REG - Hornby PLC - Placing and Open Offer <Origin Href="QuoteRef">HRN.L</Origin> - Part 2
22/06/2016 07:17
- Part 2: For the preceding part double click ID:nRSV8922Ba
under the Amended and Restated RCF may be made in sterling,
euro, Hong Kong dollars and US dollars or such other currency approved by
Barclays. Any such drawing will be for a term of either one month, three
months or six months, but may, subject to payment of break costs by the
Company, be prepaid prior to the end of its term in accordance with the terms
of the Amended and Restated RCF. In addition, the net proceeds from the
disposal of two of the Group's non-core properties (one of which has already
been disposed of) will be required to be applied in reduction of the revolving
credit facility limit (up to an aggregate maximum of £2.25 million).
14.8 Barclays will only be obliged to make available a drawing under the
revolving credit facility if certain conditions precedent are satisfied,
including that no event of default (or potential event of default) is
continuing or would result from the drawing. Subject to the other terms of the
Amended and Restated RCF, the revolving credit facility may, once a drawing is
repaid, be re-drawn up to the level of the total facility commitments.
14.9 As is customary, the Amended and Restated RCF will contain financial
covenants which the Group must comply with and which are to be tested
quarterly. Through to and including December 2017, such financial covenants
will include a minimum EBITDA test and a current asset (stock and receivables)
to net debt test. Thereafter, such financial covenants will revert to
leverage and interest cover financial covenants.
14.10 The Amended and Restated RCF contains various representations and
warranties given by the Company and various members of the Group. In the
Amended and Restated RCF, the Company also gives various information
undertakings and (on behalf of itself and each other member of the Group)
various general undertakings.
14.11 Breach of an undertaking, financial covenant, representation or
warranty given by the Company or other member of the Group under the Amended
and Restated RCF will constitute an event of default and entitle Barclays to
cancel the revolving credit facility and make demand for all amounts
outstanding under the Amended and Restated RCF to be repaid.
14.12 Other events of default relating to the Group are contained in the
Amended and Restated RCF whose occurrence would also entitle Barclays to
cancel the revolving credit facility and make demand for all amounts
outstanding under the Amended and Restated RCF. These include events of
default relating to non-payment, cross-default, insolvency, insolvency
proceedings, creditors' process, unlawfulness, cessation of business,
expropriation, repudiation, litigation and material adverse change.
15. DIVIDENDS
The challenges facing the business during the past 12 months have been
significant and consequently trading has been impacted. Therefore, the Board
has once more taken the decision not to pay a dividend (2015: 0.0p). The
Board continues to keep the dividend policy under review. The Company may
revise its dividend policy from time to time. Under the Amended and Restated
RCF, the Group is permitted to make dividends on the basis that such dividends
do not exceed 60 per cent. of amounts available for distribution in any
relevant financial period and it continues to forecast compliance with its
financial covenants for the next 12 months. A similar restriction on share
buy-backs has also been put in place.
16. GEneral meeting
16.1 The Directors currently have existing authorities to allot shares and
disapply pre-emption rights under section 551 and section 570 of the Act which
were obtained at the Company's Annual General Meeting held on 16 September
2015. However, these would be insufficient to enable the Company to allot and
issue the full amount of New Ordinary Shares pursuant to the Placing and Open
Offer.
16.2 Accordingly, in order for the Company to allot and issue the New
Ordinary Shares, the Company needs to first obtain approval from its
Shareholders to grant to the Board additional authority to allot the New
Ordinary Shares and disapply statutory pre-emption rights which would
otherwise apply to such allotment. In addition to the Whitewash Resolution
described in the Circular, the Company is therefore also seeking Shareholder
authority to increase the Director's general authority to allot securities and
disapply pre-emption rights pursuant to sections 551 and 570 of the Act
respectively.
16.3 Set out at the end of the Circular is a notice convening the General
Meeting of the Company to be held at the offices of the Company's solicitors,
Berwin Leighton Paisner LLP at Adelaide House, London Bridge, London EC4R 9HA
on 8 July 2016 at 9.00 a.m., at which the Resolutions will be proposed.
