TIDMALLG
RNS Number : 5944F
All Leisure Group PLC
13 November 2015
For Immediate Release 13 November 2015
All Leisure Group plc
("All Leisure" or the "Company")
Proposed sale and leaseback of the Hebridean Princess vessel and
related assets
Circular to Shareholders
Notice of General Meeting
The Company today announces that its wholly-owned subsidiary,
All Leisure Holidays Limited ("ALH"), has entered into conditional
agreements for the proposed sale and leaseback of the Hebridean
Princess cruise vessel and certain related assets to, and for the
sharing of customer data with, HP Shipping, a new company which
will, on or prior to completion of the Proposed Transaction, be
wholly owned by a syndicate of private investors led by Roger
Allard, the Chairman of, and substantial shareholder in, All
Leisure. Completion of the Proposed Transaction is conditional,
inter alia, on Shareholder approval.
The Assets subject to the Proposed Transaction are presently
owned by ALH and comprise the cruise vessel known as MV Hebridean
Princess, presently owned and operated by ALH's Hebridean Island
Cruises division, together with all the fixtures and fittings and
other assets on board and on shore which relate to the Vessel. The
Hebridean Princess vessel is a five star cruise vessel which can
carry 50 passengers. Cruises typically operate around the west
coast of Scotland and the Outer Isles, occasionally visiting
Northern Ireland, Norway and the Channel Islands.
The Proposed Transaction will provide important additional
liquidity to the Group, whilst making the Group less asset
intensive and still retaining the business of the Hebridean Island
Cruises division and the positive cash flow it generates. The
Independent Directors believe that the operations and performance
of this division will not be affected by the Proposed Transaction,
and also note that all scheduled cruises of the division are
expected to go ahead as planned.
Summary of the Proposed Transaction
-- Proposed sale of the Assets for cash consideration of GBP2.9
million (plus VAT if applicable).
-- HP Shipping will lease the Assets back to ALH for a fixed fee
of GBP500,000 per annum (plus VAT if applicable) under a lease term
expiring on 31 December 2023.
-- ALH will also agree to share ALH data relating to current,
prospective and former customers of ALH or the Vessel with HP
Shipping during the period of the lease for cash consideration of
GBP100,000 (plus VAT if applicable).
-- The Hebridean Island Cruises division contributed
approximately GBP2.1 million to Group net profit for the year ended
31 October 2014.
-- The Assets had a net book value of approximately GBP1.9 million as at 30 April 2015.
-- ALH will have a call option to repurchase the Assets for two
years from the date of completion of the Proposed Transaction under
terms disclosed later in this announcement.
-- The Group would benefit from an immediate cash injection of
GBP3 million (before expenses) and will retain the operational
division and the associated cashflows of the profitable Hebridean
Island Cruises business.
-- The proceeds of the Proposed Transaction will strengthen the
Group's balance sheet and improve liquidity.
-- The expected date of completion for the Proposed Transaction is 30 November 2015.
The Proposed Transaction constitutes a fundamental change of
business under Rule 15 of the AIM Rules. The Proposed Transaction
also constitutes a substantial property transaction under section
190 of the Companies Act because Roger Allard, Nigel Jenkins and
Philip Ovenden will, on or prior to Completion, be together
interested in 63.5 per cent. of the equity share capital of HP
Shipping. Accordingly, the Proposed Transaction is conditional
upon, inter alia, approval of the Shareholders at a General
Meeting.
A General Meeting of the Company will therefore be held at 12
noon on 30 November 2015 for Shareholders to approve the
Resolution. A circular, explaining the background to and reasons
for the Proposed Transaction and providing notice of the General
Meeting, will shortly be posted to Shareholders. Copies of the
Circular will shortly be made available on the Company's website
(www.allleisuregroup.com).
The Proposed Transaction constitutes a related party transaction
under Rule 13 of the AIM Rules as HP Shipping, as at the date of
this announcement, is wholly-owned by Roger Allard (a Director and
also a substantial shareholder of the Company, being interested in
37,124,236 Ordinary Shares, representing 60.13 per cent. of the
Company's issued ordinary share capital at the date of this
announcement) and, on or prior to Completion, Roger Allard, Nigel
Jenkins and Philip Ovenden will together be interested in 63.5 per
cent. of the issued share capital of HP Shipping and will therefore
control over 30 per cent. of its voting rights at general meetings.
