RAM Ram Active

 

TIDMRAM 
 
RNS Number : 8224R 
RAM Investment Group PLC 
07 May 2009 
 

FOR IMMEDIATE RELEASE 7 May 2009 
 
 
 
 
RAM INVESTMENT GROUP PLC 
("RAM" or the "Company") 
 
 
RAM INVESTMENT GROUP PLC ACQUIRES 49.9% OF TRAIN FX, ACQUIRES NEW PLANET 
INVESTMENTS ("NPI"), 
PLACING OF NEW ORDINARY SHARES 
AND CHANGE OF BROKER 
 
 
 
 
Background 
 
 
On 13 March 2009, RAM announced an investment of GBP177,500 in New Planet 
Investments Ltd ("NPI"), a special purpose vehicle established to acquire the 
assets of Train FX Ltd from the Vision Media Group plc ("VMG"). This initial 
investment secured RAM 18.2 % of NPI's issued share capital. In addition, RAM 
agreed an option (at RAM's call only) with VMG to acquire the remaining issued 
share capital of NPI in the event that NPI is successful in acquiring the 
remainder of Train FX from VMG and also made a loan of GBP200,000 to VMG. RAM 
has now agreed to restructure and increase this investment as set out below. 
 
 
Investment in Train FX Limited 
 
 
The Board of RAM Investment Group plc ("RAM") announces that it has agreed to 
invest GBP920,000 in Train FX.  Having intended to acquire an interest in NPI 
(which in turn would have held an interest in Train FX) an opportunity arose to 
take a direct stake in Train FX. Broadly this deal would see RAM acquiring an 
initial stake, with an option to acquire further shares in due course. To date 
agreements have been entered into under which RAM have acquired a direct stake 
of 49.9%, and are due to be granted an option to acquire the remaining 50.1%. 
Under the existing arrangements if the option is not granted then RAM have the 
right to increase their stake to a 50% holding. However, the exercise of the 
option to acquire the remaining 50.1% and the right to increase RAM's holding to 
50% are dependent upon compliance with the AIM Rules, under which these actions 
may require compliance with AIM Rule 14 as a 'reverse transaction' which would 
include the requirement for approval by RAM's shareholders. 
 
 
The acquisition by RAM of 50% or more of Train FX under the above arrangements 
is also conditional on the approval of VMG's shareholders. 
 
 
 
 
The investment in Train FX has been satisfied by conversion of the existing 
GBP200,000 loan by RAM to VMG and additional cash payments of GBP400,000 made on 
24 April 2009 and GBP320,000 made on 30 April 2009. This investment secures RAM 
49.9% of the issued ordinary share capital of Train FX and the 
Agreement provides RAM with either: 
 
 
A) a call option, exercisable solely at the Company's discretion, to acquire the 
balance of Train FX free of any inter-company debts, with a long stop date of 
31st August 2009 from VMG. The exercise of this option is subject, inter alia, 
to due diligence, financing and compliance with the applicable AIM Rules. The 
exercise price would be the aggregate sum of up to GBP1,270,000 which shall be 
satisfied as follows: 
 
 
(i)    GBP785,000 in cash; 
(ii)    GBP425,000 to be satisfied by the issue of 7,727,272 new RAM Ordinary 
Shares; and 
(iii)     up to GBP60,000 in RAM loan notes. 
 
 
In relation to the issue of GBP425,000 of RAM shares (7,727,272 shares) to be 
issued to VMG upon exercise of the RAM Option, the shares will be priced at 5.5p 
and these will be locked in until 15th December 2009 unless RAM should choose to 
exercise an option to re-acquire these shares at 5.5p per share during the three 
month period after completion of the exercise of the RAM Option; or 
 
 
 
 
B) if that option is not granted, the right to take additional shares giving RAM 
50% of Train FX with joint board control. 
 
 
 
 
Details on Train FX Limited 
 
 
Train FX Ltd (under the 'Train TV' registered trademark) has signed contracts 
with National Express and First Capital Connect with the right to install 
digital TV screens and an ambient sound system on their railway carriage fleet. 
The system will broadcast passenger journey information, breakfast style news 
and advertising. The technology is also in place for the train operators to 
access back-haul information. 
 
 
For the year ended 31 December 2007, Train FX made a loss of GBP561,612 on 
Turnover of GBP34,169. As at 31 December 2007, it had Net Liabilities of 
GBP1,630,646 and this included inter-company debt due to VMG of 
GBP2,045,142. For the year ended 31 December 2008 the draft results show that 
TrainFX made a loss of GBP0.5 million on turnover of GBP0.02 million and that as 
at December 2008 it had net liabilities of GBP2.2 million. 
 
 
 
Acquisition of NPI 
 
 
As part of the arrangements to make the further investment in Train FX, the 
Company has acquired 100% of NPI for GBP530,000 of which GBP130,000 has already 
been paid to NPI (which was used to acquire 18.2% of NPI). In addition to which, 
RAM also has loaned GBP73,500 to NPI. The balance of GBP400,000 is to be settled 
by the issue of 7,272,727 new ordinary shares in RAM at a price of 5.5p per 
share. The net assets of NPI as at 30 April 2009 were GBP165,775.20 principally 
comprising its investment in Train FX and its arrangements (as referred to 
below) in respect of the acquisition of Train FX, as announced on 13 March 2009. 
 
