RNS Number:4659U
Hamworthy plc
22 November 2005
Press Release 22 November 2005
Hamworthy plc
("Hamworthy" or "the Group")
Proposed Placing of 6,140,351 Placing Shares at 285p per share
Notice of Extraordinary General Meeting
Hamworthy plc (AIM:HMY), a leading designer, developer and manufacturer of
advanced marine and offshore fluid handling systems, announces today that it is
to raise #17.5 million, before expenses, by way of a Placing of 6,140,351 new
Ordinary Shares at a price of 285p per Placing Share. For reasons described
below, it is proposed that the Placing be carried out on a non pre-emptive
basis. The Placing is conditional on, inter alia, Shareholder approval at an
Extraordinary General Meeting convened for 12.00, midday on 16 December 2005 at
the offices of Abchurch Communications Limited, 100 Cannon Street, London EC4N
6EU.
The funds raised in the Placing will:
* support growth in the Group's order book and allow it to undertake
additional organic growth opportunities
* together with the planned extension of banking facilities provide a
flexible mix of bank bonds and own liquidity to finance contract working
capital
* demonstrate Hamworthy's financial strength to customers and suppliers
* allow for acquisitive growth supported by proceeds
Commenting on the Placing, Gordon Page CBE, Chairman of Hamworthy plc, said:
"This successful placing enables the Group to take the business to the next
stage in its development against a background of significant growth since its
admission to AIM and a continuing very strong order intake."
For further information:
Hamworthy plc
Kelvyn Derrick, Chief Executive Tel: +44 (0) 1202 662 600
kderrick@hamworthy.com
Paul Crompton, Financial Director Tel: +44 (0) 1202 662 600
pcrompton@hamworthy.com www.hamworthy.com
Collins Stewart Limited
Chris Wells / Mark Connelly / Stewart Wallace Tel: +44 (0) 20 7523 8350
Corporate Finance
Media enquiries:
Abchurch
Henry Harrison-Topham / Ariane Comstive Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com
Collins Stewart, which is authorised and regulated in the United Kingdom by The
Financial Services Authority, is nominated adviser and broker to the Company,
and will not be responsible to anyone other than the Company for providing the
protections afforded to clients of Collins Stewart or for providing advice in
relation to the matters contained in this announcement or any matter concerning
the Placing or Admission. The responsibilities of Collins Stewart as nominated
adviser and broker to the Company are and will be owed solely to the London
Stock Exchange.
This announcement does not constitute or form part of an offer to sell or an
invitation to subscribe for, or the solicitation of an offer to buy or subscribe
for, any securities. This summary should be read in conjunction with the full
text of the announcement below.
The Directors accept responsibility for the information contained in this
announcement. To the best of the knowledge and belief of the Directors (who
have taken all reasonable care to ensure that such is the case), such
information is in accordance with the facts and does not omit anything likely to
affect the import of such information.
Not for release, publication or distribution in whole or in part in or into the
United States, Canada, Australia, Japan or the Republic of Ireland.
The following information is an excerpt from the circular to Shareholders (the "
Circular") posted today. Copies of the Circular are available at the offices of
Collins Stewart Limited (9th Floor, 88 Wood Street, London EC2V 7QR) upon
request. Definitions used in the Circular apply in this announcement unless the
context otherwise requires.
Introduction
The Board announced today that Hamworthy proposes, subject to certain
conditions, to raise #17.5 million, before expenses, by way of a Placing of
6,140,351 new Ordinary Shares at a price of 285p per Placing Share. For reasons
described below, it is proposed that the Placing is carried out on a non
pre-emptive basis. The Placing is conditional on, inter alia, Shareholder
approval at an Extraordinary General Meeting convened for 12.00, midday on 16
December 2005. In addition, the authorities necessary for the allotment of the
Placing Shares pursuant to the Placing will be sought at the EGM. Further
details of the Placing are set out below in this announcement.
Application will be made to the London Stock Exchange for the Placing Shares to
be admitted to trading on AIM. Subject to, inter alia, Admission, it is
expected that dealings in the Placing Shares will commence on 19 December 2005.
