 2017 was
EUR656,137.
In 2017 the Company made progress in developing its sales
profile. It has entered into large scale block sales agreements
with companies in India and Turkey such as OM trading, Mahadev
Marmo and Simsekler. Since the start of operations in the factory
it has seen encouraging sales of processed material which are
expected to develop further over 2018. As announced today the
Company has entered into a sale and purchase agreement with Mr
Shailesh Patil for the sale of processed slabs across the Fox
Marble range, for which Mr Patil has agreed to make an advance
payment of GBP500,000. This offtake agreement confers exclusivity
for Fox Marble products to Mr Shailesh Patil in the GCC, comprising
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, on
condition of maintaining a minimum volume of 3,000 tonnes per
annum. Mr Patil is the CEO and owner of Kesari Tours PVT Limited
which is subscribing for the Subscription Shares as part of this
Issue.
The Company expects its full year sales for 2017 to be EUR1.3
million, together with a further EUR0.8 million of advances which
the Company has not yet recognised in revenue (2016 revenue EUR0.8
million).
On 31 August 2012 the Company issued a GBP1,060,000 fixed rate
convertible unsecured loan note under the terms of the agreement
signed on 24 August 2012 with Amati Global Investors Limited. It is
the Company's intention to repay this loan with some of the funds
raised from the Placing and Subscription. Further on 10 February
2017, the Company entered into a short term finance arrangement
with Peers Hardy (UK) Limited for GBP500,000. It is the Company's
attention to repay this balance with some of the funds raised from
the Placing and Subscription.
On 2 June 2017 the Company announced that it had agreed a
GBP1,000,000 facility from Brandon Hill Capital Limited. As at 27
December 2017 GBP200,000 has been drawn down under this facility.
As part of the Issue this loan will be converted into equity. On 7
December 2017 the Company announced that it had received an
unsecured loan of GBP500,000 from Roy Harrison OBE, a non-executive
director of the Company. As part of the Issue this loan will be
converted into equity.
In order to conserve cash the Non-Executive Directors of the
Company have agreed to continue to utilise their fees (net of tax)
to subscribe for Ordinary Shares in the Company. In addition,
Executive Director Christopher Gilbert has agreed to continue to
utilise fifty percent of his remuneration (net of tax) to subscribe
for Ordinary Shares in the Company at the Company's request. The
number of Ordinary Shares subscribed for will be calculated
quarterly in arrears and with reference to the 30 day volume
weighted average price as at the time of issue.
Details of the Issue
The Issue comprises the Placing, the Subscription, the issue of
the Conversion Shares and the Director Shares and the issue of
GBP235,000 of the Convertible Loan Notes, as described below. The
Issue Shares will be credited as fully paid and rank equally with
the existing issued Ordinary Shares if and when issued. Application
will be made for the Issue Shares to be admitted to trading on AIM
following the approval of the Resolutions at the General Meeting.
The Issue is expected to become effective by no later than 8.00
a.m. on 22 January 2018.
Placing
The Placing comprises the issue of 7,235,712 new Ordinary Shares
at the Issue Price to existing and new investors to raise
GBP759,750 before expenses. The Placing is conditional upon, among
other things, Shareholder approval of the Resolutions at the
General Meeting, the Company allotting, subject only to Admission,
the Placing Shares in accordance with the Placing Agreement,
Admission of the Placing Shares to trading on AIM becoming
effective by no later than 8.00 a.m. on 22 January 2018 (or such
other time and/or date, being no later than 8.00 a.m. on 31 January
2018, as Brandon Hill Capital and the Company may agree), the
conditions in the Placing Agreement relating to the Placing being
satisfied or (if applicable) waived and the Placing Agreement not
having been terminated in accordance with its terms prior to
Admission.
In connection with the Placing, the Company has entered into a
Placing Agreement under which Brandon Hill Capital has agreed, in
accordance with its terms, to use its reasonable endeavours to
procure subscribers for the Placing Shares at the Placing Price.
The Placing has not been underwritten by Brandon Hill Capital or
any
other person.
The Placing Agreement contains a customary indemnity given by
the Company to Brandon Hill Capital in respect of liabilities
arising out of or in connection with the Placing. Brandon Hill
Capital is entitled to terminate the Placing Agreement in certain
circumstances prior to Admission.
The Placing Shares are not being made available to the public
and are not being offered or sold in any jurisdiction where it
would be unlawful to do so.
Subscription
In accordance with the terms of the Subscription Agreement,
Kesari Tours PVT Limited has agreed to subscribe GBP2,000,000 for
19,047,619 new Ordinary Shares at the Issue Price. The Subscription
is conditional on the Resolutions being passed at the General
Meeting and Admission. The transfer of the subscription funds to
the Company is subject to receipt by Kesari Tours PVT Limited of
the requisite Indian regulatory approvals which are expected to be
forthcoming prior to the General Meeting.
