TIDMSC.
RNS Number : 9996H
Supercart PLC
19 July 2012
19 July 2012
Supercart plc
("Supercart" or the "Company")
Subscription of 30,000,000 New Ordinary Shares at 2.5 pence per
share and
Issue of 55,656,994 New Ordinary Shares by Capitalisation of
Loan at
2.5 pence per share
Waiver from the provisions of Rule 9 of the Takeover Code
Notice of General Meeting
1. Introduction
Supercart is pleased to announce that it proposes to raise
GBP750,000 from a Subscription of 30,000,000 New Ordinary Shares by
Venture Holdings. The Company will also issue a further 55,656,994
New Ordinary Shares to Venture Holdings for the capitalisation of
certain existing loans from Venture Holdings to Supercart. The New
Ordinary Shares are to be issued at a price of 2.5p per share which
represents a premium of 203 per cent. to the closing mid market
price of 0.825 pence as at 18 July 2012.
Venture Holdings is the Company's largest shareholder and long
term manufacturing partner and has worked closely with the Company
to develop new product ranges and in particular has helped finance
certain of the Company's new moulds. The agreement by Venture
Holdings to capitalise the Loan which has been made to the Company
in the course of its commercial relationship with the Venture
Group, of which approximately GBP1.39m remains outstanding, will
save the Company approximately GBP73,000 in interest payments over
the next twelve months. The Subscription will provide additional
working capital and further strengthen the Company's balance
sheet.
Following the Issue, Venture Holdings' interest in the share
capital of the Company will increase from 48.61 to 67.41 per cent.
of the Enlarged Share Capital. Under the Code, Venture Holdings
would be required to make a general offer to Shareholders for the
whole of the issued share capital of Supercart not already held by
it, unless a waiver of that obligation is approved by Independent
Shareholders by passing the Whitewash Resolution at the General
Meeting. The Subscription and Loan Capitalisation are conditional
upon Shareholder approval, including the Whitewash Resolution being
passed by the Independent Shareholders, at the General meeting to
be held on 6 August 2012.
If the Resolutions are duly passed, it is expected that the New
Ordinary Shares will be admitted to trading on AIM on 7 August
2012.
2. Background to and reasons for the Proposals
The Company's interim results statement for the period ended 31
December 2011 was made on 30 March 2012 in which the Directors
stated that they believed the Company required further equity or
debt funding to meet working capital requirements for the coming
months. Although 2011 was a year of progress, the level of success
was lower than expected. So far in 2012, the European market has
seen reduced demand because of the financial difficulties being
experienced by our distributor Caddie SA. This has contributed to
the diminution of sales in this region. In the Company's other key
markets of South Africa and North America, however, the Company has
seen an increase in unit sales and the Directors remain cautiously
optimistic that the growth trend will continue.
The Company is proposing to raise GBP750,000 (before expenses)
by way of the issue to Venture Holdings of 30,000,000 New Ordinary
Shares in exchange for the Subscription and further to capitalise
the Loan by way of the issue to Venture Holdings of a further
55,656,994 New Ordinary Shares, in each case at the Issue Price of
2.5 pence per New Ordinary Share. In consequence Venture Holdings,
the current holder of 48.61 per cent. of the Existing Ordinary
Shares will, following the Issue, hold 67.41 per cent. of the
Enlarged Issued Share Capital.
The net funds raised of approximately GBP658,000 will be used to
augment the Group's working capital and fund the continuing organic
growth of the business.
The Venture Group has extended various loans to the Group to
finance injection moulds required for certain of the Group's
products. These loans were agreed on normal commercial terms, and
the Group has been paying down these loans in accordance with the
terms of each, and as at today's date some GBP1.39 million remains
outstanding. However the interest and repayment terms do utilise
valuable working capital and the Company is pleased to announce
that Venture Holdings has agreed to convert all of the loans which
remain outstanding into New Ordinary Shares in accordance with the
terms of the Loan Capitalisation and Subscription Agreement. The
Directors estimate that this will result in a saving of some
GBP73,000 in interest payments over the next twelve months. It
should be noted that the Loan comprises three loans, two of which
were initially made between subsidiaries of Venture Holdings and
Supercart; two of the loans are denominated in Euro, and one in
South African Rand. Pursuant to the Loan Capitalisation and
Subscription Agreement, the benefit and the burden of the three
loans have, to the extent not previously transferred, been
transferred to Venture Holdings and Supercart respectively and a
sterling denominated settlement figure agreed based upon prevailing
exchange rates.
