REG - Nightcap PLC - Launch of fundraising to raise up to £3.5 million

NightcapAnnouncement

22/05/2024 07:00

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RNS Number : 3656P  Nightcap PLC  22 May 2024

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 WHICH FORMS PART OF DOMESTIC UK
LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR"). IN
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INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS
SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

 

 

22 May 2024

 

Nightcap plc

("Nightcap " or the "Company")

 

Launch of fundraising to raise up to £3.5 million

 

Nightcap (AIM: NGHT), the owner and operator of 46 premium bars, announces
that it is initiating a proposed fundraising of up to £3.5 million, before
expenses, via the issue of up to 70,000,000 new ordinary shares of £0.01 each
in the Company (the "New Ordinary Shares") at a price of five pence per New
Ordinary Share (the "Issue Price") (the "Fundraising").  As part of the
Fundraising, the Company has already raised £0.75 million, before expenses,
through a firm subscription for 15,000,000 New Ordinary Shares (the
"Subscription Shares") at the Issue Price (the "Subscription").

In addition to the Subscription, the Company has received further expressions
of interest in participating in the Fundraising and intends to continue its
fundraising activities in the coming weeks. Further announcements will be made
by the Company in relation to this part of the Fundraising in due course.

In addition to the Fundraising, the Board will consider raising additional
capital, subject to any future potential transactions. The Board is grateful
to investors for their support of its fundraisings over the past year and has
received expressions of interest for significant further conditional
investment support subject to the pricing, terms and conditions of future
potential transactions.

The Company will be convening a general meeting of the Company's shareholders
(the "General Meeting") to grant the Directors the authority to issue and
allot the New Ordinary Shares pursuant to the Fundraising (including the
Subscription Shares) for cash and otherwise than on a pre-emptive basis. A
circular, containing a notice convening the General Meeting, is expected to be
sent to shareholders in due course and a further announcement will be made at
the appropriate time.

The Fundraising (including the Subscription) will be conditional only upon the
passing of the resolutions at the General Meeting and admission of any New
Ordinary Shares to trading on AIM.

Commenting on the Fundraising, Sarah Willingham, Chief Executive Officer of
Nightcap, said:

"We believe that a once in a generation opportunity currently exists in the
late night bar sector to create a substantial market leading group of the most
popular and much loved late night bar concepts. It was always our intention to
position Nightcap as the preferred consolidator in the premium bar sector and
with this Fundraising we intend to continue our efforts to create the UK's
leading bar group.

"A combination of businesses struggling with significant debt from the COVID
period, ongoing macro-economic challenges from the cost-of-living crisis, and
rail strikes have all escalated and accelerated the opportunity for
consolidation, as we see a number of companies from across the sector
considering their future strategic options.

"It is core to our strategy to be present in the conversations that will shape
the late night bar sector in the UK as we approach the next economic cycle,
with a more positive outlook on real wage growth, lower inflation, coupled
with anticipated lower interest rates, which is expected to lead to an
improvement in consumer confidence.

"Over the last 18 months, we have built a robust and professional management
and leadership infrastructure at Nightcap and our team is capable of doubling
the number of bars that it manages without the need for Nightcap to make
significant further investment."

Background to the Fundraising and use of proceeds

Nightcap's strategy, since its IPO on AIM in January 2021, is to become the
leading bar group in the UK through consolidation and organic roll-out.
Nightcap has completed five acquisitions since 2021. The Board believes that
further opportunities will arise in the coming year for further consolidation
of a significant part of the premium bar segment as the sector moves from
incremental M&A activity to a more fundamental shift, as many of the
operators in the sector are going through significant change.

 

The Board believes that its strategy of raising capital incrementally to
satisfy each acquisition has been appropriate for its acquisitions to date.
However, to execute the Company's ambition of creating the UK's leading bar
group, the Board now believes that the Company will benefit from strengthening
its balance sheet, which will, among other things, enable it to be well
positioned strategically when future consolidation opportunities arise.

The Directors intend that the net proceeds of the Fundraising (once completed)
will be used:

·      to take advantage of acquisition opportunities that the Company
expects to identify as a result of the structural changes taking place in the
premium bar sector of the UK hospitality industry;

·      to strengthen the Company's balance sheet; and

·      for general working capital purposes.

Details of the Fundraising and Subscription

The total number of New Ordinary Shares proposed to be issued pursuant to the
Fundraising exceeds the Directors' current authority to issue new Ordinary
Shares for cash on a non-pre-emptive basis. Accordingly, the Fundraising and
the Subscription are conditional on the approval of the Company's
shareholders, at the General Meeting, of resolutions to provide authority to
the Directors to allot New Ordinary Shares in relation to the Fundraising and
the Subscription for cash and otherwise than on a pre-emptive basis.

The Subscription Shares will represent approximately 6.01 per cent. of the
Company's issued share capital, as enlarged by the Subscription.  Assuming
that the maximum number of New Ordinary Shares that may be issued pursuant to
the Fundraising are issued, these New Ordinary Shares will represent
approximately 22.98 per cent. of the Company's issued share capital as
enlarged by the Fundraising.

The Issue Price represents a premium of approximately 30 per cent. to the
mid-market closing price on AIM of 3.85 pence per ordinary share on 21 May
2024, being the latest practicable business day prior to the publication of
this announcement.