As announced on 3 January 2018, the Company has entered into a
sale and purchase agreement with Mr Shailesh Patil for the sale of
processed slabs across the Fox Marble range. Mr Patil is the
founder and CEO of Kesari Tours PVt Ltd, which is one of India's
most reputed travel companies, with branches across India and the
GCC.
Issue of Conversion Shares
Roy Harrison OBE and Brandon Hill Capital have agreed to convert
their outstanding loans in the respective sums of GBP500,000 and
GBP200,000 into new Ordinary Shares at the Issue Price resulting in
the issue of 4,761,904 and 1,904,761 new Ordinary Shares to each of
them respectively.
The issue of Conversion Shares to Roy Harrison OBE constitutes a
related party transactions under Rule 13 of the AIM Rules. The
independent Directors for this purpose (Andrew Allner, Sir Colin
Terry, Chris Gilbert and Fiona Hadfield) consider, having consulted
with the Company's nominated adviser (Cairn Financial Advisors
LLP), that the terms of this agreement are fair and reasonable
insofar as Shareholders are concerned.
Director Shares
Each of Andrew Allner, Sir Colin Terry and Roy Harrison OBE has
agreed to accept the issue of 378,571, 214,285 and 197,619 new
Ordinary Shares respectively at the Issue Price in satisfaction of
the outstanding fees due to each of them as non-executive directors
of the Company for the period from 1 October 2016 to 31 December
2017.
The issue of Director Shares to Andrew Allner, Sir Colin Terry
and Roy Harrison OBE constitutes a related party transactions under
Rule 13 of the AIM Rules. The independent Directors for this
purpose (Chris Gilbert and Fiona Hadfield) consider, having
consulted with the Company's nominated adviser (Cairn Financial
Advisors LLP), that the terms of this agreement are fair and
reasonable insofar as Shareholders are concerned.
Existing Conversion Director Resultant % of Enlarged
Holding Shares Shares Holding Share
Capital
Andrew
Allner 1,008,350 - 378,571 1,386,921 0.6%
Sir Colin
Terry 179,264 - 214,285 393,549 0.2%
Roy Harrison
OBE 789,408 4,761,904 197,619 5,748,931 2.7%
Issue of Convertible Loan Notes
The holder of the Company's existing Series 3 Unsecured
Convertible Loan Note has agreed to subscribe to an additional
GBP160,000. In addition the Company has agreed to issue an
aggregate of GBP75,000 of Series 4 Unsecured Convertible Loan Notes
under the same terms as Series 3 Unsecured Convertible Loan Notes.
The Convertible Loan Notes will carry an interest rate of 8% per
annum. The Convertible Loan Notes are due for conversion or
repayment on 31 August 2019 with a conversion price set at 10.5p
per ordinary share.
Use of Proceeds
GBP million
Expand production capacity
at quarry sites 1.0
Repay existing debt obligations 1.5
Expand factory capabilities 0.3
Fees 0.1
Total GBP2.9
In addition the Company intends to discharge GBP783,000 of the
Company's outstanding loans and liabilities by the issue of
Conversion Shares and Director Shares.
General Meeting
A notice convening a General Meeting of the Company to be held
at the offices of CMS Cameron McKenna Nabarro Olswang LLP at Cannon
Place, 78 Cannon Street, London EC4N 6AF at 9.00 a.m. on 19 January
2018 will be included in the circular to Shareholders. The business
to be considered at the General Meeting is set out in the Notice of
General Meeting. Explanatory notes relating to each Resolution are
set out below. The Issue is conditional upon, among other things,
the passing of the Resolutions.
At the annual general meeting of the Company held on 30 June
2017, Shareholders passed resolutions in order to: (i) grant the
Directors authority to allot equity securities up to a maximum
nominal value of GBP603,556; and (ii) disapply statutory
pre-emption rights to allow the allotment by the Directors of
equity securities for cash up to an aggregate nominal value of
GBP181,067 without the requirement for such equity securities to be
first offered to existing Shareholders. The issue of the Issue
Shares, together with other relevant prior allotments, renders the
second of these authorities insufficient to allow the placing of
the Issue Shares to proceed without further Shareholder approval.
Accordingly, the issue of the Issue Shares is conditional on
Resolutions 1 and 2 being passed.