The New Ordinary Shares to be issued pursuant to the Proposals
will represent approximately 36.58 per cent. of the Enlarged Issued
Share Capital.
The Subscription and Loan Capitalisation are conditional upon
Shareholder approval of the Resolutions at the forthcoming General
Meeting.
The Issue is not a rights issue nor an open offer and the New
Ordinary Shares will not be offered generally to Shareholders,
whether on a pre-emptive basis or otherwise. The Directors believe
that the considerable extra cost and delay involved in a rights
issue or open offer would not be in the best interests of the
Company in the circumstances.
The Issue Price of 2.5 pence per New Ordinary Shares represents
a premium of 203 per cent. to the closing middle market quotation
for an Ordinary Share of 0.825 pence at the close of business on 18
July 2012, being the business day immediately prior to this
announcement.
The Board considers that the Proposals are in the best interests
of the Company and the Shareholders as a whole.
3. Details of the Proposals
General
The 85,656,994 New Ordinary Shares are to be issued in aggregate
pursuant to both the Loan Capitalisation and the Subscription
representing together approximately 36.58 per cent. of the Enlarged
Issued Share Capital. Of this number, 55,656,994 are to be issued
pursuant to the Loan Capitalisation and will represent
approximately 23.77 per cent. of the Enlarged Issued Share Capital,
while the balance of 30,000,000 will be issued pursuant to the
Subscription and will represent approximately 12.81 per cent. of
the Enlarged Issued Share Capital.
The New Ordinary Shares will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid after the date of completion
of the Proposals.
Conditional on the passing of the Resolutions, application will
be made to the London Stock Exchange for the New Ordinary Shares to
be admitted to trading on AIM. It is expected that such Admission
will become effective and that dealings will commence on 7 August
2012.
Director and Shareholder Interests
Venture Holdings is the Company's largest shareholder and long
term manufacturing partner. Venture Holdings, through P.I.M.
Management Company Inc, is wholly owned by the Larry Winget Living
Trust, of which Larry Winget, Venture Holdings' Non-Executive
Chairman, is the sole beneficiary and trustee.
At the date of this document and following completion of the
Proposals the Directors (and their immediate families and or
persons connected with them (within the meaning of Section 252 of
the Companies Act 2006)) will, so far as the Company is aware, have
the following interests in the Enlarged Issued Share Capital
(without taking into account any shares to be issued on exercise of
outstanding options over Ordinary Shares granted pursuant to the
Company's share option schemes):
Percentage of fully diluted
Percentage of existing issued share capital following the
Name of Director Existing shareholding share capital Proposals
Michael Castledine - Wolfe 9,668,928 6.51% 4.13%
Stephen Wright 2,785,236 1.88% 1.19%
Victor Segal 2,208,792 1.49% 0.94%
Other than the Directors referred to above, as at the date of
this document and following completion of the Proposals, the
Directors are aware of the following interests that are or will be
held directly or indirectly in 3 per cent. or more of the issued
ordinary share capital of the Company:
Percentage
of fully
Percentage New Ordinary diluted
of existing Shares Enlarged share
ordinary issued shareholding capital
Existing share through following following
Name of Shareholder shareholding capital the Proposals the Proposals the Proposals
Venture Holdings 72,186,872 48.61% 85,656,994 157,843,866 67.41%
Charles Stanley
& Co Ltd 18,540,783 12.49% Nil 18,540,783 7.92%
Philip Richards* 12,928,750 8.71% Nil 12,928,750 5.52%
RAB Special Situations
(Master) Fund
Limited 5,436,250 3.66% Nil 5,436,250 2.32%
* Philip Richards' holding in the Company is 12,928,750Ordinary
Shares, representing some 5.52 per cent. of the Enlarged Issued
Share Capital of the Company. RAB Special Situations (Master) Fund
Limited has an interest in 5,436,250 Ordinary Shares, representing
some 2.32 per cent. of the Enlarged Issued Share Capital of the
Company. Phillip Richards was a co-founder of RAB Capital plc and
continues to be an executive director of it.