Please note that the summary and explanation set out below is not the full
text of the Resolutions and Shareholders should read the full text of the
Resolutions as set out in the Notice of General Meeting before returning their
Forms of Proxy.
16.4 The Resolutions are all inter-conditional such that if any Resolution
is not passed by Shareholders at the General Meeting, the Placing and Open
Offer and Waiver will not proceed. The Resolutions can be summarised as
follows:
(a) Resolution 1 - this will be proposed as an ordinary resolution (to be
taken on a poll of the Independent Shareholders voting in person and by proxy)
and seeks the approval of the Independent Shareholders to waive the obligation
on the Concert Party which would otherwise arise under Rule 9 as a result of
the participation of any member of the Concert Party in the Placing and Open
Offer;
(b) Resolution 2 - this will be proposed as an ordinary resolution and
seeks the approval of Shareholders to authorise the Directors to allot the New
Ordinary Shares in connection with the Placing and Open Offer; and
(c) Resolution 3 - this will be proposed as a special resolution and seeks
the approval of Shareholders, to authorise the Directors under section 570 of
the Act, to disapply pre-emption rights in connection with the allotment of
the New Ordinary Shares.
16.5 Save in respect of the allotment of the Placing Shares and Open Offer
Shares, the grant of options to employees under employee share plans or other
similar incentive arrangements and pursuant to any exercise of existing
options in respect of Ordinary Shares, the Directors have no current intention
to allot shares, or rights to subscribe or convert into shares, in the capital
of the Company.
16.6 Shareholders should note that, if the Resolutions are not passed at the
General Meeting, the Placing and Open Offer and Waiver will not proceed and
that, as explained in paragraph 4 above, the Company will not receive the full
amount of the anticipated proceeds of the fundraising. Without the full
anticipated proceeds of the Placing and Open Offer, the consequences described
at paragraph 4 will apply and which include, the need for the Board to
consider alternative sources of financing, which may or may not be
forthcoming. In light of this, the Directors and where appropriate the
Independent Directors believe that the Placing and Open Offer and Waiver are
in the best interests of Shareholders and the Directors and where appropriate
the Independent Directors unanimously recommend that Shareholders vote in
favour of the Resolutions so that the Placing and Open Offer and Waiver can be
implemented.
17. Irrevocable undertakings and Relationship Agreement
17.1 Those Independent Directors who hold Ordinary Shares, have given an
irrevocable undertaking to vote or, where applicable, to procure the casting
of votes by his connected persons (as defined in section 252 of the Act), in
favour of the Resolutions in respect of his own (or, as applicable, his
connected persons') beneficial holding of Existing Ordinary Shares together
totalling 42,325, representing in aggregate 0.08 per cent. of the issued
Existing Ordinary Shares.
17.2 Roger Canham, a Director and a member of the Concert Party, has given
an irrevocable undertaking:
(a) not to vote in favour of the Whitewash Resolution;
(b) to vote in favour of Resolutions 2 and 3; and
(c) not to take up any of his Open Offer Entitlement under the Open Offer,
in respect of his own (or, as applicable, his connected persons') beneficial
holdings of Existing Ordinary Shares together totalling 40,000 Existing
Ordinary Shares, representing in aggregate 0.07 per cent. of the Existing
Ordinary Shares.
17.3 Phoenix, a member of the Concert Party, has:
(a) given an irrevocable undertaking to:
(i) vote or, where applicable, to procure the casting of votes by its
connected persons (as defined in section 252 of the Act), in favour of
Resolutions 2 and 3;
(ii) not to vote in favour of the Whitewash Resolution; and
(iii) not to take up any of its Open Offer Entitlement under the Open
Offer,
in respect of its own (or, as applicable, his connected persons') beneficial
holdings of Existing Ordinary Shares together totalling 16,257,323 Existing
Ordinary Shares, representing in aggregate 29.58 per cent. of the Existing
Ordinary Shares; and
(b) contractually agreed with Numis Securities, as the Company's agent, to
subscribe as a Firm Placee for 8,765,554 New Ordinary Shares at the Issue
Price pursuant to the Placing and as a Conditional Placee for up to 8,110,944
additional New Ordinary Shares also at the Issue Price pursuant to the
Placing, subject to the clawback under the Open Offer.