The Company is therefore proposing that Shareholders pass the
Resolutions in order to:
(1) grant authority to the Directors under section 551 of the
Act, to allot Ordinary Shares up to a maximum aggregate nominal
amount of GBP359,786 being the maximum required for the purposes of
issuing the Issue Shares and the Convertible Loan Notes; and
(2) empower the Directors, under section 570 of the Act, to
allot Ordinary Shares up to a maximum aggregate nominal amount of
GBP359,786 being the maximum required for issuing the Issue Shares
and the Convertible Loan Notes on a non pre-emptive basis.
Each of the authorities sought at the General Meeting will be in
addition to the authorities granted at the 2017 AGM. These
authorities will expire on 31 March 2018 or at the end of the AGM
in 2018, whichever is earlier.
Admission, Settlement and CREST
Application will be made to the London Stock Exchange for the
Issue Shares to be admitted to trading on AIM. On the assumption
that, among other things, the Resolutions are passed, it is
expected that Admission of the Issue Shares will become effective
and that dealings in the Issue Shares will commence at 8.00 a.m. on
22 January 2018.
The Articles permit the Company to issue shares in
uncertificated form. CREST is 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
Issue 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 on request. The Issue Shares due
to uncertificated holders are expected to be delivered in CREST on
22 January 2018.
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. Shareholders are strongly
encouraged to complete, sign and return the 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, to Lorraine Young, 60 Gracechurch
Street, London EC3V 0HR by 9.00 a.m. on 17 January 2018 (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 working day). Alternatively, the form of
proxy may be scanned and sent by email to lorraine.young@shma.co.uk
so as to be received by 9.00 a.m. on 17 January 2018.
The appointment of proxies or the giving of any instruction by
the CREST system will not be accepted for the purposes of the
General Meeting.
Recommendation
The Directors believe that the Resolutions to be proposed at the
General Meeting are in the best interests of the Company and
Shareholders as a whole and unanimously recommend that Shareholders
vote in favour of them as they intend to do (or procure to be done)
in respect of their own beneficial holdings totalling 21,474,685
Ordinary Shares, representing approximately 11.84 per cent. of the
Existing Ordinary Shares.
Placing statistics
Placing Price 10.5 pence
Number of Existing Ordinary Shares 181,344,851
Number of Placing Shares 7,235,712
Number of Subscription Shares 19,047,619
Number of Conversion Shares 6,666,665
Number of Director Shares 790,475
Number of Ordinary Shares in issue
immediately following completion
of the Issue(1) 215,085,322
Issue Shares as a percentage of 15.69 per
the enlarged issued share capital cent.
Gross cash proceeds of the Placing GBP759,750
Gross cash proceeds of the Subscription GBP2,000,000
Gross cash proceeds of the issue GBP235,000
of Convertible Loan Notes
Gross cash proceeds of the Issue GBP2,994,750
Estimated net cash proceeds of GBP2,885,763
the Issue receivable by the Company
Liabilities discharged through GBP783,000
the issue of Conversion and Director
Shares
ISIN Code GB00B7LGG306
SEDOL Code B7LGG30
Note:
(1) Assuming that no other Ordinary Shares (other than the
Placing Shares) will be issued in the period between the date of
this document and completion of the Placing.
Expected timetable of events
2018
Latest time and date for receipt 9.00 a.m. on
of Forms of Proxy for General 17 January
Meeting
General Meeting 9.00 a.m. on
19January
Admission of and commencement 8.00 a.m. on
of dealings in the Firm Placing 22 January
Shares expected on AIM
CREST accounts credited with 8.00 a.m. 22
the Firm Placing Shares in January
uncertificated form
Despatch of definitive share by 25 January
certificates in respect of
the Firm Placing Shares to
be issued in certificated
form (if required)
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "will" or the negative of those, variations or
comparable expressions, including references to assumptions. These
forward looking statements are not based on historical facts but
rather on the Directors' current expectations and assumptions
regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the
amount, nature and sources of funding thereof), competitive
advantages, business prospects and opportunities. Such forward
looking statements re ect the Directors' current beliefs and
assumptions and are based on information currently available to the
Directors.
A number of factors could cause actual results to differ
materially from the results discussed in the forward looking
statements including risks associated with vulnerability to general
economic and business conditions, competition, environmental and
other regulatory changes, actions by governmental authorities, the
availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which
are beyond the control of the Company. Although any forward looking
statements contained in this announcement are based upon what the
Directors believe to be reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with such
forward looking statements. Accordingly, readers are cautioned not
to place undue reliance on forward looking statements. Subject to
any continuing obligations under applicable law or any relevant AIM
Rule requirements, in providing this information the Company does
not undertake any obligation to publicly update or revise any of
the forward looking statements or to advise of any change in
events, conditions or circumstances on which any such statement is
based.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCBTMLTMBBMBFP
(END) Dow Jones Newswires
January 03, 2018 02:01 ET (07:01 GMT)
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