4. Current trading and prospects
The interim results released on 26 March 2012 outlined that the
Company had seen profits for the first six month period of the
financial period.
Although in a mature market, operations in South Africa continue
to show growth. Unit sales in South Africa are expected currently
to show a 10% increase at the end of the financial year to 30 June
2012. However, the strengthening of the Rand will have an impact in
the consolidated results.
The North American operations have made good progress in
ensuring a balanced mix of products sold. There is currently no
dependency upon any one product in sales to customers. Margins
achieved continue to improve and overall cost efficiencies have
been made.
5. Dispensation from Rule 9 of the Takeover Code
Under Rule 9, any person who acquires an interest (as defined in
the Code) in shares which, taken together with shares in which he
is already interested and in which persons acting in concert with
him have interest, or interests, in shares carrying in aggregate 30
per cent. or more of the voting rights of a company, irrespective
of whether such interest or interests give de facto control, is
normally required to make a general offer to all the remaining
shareholders to acquire their shares.
Similarly, when any person together with persons acting in
concert with him, is interested in shares which in the aggregate
carry not less than 30 per cent. of the voting rights of such a
company but does not hold shares carrying more than 50 per cent. of
such voting rights, a general offer will normally be required if
any further interests in shares are acquired by any such
person.
Any offer under Rule 9 must be in cash and at the highest price
paid during the 12 months prior to the announcement of the offer
for any interest in shares of the Company by the person required to
make the offer or any person acting in concert with him.
Venture Holdings through P.I.M. Management Company Inc, is
wholly owned by the Larry Winget Living Trust, of which Larry
Winget (further information on Larry Winget can be found at Part II
on page 13), Venture Holdings' Non-Executive Chairman, is the sole
beneficiary and trustee.
Venture Holdings currently holds 48.61per cent. of the issued
share capital of the Company.
Venture Holdings will hold 67.41 per cent. of the Enlarged
Issued Share Capital following the completion of the proposed
Proposals.
The Panel has agreed, however, to waive the obligation to make a
general offer that would otherwise arise as a result of the
Proposals, subject to the approval of Independent Shareholders.
Accordingly, the Whitewash Resolution is proposed at the General
Meeting and will be taken on a poll. Venture Holdings will be
precluded from voting on the Whitewash Resolution.
Following completion of the proposed Subscription and Loan
Capitalisation Venture Holdings will hold more than 50 per cent. of
the Company's share capital.
It should be noted that following completion of the Proposals as
Venture Holdings will hold more than 50 per cent. of the Company's
share capital, normally no obligations will arise under Rule 9 from
any further acquisition made by Venture Holdings unless at a future
stage Venture Holdings' interest should fall below 50 per cent. but
remain above 30 per cent., and in certain other limited
circumstances.
6. Intentions of Venture Holdings
Venture Holdings has confirmed its intention that the business
of the Company will be allowed to continue in the same manner as at
present with no intention to relocate the business, or to re-deploy
any of the Company's fixed assets. Venture Holdings has also
confirmed that the existing employment rights, including pension
rights, of all employees of the Company will be maintained.
Venture Holdings has been the Company's manufacturer of all its
South African made products since the commencement of the Company's
operations in South Africa in 1995. The Directors believe this has
been a successful relationship and that Venture Holdings has been
supportive of the Company's global sales effort.
Venture Holdings will be precluded from voting on the Whitewash
Resolution to approve the waiver granted by the Panel of the
obligation under Rule 9 that would otherwise arise on Venture
Holdings to make a general offer to Shareholders under Rule 9.
7. Use of proceeds
The funds raised by the Subscription will be used for further
development and marketing of new products in the remainder of 2012
and beyond and to provide the Company with additional working
capital to finance the Group's expansion.
8. Irrevocable undertakings to vote in favour of the Resolutions
The Company has received irrevocable undertakings to vote in
favour of the Whitewash Resolution from Independent Shareholders
holding 14,662,956 Existing Ordinary Shares in aggregate,
representing approximately 19.2 per cent. of the Ordinary Shares
held by Independent Shareholders.
The Company has received irrevocable undertakings to vote in
favour of the Resolutions (other than the Whitewash Resolution)
from Shareholders holding 86,849,828 Existing Ordinary Shares in
aggregate, representing approximately 58.48 per cent. of the
Existing Ordinary Shares.
