Arria NLG PLC Re Contract and Trading Update (7758L)
April 30 2015 - 2:01AM
UK Regulatory
TIDMNLG
RNS Number : 7758L
Arria NLG PLC
30 April 2015
Arria NLG plc ("Arria" or the "Company")
Termination of contract and trading update
The Board of Arria announces that the Company's contract with
Shell Exploration & Production Company ("Shell"), which was
announced on 23 May 2014, has been terminated by notice given by
Shell in accordance with its terms. Shell has confirmed that the
cessation of its relationship with the Company does not reflect the
value it sees in Arria's technology, to which Shell has responded
positively and which is demonstrated by the significant development
work done to date. The directors of Arria understand that when
Shell is better placed to exploit the benefits offered by Arria's
technology, Shell will consider re-establishing the relationship
with Arria.
Under the terms of the contract there will be a termination
payment to the Company. Nevertheless, the termination of the
contract will have a material adverse impact on the Company's
trading and revenues for the year ending 30 September 2015, which
are now expected to be significantly below market expectations.
Furthermore, as stated in the Director's Report in the audited
financial statements for the period ending 30 September 2014, there
existed a material uncertainty on the continuing financial
viability of the Company pending a successful agreement for
additional funding. The Company was until yesterday in advanced
discussions with a number of institutional and other investors for
a substantial equity fundraising at a share price significantly
below the current market price, which it was targeting to conclude
within a matter of days. This fundraising was predicated on revenue
expectations which included the continuation of the Shell contract
and, therefore, the Company has suspended these discussions.
The Company intends to re-engage with potential investors to
explore the provision of additional capital in light of the revised
revenue expectations as a matter of urgency. In addition, the
Company will continue to explore all other financing options
available to it. There can be no certainty, however, that further
financing will be available to the Company on acceptable terms, or
at all.
As explained in the Company's last annual results, the extent of
funding required would depend on the speed and quantum with which
the Company secures additional profitable revenue growth. The
cessation of the Shell relationship creates a significant gap in
the funding available to the Company and further funds will be
required in the near term if it is to continue as a going
concern.
The Directors continue to remain extremely confident in the
potential for the Arria technology. Although Shell was a major
client and contributor to revenue, revenues are beginning to be
generated by other customers. It is encouraging to see that the
number of clients contributing to revenues in the first half of
this year has doubled from two to four when compared to the prior
year.
As Arria worked through 2014, management assumed that the
Company would gain one new client per quarter going forward. As it
has turned out, since August of last year, we have achieved an
average pace of approximately one new client per month. We also
have an exciting opportunity with IBM Watson where we are a part of
their partnership programme.
The Company will make further announcements in due course.
For further information, please visit www.arria.com or
contact:
Arria NLG plc Tel +44 (0) 20 7100 4540
Stuart Rogers, Chairman and Chief Executive
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Allenby Capital, Nominated Adviser Tel: +44 (0)20 3328 5656
and Joint Broker
Nick Naylor
Jeremy Porter
James Reeve
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Westhouse Securities, Joint Broker Tel: +44 (0) 20 7601 6100
Antonio Bossi
Robert Finlay
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IFC Advisory, Financial PR and IR Tel: 44 (0) 20 3053 8671
Tim Metcalfe tim.metcalfe@investor-focus.co.uk
Graham Herring graham.herring@investor-focus.co.uk
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This information is provided by RNS
The company news service from the London Stock Exchange
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