Strategic Review and Subscription (2377Q)
October 14 2011 - 10:28AM
UK Regulatory
TIDMWSAG
RNS Number : 2377Q
Woodburne Square AG PLC
14 October 2011
14 October 2011
Woodburne Square AG plc (AIM: WSG)
STRATEGIC REVIEW AND SUBSCRIPTION
The Board of Woodburne Square AG ('Woodburne' or the 'Company'),
the silver and precious metals focused investment company,
announces that it has undertaken a major review of the strategic
position and business model of the Company. The conclusion of this
review is that the Company's current business model is unsuited to
present market conditions, and that Woodburne should seek to
re-structure itself as a broader resource focused investment
vehicle.
A circular to shareholders seeking approval for its new
investing policy will be issued shortly.
Background
Following the November 2010 re-positioning of Woodburne as a
focused precious metals investment company, your Board has sought
to identify a portfolio of suitable precious metal investment
opportunities in Canada and Australia, to provide UK investors with
a direct stake in high quality companies.
Whilst this investment strategy has proved successful in terms
of Woodburne's share price, which has more than doubled since the
November 2010 re-launch of the Company, the Board believes that for
the Company to grow further, and to build on this successful
platform, Woodburne will require substantial additional funds.
Having considered the growing uncertainty in the global stock
markets, and the resulting difficulty of raising capital on terms
acceptable to the Board, it is the view of the Board that there is
little prospect of the current sub-optimal size and nature of
Woodburne's asset base being successfully addressed in the near
future.
Faced with these continuing difficulties, and mindful of the
need to retain shareholder value in the Company's existing
portfolio, the Board has undertaken a strategic review of the
sustainability of Woodburne's current investment model. This review
has concluded that to provide a long-term, sustainable platform to
drive shareholder value, the Company should build its cash
resources, via the phased sell-down of its existing portfolio, and
thereafter to seek one or more large-scale natural resource
investment or acquisition opportunities.
As part of this revised business model, and to initiate the
establishment of the Company's cash resources, Woodburne is pleased
to announce that it has raised GBP150,000 before expenses, by way
of subscription by new investors, for 4,615,384 new ordinary shares
of 0.4p each in the share capital of the Company (the 'Subscription
Shares') at a price of 3.25 pence per share (the 'Subscription
Price'). The Subscription Price represents a premium of 4% to the
closing share price of the Company on 13 October 2011.
Mr Tom Winnifrith who initiated the review has informed the
Company of his intention to resign as Woodburne's Chief Investment
Officer with immediate effect. In accepting his resignation, the
Board of Woodburne would like to put on record its thanks to Mr
Winnifrith for his invaluable contribution to the Company.
Commenting on today's announcement, Martin Kiersnowski, Chairman
of Woodburne Square, said:
"Since the formation of Woodburne Square in 2010, your Board,
with the invaluable assistance of its Chief Investment Officer, Tom
Winnifrith, has sought to deliver real shareholder value through
the creation of a growing portfolio of undervalued, high quality
precious metal investment positions. It is clear that our analysis
of the market was sound, despite recent commodity market
corrections, and the Company's share price has remained resilient
in very difficult market conditions for smallcap companies in
London. However, it was always the intention of your Board that
Woodburne would build itself rapidly into a large-scale investment
vehicle, with significant positions in all of the world's major
natural resource market places. But in the current funding climate
your Board has therefore decided to pursue an alternative strategy,
one which we are confident will enable us to deliver meaningful
shareholder value in the near future".
Enquiries:
Woodburne Square AG plc
Martin Kiersnowski +44 (0) 207 562 3350
Libertas Capital Corporate Finance Limited
Sandy Jamieson +44 (0) 20 569 9650
This information is provided by RNS
The company news service from the London Stock Exchange
END
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