TIDMTRAF
RNS Number : 3453L
Trafalgar Property Group PLC
21 December 2018
21 December 2018
Trafalgar Property Group plc
("Trafalgar", the "Company" or "Group")
Proposed fundraising to raise up to GBP1 million via a bond
issue
The Board of Trafalgar Property Group Plc (AIM:TRAF), the AIM
quoted residential and assisted living property developer,
announces its intention to raise up to GBP1 million (but not less
than GBP0.5 million), before expenses, ( "Proposed Fundraising") by
way of the issue of new 8.5% Convertible Secured Bonds due 2025
("Bonds"), of GBP1.00 per unit nominal value, to be issued at GBP1
per Bond ("Subscription Price"). The Company intends to create and
issue up to GBP5 million of Bonds which will be available for
subscription. The Proposed Fundraising constitutes the initial
tranche of a proposed overall fundraising of up to GBP5
million.
The proposed Bond issue
As highlighted in the Notice of General Meeting Circular issued
on 27 February 2018, the Company has been exploring the issue of a
bond which will be traded on NEX Exchange Growth Market ("NEX
Exchange"). The Board has been reviewing the Company's options to
address the ongoing working capital requirements of the Group and
for the implementation of its strategy for Trafalgar Retirement +
Limited and as such, the Directors have explored a number of
options and believe that the Proposed Fundraising is the best
option available to the Group.
Terms of the Bonds
The principle terms of the Bonds include:
-- Income: 8.5% per annum, initially payable for the period to
30 September 2019 and thereafter quarterly in arrears on 31 March,
30 June, 30 September and 31 December in each year.
-- Security: the Bonds will be secured by a floating charge
given by the Company over its assets. The benefit of the charge
will be held by Woodside Corporate Services Limited as trustee. The
Company's subsidiaries will be able to repay existing secured and
unsecured loans and take new secured and unsecured loans; and the
Company will be able to grant security on such terms as it may
determine, whether ranking in priority to, pari passu with or
behind the security for the Bonds.
-- Redemption: the Bonds will mature on 31 December 2025.
Bondholders are able to request early redemption on 31 December
2021 and on 31 December 2023; the Company reserves the right to
refuse any early redemption request.
-- Conversion: bondholders can elect, instead of redemption on
the final redemption date in 2025, to convert all or part of their
bonds into ordinary shares of 0.1p in the Company ("Ordinary
Shares") at a 5% discount to the then closing mid-market share
price on the business day prior to the final redemption date.
-- Transferability: the Bonds will be freely transferable and eligible to be held in CREST.
The minimum investment for the Bonds is GBP5,000 and in GBP5,000
increments thereafter.
Availability
Under the Proposed Fundraising, the Bonds will only be made
available to:
(i) persons falling within the definition of "qualified
investors" for the purposes of section 86(7) of the Financial
Services and Markets Act 2000 (as amended), and (ii) a
"professional client" or an "eligible counterparty" ("Eligible
Counterparty") within the meaning given in COBS 3.5.1 and COBS
3.6.1, respectively, of the FCA Conduct of Business Sourcebook as
at 1(st) November 2007; and (iii) who have professional experience
in matters relating to investments falling within Article 19(5) of
the United Kingdom Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 as amended (the "Order") or are
high net worth companies, unincorporated associations etc. falling
within Article 49(2) of the Order; or
(ii) elsewhere, persons to whom the Bonds information document
may be lawfully distributed, (together, "Relevant Persons").
Proposed fundraising
The Company is proposing to raise in total up to GBP5 million
through the issue of the Bonds, with an initial Proposed
Fundraising of up to GBP1 million. The Proposed Fundraising is
conditional upon a minimum subscription of GBP500,000 being
reached. The Proposed Fundraising will be marketed to potential
investors that are Relevant Persons through the Company's agent,
Holmes Property Ventures Limited, and a further announcement of the
results of that fundraising will be made in due course, although
closing of the Proposed Fundraising is not expected to take place
before 31 March 2019. The Proposed Fundraising is not
underwritten.
Admissions to trading onto NEX Exchange
Upon the minimum subscription for the Bonds being achieved,
applications will be made to NEX Exchange for the admissions to
trading on the NEX Exchange Growth Market of the Bonds and also of
the Company's ordinary shares of 0.1 pence each (the "Ordinary
Shares").
Subject to the conditions to the Proposed Fundraising being
satisfied, further announcements as to the admissions of the
Ordinary Shares and of the Bonds to trading on the NEX Exchange
Growth Market will be made in due course.
The admission of the Ordinary Shares to trading on the AIM
market will be maintained.
Use of Proceeds
It is anticipated that net proceeds received from the initial
Proposed Fundraising will be used by the Group (i) to fund suitable
residential property development opportunities through its
established sourcing network of contacts; (ii) to fund planning
permission costs for assisted living sites it currently has under
option; (iii) to expand the land department team to facilitate the
identification and acquisition of options over a larger number of
sites; and (iv) for working capital purposes. The extent of
achieving these objectives will be affected by the level of initial
funding raised through the Proposed Fundraising.
Grant of warrants
As part of the consideration payable to Alexander David
Securities Limited ("Alexander David") for their services as
financial adviser to the Bond issue and NEX Corporate Adviser, the
Company has agreed to grant to Alexander David warrants to
subscribe for up to 4,251,904 new Ordinary Shares (representing 1%
of the current issued ordinary share capital), exercisable at the
closing mid-market price for Ordinary Shares on AIM at the date of
admission of the Bonds to the NEX Exchange, for a period of three
years from such admission.
Arrangements with Holmes Property Ventures Limited ("HPV")
As disclosed in the Notice of General Meeting Circular issued on
27 February 2018, the Company appointed HPV to advise on funding
structures and to use its reasonable endeavours to procure funding
for the Group. In consideration for those services, and conditional
upon the raising of both a pre-funding amount of GBP200,000 -
GBP300,000 and an initial funding amount of GBP5 million in full
(or agreed amount at withdrawal of the offer), the Company has
agreed to issue to HPV 100 million new Ordinary Shares
(representing 19.04% of the then enlarged ordinary share capital)
at the closing mid-market price for Ordinary Shares on AIM at the
date of issue.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
FOR FURTHER INFORMATION PLEASE CONTACT:
Trafalgar Property Group plc
Christopher Johnson
Telephone: +44 (0) 1732 700 000
NEX Exchange Corporate Adviser and Financial Adviser for the
Proposed Fundraising and Bond issue
Alexander David Securities Limited
David Scott -Corporate Finance
James Dewhurst - Corporate Broking
Telephone: +44 (0) 20 7448 9820
AIM Nominated Adviser and Broker:
Allenby Capital Limited
Jeremy Porter / James Reeve / Liz Kirchner
Telephone: +44 (0) 20 3328 5656
Yellow Jersey Limited
Charles Goodwin
Telephone: +44 (0) 7747 788 221
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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