Result of EGM
September 29 2008 - 6:39AM
UK Regulatory
RNS Number : 5491E
Ninety PLC
29 September 2008
Immediate Release: Monday 29 September 2008
Ninety Plc
("Ninety" or "the Company")
Result of Extraordinary General Meeting
Acquisition of Honour Field for up to �20.12m
1 for 60 Share Consolidation and Placing
Name Change to Sorbic International plc (ticker: SORB.L)
Ninety plc is pleased to announce that at today's EGM all resolutions were duly passed. Following Admission of the enlarged share
capital, which is expected to commence on AIM at 8.00am on 30 September 2008, the Company will complete the acquisition of Honour Field for
a consideration of up to �20.12 million. This is to be satisfied by the issue of 9,860,000 new ordinary shares and up to a further
10,300,000 deferred shares to be issued conditional upon Honour Field achieving a minimum audited net profit after tax for the financial
year ending 31 December 2008 of RMB60 million, �4.38 million (�1: RMB 13.71). FinnCap is nominated adviser and broker to the Company.
* Admission and dealings in the enlarged share capital are expected to commence on AIM at 8.00am on Tuesday 30 September 2008. On
Admission the Company's name will be Sorbic International plc. The new AIM ticker on admission will be SORB.L.
* There is a 1 for 60 share consolidation and the Company has raised �0.24 million through the issue of Placing Shares at the
consolidated price of 75 pence for each new Placing Share. On Admission there will be 23,088,499 ordinary shares in issue (excluding
deferred shares) and a market capitalization of �17.3m at the Placing Price.
* The acquisition provides the Company with a well established and proven business in the Peoples Republic of China ("PRC") which
produces Sorbic Acid and Potassium Sorbate for customers in over forty six countries. On Completion, the Enlarged Group has approximately
�4.4m of cash. Summary financials are as follows:
Six months ended Year ended Year ended Year ended
30 June 31 December 31 December 31 December
2008 2007 2006 2005
�000s �000s �000s �000s
Revenue 7,373 12,918 11,527 8,009
Gross profit 2,732 4,204 3,004 1,748
Profit before tax 2,260 3,414 2,340 1,303
Profit for the period 1,978 2,842 2,340 1,303
Net assets 6,619 7,528 5,778 4,095
The Company announces the following Board changes: John McLean is appointed Non-Executive Chairman, Wang Yan Ting, President and
executive Director, Ray Ang, CEO, Susan Chong, CFO and Nicholas Smith as Non-Executive Director. Michael Gretton and Thomas Vaughan have
resigned from the Board.
Commenting, John McLean, Chairman of Sorbic International plc, said:
"We have acquired a company with a strong growth record which is both profitable and cash generative and continues to trade in line with
our expectations. The Company is well positioned in growing domestic and international markets for Sorbic Acid and Potassium Sorbate. It has
an impressive domestic and international customer base and a clear strategy to grow the business both organically and by acquisition."
Enquiries:
Sorbic International plc, John McLean, Chairman Tel: +44 (0)7768 031 454
FinnCap, Geoff Nash Tel: +44 (0) 20 7600 1658
Hansard Group, John Bick Tel: +44 (0) 7872 061007
www.sorbicinternational.com
Notes to editors - Background and Future Strategy
* Honour Field owns LVST which was established in July 2001. It's principal activity is the production and sale of the food
preservatives Sorbic Acid and Potassium Sorbate from its 33,000 m� production facility in Linyi City, Shandong Province, PRC. LVST currently
produces approximately 3,000 metric tonnes of Sorbic Acid and 5,000 metric tonnes of Potassium Sorbate per year.
* In 2007, LVST sold 47.7 per cent. of its products to overseas markets and 52.3 per cent. to the Chinese domestic market. In that
period, its overseas customers were spread over 46 countries and its domestic customers were spread all over China.
* Global demand for Sorbic Acid and Potassium Sorbate has increased as a result of the increase in the world's population and higher
demand for food. According to the Food and Agriculture Organization of the United Nations, global population increased by over 74.8 per
cent. between 1970 and 2005, and is expected to reach 8.3 billion by 2030. With the steady growth of the global population, increased
production of food products is essential to ensure adequate food supply. The continuous increase in food production has significantly
increased the importance of, and demand for, food preservatives.
* Increased household income and rapid urbanization in China has also led to continued growth in the domestic consumption of meat,
dairy and other high-protein products as well as the use of modern household products. The production of these food and household products
often requires high volumes of preservatives, thereby increasing the demand for both Sorbic Acid and Potassium Sorbate.
Future Strategy - the Enlarged Group has three main elements to its future strategy.
* New facilities - At present, LVST operates from a site in Linyi City. The existing facility has an area of approximately 33,000 m�
and has two production lines which are currently operating at their full design capacities. In order for LVST to be better positioned to
service future anticipated growth in demand for its products, it has acquired land immediately adjacent to its present site with total area
of approximately 14,700 m�. The total cost of expanding production facilities will be approximately RMB 100 million (circa �7.3 million)
which will be available from the cash resources of the Enlarged group and existing working capital facilities. The proposed new production
facilities will include two more production lines which would double the existing capacity. A major international food manufacturer has
already expressed an interest in purchasing the entire output from one of the proposed new production lines.
* Increase marketing activities - Currently the New Board believes that sales of products is limited by production capacity.
Anticipating the increase in production capacity, the New Board plans to enhance its effort in the area of distribution. With strong growth
in both domestic and international market, it is proposed that the sales team focus on developing new markets while strengthening the
relationship with the existing customers.
* Acquisition opportunities - Whilst the New Board believe that there are substantial opportunities for organic growth through
increased production, they will also consider suitable acquisition opportunities as they arise.
Acquisition and Placing Statistics
Number of Existing Ordinary Shares 374,500,020
Number of issued New Ordinary Shares arising pursuant to the 6,241,667
Capital Reorganisation
Number of Acquisition Shares* 9,860,000
Number of Deferred Shares* 10,300,000
Number of Conversion Shares* 6,666,666
Issue Price 75p
Placing Price 75p
Number of Placing Shares* 320,166
Number of New Ordinary Shares in issue on Admission* 23,088,499
Notional market capitalisation of the Company at the Placing �17.3 million
Price on Admission*
Notional market capitalisation of the Company at the Placing �25.0 million
Price assuming the Profit Target is met and the Deferred
Shares issued
Value of the Acquisition Shares at the Placing Price �7.4 million
Percentage of the Enlarged Share Capital represented by the 42.7 per cent
Acquisition Shares at Admission
Percentage of the Enlarged Share Capital represented by the 1.4 per cent
Placing Shares at Admission
Percentage of the Enlarged Share Capital held by the New Board 43.2 per cent
at Admission (includes the Acquisition Shares)
Gross Proceeds of the Placing �0.24 million
Current AIM symbol NINE
Proposed new AIM symbol upon Admission SORB
ISIN Number of the Existing Ordinary Shares GB00B245C648
ISIN Number of the New Ordinary Shares GB00B3CX3F30
* the number of shares is stated following the Capital Reorganisation. Number of New Ordinary Shares on Admission excludes the Deferred
Shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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