MPS Minorplanet

 

TIDMMPS 
 
RNS Number : 9948L 
Minorplanet Systems PLC 
14 May 2010 
 
 
14 May 2010 
 
 
 
  Minorplanet Systems plc ("Minorplanet" or the "Company") and its subsidiaries 
                                  (the "Group") 
 
 
Acquisition out of administration of business and certain assets of Minorplanet 
                          Limited by MPS 2010 Limited 
 
 
Further to the announcement of 22 April 2010, the Board of Minorplanet announces 
that MPS 2010 Limited ("MPS 2010"), a newly formed subsidiary of Minorplanet, 
has today signed an agreement to acquire out of administration the UK business 
and certain assets of the Company's UK subsidiary, Minorplanet Limited, together 
with all of the Group's Intellectual Property Rights ("IPR") (the 
"Transaction"). As a consequence of the Administrators' appointment the winding 
up petition initiated by HMRC against Minorplanet Limited has been suspended. 
 
Key terms of the Transaction 
 
·      Agreement signed for the disposal of the UK business from Minorplanet 
Limited to MPS 2010, including certain assets and IPR for a cash consideration 
of GBP2.7 million and the assumption of a GBP0.3 million loan, previously 
provided by Mr Terry Donovan, the Group's Chief Executive; 
·      MPS 2010 is funded by a GBP3.0 million loan and capital from DigiCore 
International Holdings BV ("DigiCore"), which includes GBP0.3m to be provided 
for working capital (the "Loan"). The consideration paid by MPS 2010 will be 
used to repay the secured and unsecured creditors of Minorplanet Limited to the 
extent possible pursuant to the provisions of the Insolvency Act 1986; 
·      MPS 2010 is 75% owned by Minorplanet and 25% owned by DigiCore; 
·      Terry Donovan and Carolanne Hurley, Chief Executive and Operations 
Director of the Group, will also be the directors of MPS 2010 and DigiCore will 
have the right to nominate one member to the board of MPS 2010; 
·      The Loan, which is guaranteed by the Company and secured on the shares of 
MPS 2010, bears interest at 5% per annum and is due for repayment on 14 November 
2010. The interest can be accrued and added to the outstanding balance of the 
Loan; 
·      MPS 2010 can make early repayments of the Loan in full or in part without 
incurring penalty fees; 
·      The Company and MPS 2010 may jointly elect, prior to the repayment date, 
to convert all or part of the outstanding Loan to new ordinary shares in the 
Company ("new Ordinary Shares") at a price of 12p per new Ordinary Share. The 
issue of new Ordinary Shares will be subject to shareholder and regulatory 
approvals; and 
·      On full repayment of the Loan (either in cash or through the issue of new 
Ordinary Shares in the Company) to DigiCore, DigiCore's 25% interest in MPS 2010 
reverts to the Company such that the Company would at that point hold 100% of 
MPS 2010. 
 
In the year ended 31 August 2009 Minorplanet Limited accounted for c.40% of the 
Group's turnover and generated pre tax losses of GBP2.5 million. The overseas 
operations of the Group will continue to have rights to use all IPR by way of a 
royalty free perpetual licence. 
 
 
Benefits of the Transaction 
 
DigiCore is a wholly owned subsidiary of DigiCore Holdings Limited, which is 
listed on the Johannesburg Stock Exchange and has a market capitalisation of 
c.R718 million (c.GBP64 million). DigiCore specialises in the research, design, 
development, manufacture, sales and support of technologically advanced GPS/GSM 
fleet management and vehicle tracking solutions. 
 
The support of DigiCore in the establishment of MPS 2010 has provided immediate 
financial stability for Minorplanet, which has faced significant financial 
problems that have severely limited the Group's ability to sell and raise lease 
finance. 
 
DigiCore's involvement in MPS 2010 is expected to bring wider commercial 
benefits to both businesses across all geographies. It combines the strengths of 
Minorplanet in the UK SME market with its customer service and software 
competence together with DigiCore's commercial presence and established position 
in the corporate market. 
 
