REG-Clear Leisure Plc: Business Update <Origin Href="QuoteRef">CLPC.L</Origin>

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07/12/2017 07:05

7 December 2017

Clear Leisure Plc

(“Clear Leisure”, “the Group” or “the Company”)

Business Update

Recent Events

The past two months have been especially challenging for the Company’s
management; as they must have been frustrating for shareholders.

On 10 October 2017, through no fault of the Company, the Company’s then
nominated adviser, ZAI Corporate Finance Limited had its status as a Nominated
Advisor removed. As the Company had not confirmed a replacement nominated
adviser by 19 October 2017, AIM temporarily suspended trading in the
Company’s shares.

On the same day, the Ivrea Court in Turin, announced on its website, that it
had found in favour of a petition by the Court Prosecutor to wind up Clear
Leisure’s Italian subsidiary, Mediapolis srl. Despite the original claim
against Mediapolis, which triggered the petition having been settled by the
Company, the Court, surprisingly, elected not only to continue with the
petition but also found in favour of the prosecutor. Following this, on 21
November 2017, the Company announced that having received and carefully
studied the formal judgment, the Company and Mediapolis jointly appealed the
Court’s decision.

On 17 November 2017, the Company was very pleased to announce that it had
appointed SP Angel as nominated adviser and joint broker, as a consequence of
which, trading in the Company’s ordinary shares recommenced on the same day.

Investment Portfolio

GeoSim Systems Ltd (“GeoSim”)

Clear Leisure has a 4.53% shareholding in GeoSim, a company which develops
very sophisticated 3D modeling software.  The value of this investment was
written-off in the 2014 annual accounts. Clear Leisure has now been advised
that the most recent round of fundraising by GeoSim took place at a pre-money
valuation in excess of US$11 million, corresponding to a valuation for Clear
Leisure’s stake of US$667,487(or approximately £500,000).

Currently GeoSim has management and R&D teams based in Tel Aviv, Israel, where
it has 15 employees. In Vancouver, Canada it has a team of three people. The
production centers are in India & Poland employing a further 15 people.

It is currently undergoing a round of funding as follows: an internal fund
raising with existing shareholders is being completed at a valuation of US$15
million pre-money and a roadshow to attract new investors is at a valuation of
over US$20 million pre-money.

Geosim’s new 3D model of city of Vancouver has been released and a short
demo can be found at:  http://new.geosimmovies.com.

Mediapolis

On 24 November 2017, subsequent to the winding up ruling by the Ivrea Court
and the tabling of the joint appeal by Clear Leisure and Mediapolis, a Court
hearing took place to determine the process for the auction of the land over
which Clear Leisure holds a first charge.

The receiver challenged some of the Company’s claims on the technical nature
of the first charge, however the receiver did not dispute the first charge
itself. The receiver therefore agreed to proceed with an auction without
restarting the auction procedure, which could have delayed the disposal of the
land by more than 12 months.

The Court ruled in favour of the receiver’s request, a decision which the
Company and its legal advisors support because, notwithstanding a successful
appeal against the winding up decision, it makes more imminent the recovery of
the asset or the €3.86 million valuation of the Court appointed surveyor.

Ondaland

The Company continues to pursue a solution with the management of T.L.T S.a.s,
owner of the Ondaland waterpark in Northern Italy, which recognises the
substantial investment made by Clear Leisure’s subsidiary, Sipiem SpA, in
T.L.T.

The Company remains optimistic of reaching a mutually beneficial solution
which will result in Clear Leisure securing a substantial stake in T.L.T.

The waterpark is a popular summer destination for Italians living in north
east Italy and there are plans to create an all year family oriented theme
park facility, using the existing empty building comprising of 7,500 square
meters of space erected in 2012.

For the fiscal year ended 31 October 2017, which includes the peak summer
season, T.L.T recorded revenues of €2.9 million (£2.5 million) generating
an EBITDA of nearly 30% (approximately £750,000). No dividend has been
declared as T.L.T’s debt position is such that the balance sheet will
require substantial restructuring.

Debt Reduction

During the past 18 months, the Company has reduced Group debt by approx. €10
million (£8.8 million) at a cost to the Group of under €2 million
(approximately £1.75 million) including securing a prior charge over
Mediapolis.  This has been achieved through negotiating discounts with
various Italian banks and creditors on the face value of debt averaging 80%.
It is the Company’s intention to continue with this policy which has
resulted in a considerable improvement in the Group balance sheet and
reduction in debt servicing payments.

Most recently, the Company began discussions with two Clear Leisure
bondholders on discounted advance payment for cash and shares on nearly €2
million of bonds outstanding, with maturity of 15 December 2018. While there
is no guarantee on a successful outcome of the negotiations, the climate of
the negotiations is positive.