17.4 The Firm Placees, other than Phoenix, have each given an irrevocable
undertaking:
(a) to vote in favour of the Resolutions; and
(b) not to take up any of their respective Open Offer Entitlement under
the Open Offer,
in respect of their own (or, as applicable, their respective connected
persons') beneficial holdings of Existing Ordinary Shares together totalling,
in aggregate, 23,627,280 Existing Ordinary Shares, representing in aggregate
42.99 per cent. of the Existing Ordinary Shares.
17.5 Phoenix has entered into a relationship agreement dated 22 June 2016
with the Company and Numis Securities (the "Relationship Agreement"),
conditional on Admission occurring. The purpose of the Relationship Agreement
is to ensure that, for so long as Phoenix holds 25 per cent. or more of the
issued voting share capital of the Company, the relationship between the
Company and Phoenix is appropriately regulated between them to ensure that,
amongst other things, (a) the Group will be capable at all times of carrying
on its business independently of Phoenix (and/or its associates) and (b) all
transactions, arrangements, relationships and arrangements entered into
between Phoenix (and/or its associates) and the Group will only be made on an
arm's length basis and on normal commercial terms.
18. Actions to be taken
18.1 Please check that you have received, together with the Circular, a Form
of Proxy for use in respect of the General Meeting and, if you are a
Qualifying Non-CREST Shareholder, an Application Form for use in connection
with the Open Offer.
General Meeting
18.2 Whether or not you propose to attend the General Meeting in person, you
are urged to complete, sign and return your Form of Proxy in accordance with
the instructions printed thereon as soon as possible, but in any event so as
to be received, by post or, during normal business hours only, by hand, by the
Registrar, Capita Asset Services, PXS 1, 34 Beckenham Road, Beckenham, Kent
BR3 4TU, by no later than 9.00 a.m. on 6 July 2016 (or, in the case of an
adjournment of the General Meeting, not later than 48 hours before the time
fixed for the holding of the adjourned meeting (excluding any part of a day
that is not a Business Day)). If you are posting your completed Form of Proxy
in the UK, you may do so using the reply-paid card printed on the reverse of
the Form of Proxy.
18.3 Appointing a proxy in accordance with the instructions set out above
will enable your vote to be counted at the General Meeting in the event of
your absence. The completion and return of the Form of Proxy will not prevent
you from attending and voting at the General Meeting, or any adjournment
thereof, in person should you wish to do so.
Open Offer
18.4 If you are a Qualifying Non-CREST Shareholder you will have received an
Application Form which gives details of your entitlement under the Open Offer
(as shown by the number of Open Offer Entitlements allocated to you). If you
wish to apply for Open Offer Shares under the Open Offer (whether in respect
of your Open Offer Entitlement or both your Open Offer Entitlement and any
Excess Open Offer Entitlement), you should complete the accompanying
Application Form in accordance with the procedure for application set out in
Part 3 of the Circular and on the Application Form itself.
18.5 If you are a Qualifying CREST Shareholder and do not hold any Existing
Ordinary Shares in certificated form, no Application Form is enclosed with the
Circular and you will receive a credit to your appropriate stock account in
CREST in respect of the Open Offer Entitlements representing your entitlement
under the Open Offer except (subject to certain exceptions) if you are an
Overseas Shareholder who has a registered address in, or is a resident in or a
citizen of a Restricted Jurisdiction. Applications by Qualifying CREST
Shareholders for Excess Open Offer Entitlements in excess of their Open Offer
Entitlements should be made in accordance with the procedures set out in Part
3 of the Circular, unless you are an Overseas Shareholder. Shareholders
should note that Excess Open Offer Entitlements will not be subject to
Euroclear's market claims process. Qualifying CREST Shareholders claiming
Excess Open Offer Entitlements by virtue of a bona fide market claim are
advised to contact the Receiving Agent to request a credit of the appropriate
number of entitlements to their CREST account.
