TIDMEPO
RNS Number : 8882M
Earthport PLC
19 October 2016
19 October 2016
Earthport plc
("Earthport" or the "Company")
Amendment to CVR Deed
Earthport (AIM: EPO.L), the global leader in cross-border
payments, is pleased to announce it has reached an agreement with
the committee representing the interests of the Contingent Value
Right ("CVR") holders from the 2013 acquisition of Baydonhill plc
("CVR Committee"), on the terms of an amendment (the "Amendment")
to the CVR Deed Poll, dated 18 September 2013 ("Original
Agreement").
The Original Agreement set out the rights of those Baydonhill
shareholders which accepted the alternative to the cash offer (the
"Earnout Offer") for the acquisition of Baydonhill. The Earnout
Offer comprised 4.80 pence in cash and one CVR for each Baydonhill
share held. A total of 49,177,912 CVRs are currently
outstanding.
Under the terms of the Original Agreement:
- Baydonhill shareholders who opted for the Earnout Offer were
eligible to receive an earnout payment ("the CVR Entitlement")
following the conclusion of the three-year earnout period, ended 30
June 2016
- The CVR Entitlement was to be determined by a formula
dependent on the aggregate free-cash-flow generated by Baydonhill
during the Earnout Period, as specified in the Original
Agreement
- In aggregate, the CVR Entitlement was to be no less than a
minimum of GBP1.0 million (to be paid entirely in Earthport
ordinary shares ("Earthport Shares") at a rate of 0.097 Earthport
Shares per CVR held, at a fixed price per Earthport Share of 21.24
pence), and no greater than a maximum of GBP4.2 million (to be paid
70% in Earthport Shares at a rate of 0.281 Earthport Shares per CVR
held, at a fixed price per Earthport Share of 21.24 pence and 30%
in loan notes ("Loan Notes")). The Loan Notes bear interest at a
rate of 1% per annum and are redeemable one day and six months from
the date of issue
The Amendment has been agreed by Earthport and the CVR Committee
in response to the impact of the February loss at Baydonhill ("Loss
Incident"), as announced on 25 February 2016 (see RNS 1396Q), in
accordance with the terms of the Original Agreement. Both parties
have agreed that:
a. The aggregate free-cash-flow figure used to calculate the
current CVR Entitlement will bear a partial impact of the GBP5
million Baydonhill loss resulting from the Loss Incident; and
b. CVR holders would have the opportunity to receive an
additional payment ("Additional Entitlement") in the event of any
potential insurance and/or legal recovery related to the Loss
Incident greater than an agreed threshold of GBP2,639,004. There
would be no additional entitlement if the recovery is below this
amount
The Amendment is structured as follows:
- The amended CVR Entitlement shall be GBP2,295,400, to be paid as follows:
o A maximum of GBP135,935 by the issue of Loan Notes to the CVR
holders; and
o A minimum of GBP2,159,465 payable by the issue of at least
10,797,671 Earthport Shares, at an average issue price of 20.00p
(with the maximum of GBP2,295,400 payable by the issue of
11,710,103 Earthport shares, at an average price of 20.00p)
o The final mix of Loan Notes and Earthport Shares, as well as
the resulting average issue price, will be determined following the
formal acceptance and elections of CVR holders, to be completed no
later than 8 days following this announcement
- In the event of an insurance and/or legal recovery in respect
to the Loss Incident, greater than the agreed amount of
GBP2,639,004, the CVR holders will be eligible to receive an
additional entitlement, up to a maximum of GBP1,923,297 to be
paid:
o 40% by the issue of Loan Notes; and
o 60% by the issue of Earthport Shares at 21.24p per Earthport
Share
- The Amendment is subject to approval by way of a written
resolution from holders of not less than two thirds of the CVRs.
Ekwienox Limited, which holds 92% of the CVRs, has already signed a
written resolution approving the Amendment, meaning that the
Amendment has been duly approved under the terms of the Original
Agreement
- All Earthport Shares issued pursuant to the terms of the
Amendment will rank pari passu in all respects with the existing
shares in issue
As a result of the Amendment, approximately GBP700,000 in cash
will be returned to Earthport from an escrow account established
and funded for meeting its obligations under the Original
Agreement. This results in a pro forma cash balance of GBP15.1
million for fiscal year ended 30 June 2016. The Board of Directors
of Earthport has concluded that the Amendment is in the best
interests of its shareholders.
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
For further information, please contact:
Earthport plc 020 7220 9700
Hank Uberoi, Chief Executive Officer
Simon Adamiyatt, Chief Financial Officer
Newgate 020 7653 9848
Bob Huxford / Helena Bogle
Panmure Gordon (Nominated Adviser and Joint Broker) 020 7886 2500
Dominic Morley / Fabien Holler / Charles Leigh-Pemberton
N+1 Singer (Joint Broker) 020 7496 3000
Mark Taylor / James White
Shore Capital (Joint Broker) 020 7408 4090
Bidhi Bhoma/ Toby Gibbs
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLLFIAIVLTLIR
(END) Dow Jones Newswires
October 19, 2016 02:00 ET (06:00 GMT)
Earthport (LSE:EPO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Earthport (LSE:EPO)
Historical Stock Chart
From Apr 2023 to Apr 2024