Legal Claims being made by the Company

Since its appointment just over two years’ ago, the Board has undertaken a
major and ongoing investigation into the status of the Company’s
investments. While priorities had to be assigned on investments which required
immediate action, in depth analyses on recovered documents for other
investments continued and now the Company is in a position to file two legal
claims for an approximate combined value of £2.5 million. The Company, as
advised by its lawyers, is currently unable to disclose the names of the
defendants at this stage. For the sake of clarity, no former director of Clear
Leisure is involved in these two claims.

The first claim relates to an investment into an Italian subsidiary regarding
serious misrepresentations about the company’s accounts, which were used as
the primary basis for the investment, and on the day-by-day management of the
investment itself by the former owner, then a manager of the subsidiary. A
complaint for criminal offences has been filed with the prosecutor of the
relevant Italian jurisdiction and a claim for damages will be approved by
Clear Leisure, the controlling shareholder, at the subsidiary shareholders
meeting, in the next few weeks. The amount of the claim is estimated in the
region of €1.7million (£1.5 million).

The second claim relates to rights owned by Clear Leisure on the sharing of
the final upside on exit by the buyer of a formerly disposed UK based
portfolio investment. A Letter before Action has been served to the defendant,
for a settlement of £700,000 against a total claim in the region of £1.2
million. No settlement has been reached to date, hence the Company’s
intention to start legal procedures as soon as practical.

The outcome of the two aforementioned claims is not guaranteed and, even if
the legal action is successful, there is no guarantee that the defendants will
have funds to meet the financial demands which will follow.

The Company advises that there are further potential claims relating to other
Italian investments, in particular ORH S.p.A. (trading as Ora Hotel Group),
which remains under investigation.

Eufingest SA

Clear Leisure’s largest shareholder, Eufingest SA (“Eufingest”), which
has been the dominant provider of financial support to the Company during the
challenging last few years, has confirmed to the Company its continued support
for the Board and its intention to maintain its shareholding in the Company at
just below 30%, by converting into shares part of its €2.4 million
convertible loan each time a new share issue takes place.

Eufingest, as the largest shareholder, remains fully supportive of the
Board’s efforts to realise value from its investments.

Loan Facility

The Board is pleased to announce that the Company has entered into an
unsecured convertible loan facility agreement (the Facility") with Eufingest.

Under the Facility, Eufingest provides €50,000 at an interest rate of 2.5
per cent per annum.  The Facility is repayable on 31 December 2017 and the
proceeds will be used for working capital purposes.

The Company may repay the Facility early at any time without penalty. At any
time before 31 December 2017, Eufingest may convert the outstanding balance of
the Facility into Shares at the rate of 1 pence per Share.

Eufingest is the beneficial holder of more than 10 per cent of the ordinary
share capital of the Company.  Eufingest is therefore a "related party" for
the purposes of the AIM Rules.

The Directors of the Company (each of whom is independent from Eufingest),
having consulted with the Company's Nomad, consider the terms of the
transaction to be fair and reasonable insofar as shareholders are concerned.

Future Funding

Notwithstanding the possibility of generating funds from asset disposals or
successful debt recovery, the Company remains reliant on debt and equity
placements in order to sustain its day to day activities, including
acquisition of subsidiary debt at discount, funding of litigations and
development of existing investments.

Francesco Gardin, CEO and Executive Chairman of Clear Leisure, commented,

“Since mid-May, following the winding up demand on Mediapolis by the Ivrea
Court Prosecutor and more recently the loss of the licence by our former
Nomad, with the urgent need to select and appoint a new Nomad, the Company’s
Board has been forced to focus on a number of unexpected events. While this
has inevitably consumed substantial time allocation and prioritisation on
these matters, all other business has been carried out in parallel.

“We wish to thank our shareholders for their continuing patience and look
forward to reporting further, positive results in 2018.”

-ends-

For further information please contact:

Clear Leisure Plc                                       
                                         +39 335 296573
Francesco Gardin, CEO and Executive Chairman

SP Angel Corporate Finance (Nominated Adviser & Joint Broker)        
+44 (0)20 3407 0470
Jeff Keating / John Mackay/ Charlie Bouverat                      
                                            

Peterhouse Corporate Finance (Joint Broker)                      
              +44 (0) 20 7469 0935
Lucy Williams / Heena Karani

Leander (Financial PR)                                    
                                     +44 (0) 7795 168 157
Christian Taylor-Wilkinson

About Clear Leisure Plc

Clear Leisure plc (AIM: CLP) is an AIM listed investment company with a
portfolio of companies primarily encompassing the leisure and real estate
sectors mainly in Italy. The focus of management is to pursue the monetisation
of all of the Company’s existing assets, through selected realisations,
court-led recoveries of misappropriated assets and substantial debt-recovery
processes. For further information, please visit, www.clearleisure.co.uk



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