Accordingly, an independent committee of the board comprising Ian
Smith and Nigel Arthur having consulted with Panmure Gordon, the
Company's Nominated Adviser, consider that the terms of the
Proposed Transaction are fair and reasonable insofar as the
Company's shareholders are concerned.
Expected Timetable
Publication and posting of the 13 November 2015
Circular
Latest time and date for receipt 12.00 noon on
of Forms of Proxy and CREST Proxy 28 November 2015
Instructions for the General
Meeting
General Meeting 12.00 noon on
30 November 2015
Completion of the Proposed Transaction 30 November 2015
References to times in this announcement are to times in London,
England unless otherwise stated. The above times and/or dates may
be subject to change and, in the event of such change, the revised
times and/or dates will be notified to Shareholders by an
announcement through a regulatory information service.
This preceding summary should be read in conjunction with the
full text of this announcement, together with the Circular.
Capitalised terms and expressions in this announcement shall
have the same meanings as those attributed to them in the
Circular.
For further information:
All Leisure Group plc
Roger Allard, Executive Chairman +44 (0) 1858 588 396
Ian Smith, Group Chief Executive Officer +44 (0) 1858 588
396
Nigel Arthur, Chief Financial Officer +44 (0) 1858 588 396
Panmure Gordon (Nominated Adviser and Broker) +44 (0) 20 7886 2500
Andrew Godber / Charles Leigh-Pemberton
Panmure Gordon (UK) Limited, which is authorised and regulated
by the Financial Conduct Authority, is acting for the Company and
for no-one else in connection with the matters set out in this
announcement and will not be responsible to anyone other than the
Company for providing the protections afforded to customers of
Panmure Gordon or for affording advice in relation to the contents
of this announcement or any matters referred to herein.
Proposed sale and leaseback of the MV Hebridean Princess cruise
vessel and certain related assets and sharing of customer data,
approval of substantial property transaction and fundamental change
of business and Notice of General Meeting
1. Introduction
The Company's subsidiary, ALH, has entered into conditional
agreements for the sale and leaseback of the Vessel and certain
related assets to, and for the sharing of customer data with, HP
Shipping, a new company formed by Roger Allard and which, on or
before completion of the Proposed Transaction, will be wholly owned
by the Syndicate. Completion of the Proposed Transaction is
conditional, amongst other things, on Shareholder approval. The
Assets concerned are presently owned by ALH and operated by its
business known as "Hebridean Island Cruises".
Under the terms of the Transaction Documents, it is proposed
that HP Shipping will acquire the Assets for cash consideration of
GBP2.9 million (plus VAT if applicable). ALH will then lease the
Assets back from HP Shipping for a fixed fee of GBP500,000 per
annum (plus VAT if applicable) for a fixed term expiring on 31
December 2023. Pursuant to the Data Sharing Agreement, ALH will
also agree to share the Customer Data with HP Shipping during the
period of the Charter Agreement (subject to termination in
accordance with the Data Sharing Agreement) in return for cash
consideration of GBP100,000 (plus VAT if applicable). ALH will
thereby benefit from an immediate cash injection of GBP3 million
(before expenses) and will retain the operational division and the
associated cashflows of this profitable Business. Additionally, ALH
will realise a reduction in its depreciation expense, following
completion of the proposed sale of the Assets. As explained further
below, ALH will also have the option to repurchase the Assets from
HP Shipping at any time upon not less than 30 days' notice during
the two year period immediately following completion of the
Proposed Transaction, whereupon the Data Sharing Agreement will
terminate. If the Resolution is passed, it is expected that
completion of the Proposed Transaction will occur following the
conclusion of the General Meeting.
The following information explains the background to and reasons
for the Proposed Transaction, explains why the Independent
Directors consider the Proposed Transaction to be in the best
interests of the Company and its Shareholders and why the
Independent Directors unanimously recommend that you vote in favour
of the Resolution to be proposed at the General Meeting, notice of
which is set out at the end of the Circular.