18.6 The latest time for applications under the Open Offer to be received is
11.00 a.m. on 7 July 2016. The procedure for application and payment depends
on whether, at the time at which application and payment is made, you have an
Application Form in respect of your Open Offer Entitlements or have Open Offer
Entitlements credited to your stock account in CREST in respect of such
entitlement. The procedures for application and payment are set out in Part 3
of the Circular.
18.7 Qualifying Non-CREST Shareholders are advised to return the Application
Form using the enclosed reply-paid envelope, which can also be used for return
of completed Forms of Proxy. Qualifying CREST Shareholders who are CREST
sponsored members should refer to their CREST sponsors regarding the action to
be taken in connection with the Circular and the Open Offer.
18.8 If you are in any doubt as to what action you should take, you should
immediately seek your own personal financial advice from your stockbroker,
bank manager, solicitor, accountant or other independent professional adviser
duly authorised under the FSMA if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial adviser.
19. Overseas Shareholders
It is the responsibility of any person receiving a copy of the Circular, the
Open Offer Entitlements and/or the Application Form outside of the United
Kingdom to satisfy himself/herself as to the full observance of the laws and
regulatory requirements of the relevant territory in connection therewith,
including obtaining any governmental or other consents which may be required
or observing any other formalities required to be observed in such territory
and paying any other issue, transfer or other taxes due in such territory.
Such persons should consult their professional advisers as to whether they
require any governmental and/or other consents or need to observe any other
formalities to enable them to take up their entitlements. Persons (including,
without limitation, nominees and trustees) receiving the Circular, the Open
Offer Entitlements and/or the Application Form should not, in connection with
the Placing and Open Offer, distribute or send them into any jurisdiction when
to do so would, or might, contravene local securities laws or regulations. Any
person who does forward the Circular into any such jurisdictions should draw
the recipient's attention to the contents of Part 3 of the Circular regarding
Overseas Shareholders. If you are an Overseas Shareholder, it is important
that you read that part of the Circular.
20. Recommendations
20.1 Shareholders should note that if the Resolutions are not passed by
Shareholders at the General Meeting, the Placing and Open Offer and Waiver
will not proceed and that, as explained in paragraph 4 above, the Company will
not receive the full amount of the anticipated proceeds of the fundraising.
Without the full anticipated proceeds of the Placing and Open Offer, the
consequences described at paragraph 4 of this announcement will apply and
which include that the Company is expected to be unable to comply with one or
more covenants that are in place under the terms of its Existing Bank
Facility, may find itself unable to prepare accounts on a going concern basis
and the Board will need to consider further external bank finance and/or other
alternative sources of financing which may or may not be forthcoming.
20.2 The Directors consider that the Placing and Open Offer are in the best
interests of the Company and Shareholders as a whole. Accordingly, the
Directors recommend that Shareholders vote in favour of the share authority
resolutions (Resolutions 2 and 3) at the General Meeting as they intend to do
in respect of their entire holdings which amount to interests in 82,325
Ordinary Shares, representing approximately 0.15 per cent. of the existing
issued ordinary share capital of the Company.
20.3 The Independent Directors, who have been so advised by the Company's
financial adviser, Numis Securities, consider the terms of the Placing and
Open Offer and Waiver to be fair and reasonable and in the best interests of
Independent Shareholders and of the Company as a whole. In providing its
advice to the Independent Directors, Numis Securities has taken into account
the Independent Directors' commercial assessments. Accordingly, the
Independent Directors recommend that the Independent Shareholders vote in
favour of the Whitewash Resolution (Resolution 1) at the General Meeting as
they intend to do in respect of their entire holdings which amount to
interests in 42,325 Ordinary Shares, representing approximately 0.08 per cent.
