Sinclair (William) Holdings PLC Completion of £8.24 million Financing (0040W)

TIDMSNCL

RNS Number : 0040W

Sinclair (William) Holdings PLC

20 December 2013

WILLIAM SINCLAIR HOLDINGS PLC

("William Sinclair", the "Company" or the "Group")

Completion of GBP8.24 million Financing

Highlights:

   --     GBP8.24 million raised from existing and new investors 
   --     Injection of working capital ahead of 2014 spring growing season 
   --     Acceleration of Ellesmere Port development 
   --     Reinvigoration of William Sinclair's market leading brands

William Sinclair, one of the UK's leading suppliers of growing media, announces the completion of a financing to raise GBP8.24 million before expenses through the issue of secured redeemable convertible loan notes (the "Convertible Notes") to institutional and other investors (the "Noteholders") the majority of whom are existing shareholders in the Company.

The funding provided by the Convertible Notes is intended to be used to fund the working capital needs of the Group, to support the implementation of new working capital facilities on favourable terms, and to expedite development of the Group's Ellesmere Port manufacturing facility.

Peter Rush, Chief Executive Officer of William Sinclair commented:

"2014 will be the year William Sinclair begins to unlock its potential through the development of the Ellesmere Port site. It is very encouraging to see many of our shareholders demonstrate their support for the Company's prospects and vision by becoming investors in these loan notes.

"This injection of new capital will allow William Sinclair to accelerate the development of Ellesmere Port and will support the re-positioning and re-launch of our brands in order to deliver our goals of greater efficiency, profitability and growth."

Working Capital Financing

The Group is in the process of moving its banking arrangements and working capital facilities to a new provider. Offers of facilities, indicative or credit backed, in excess of GBP20 million have been received from all the lenders that the Company approached and a timetable has now been agreed with the incumbent lender to facilitate the move. The new working capital facilities are expected to be in place within six weeks and will then provide funding for the continuation of the Group's strategy, including accelerating investment in the integrated manufacturing facility at Ellesmere Port.

Convertible Notes

The Group has issued a principal amount of GBP8.24 million of Convertible Notes. The Convertible Notes have a maturity of 5 years and carry an interest rate of between 8% and 11% per annum, reducing with the principal amount outstanding. Interest may be either settled in cash or added to the principal amount. The interest rate may be varied upwards in the event that spot LIBOR plus 3% exceeds 8% per annum. The Convertible Notes are redeemable by the Group in whole or in part at any time prior to their maturity.

Under the terms of the Convertible Notes the Noteholders are entitled to receive 5,665,000 warrants (the "Warrants") to subscribe for new ordinary shares of 25 pence (the "Shares") in the capital of the Company at a price of 80p per Share. At their maturity the Convertible Notes may, at the option of the Noteholders, be converted into Shares at a price of 159 pence per Share ("Conversion").

Issue of the Warrants and Conversion (the "Equity Features") both require the approval of shareholders in a general meeting of the Company. Should the Company fail to approve the Equity Features the interest rate payable on the Convertible Notes would increase to between 25% and 28% per annum, their maturity would reduce to 3 years and the Group would not be able to redeem them prior to maturity.

The Noteholders are also entitled to appoint a non-executive director to the board of the Company. The Company expects to work closely with the Noteholders to identify a suitable individual.

Directors Dealing

Peter Rush, Peter Williams, Hugh Etheridge and Ken Piggott, all Directors of the Company, have subscribed for an aggregate amount of GBP60,000 of Convertible Notes. They are therefore entitled to the Warrants and conversion rights available to all Noteholders, and this subscription therefore constitutes dealing for the purposes of the AIM Rules for Companies.

As a result of their (or their immediate family's) subscription Mr Rush and Mr Williams are both interested in 13,750 of the Warrants and conversion rights in respect of 12,579 Shares, whilst Mr Etheridge and Mr Piggott are interested in 6,875 of the Warrants and conversion rights in respect of 6,289 Shares.

Shareholder Circular & General Meeting

A circular to all shareholders convening a general meeting of the Company, at which the resolutions implementing the Equity Features, approving a Waiver of Rule 9 of the City Code on Takeovers and Mergers (the "Whitewash Waiver") in respect of the Convertible Notes, and amending the Company's articles to remove the limit upon its borrowing powers will be put, will be posted to shareholders shortly, and a further announcement made at that time.

Natural England and Bolton Fell

At a case management hearing of the Upper Chamber of the Lands Tribunal held in early October 2013 the court set a timetable for the exchange of documents and information between the parties and for a hearing to take place in early Summer 2014. The Company expects to meet its obligations under this timetable. In the meantime the monies raised by the loan notes will allow the Company to continue its investment plans despite the protracted process of reaching an acceptable settlement with Natural England.

Current Trading

The Company expects its results for the year ended 30 September 2013 to be in line with market expectations and expects to announce them in late January 2014.

For further information:

www.william-sinclair.co.uk

 
 William Sinclair Holdings            Tel: 01522 780223 
  Plc 
 Peter Rush, CEO                      Tel 07741 249461 
 Peter Williams, Finance              Tel: 07710 982577 
  Director 
 Mark Way, Corporate Communications   Tel: 07786 116991 
 
 
 WH Ireland Limited 
 Andrew Kitchingman   Tel: 0113 394 6600 
 Nick Field           Tel: 0207 220 1666

This information is provided by RNS

The company news service from the London Stock Exchange

END

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