Background
Hamworthy is a leading designer, developer and manufacturer of advanced marine
fluid handling systems for ships and offshore oil and gas facilities. It has a
significant market share in most of its nine product areas. The Group serves
international markets and customers which, typically, are commercial and naval
shipbuilding yards, ship owners and oil and gas companies. The Group has
created a strong market position through developing leading edge technologies
and focusing on markets which offer growth potential, particularly from
increasing oil and gas transportation. In addition, the Group's markets are
often underpinned by increasing environmental, noise and safety legislation and
regulation.
Hamworthy has its headquarters in Poole, Dorset and the Group also has design,
development and production facilities in the UK, Norway, Denmark, Singapore and
a modern assembly plant in China. It employs approximately 690 people worldwide.
Hamworthy was founded in 1911 and has an established name in the world marine
equipment engineering business. The Company, formerly owned by Powell Duffryn
plc, grew out of the combination of several businesses, most notably Svanehoj
International A/S in 1993 and the ships' equipment companies of the Norwegian
group, Kvaerner, in 1998. In 2000, a company controlled by Nikko Principal
Investments Limited financed the purchase of Powell Duffryn plc and since then,
the Company has disposed of a number of lower growth activities and has
developed new products and technologies for the fluid handling systems market.
The Group opened an assembly facility at Suzhou, China in November 1998 which
was replaced with a larger and more modern facility in 2001.
The Company was admitted to trading on AIM on 20 July 2004. Since then, the
Group has focused on organic growth and has seen a strong increase in orders.
The order book has grown from #98 million, as at 31 May 2004, to #171 million,
as at 30 September 2005.
Reasons for the Placing
Hamworthy's business is characterised by individual contract sizes ranging from
less than #10,000 in value for more simple equipment to the installation of
large engineering systems with a value of in excess of #10 million. A
significant proportion of the Group's recent growth in order intake has been in
the part of the business with the largest value contracts, notably its gas
systems business. The order book for gas systems has grown almost four fold in
the last twelve months to #101 million, as at 30 September 2005. These
contracts typically have equipment delivery times of over one year.
Whilst the payment terms applicable to individual contracts vary, the working
capital financing of larger orders is provided by a combination of the Company's
own funds and progress stage payments received from the customer. Customers
typically require that these progress payments are matched by bank guarantees
given to the customer in exchange for the cash received by the Group. The
Company therefore needs both sufficient balance sheet strength and the necessary
bank bonding facilities in order to complete these orders.
The variability in payment terms and bank guarantee requirements together with
the increased number of large contracts entered into by members of the Group
make forecasting the exact mix of working capital requirements for future orders
difficult to determine with precision. The Directors believe that a combination
of increased banking facilities and a strengthened balance sheet, resulting from
funds raised by the Placing, would allow the Group the financial flexibility to
take advantage of other available business opportunities and thereby both
support growth in the Group's order book and allow it to win and undertake
future orders.
The Directors also believe that the strengthening of the Group's balance sheet
will provide a more convincing demonstration to its customers and suppliers that
it has adequate financial strength to accept and execute a growing order book of
larger contracts.
In addition to its focus on organic growth since flotation, the Company also
proposes to grow through selective acquisition. The Company is aware of a
number of companies which represent potential acquisition opportunities although
to date no discussions have advanced beyond a preliminary stage. Given the
potential for growth that exists both organically and by acquisition, while the
principal purpose of the Placing is to support organic growth, part of the
Placing proceeds may also be used to finance the expansion of the Group by
acquisition, should the appropriate opportunity arise.
The Placing
Under the Placing, the Company is proposing to issue 6,140,351 new Ordinary
Shares at the Placing Price. The Placing is underwritten by Collins Stewart.
The Company will raise gross proceeds of #17.5 million (or approximately #16.9
million net of expenses). The Placing Price represents a discount of
approximately 7.3 per cent. to the closing middle market price of an Ordinary
Share on 21 November 2005 (the latest practicable date prior to the printing of
the Circular).
The Placing Shares represent approximately 16.6 per cent. of the Company's
issued share capital immediately prior to the Placing.
As at the date of this announcement, the Company has an authorised share capital
of #3,000,000 divided into 60,000,000 Ordinary Shares of which 37,000,000 fully
paid Ordinary Shares are in issue. Following completion of the Placing, the
issued share capital of the Company will increase to 43,140,351 fully paid
Ordinary Shares and the Placing Shares will represent approximately 14.2 per
cent. of the Enlarged Share Capital.
