HMF Handmade

    RNS Number : 4325E
  Handmade PLC
  26 September 2008
   
    HANDMADE PLC
    ("Handmade" or the "Company")


    RENEGOTIATION OF THE TERMS OF ACQUISITION OF HAND MADE HOLDINGS LIMITED 


    The Board of HandMade PLC (AIM:HMF) is pleased to announce that it has today reached agreement with Cartier Investments Inc ("Cartier"),
to amend the terms of the agreement dated 15 May 2006 (the "Agreement") between Cartier and Equator Group PLC (now HandMade PLC) under which
the Company acquired 100% of the issued share capital of Hand Made Holdings Limited (the "Acquisition").  Further details of the Acquisition
were set out in the Company's admission document dated 15 May 2006, which can be obtained from the Company's website www.handmadeplc.com .

    The aggregate consideration for the Acquisition was �14.75 million, comprising an initial and two deferred payments. The initial
consideration of �7 million was settled at the time of the Company's admission to trading on AIM by the issue of �5 million of new ordinary
shares in the capital of the Company ("Ordinary Shares") and a Convertible Loan Note dated 15 May 2006 ("CLN") of �2 million. 
        
    The CLN carried an interest of 6% per annum and the principal was repayable by the Company from the first business day falling 18 months
after the date of Admission (being 9 December 2007) and thereafter at six monthly intervals until fully redeemed with a minimum payment of
�250,000 on each such payment date. Repayments were split as to: 50% in cash and 50% in cash or new Ordinary Shares at the Company's option.
New Ordinary Shares in repayment of the CLN were to be issued at a price of 25 pence per share.

    Pursuant to the amendment of the Agreement, a repayment of the principal of �100,000 is to be made immediately in part payment of the
CLN, leaving a principal due to Cartier of �1.9 million. Cartier and the Company have also agreed to extend the repayment date for the first
tranche of the principal amount payable under the terms of the CLN to 31 July 2009 and to increase the interest rate to 10% p.a. from the
date hereof until final repayment. Any shares to be issued pursuant to the repayment of the CLN are to be issued at the average mid-market
closing price of the Company's Ordinary Shares for the five days prior to the relevant payment date provided that if such price is less than
5 pence the issue price shall be deemed to be 5 pence.  The other terms of the CLN remain unchanged.  

    The deferred payment under the Agreement is �7.75 million and was payable in two tranches. The first tranche of �5 million was payable
on a date to be selected by the Company falling between the first and second anniversary of completion of the Acquisition ("Completion"
which was 8 June 2006) as to �2 million in cash and �3 million in cash or new Ordinary Shares. The second tranche of �2.75 million was
payable on the second anniversary of Completion (being 8 June 2008) as to �1 million in cash and �1.75 million in cash or new Ordinary
Shares at the Company's option.  Any shares to be issued were be issued at the average mid-market closing price of an Ordinary Share for the
five days prior to the relevant payment date provided that if such price was less than 5 pence the issue price shall be deemed to be 5
pence, and if such price was greater than 50 pence the issue price is deemed to be 50 pence.

    Pursuant to the amendment of the Agreement, Cartier have agreed to defer repayment of the cash portion of the deferred consideration
(totalling �3 million) until 31 July 2009 and the Company has agreed to pay interest of 10% p.a. on the outstanding cash portion of the
deferred consideration from the date hereof until repayment. The share portion of the consideration due under the Agreement (totalling �4.75
million) is to be settled immediately by the issue of 23,456,790 Ordinary Shares at 20.25 pence per share, being the average mid-market
closing price of an Ordinary Share for the five days prior to the suspension of the Company's shares on AIM pending filing of Handmade's
annual accounts.

    Patrick Meehan, the Chairman of the Company, and certain members of his family are potential beneficiaries of a discretionary trust,
known as The Meehan Family Settlement which owns 100% of the issued share capital of Cartier. Following the issue of the deferred
consideration Ordinary Shares, Cartier will own 75,784,015 Ordinary Shares representing 53.25% of the issued share capital of the Company.
    Due to Patrick Meehan's relationship with Cartier, any amendment to the Agreement and the CLN is classified as a related party
transaction under the AIM Rules for Companies. The directors, with the exception of Patrick Meehan who is involved in the transaction as a
related party, having consulted with the Company's nominated adviser, Canaccord Adams Limited, consider the terms of the amendments to the
Agreement and the CLN are fair and reasonable insofar as the Company's  shareholders are concerned.
    David Ravden (CEO) said "We are pleased to have been able to negotiate a deferral in the payments due under the Agreement and CLN. This
allows the Company to preserve its cash for use in developing its commercial opportunities until a time when it expects to have increased
revenues  and cash from a number of exciting projects that are currently underway."
    The Company announces that following the renegotiation of the terms of acquisition of Hand Made Holdings Limited (detailed above), the
Company has issued 23,456,790 new Ordinary Shares of 0.5 pence each to the Vendor, Cartier, at a price of 20.25 pence per share.

    The Company further announces that, on 21 April 2007, the Company placed for cash, 3,000,000 new ordinary shares of 0.5 pence at a price
of 18 pence per share to an existing shareholder. The cash from the placing was raised for the purpose of general working capital.

    Application will shortly be made for the admission of 23,456,790 and 3,000,000 Ordinary Shares to trading on AIM. The shares will rank
parri passu with the Company's existing Ordinary Shares and it is expected that admission will occur at 8 a.m. on 2 October 2008

    Following Admission of the 23,456,790 and 3,000,000 new Ordinary Shares, the total number of voting rights in the Company's Ordinary
Shares will be 142,325,997 which may be used by shareholders as the denominator for the calculations by which they will determine if they
are required to notify their interest in, or a change to their interest in, Handmade under the Financial Service Authority's Disclosure and
Transparency Rules. In addition, the Company has in issue 600,000 �1 Preference Shares that carry no voting rights.

    Contact:

 HandMade plc       020 7518 8230
 David Ravden, CEO

 Conduit PR         0207 429 6603
 Jos Simpson

 Canaccord Adams    020 7050 6500
 Mark Williams

    About HandMade
    HandMade Plc, which encompasses HandMade Films International and HandMade Film Productions, is an international rights and film
Production Company with one of the UK's largest independent film libraries. The HandMade Group acquires, owns and exploits intellectual
property rights, comprising film, TV and theatrical productions, book and music rights, and merchandising. They are the sole owners of all
ancillary and merchandising rights to the iconic childrens book character 'Eloise' and specialise in the marketing and branding of all
'Eloise' merchandise plus production and marketing of remakes of all films in their library. HandMade plc was re-admitted to trading on AIM
in May 2006 and has offices in both London and Los Angeles.
    Under the original ownership of George Harrison, HandMade was responsible for producing some of the great British films of the 70's and
80's: The Long Good Friday, Mona Lisa and Time Bandits to name but a few.  More detail, together with the Company's AIM Rule 26 information
is available on the Company's website www.handmadeplc.com .


This information is provided by RNS
The company news service from the London Stock Exchange
 
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