Whilst the funds raised pursuant to the Subscription have been conditionally
raised subject to the terms of subscription letters entered into between the
Company and the subscribers, as at the date of this announcement, the total
funding proposed under the Fundraising has not yet been raised and there can
be no certainty that the Fundraising will proceed in line with its proposed
terms or as to the amount that may ultimately be raised pursuant to the
Fundraising. The Fundraising is not being underwritten by any person.  The
Subscription is not conditional on the issue of further New Ordinary Shares
pursuant to the Fundraising (excluding the Subscription Shares). The
obligations of investors pursuant to the Subscription will not be affected if
the Fundraising (excluding the Subscription) is not completed for any
reason.

Admission

Application will be made for the Subscription Shares to be admitted to AIM
("Admission"), which is expected to occur on or before 2 September 2024.  A
further announcement regarding the settlement of the Subscription and
Admission will be made in due course.

 

Contacts:

 

 Nightcap plc

 Sarah Willingham / Richard Haley / Gareth Edwards                           email@nightcapplc.com

 Allenby Capital Limited (Financial Adviser, Nominated Adviser and Broker)   +44 (0) 20 3328 5656

 Nick Naylor / Alex Brearley / Piers Shimwell (Corporate Finance)

 Jos Pinnington / Amrit Nahal / Tony Quirke (Sales and Corporate Broking)    www.allenbycapital.com (http://www.allenbycapital.com/)

 Bright Star Digital (PR)                                                    https://www.brightstardigital.co.uk/

 Pam Lyddon                                                                  +44 (0) 7534 500 829

                                                                             pamlyddon@brightstardigital.co.uk

 

Notice to Distributors

Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended and as this is applied in the United Kingdom ("MiFID II"); (b)
Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593
supplementing MiFID II and Regulation (EU) No 600/2014 of the European
Parliament, as they form part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the new Ordinary Shares
to be issued pursuant to the Fundraising have been subject to a product
approval process, which has determined that such securities are: (i)
compatible with an end target market of retail investors who do not need a
guaranteed income or capital protection and investors who meet the criteria of
professional clients and eligible counterparties, each as defined in MiFID II;
and (ii) eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market Assessment"). The new Ordinary
Shares to be issued pursuant to the Fundraising are not appropriate for a
target market of investors whose objectives include no capital loss.
Notwithstanding the Target Market Assessment, distributors should note that:
the price of the Fundraise Shares may decline and investors could lose all or
part of their investment; the new Ordinary Shares to be issued pursuant to the
Fundraising offer no guaranteed income and no capital protection; and an
investment in the new Ordinary Shares to be issued pursuant to the Fundraising
is compatible only with investors who do not need a guaranteed income or
capital projection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits and risks of
such an investment and who have sufficient resources to be able to bear any
losses that may result therefrom. The Target Market Assessment is without
prejudice to the requirements of any contractual, legal or regulatory selling
restrictions in relation to the Fundraising. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, investors will only be procured
who meet the criteria of professional clients and eligible counterparties. For
the avoidance of doubt, the Target Market Assessment does not constitute: (a)
an assessment of suitability or appropriateness for the purposes of MiFID II;
or (b) a recommendation to any investor or group of investors to invest in, or
purchase, or take any other action whatsoever with respect to the new Ordinary
Shares to be issued pursuant to the Fundraising. Each distributor is
responsible for undertaking its own target market assessment in respect of the
shares and determining appropriate distribution channels.

Forward Looking Statements

This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "anticipates", "expressions of interest",
"targets", "aims", "continues", "expects", "intends", "hopes", "may", "will",
"would", "could" or "should" or, in each case, their negative or other
variations or comparable terminology. These forward-looking statements include
matters that are not facts. They appear in a number of places throughout this
announcement and include statements regarding the Directors' beliefs or
current expectations. By their nature, forward-looking statements involve risk
and uncertainty because they relate to future events and circumstances.
Investors should not place undue reliance on forward-looking statements, which
speak only as of the date of this announcement.

Notice to overseas persons

This announcement does not constitute, or form part of, a prospectus relating
to the Company, nor does it constitute or contain any invitation or offer to
any person, or any public offer, to subscribe for, purchase or otherwise
acquire any shares in the Company or advise persons to do so in any
jurisdiction, nor shall it, or any part of it form the basis of or be relied
on in connection with any contract or as an inducement to enter into any
contract or commitment with the Company.

This announcement is not for release, publication or distribution, in whole or
in part, directly or indirectly, in or into Australia, Canada, Japan or the
Republic of South Africa or any jurisdiction into which the publication or
distribution would be unlawful. This announcement is for information purposes
only and does not constitute an offer to sell or issue or the solicitation of
an offer to buy or acquire shares in the capital of the Company in Australia,
Canada, Japan, New Zealand, the Republic of South Africa or any jurisdiction
in which such offer or solicitation would be unlawful or require preparation
of any prospectus or other offer documentation or would be unlawful prior to
registration, exemption from registration or qualification under the
securities laws of any such jurisdiction.  Persons into whose possession this
announcement comes are required by the Company to inform themselves about, and
to observe, such restrictions.

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America.  This announcement is
not an offer of securities for sale into the United States.  The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.

General

Neither the content of the Company's website (or any other website) nor the
content of any website accessible from hyperlinks on the Company's website (or
any other website) or any previous announcement made by the Company is
incorporated into, or forms part of, this announcement.

Allenby Capital, which is authorised and regulated by the FCA in the United
Kingdom, is acting as nominated adviser to the Company in connection with the
Fundraising. Allenby Capital will not be responsible to any person other than
the Company for providing the protections afforded to clients of Allenby
Capital or for providing advice to any other person in connection with the
Fundraise. Allenby Capital has not authorised the contents of, or any part of,
this announcement, and no liability whatsoever is accepted by Allenby Capital
for the accuracy of any information or opinions contained in this announcement
or for the omission of any material information.

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