It provides both companies with the potential to create a significantly larger 
telematics platform across Europe and be well positioned to take advantage of 
the opportunities that this is likely to bring. 
 
 
Risks associated with the Transaction 
 
MPS 2010 will need to repay or re-finance the Loan before 14 November 2010. 
Alternatively, the Company and MPS 2010 can jointly elect to repay the Loan in 
full together with any interest accrued but not paid by issuing new Ordinary 
Shares at a price of 12p per new Ordinary Share. Consequently, DigiCore could 
end up owning in excess of 30% per cent of the enlarged issued share capital of 
the Company. The level of shareholding is dependent on the level of debt and 
accrued interest outstanding under the Loan on repayment. The issue of new 
Ordinary Shares would be subject to shareholder and regulatory approvals. 
 
In certain circumstances, related primarily to the solvency of the Company and 
MPS 2010, DigiCore may have the right to decide not to accept the repayment of 
the Loan in the form of new Ordinary Shares. The Loan is guaranteed by the 
Company. Should the Group not be in a position to repay, re-finance or settle 
the Loan in full by issue of new Ordinary Shares by the due date, then DigiCore 
would be in a position to enforce its rights as a secured lender. 
 
Related Party Transaction 
 
The transfer of Mr Terry Donovan's loan from Minorplanet Limited to MPS 2010 is 
a Related Party Transaction for the purpose of AIM Rule 13.  The Directors 
consider, having consulted with Shore Capital and Corporate Limited, the 
Company's Nominated Adviser, that the terms of the related party transaction are 
fair and reasonable insofar as the Company's shareholders are concerned. 
 
 
Terry Donovan, Chief Executive of Minorplanet, said: 
"This is a positive development for the Group given the economic backdrop. We 
appreciate Digicore's assistance and recognition of the inherent value of 
Minorplanet's major subsidiary, the value of the customer base and its 
experience in providing telemetry solutions. DigiCore is a leading international 
vehicle tracking provider and we believe their commitment to MPS 2010 offers an 
opportunity to maximise our business within the UK and across mainland Europe." 
 
Nick Vlok, Chief Executive of DigiCore Holdings Limited, added: 
"Minorplanet is a long established business within the telematics sector with 
considerable experience and expertise. We hope this is the start of a 
relationship that we can develop further for our mutual commercial benefit by 
taking advantage of growing demand for tracking solutions in the UK and mainland 
Europe." 
 
 
+--------------------+-------------+----------------------------------+ 
| Minorplanet        |        Tel: |                    0113 346 7777 | 
| Systems plc        |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Terry Donovan,     |                 terry.donovan@minorplanet.com  | 
| Chief Executive    |                                                | 
+--------------------+------------------------------------------------+ 
| Richard Hopkin,    |                 richard.hopkin@minorplanet.com | 
| Finance Director   |                                                | 
+--------------------+------------------------------------------------+ 
|                    |             |              www.minorplanet.com | 
+--------------------+-------------+----------------------------------+ 
|                    |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Shore Capital &    |        Tel: |                    020 7408 4090 | 
| Corporate Ltd      |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Anita Ghanekar     |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Edward Mansfield   |             |                                  | 
+--------------------+-------------+----------------------------------+ 
|                    |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Rawlings Financial |        Tel: |                    01653 618 016 | 
| PR Limited         |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Catriona Valentine |             | catriona@rawlingsfinancial.co.uk | 
+--------------------+-------------+----------------------------------+ 
|                    |             |      www.rawlingsfinancial.co.uk | 
+--------------------+-------------+----------------------------------+ 
|                    |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| BDO LLP            |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Administrators of  |             |                                  | 
| Minorplanet        |             |                                  | 
| Limited            |             |                                  | 
+--------------------+-------------+----------------------------------+ 
| Charlotte Freeman  |        Tel: |                    020 7893 3590 | 
+--------------------+-------------+----------------------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCEAKSLFAFEEFF 
 

Minorplanet Systems (LSE:MPS)
Historical Stock Chart
From Apr 2024 to May 2024

Minorplanet Systems (LSE:MPS)
Historical Stock Chart
From May 2023 to May 2024