The Placing Shares have not been and will not be offered generally to
Shareholders, whether on a pre-emptive basis or otherwise. Following the
introduction of the Prospectus Rules on 1 July 2005 and the consequential
increase in costs and the time required for AIM companies to raise new equity
capital on a pre-emptive basis, the Directors believe that the Placing is the
most cost effective and expeditious method of raising new equity capital. The
Placing Shares have been conditionally placed with institutional and other
investors.
The Placing Shares will rank in full for all dividends declared, made or paid
after the date of this document, save that they will not rank for the interim
dividend of 1.8p per Ordinary Share declared today in respect of the period
ended 30 September 2005 and otherwise will rank pari passu with the Existing
Ordinary Shares.
The Placing is conditional, inter alia, upon:
* the approval of the Resolutions at the EGM;
* the Placing Agreement becoming unconditional in all respects and not
having been terminated in accordance with its terms; and
* Admission.
The Placing is to be effected on behalf of the Company by Collins Stewart, on
the terms of the Placing Agreement. Completion of the Placing is subject to
certain conditions including those listed above.
The Placing Agreement contains certain warranties given by the Company with
respect to its business and the Group and certain matters connected with the
Placing. In addition, the Company has given indemnities to Collins Stewart in
connection with the Placing and Collins Stewart's performance of services in
relation to the Placing. The Placing Agreement may be terminated by Collins
Stewart at any time before Admission for, inter alia, a material breach by the
Company of the terms of the Placing Agreement or the warranties contained in it,
or on the occurrence of certain specified events or of certain force majeure
events.
Application will be made to the London Stock Exchange for the Placing Shares to
be admitted to trading on AIM. It is expected that Admission will become
effective and dealings in the Placing Shares will commence on 19 December 2005.
No application has been or is being made for the Placing Shares to be admitted
to any other recognised investment exchange.
Banking facilities
The Company's principal financing and banking facilities are provided by
Barclays Bank plc ("Barclays"). The facilities currently comprise, inter alia:
i. a term loan facility of up to #9 million; and
ii. a revolving and related ancillary facility comprising, inter alia, up to
#3.5 million by way of overdraft facility, up to #150 million of spot
and forward foreign exchange transactions and #50 million by way of
letters of credit, bonds, guarantees and indemnities.
Barclays have indicated their willingness, subject to the execution of a
facility variation letter, to increase the facility for letters of credit,
bonds, guarantees and indemnities, over the next nine months, from #50 million
to #80 million. The Directors expect that written agreement will be finalised
within the next month.
Working Capital
The Directors are of the opinion that, after taking into account the net
proceeds of the Placing and the Company's bank facilities referred to above, the
Company will have sufficient working capital for its present requirements, that
is for at least 12 months from the date of Admission.
Current trading and prospects
Trading since the half year has been satisfactory with the Group's order book
now standing at over #190 million. In October 2005, Hamworthy won a contract
with a value in excess of #17 million for the supply of an additional three
shipsets of liquefied natural gas reliquefaction systems to Hyundai and in
November won a further contract for three shipsets of liquefied petroleum gas
reliquefaction systems, with a value of in excess of #12 million, from the same
yard.
Also in October 2005, the Group obtained an order worth in excess of #1 million
to retrofit a Royal Caribbean ship with advanced wastewater treatment systems.
This is significant for Hamworthy as it is the first wastewater order from this
customer and positions the Group well for further retrofit and newbuild
opportunities.
The Group has been more successful than hitherto expected in growing its order
book. This and continued prospects for higher demand for its products allows
the Board to look forward with confidence over the medium term.