(MORE TO FOLLOW) Dow Jones Newswires
November 13, 2015 02:00 ET (07:00 GMT)
Under Rule 15 of the AIM Rules, the Proposed Transaction is
deemed to be a disposal resulting in a fundamental change in the
business of the Company. It also constitutes a substantial property
transaction under section 190 of the Companies Act because Roger
Allard, Nigel Jenkins and Philip Ovenden will, on or prior to
completion of the Proposed Transaction, be together interested in
63.5 per cent. of the equity share capital of HP Shipping. As a
result, the Proposed Transaction requires Shareholder approval and,
accordingly, is conditional, inter alia, on the approval of
Shareholders at the General Meeting. Under section 190 of the
Companies Act, a company must not enter into any arrangement by
which a director of the company or of its holding company, or a
person connected with such a director, acquires or is to acquire
from the company (directly or indirectly) a substantial non-cash
asset (being an asset whose value exceeds 10 per cent. of the
company's asset value and is more than GBP5,000, or exceeds
GBP100,000) unless the arrangement has been approved by a
resolution of the members of its holding company or is conditional
upon such approval being obtained.
As further detailed in paragraph 2 below, the Proposed
Transaction also constitutes a related party transaction under Rule
13 of the AIM Rules.
2. Background to and reasons for the Proposed Transaction and effect on the Company
As set out in the Company's interim results for the six months
ended 30 April 2015 which were announced on 30 July 2015, trading
conditions for the Group have been under pressure in recent years.
The cruise industry is becomingly increasingly competitive as new
vessels are launched and the capacity within the industry grows.
Consequently the industry is seeing increased levels of price
competition which negatively affects the profitability of the
Group. Geo-political events continue to have an adverse impact on
the business, affecting the appetite of tourists to travel to a
number of destinations and limiting the Group's ability to visit
certain destinations. Furthermore, it was necessary in the first
half of the year to put all three of the Group's cruise vessels
into dry dock, with a resulting annual capital expenditure cost of
approximately GBP4.5 million and a loss of revenue relating to the
lost cruising time of approximately GBP2.5 million. The Group's
cash flows are highly seasonal, with cash at its lowest point in
December to February, and at its highest in the period June to
July.
Against this backdrop, the Board has reviewed the funding
position of the Group with a view to strengthening the Company's
balance sheet and improving liquidity. The Board has explored
various options over the last six months and has determined that
the Proposed Transaction is the best option available to the Group.
The proposed purchaser of the Assets is HP Shipping, a newly
incorporated private limited company which, at the date of this
announcement, is wholly-owned by Roger Allard and which, on or
prior to completion of the Proposed Transaction, will be
wholly-owned by the Syndicate, being a group of private investors
headed by Roger Allard, the Executive Chairman of the Group. The
Assets had a net book value in the Group's most recently published
consolidated balance sheet at 30 April 2015 of approximately GBP1.9
million. Shareholders should note that the Group will retain the
overall Hebridean Island Cruises Business along with its goodwill,
know-how and intellectual property rights (including the names
"Hebridean Island Cruises" and "Hebridean Princess"), subject to
the sharing of Customer Data with HP Shipping and assignment of any
intellectual property rights therein pursuant to the Data Sharing
Agreement.
The AIM Rules provide that each of the Directors, any
substantial shareholder (each being a person who holds any legal or
beneficial interest directly or indirectly in 10 per cent. or more
of a class of shares in the company admitted to trading on AIM),
and an associate of either (including any company in whose equity
shares a substantial shareholder or the Directors collectively are
interested, to the extent that they are or could be able to
exercise or control the exercise of 30 per cent. or more of the
votes to be cast at general meetings of the Company) are related
parties of the Company. The Proposed Transaction constitutes a
related party transaction under Rule 13 of the AIM Rules as HP
Shipping, as at the date of this announcement, is wholly owned by
Roger Allard (a Director and also a substantial shareholder of the
Company being interested in 37,124,236 Ordinary Shares,
representing 60.13 per cent. of the Company's issued ordinary share
capital at the date of this announcement) and on or prior to
completion of the Proposed Transaction, Roger Allard, Nigel Jenkins
and Philip Ovenden will together be interested in 63.5 per cent. of
the issued share capital of HP Shipping and will therefore control
over 30 per cent. of its voting rights at general meetings.
Accordingly, an independent committee of the Board comprising Ian
Smith and Nigel Arthur has been formed to assess the Proposed
Transaction.
An important feature of the Proposed Transaction is that,
pursuant to the terms of the Charter Agreement, ALH will be granted
a call option to re-purchase the Assets at any time in the first 24
months following completion of the Proposed Transaction (and the
Data Sharing Agreement will terminate upon exercise and completion
of this option). ALH will be free to exercise this option at its
discretion, for example, if a more attractive source of finance or
use for the Assets is identified.
