REG - Lumiere Acquisitions FFI Holdings PLC - FFI Holdings PLC Rule 19.6(b) Update
FOR IMMEDIATE RELEASE
30 April 2020
Lumiere Acquisitions Company LLC ("Lumiere")
a wholly owned subsidiary of the 777 Group, comprised of 777 Partners LLC and 600 Partners LLC
Rule 19.6(b) update to stated post-offer intention statement with regard to FFI Holdings PLC, now FFI Holdings Limited ("FFI")
Lumiere announces that further to the completion of its offer for the entire issued and to be issued ordinary share capital of FFI not already acquired or agreed to be acquired by Lumiere on 16 August 2019 (the "Acquisition"), it has taken certain courses of action which differ from its statements of intent made pursuant to Rule 2.7(c)(iv) and 24.2(a)(ii) of the City Code on Takeovers and Mergers (the "Stated Intentions") which were set out in its announcement in connection with the Acquisition of 02 July 2019 and the related offer document published on 26 July 2019 (together, the "Offer Documentation").
Except as otherwise defined herein, capitalised terms used but not defined in this announcement have the same meanings as given to them in the Offer Documentation.
Reasons for changes to the Stated Intentions
The revisions to the Stated Intentions, as set out below, are as a result of a strategic decision to reorganise our office in China, as well from the unprecedented challenges on the global entertainment industry resulting from the COVID-19 pandemic, which has severely impacted global film and television productions. Lumiere, in conjunction with FFI management, has taken proactive steps to move FFI's office in China from Shanghai to Beijing, which includes the voluntary redundancy of four employees, in line with Chinese regulation. Separately, Lumiere has taken proactive steps to reduce costs at FFI to safeguard the continuity of the business, and to ensure that it is well positioned to serve its global customer base when the global entertainment industry starts to recover.
Revisions to the Stated Intentions
The Stated Intentions included that, following completion of the Acquisition, Lumiere had no intention to make any material change to the conditions of employment of FFI employees and confirmed that, following completion of the Acquisition, the existing contractual and statutory rights and terms and conditions of employment, including pension obligations, of the management and employees of FFI and its subsidiaries would be fully safeguarded in accordance with applicable law.
i) Reorganisation of our office in China
As set out in the Offer Documentation, the FFI Board is in the process of implementing a growth strategy which includes the expansion of FFI's ongoing completion contract offering into China, noting China's entertainment industry's unprecedented growth in recent years.
In February 2020, Lumiere and FFI management made a strategic decision to reorganise our office in China which will involve moving the office location from Shanghai to Beijing, noting Beijing's growing importance as a cultural hub. In line with this, in February 2020 FFI initiated a voluntary redundancy package for the FFI employees that comprise our office in China, which constitute less than 2% of FFI's global employee base. The voluntary redundancy package includes a severance allowance in line with Chinese regulation. It is the intention of FFI to replace these individuals once the FFI office in Beijing has been established.
ii) Response to the COVID-19 Pandemic
In light of the COVID-19 pandemic currently affecting the market and, in particular, its significant negative impact on the entertainment industry and on FFI, FFI has taken and is continuing to take certain steps to mitigate any losses arising from such market conditions. One of the steps that has been and is being taken is to defer the payment of salaries and other discretionary costs, including rental payments and credit card-related expenses.
The timeframe and manner for implementing responses to the COVID-19 pandemic have been and will continue to be formulated appropriately in each of the jurisdictions where affected FFI employees and are based.
The terms of such salary deferral arrangements meet and will continue to meet the relevant guidelines issued by the relevant governments. Lumiere and FFI intend to end the salary deferral arrangements when appropriate. It is the current intention to enable FFI employees to recover the deferred salary amounts once the business has recovered.
While we deeply regret these changes to the Stated Intentions with respect to employees, the strategic decision to reorganise our office in China was deemed necessary to ensure that FFI is able to capitalise on the significant growth that is taking place in the Chinese film and television production market. Additionally, the COVID-19 pandemic has required Lumiere and FFI to take immediate action to safeguard the future of FFI and its prospects. The contractual rights of FFI employees will continue to be honoured.
Enquiries:
Lumiere / FFI +1 (0) 212 397 6102
Jorge Beruff (Director)
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