Abal Group PLC Update, Proposed Transaction and RPT (9755N)
September 27 2019 - 6:30AM
UK Regulatory
TIDMABAL
RNS Number : 9755N
Abal Group PLC
27 September 2019
27 September 2019
Abal Group Plc
("Abal" or "the Company")
Update, Proposed Transaction and Related Party Transaction
Introduction
Abal announces that it has entered into a conditional share sale
and purchase agreement (the "Agreement") to acquire the entire
issued and to be issued share capital of Supply@ME S.r.l.,
("Supply@ME").
The proposed transaction, the principal terms of which are
summarised below under the heading "Terms of the Agreement", would,
because of the relative sizes of the Company and Supply@ME,
constitute a reverse takeover of the Company for the purpose of
Rule 14 of the AIM Rules for Companies (the "AIM Rules"). In
addition, because of the relationships with certain persons in
relation to both the Company and Supply@ME, the proposed
transaction would constitute a related party transaction by the
Company for the purpose of Rule 14 of the AIM Rules.
The Company also proposes to undertake a placing of new ordinary
shares to raise new monies to provide additional funding to cover
the costs of the proposed transaction and to provide working and
development capital to the Company following the proposed
transaction's completion.
Details of Supply@ME
Supply@ME has developed an innovative, proprietary, digital
system which underpins a fintech platform that enables customer
companies to carry out "inventory monetisation" transactions by
transferring their unsold stock of goods to Supply@ME. This allows
customers to strengthen their balance sheets while maintaining the
availability of the stock of such goods so as to continue to sell
them to their end customers.
Supply@Me has its headquarters in Milan and it intends to build
a presence in London. It is also the intention that its services
will be rolled out into other European countries in due course.
Supply@Me's chief executive officer, Alessandro Zamboni, is a
regulatory and digital models specialist. The intention is that he
will become the Company's chief executive officer on completion of
its acquisition of Supply@Me.
Terms of the Agreement
The Agreement, which was entered into on 26 September 2019,
provides for the Company to acquire the entire issued and to be
issued share capital of Supply@ME from the sellers for a
consideration to be settled entirely by the issue of new ordinary
shares in the Company. These new ordinary shares will be issued at
a price of 0.6756 pence per share, being the volume weighted
average price of an Abal ordinary share over the 5 business days
preceding the date on which its shares were suspended from trading
on AIM. No cash or other consideration will be payable by the
Company. The value of the consideration to be paid, that is to say
the number of new ordinary shares to be issued by Abal to the
sellers of Supply@ME, will be linked and referable to the terms of
the proposed placing to be undertaken by the Company and is
currently therefore uncertain.
The Agreement is conditional on a number of matters, including
completion of the proposed placing, shareholders' approval and
completion of all necessary regulatory permissions, and the
admission of the entire issued and to be issued (in respect of the
Acquisition and the proposed placing) ordinary share capital of the
Company to the Official List (standard segment) of the UK Listing
Authority (the "Standard List") and to trading on the Main Market
of London Stock Exchange Plc, for which application is expected to
be made in due course. There can be no assurance that all or any of
the conditions to the Agreement will be satisfied and accordingly
there can be no assurance that the Agreement will complete in
accordance with its terms or at all.
Regulatory disclosures
Reverse Takeover
The proposed acquisition of Supply@ME, relative to the net
assets, market capitalisation and turnover of the Company, exceeds
100% of class tests contained in the AIM Rules and accordingly
comprises a reverse takeover for the purpose of Rule 14 of the AIM
Rules. The proposed transaction will therefore be subject to
Shareholders' approval. A notice of general meeting to obtain such
approval will be contained in a prospectus to be published in due
course.
Related Party Transaction - The Avant Garde Group
The AvantGarde Group is interested in 92.2% of Supply@ME's
issued share capital. Dominic White is a director of Eight Capital
Partners PLC which is interested in 22.61% of the Company's
ordinary shares. Dominic White is indirectly interested in 42% of
the issued share capital of The Avant Garde Group and is therefore
a related party of the Company in accordance with AIM Rule 13.
Consequently, the proposed acquisition will be subject to, inter
alia, agreement from that Company's independent director, Simon
Charles, in consultation with the Company's nominated adviser, WH
Ireland Limited, that the final terms of the transaction, once they
are agreed, are fair and reasonable so far as shareholders are
concerned.
Related Party Transaction - Epsion Capital
Epsion Capital Limited has been appointed as the placing agent
to the Company. John Treacy, a director of the Company, is also a
director of Epsion Capital Limited. John Treacy is interested in
30% of the share capital of Epsion Capital Limited. Eight Capital
Partners PLC, which is interested in 22.61% of the Company's
ordinary shares, is a 70% shareholder of Epsion Capital Limited.
Therefore in accordance with AIM Rule 13, John Treacy and Eight
Capital are each regarded as related parties and the transaction
with Epsion Capital constitutes a related party transaction. Having
consulted with the Company's nominated adviser, WH Ireland Limited,
the independent director, Simon Charles, considers the terms of
Epsion Capital Limited's appointment are fair and reasonable so far
as shareholders are concerned.
Accounts for year ended 31 March 2019
In respect of the company's financial statements for the
financial ended 31 March 2019, these will be published after 30
September 2019, and in conjunction with an update in respect of the
potential transaction referred to above.
Trading in the Company's shares on AIM was suspended on 6 August
2019. It is currently anticipated that trading in the Company's
shares will not resume until the transaction with Supply@Me is
completed and the Company has been successfully admitted to the
Standard List.
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
Enquiries:
Abal plc Tel: +44 (0)7717 436384
Simon Charles
WH Ireland NOMAD and Broker Tel: 0117 945 3471
Mike Coe / Chris Savidge
Peterhouse Capital (Joint broker) Tel: 020 7469 0936
Lucy Williams / Duncan Vasey
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END
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