TIDMKBC
RNS Number : 7641H
KBC Advanced Technologies plc
22 May 2014
Embargoed until 0700 hrs 22 May 2014
KBC Advanced Technologies plc
("KBC" or "the Group")
Placing of 20,869,565 Ordinary Shares at 115 pence per share to
raise GBP24.0 million
KBC Advanced Technologies plc, a leading provider of consulting
and software solutions to the hydrocarbon processing industry, is
pleased to announce that it has raised GBP24.0 million via a
placing of 20,869,565 Ordinary Shares at the Placing Price of 115
pence per share. The Placing Shares have been conditionally placed
by Cenkos, as agent for the Company, with institutional and other
investors.
Reason for Placing
As KBC set out in its most recent Full Year Results the demand
for its services remains buoyant and its addressable market
continues to grow.
KBC's long term strategy is to broaden its technology offering
and expand its business further into the upstream sector in order
to increase the proportion of technology revenues, both organically
and inorganically.
The net proceeds of the Placing will be used to:
-- allow the Group to target larger, more capital intensive, higher margin projects;
-- continue investment in sales and marketing with the objective
of further enhancing revenue and earnings growth;
-- continue the Group's two year investment in high growth
geomarkets, which commenced last year in China and Middle East and
will include the former Soviet Union, Latin America, Northeast Asia
and India in 2014 and 2015;
-- expand the Group's technology offering to offer a more
comprehensive software package across the full spectrum of
wellhead, production, oil and gas processing, refining and
petrochemicals; and
-- continue the Board's strategy to selectively acquire niche
software companies that sell into the upstream sector and whose
software integrates effectively into KBC's Petro-SIM(TM)
platform.
Summary of Placing
Conditional on Admission, the Company will issue 20,869,565 new
Ordinary Shares which will raise GBP24.0 million, before expenses,
and approximately GBP23.1 million, after the expenses of the
Placing. The Placing Shares issued pursuant to the Placing will
represent approximately 25.9 per cent. of the Enlarged Share
Capital. Dealings are expected to commence on 10 June 2014.
As part of the Placing Kongsberg Gruppen ASA, an Oslo listed
company, has agreed to subscribe for 4,032,000 Placing Shares and
will have a beneficial interest in 5.0 per cent. of the Enlarged
Share Capital following Admission. Kongsberg Gruppen ASA is an
international, knowledge-based group that supplies high-technology
systems and solutions to customers in the oil and gas industry, the
merchant marine, and the defence and aerospace industries.
Ian Godden, Chairman of KBC, commented:
"KBC has made significant financial and strategic progress over
recent periods and we see substantial opportunities in high growth
markets.
"This Placing provides the funding that will allow the Group to
take best advantage of those opportunities, through organic and
inorganic investment in our technology offering, the further
development of our market reach and an enhanced ability to
undertake larger projects.
"We are delighted by the support we have received from current
and new investors and in particular welcome Kongsberg Gruppen ASA
as a shareholder. Their investment will further strengthen the
relationship between KBC and Kongsberg Gruppen ASA with the aim of
offering upstream, midstream and downstream customers improved
solutions for process simulation."
- END -
For further information, please contact:
KBC Advanced Technologies plc
Ian Godden, Chairman +44 (0)1932 236314
Cenkos Securities plc
Bobbie Hilliam/Harry Pardoe +44 (0)20 7397 8900
Weber Shandwick Financial
Nick Oborne/Stephanie Badjonat +44 (0)20 7067 0000
DETAILS OF THE PLACING
KBC Advanced Technologies plc, a leading provider of consulting
and software solutions to the hydrocarbon processing industry, is
pleased to announce that it has raised GBP24.0 million via a
placing of 20,869,565 Ordinary Shares at the Placing Price of 115
pence per share. The Placing Shares have been conditionally placed
by Cenkos, as agent for the Company, with institutional and other
investors.
