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REG - Roadside Real Estate - Partial sale of CSS shareholding

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RNS Number : 3486G  Roadside Real Estate PLC  01 October 2024

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.

 

Roadside Real Estate plc

 

("Roadside" or the "Company")

 

Partial sale of Cambridge Sleep Sciences shareholding for £8.5m and

Payment of CSS Bonus to Loan Note holders

 

 

Roadside (AIM: ROAD) is pleased to announce that it has signed an
unconditional share purchase agreement to sell a further 1,000 shares in its
subsidiary, Cambridge Sleep Sciences ("CSS"), for £8,500 per share to CGV
Ventures 1 Ltd. ("CGV") (the "Transaction"). The consideration of £8.5
million implies a significant increase in value to the Company's retained
shareholding in CSS.

 

The consideration becomes payable at the earlier of 30 November 2024 or on
receipt of delivery of CSS's first production run of Smart Pillows. Roadside
intends to use the proceeds from the Transaction to reduce the Company's debt
and a further announcement will be made following receipt of the proceeds of
the Transaction.

 

In addition, CGV has agreed to pay a further £1.5 million of contingent
consideration to Roadside, conditional on CSS receiving dispatch notices for,
in aggregate, 25,000 smart pillows for dispatch on or before 11.59 pm on 31
January 2025.

 

About CGV

CGV is a US-based Venture Capital fund which specialises in taking minority
positions in innovative healthcare companies. CGV last invested in CSS in
April 2024 at a price of £7,500 per CSS share. Following completion of the
Transaction, CGV will have a total stake of 20.0% in CSS.

 

About CSS

In the period ended 30 September 2023, CSS achieved revenue of £0.013
million, a loss before tax of £0.496 million and CSS's gross assets were held
by Roadside at a total carrying value of £0.46 million, (net of intercompany
positions).

 

On 11 September 2023, the Company announced that it was evaluating the best
corporate setting to maximise shareholder value from its investment in
CSS. The Board continues to explore the potential for a trade sale of CSS or
other forms of divestment, but there can be no certainty that any transaction
will ultimately be made nor on its value.

 

CSS Bonus to Loan Note holders

On 23 April 2024 Roadside, announced that it had completed the issue of £9.0
million principal amount of secured loan notes, ("2026 Loan Notes"). Roadside
has now agreed with 2026 Loan Note holders, that they may exchange the 25%
cash CSS Bonus payable by Roadside under the 2026 Loan Note for ordinary
shares in CSS. Each £50,000 Loan Note has received two ordinary shares in CSS
(previously held by Roadside) in exchange for the cash bonus payable. This has
resulted in the transfer of 360 CSS shares from Roadside to Loan Note holders.

 

The CSS Bonus being paid in CSS shares rather than cash constitutes a change
to the terms of the original Loan Note agreement and side letter originally
entered into and announced on 23 April 2024 and is therefore deemed a Related
Party Transaction under Rule 13 of the AIM Rules for Companies.

 

The Loan Note holders consist of, inter alia, Tarncourt, a company ultimately
controlled by Charles Dickson and the Dickson Family and Charles Dickson
subscribed directly for Loan Notes in an individual capacity. Charles Dickson
is Executive Chairman of Roadside and a Director of the Company. Accordingly,
the amendment to the Loan Note agreement and side letter constitutes a related
party transaction under Rule 13 of the AIM Rules for Companies. The
independent Directors, having consulted with the Company's nominated adviser,
Cavendish Capital Markets Limited, consider that the terms of the transaction
are fair and reasonable insofar as the Company's shareholders are concerned.

 

Effect on Roadside

Upon completion of the Transaction and the transfer of the shares pursuant to
the CSS Bonus, Roadside's shareholding in CSS will reduce from 61.4% to 47.8%.

 

Following completion of the Transaction and the transfer of the shares under
the CSS Bonus, Roadside will own less than 50.0% of the equity in CSS and so
the remaining Roadside stake in CSS will now be recognised as an investment in
Roadside's accounts.

 

The carrying value of the retained investment will be derived from the value
of the Transaction and is therefore expected to generate a P&L profit.
This remains subject to audit and a further announcement will be made in due
course.

 

Charles Dickson, Executive Chairman, said:

"Whilst the Company is now focused on roadside real estate, we are delighted
with the progress that CSS and its management team have made. We welcome CGV's
decision to increase its stake in CSS and we continue to evaluate the right
corporate setting for CSS to reach its full potential."

 

 

- Ends -

 

 

 For more information
 Roadside Real Estate plc

 Charles Dickson, Executive Chairman

 c/o Montfort

 Cavendish Capital Markets Limited (Nomad and Joint Corporate Broker)           +44 (0)20 7220 0500

 Carl Holmes / Abigail Kelly (Corporate Finance)

 Tim Redfern (ECM)

 Stifel Nicolaus Europe Limited (Financial Adviser and Joint Corporate Broker)  +44 (0)20 7710 7600

 Mark Young

 Jonathan Wilkes-Green

 Catriona Neville

 Montfort

 Olly Scott                                                                     +44 (0)78 1234 5205

 Georgia Colkin                                                                 +44 (0)75 4284 6844

 

About Roadside

Roadside is a real estate business focused on building and scaling a
high-quality portfolio of modern roadside retail assets, including modern EV
charging infrastructure.

 

About Cambridge Sleep Sciences Ltd

Cambridge Sleep Sciences Ltd, is a legacy Life Sciences investment in which
Roadside Real Estate plc holds a 47.8% interest. CSS develops technology which
improves natural sleep. Using the principles of neuroscience and cutting-edge
technology to enhance brain activity during sleep, its innovative solutions
aim to improve health, wellbeing and enhance quality of life.

 

Its SleepEngine® technology has been developed and refined over a decade by
a team of researchers, scientists, sound engineers and medical experts. This
unique technology produces sounds which emulate the waves created by the brain
during sleep cycles. The sleep sounds guide the user's brain through the
sequence of healthy sleep cycles, helping them fall asleep and achieve the
quality of sleep they need in a consistent and optimal way.

 

Find out more at: www.cambridgesleepsciences.com
(http://www.cambridgesleepsciences.com/)

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