of the Existing Ordinary Shares.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Open Offer Record Date 5.00 p.m. on 20 June 2016
Existing Ordinary Shares marked 'ex-entitlement' by the London Stock Exchange 8.00 a.m. on 22 June 2016
Announcement of the Placing and Open Offer, the date of the Circular and of the posting of the Circular, Application Forms and Forms of Proxy 22 June 2016
Open Offer Entitlements and Excess Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders 8.00 a.m. on 23 June 2016
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements and Excess Open Offer Entitlements from CREST 4.30 p.m. on 1 July 2016
Latest time and date for depositing Open Offer Entitlements and Excess Open Offer Entitlements into CREST 3.00 p.m. on 4 July 2016
Latest time and date for splitting Application Forms (to satisfy bona fide market claims in relation to Open Offer Entitlements only) 3.00 p.m. on 5 July 2016
Last time and date for receipt of completed Forms of Proxy 9.00 a.m. on 6 July 2016
Last time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of the relevant CREST instructions (as appropriate) 11.00 a.m. on 7 July 2016
General Meeting 9.00 a.m. on 8 July 2016
Results of General Meeting and the Placing and Open Offer expected to be announced through a Regulatory Information Service 8 July 2016
Admission and commencement of dealings in the New Ordinary Shares on AIM expected to commence 8.00 a.m. on 11 July 2016
Expected date for CREST accounts to be credited with New Ordinary Shares in uncertificated form 11 July 2016
Expected date for dispatch of definitive share certificates in respect of New Ordinary Shares to be issued in certificated form by 19 July 2016
Each of the times and dates in the table above is indicative only and may be
subject to change. If any of the details contained in the timetable above
should change, the revised times and dates will be notified by means of an
announcement through a Regulatory Information Service. References to times in
this announcement are to Greenwich Mean Time ("GMT") unless stated otherwise.
The timetable above assumes that the Resolutions are all passed at the General
Meeting without adjournment.
Note:
If you have any questions on how to complete the Form of Proxy and, in the
case of Qualifying Non-CREST Shareholders, the Application Form, please
contact the Registrars, Capita Asset Services, on +44 (0)371 664 0321. Calls
are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international
rate. The helpline is open between 9.00 a.m. - 5.30 p.m., Monday to Friday
excluding public holidays in England and Wales. Please note that Capita Asset
Services cannot provide any financial, legal or tax advice and calls may be
recorded and monitored for security and training purposes.
The ISIN code for the Existing Ordinary Shares and, following Admission, the
New Ordinary Shares will remain GB00B01CZ652.
The issue of, Admission and commencement of dealings in the New Ordinary
Shares on AIM are conditional on, amongst other things, the passing of the
Resolutions at the General Meeting. Neither the Placing nor the Open Offer
will proceed if Admission does not occur.
PLACING AND OPEN OFFER STATISTICS
Number of Existing Ordinary Shares in issue at the date of the Circular 54,953,574
Issue Price per New Ordinary Share 27 pence
Number of New Ordinary Shares being issued pursuant to the Placing and Open Offer 29,629,630
Number of Placing Shares being issued to Firm Placees pursuant to the Placing 21,518,686
Maximum number of Placing Shares being issued to Conditional Placees pursuant to the Placing (i) 8,110,944
Maximum number of Open Offer Shares being issued pursuant to the Open Offer (ii) 8,110,944
Enlarged Share Capital 84,583,204
Number of Placing Shares being issued to Firm Placees as a percentage of the Enlarged Share Capital 25.44%
Maximum number of Placing Shares being issued to Conditional Placees as a percentage of the Enlarged Share Capital (i) 9.59%
Open Offer Shares as a percentage of the Enlarged Share Capital (ii) 9.59%
New Ordinary Shares as a percentage of the Enlarged Share Capital 35.03%
Gross proceeds of the Placing to Firm Placees £5,810,045.22
Maximum gross proceeds of the Placing to Conditional Placees (i) £2,189,954.88
Maximum gross proceeds of the Open Offer (ii) £2,189,954.88
Gross proceeds of the Placing and Open Offer £8,000,000.10
Expected market capitalisation of the Company on Admission at the Issue Price £22,837,465.08
(i) Subject to clawback under the Open Offer
(ii) Subject to the Open Offer being taken up in full
This information is provided by RNS
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