 
 
NPI has the benefit of a non legally binding exclusivity arrangement with VMG in 
relation to Train FX, has also entered into advanced negotiations (including 
preparation of definitive agreements, under which it would have acquired Train 
FX) and has acquired through its management team a comprehensive understanding 
of the business and the assets of Train FX. NPI has made some advances to VMG, 
which in turn have been used to support Train FX, as a result of which NPI also 
holds certain rights in relation to Train FX and/or VMG. Some of these funds 
have been raised by NPI from third parties. Through the acquisition of NPI RAM 
has been able to accelerate its acquisition of the stake in Train FX.The Board 
of RAM also consider that the consideration paid covers the time and efforts of 
the management team of NPI (which includes some members of the boards of VMG and 
RAM) which have been involved in bringing the transaction to a successful 
conclusion. 
 
 
Executive Chairman Tim Baldwin comments; 
 
 
"We are very pleased to have been able, through our acquisition of NPI, to 
acquire a direct 49.9% interest in Train FX with additional right to take this 
stake to at least 50%.  Having secured two contracts which cover 30% of the 
Greater London commuter market, Train FX is aiming to install its technology 
with other train operating companies covering the rail commuter market over 
ground. This represents approximately 800 million passenger train journeys a 
year. For UK advertisers, this market is the last bastion of captive 
broadcasting in mass transit. The programme will be rolled out on the East 
Anglia franchise by the start of the Olympic Games. Additionally, there are many 
other territories both here in the UK and through the world where the technology 
of Train TV is attractive and commercially viable. Train TV is an investment in 
which the Board has every confidence. RAM will continue to access other 
investment opportunities in line with its stated strategy of seeking to grow RAM 
into a substantial company." 
 
 
The Placing 
 
 
In order to provide the funding for the investment in Train FX and to provide 
the Company with additional working capital, the Company has placed 20,018,273 
new ordinary shares of 1p each at a price of 5.5p per share to raise 
GBP1,101,005 before expenses, more than 80% of which is with institutional 
investors on behalf of clients. In addition, the Company has placed 581,818 new 
ordinary shares of 1p each of 5.5p in lieu of commission for fund raising. 
 
 
Application will be made for 27,872,818 new Ordinary Shares in RAM (consisting 
of the NPI vendor consideration and Placing shares), which, when issued will 
rank pari passu with the existing Ordinary Shares in issue, to be admitted to 
trading on AIM. This is expected to be on 13 May 2009. 
 
 
On completion of the above transactions: 
 
 
Ruffer LLP will have 14,600,000 RAM Ordinary Shares representing 28.92% of the 
issued share capital of RAM. 
 
 
John Mckeon will have 4,284,266 RAM Ordinary Shares representing 8.49% of the 
issued share capital of RAM. 
 
 
Mike Cottman will have 1,965,603 RAM Ordinary Shares representing 3.89% of the 
issued share capital of RAM. 
 
 
Melanie Haime will have 1,886,376 RAM Ordinary Shares representing 3.74% of the 
issued share capital of RAM. 
 
 
Donal Boylan will have 1,818,182 RAM Ordinary Shares representing 3.60% of the 
issued share capital of RAM. 
 
 
Related Party Transaction 
 
 
As a result of the acquisition of NPI, Tim Baldwin, a director and current 
14.92% Shareholder, will be issued with 943,188 new RAM Ordinary Shares at 5.5p 
per share equating to a consideration of GBP51,875. In addition, Hill Street 
Investments Plc, a company in which Tim Baldwin is a director and one in which 
Tim Baldwin exercises management control, will receive 160,342 new RAM Ordinary 
Shares at 5.5p per share equating to a consideration of GBP8,819. Therefore, 
this will bring Tim Baldwin's total holding to 4,478,101 RAM Ordinary Shares 
representing 8.87% of the enlarged issued share capital of RAM. The issue of new 
RAM Ordinary Shares to Tim Baldwin and to Hill Street Investments are Related 
Party Transactions requiring compliance with AIM Rule 13. Accordingly, the 
Independent Directors, being Edward Adams and Iain Manley, have consulted with 
Beaumont Cornish Limited, the Company's Nominated Advisor, and consider the 
terms of the transactions to be fair and reasonable insofar as the shareholders 
of the Company are concerned. 
 
 
Change of Broker 
 
 
The Company announces it has appointed Rivington Street Corporate Finance 
Limited as its broker with immediate effect. 
 
 
 
 
For further information please call: 
 
 
Tim Baldwin  RAM investment Group plc0207 518 4337 
 
 
Roland CornishBeaumont Cornish Limited0207 628 3396 
 
 
Monisha Varadan    Rivington Street Corporate Finance Limited0207 562 3389 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCUUURGAUPBGRQ 
 

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