Directors' shareholdings
The interests of the Directors (all of which are beneficial) in the issued share
capital of the Company which are required to be notified by each Director to the
Company pursuant to sections 324 and 328 of the Act or which are required to be
entered in the register maintained under section 325 of the Act or which are
interests of persons connected with the Directors within the meaning of section
346 of the Act, the existence of which is known or which could, with reasonable
diligence, be ascertained by a Director, as at the date of this document and as
they will be following the Placing, are as follows:
Current Interests Interests after Placing
Number of Percentage of Number of Percentage of
Ordinary current issued Ordinary enlarged issued
Director Shares share capital Shares share capital
P Crompton 27,523 0.07 27,523 0.06
KG Derrick 90,000 0.24 90,000 0.21
AJ Frost 50,000 0.14 50,000 0.12
GF Page 18,500 0.05 18,500 0.04
JN Wilding 36,700 0.10 36,700 0.09
Extraordinary General Meeting
An Extraordinary General Meeting of the Company, notice of which is set out at
the end of this document, is to be held at Abchurch Communications Limited, 100
Cannon Street, London EC4N 6EU at 12.00, midday on 16 December 2005. At the
EGM, the Resolutions will be proposed. In order for the Directors to allot and
issue the Placing Shares, they require authorisation by Shareholders under
section 80 of the Act. As it is proposed that the Placing Shares be allotted
for cash other than on a pre-emptive basis, authority from Shareholders is also
needed to disapply the statutory provisions of section 89 of the Act. Whilst
the Directors have such authority in relation to 1,850,000 new Ordinary Shares
pursuant to a resolution passed at the Company's last Annual General Meeting,
the number of Placing Shares is in excess of this amount and additional approval
is, therefore, required for their allotment and issue. The Placing is,
therefore, conditional, inter alia, on the Resolutions being passed without
amendment in any material respect. These authorities will be in substitution
for any existing authorities subsisting at the date of the Resolutions.
The purpose of seeking the approval of Shareholders to the taking of authority
under section 80 of the Act and the disapplication of section 89 of the Act, in
excess of that required for the Placing, is to make available to the Directors a
reasonable margin of authorised but unissued share capital for allotment
following the Placing. The Directors believe that this is in the best interests
of the Company and the Shareholders in order to preserve their flexibility to
take advantage of further opportunities as they arise. The Directors have no
present intention to exercise such authority.
Expected timetable of events
Latest time and date for receipt of Forms of 12.00, midday on 14 December 2005
Proxy
Extraordinary General Meeting 12.00, midday on 16 December 2005
Admission of the Placing Shares to AIM 19 December 2005
CREST stock accounts credited for Placing Shares 19 December 2005
Definitive share certificates for Placing Shares
despatched (as applicable) 28 December 2005
Definitions
The following definitions apply throughout this announcement unless the context
requires otherwise:
"Admission" the admission to trading on AIM of the Placing Shares becoming
effective in accordance with the AIM Rules
"AIM" the market of that name operated by the London Stock Exchange
"AIM Rules" the rules applicable to AIM issued by the London Stock
Exchange from time to time
"Board" or "Directors" the directors of the Company whose names are set out in the
Circular
"Collins Stewart" Collins Stewart Limited
"Company" or "Hamworthy" Hamworthy plc
"Companies Act" the Companies Act 1985 as amended
"CREST" the United Kingdom paperless share settlement system of which
CRESTCo Limited is the Operator (as defined in the
Uncertificated Securities Regulations 2001)
"EGM" or "Extraordinary the extraordinary general meeting of the Company to be held on
General Meeting" 16 December 2005, or any adjournment thereof
"Enlarged Share Capital" the Existing Ordinary Shares and the Placing Shares
"Existing Ordinary Shares" the 37,000,000 Ordinary Shares in issue at the date of this
announcement
"Group" Hamworthy and its subsidiaries
"London Stock Exchange" London Stock Exchange plc
"Ordinary Shares" ordinary shares of 5p each in the Company
"Placing Agreement" the conditional agreement dated 22 November 2005 between
Collins Stewart and the Company relating to the Placing, a
summary of which is set out in this announcement
"Placing" the conditional placing by Collins Stewart of the Placing
Shares pursuant to the Placing Agreement
"Placing Shares" 6,140,351 new Ordinary Shares to be issued pursuant to the
Placing
"Placing Price" 285p per Placing Share
"Resolutions" the resolutions to be proposed at the EGM, as set out in the
notice of EGM at the end of the Circular
"Shareholders" holders of Existing Ordinary Shares
This information is provided by RNS
The company news service from the London Stock Exchange
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