Summary of KBC Advanced Technologies plc
KBC is a leading international and independent provider of
consulting and technology services to the energy and processing
sectors. It operates principally in the downstream oil refining
industry, but has recently been building a position in the
midstream and upstream oil and gas sectors. The Company has a
particularly strong presence in downstream emerging markets. Its
services are geared towards improving the performance and
efficiency in both established refineries and in the design of new
facilities, along with the people operating them. KBC derives
approximately one quarter of its revenue from pure, high margin
software sales of its proprietary Petro-SIM(TM) technology and
associated add-ons which model the throughput and performance of
oil and gas processing facilities.
KBC has an internationally based business serving customers
across a broad geographic spread and with a local presence in 16
international locations which are split into ten 'GeoMarkets'. The
Company was established more than 30 years ago and now employs
approximately 300 people - two thirds in consulting, with the
balance largely in software R&D, business development and head
office activities. The Group's business model is built around
advising clients how to maximise efficiency, profitability and
staff performance as well as best practice compliance in either
existing or new build refineries or upstream assets. The
proprietary engineering software, Petro-SIM(TM) , underpins much of
the technical consulting work and is also sold as a stand alone
software package contributing a significant portion of the Group's
operating profit. KBC's primary offerings can be summarised as
Technical Consulting, Organisational Consulting and Process
Simulation Software.
Background and Reasons for the Placing
The Company remains focused on exploiting consultancy and
software opportunities within the hydrocarbon market. The Board
believes the addressable hydrocarbon market for KBC continues to
grow due to increased refining and upstream capital expenditure and
structural changes within the market which encourage customers to
utilise the Group's joint consulting and technology offering.
KBC's long term strategy is to broaden its technology offering
and expand the business further into the upstream (production)
sector in order to increase the proportion of technology revenues
generated by the Group. The acquisition of Infochem by KBC in 2012,
and the Company's investment in its technology business over the
past two years, have both been successful (as evidenced by the
Group's recent financial results) and provide the Board with
confidence to continue with this long term strategy. Both organic
and inorganic investment in technology are required to achieve the
Company's objectives.
The net proceeds of the Placing will allow the Board to target
larger, more capital intensive, but higher margin projects within
both the technology and consulting sectors. The net proceeds of the
Placing will also be used to continue the Company's investment in
sales and marketing disciplines with the objective of further
enhancing revenue and earnings growth. As set out in the
preliminary results for the year ended 31 December 2013 released on
25 March 2014 (the "Full Year Results"), the Company is currently
undertaking a two year investment in KBC's resources in high growth
geomarkets which was started in 2013, with the appointment of new
leadership, extra staffing and transfer of skills to China and the
Middle East. This will be continued by similar moves in 2014 and
2015 in the former Soviet Union, Latin America, Northeast Asia and
India. The Board believes this investment will start to deliver
positive operational and financial results in the second half of
the current financial year and beyond.
The net proceeds of the Placing will also be used to continue
the Board's strategy to selectively acquire niche software
companies that sell into upstream oil and gas producers and are
complementary to Infochem and Petro-SIM, in order to broaden the
Group's technology offering. The Board believes current market
offerings in the industry are disjointed and that the Company is
missing revenue opportunities where the Company cannot offer an
appropriate range of software. The Board's acquisition strategy
will allow the Company to expand its technology offering across the
full spectrum of wellhead, production, oil and gas processing,
refining and petrochemicals in order to offer a more comprehensive
software package. The Company would expect any acquisition to be
driven by the IP owned by the target with the potential to leverage
KBC's business development channels, as well as its existing
Infochem and Petro-SIM technology and installed base.
Current Trading and Outlook
As set out in the Full Year Results the demand for KBC's
services remains buoyant throughout most of the world and the Board
is encouraged by the sustainable improvement in prospects for the
North American downstream sector, driven by growth in light, tight
oil and gas production.