The Group's Hebridean Island Cruises Business operates cruises
on the MV Hebridean Princess vessel, a five star cruise vessel
which can carry 50 passengers. Cruises typically operate around the
west coast of Scotland and the Outer Isles, occasionally visiting
Northern Ireland, Norway and the Channel Islands. The cruising
season generally lasts from the beginning of March to mid-November.
The Business has generally delivered a strong level of customer
satisfaction and has commanded a relatively high level of customer
loyalty. The Business continues to perform well, delivering
increasing levels of profitability.
The Proposed Transaction will provide additional liquidity to
the Group, whilst making the Group less asset intensive and still
retaining the Hebridean Island Cruises Business and the positive
cash flow it generates. The Independent Directors believe that the
operations and performance of the Business will not be affected by
the Proposed Transaction, and also note that all scheduled cruises
of the Business are expected to go ahead as planned. The Company
anticipates that it will be able to provide an update on current
trading for the year ended 31 October 2015 before the end of the
calendar year.
3. Principal terms of the Proposed Transaction
Under the terms of the Transaction Documents, ALH (a subsidiary
of the Company) has agreed to sell the Assets to HP Shipping and to
enter into the Data Sharing Agreement for the sum of GBP3,000,000
payable in full in cash on completion of the Proposed
Transaction.
Completion of the Proposed Transaction is conditional, amongst
other things, upon (i) the approval of the Proposed Transaction by
the Shareholders; (ii) the Assets being released from the debenture
dated 15 May 2012 granted by ALH in favour of Lloyds TSB Bank plc
(as was); and (iii) ALH having complied with its obligations under
the Transfer of Undertakings (Protection of Employment) Regulations
2006 in relation to any of its employees affected by the Proposed
Transaction.
The main terms of the Transaction Documents are as summarised
below:-
1. the price to be paid by HP Shipping for its purchase of the
Assets is GBP2,900,000 (plus VAT if applicable) and for the sharing
of the Customer Data is GBP100,000 (plus VAT if applicable) in each
case to be paid to ALH in cash on completion of the Proposed
Transaction;
2. HP Shipping will acquire the Assets free from all claims,
liens, equities, charges, encumbrances or adverse rights of any
description, including reservation of title;
3. the Charter Agreement provides that the Assets will be
chartered by ALH. ALH will be able to continue to trade the
Hebridean Island Cruises Business as a result;
4. the Charter Agreement will be for a fixed term ending on 31
December 2023, subject only to an option during the first 24 months
of the Charter Agreement, in favour of ALH, to repurchase the
Assets from HP Shipping (described in more detail below);
5. ALH will be required to pay an annual fixed fee of GBP500,000
(plus VAT if applicable) per annum on 15th July each year to HP
Shipping in respect of the charter of the Assets;
6. ALH will continue to be responsible for insuring and
maintaining the Vessel but now subject to a minimum insured hull
value of GBP4,000,000 with the Buyer as loss payee;
7. ALH will be required to dry dock the Vessel once every 12
months (in accordance with previous practice) and arrange any
upgrades or replacements to maintain the standard of the Vessel
(fair wear and tear excepted in regard to the vessel itself but
excluded in regard to the fixtures and fittings on board);
8. ALH will have the option to repurchase the Assets from HP
Shipping at any time, upon not less than 30 days' notice, during
the 24 months following completion of the Proposed Transaction, at
a fixed price equal to GBP3,000,000 (plus VAT if applicable) plus a
sum equivalent to interest at 10% per annum from the date of sale
to the date of repurchase (pro rated to the date of repurchase)
plus a fixed fee of GBP150,000 in relation to HP Shipping's costs
and expenses, less the total amounts paid by ALH to HP Shipping
under the Charter Agreement;
9. the Charter Agreement will not be capable of termination by
reason only of the insolvency of ALH or the administration (or
other insolvency event) of ALH provided that ALH is not in default
under the Charter Agreement;
(MORE TO FOLLOW) Dow Jones Newswires
November 13, 2015 02:00 ET (07:00 GMT)
All Leisure Group (LSE:ALLG)
Historical Stock Chart
From Mar 2024 to Apr 2024
All Leisure Group (LSE:ALLG)
Historical Stock Chart
From Apr 2023 to Apr 2024