The Company retains a healthy pipeline of contracted work of
approximately GBP78.2 million. Together with a number of key
consulting contract wins in the first quarter of 2014, this means
that KBC is well positioned to meet its objectives for the coming
year. Taking into account the strength of the Group's order book,
an enhanced range of products and services and major internal
restructuring progress in 2013, the Board is also confident about
the Company's prospects beyond the current year.
The Placing
Conditional on Admission, the Company will issue 20,869,565 new
Ordinary Shares which will raise GBP24.0 million, before expenses,
and approximately GBP23.1 million after the expenses of the Placing
(which are estimated to be GBP0.9 million (excluding VAT) in
total). The Placing Shares have been conditionally placed by
Cenkos, as agent for the Company, with institutional and other
investors. Application has been made for the Placing Shares to be
admitted to trading on AIM and dealings are expected to commence on
10 June 2014.
The Placing Shares issued pursuant to the Placing will represent
approximately 25.9 per cent. of the Enlarged Share Capital. The
Placing Shares will, following Admission, rank in full for all
dividends and distributions declared, made or paid in respect of
the issued Ordinary Share capital of the Company after the date of
their issue and will otherwise rank pari passu in all other
respects with the Existing Ordinary Shares. The Placing Price
represents a discount to the closing mid-market price of 3.4 per
cent. per Ordinary Share as at 21 May 2014 (being the latest
practicable date prior to the date of this document). Cenkos, as
agent for the Company, has agreed to use its reasonable endeavours
to procure subscribers for the Placing Shares at the Placing Price.
The Placing is not underwritten.
The Placing is conditional, inter alia, upon Shareholders
approving the Resolutions at the General Meeting that will grant to
the Directors the authority to allot the Placing Shares and the
power to disapply statutory pre-emption rights in respect of the
Placing Shares. A circular, containing a Notice of General Meeting,
has been sent to Shareholders today and will be made available on
the Company's website:
www.ir.kbcat.com/shareholdercircular22may2014. Terms and
expressions used in this announcement shall, unless the context
otherwise requires, have the same meanings as given to them in the
circular.
Strategic investors' participation in the Placing
The Board is pleased to confirm that Kongsberg Gruppen ASA, an
Oslo listed company (KOG-OSL), has agreed as part of the Placing to
subscribe for 4,032,000 Placing Shares. Kongsberg Gruppen ASA will
have a beneficial interest in 5.0 per cent. of the Enlarged Share
Capital following Admission. Kongsberg Gruppen ASA is an
international, knowledge-based group that supplies high-technology
systems and solutions to customers in the oil and gas industry, the
merchant marine, and the defence and aerospace industries.
Directors' and related parties' participation in the Placing
Ian Godden, Chairman of the Company, has agreed to subscribe for
43,500 Placing Shares pursuant to the Placing. Following Admission,
Ian Godden will have a total shareholding of 201,000 Ordinary
Shares, representing 0.25 per cent. of the Enlarged Share
Capital.
Kestrel Partners LLP ("Kestrel") has also agreed to subscribe
for 1,500,000 Placing Shares pursuant to the Placing on behalf of
its discretionary clients. Following Admission, Kestrel on a
combined basis will have an indirect interest in 9,751,497 Ordinary
Shares, representing 12.09 per cent. of the Enlarged Share Capital.
Kestrel is a "related party" (as defined by the AIM Rules) of the
Company by virtue of being an existing substantial shareholder in
the Company and also due to Oliver Scott, a Non-Executive Director
of the Company, being a partner of, and holding a beneficial
interest in, Kestrel. The Directors, save for Oliver Scott,
consider, having consulted with Cenkos, the Company's Nominated
Adviser for the purposes of the AIM Rules, that the terms of the
related party subscriptions are fair and reasonable insofar as the
shareholders of the Company are concerned.
Timetable
Circular posted to Shareholders 22 May 2014
General Meeting 11.00 a.m. on 9 June 2014
Admission and dealings in the Placing Shares 10 June 2014
expected to commence on AIM
This information is provided by RNS
The company news service from the London Stock Exchange
END
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