9. Circular
A circular has today been posted to Shareholders with a Notice
of General Meeting to approve matters relating to the Proposals and
the Waiver
10. Directors' recommendation
The Directors who have been so advised by Charles Stanley
believe the Proposals to be fair and reasonable and in the best
interests of the Company and further consider the Whitewash
Resolution to be fair and reasonable and in the best interests of
the Independent Shareholders as a whole, and accordingly the
Directors unanimously recommend Independent Shareholders to vote in
favour of the Whitewash Resolution and Shareholders to vote in
favour of the Resolutions generally as they have irrevocably
undertaken to do in respect of their beneficial holdings of
14,662,956 Ordinary Shares in aggregate, representing approximately
9.87 per cent. of the Existing Ordinary Shares.
For further information please contact:
Supercart plc 01732 459898
Chief Executive
Mike Wolfe
Charles Stanley Securities 020 7149 6000
Nominated Adviser and Broker
Russell Cook/Carl Holmes
EXPECTED TIMETABLE OF EVENTS
2012
Latest time and date for receipt of Forms of Proxy for General
Meeting 11.00 a.m. on 2 August
General Meeting 11.00 a.m. on 6 August
Admission effective and dealings commence on AIM 8.00 a.m. on 7
August
in the New Ordinary Shares
STATISTICS
Issue Price 2.5 pence
Number of Ordinary Shares in issue at the date of this document
148,500,000
Number of New Ordinary Shares to be issued pursuant to the
Subscription 30,000,000
Number of New Ordinary Shares to be issued pursuant to the Loan
Capitalisation 55,656,994
Total number of New Ordinary Shares to be issued pursuant to the
Proposals 85,656,994
Percentage of the Enlarged Issued Share Capital represented by
the New Ordinary Shares 36.58%
Estimated gross proceeds of the Issue GBP750,000
Estimated net proceeds of the Issue GBP658,000
Number of Ordinary Shares in issue at completion of the
Proposals 234,156,994
DEFINITIONS
The following definitions apply throughout this announcement and
the Circular unless the context otherwise requires:
"Admission" the admission to trading
on AIM of the 85,656,994
New Ordinary Shares to be
issued pursuant to the Subscription
and the Loan Capitalisation
which is expected to take
place on 7 August 2012
"AIM" the AIM market operated
by the London Stock Exchange
"Charles Stanley" Charles Stanley Securities,
a trading division of Charles
Stanley & Co. Limited
"Code" the City Code on Takeovers
and Mergers, as amended
from time to time
"Company" or "Supercart" Supercart PLC
"Directors" or "Board" the directors of the Company
or any duly authorised committee
thereof
"Enlarged Issued Share the 234,156,994 Ordinary
Capital" Shares in issue following
completion of the Proposals
"Existing Ordinary Shares" any or all of the 148,500,000
Ordinary Shares of 0.4 pence
each in the capital of the
Company in issue at the
date of this document, all
of which are admitted to
trading on AIM
"Form of Proxy" the form of proxy enclosed
with this document for use
by Shareholders at the General
Meeting
"General Meeting" the general meeting of the
Company convened for 11.00
a.m. on 6 August 2012 and
any adjournment thereof
"Group" the Company, its existing
subsidiaries and subsidiary
undertakings
"Independent Shareholders" all Shareholders, other
than Venture Holdings, who
are entitled to vote on
the Whitewash Resolution
"Issue" together the issue of New
Ordinary Shares pursuant
to the Loan Capitalisation
and the Subscription
"Issue Price" 2.5 pence per Ordinary Share
being the price at which
the New Ordinary Shares
are to be issued
"Larry Winget Living the trust of which Larry
Trust" Winget is the sole beneficiary
and trustee and which is
the owner of 100 per cent.
of the issued share capital
of P.I.M. Management Company
Inc, which owns 100 per
cent. of the issued share
capital of Venture Holdings
"Loan" the balance of all outstanding
loans due from the Company
to Venture Holdings in the
aggregate sum of GBP1,391,424.84
(including accrued interest)
"Loan Capitalisation" the capitalisation of the
Loan upon the terms of the
Loan Capitalisation and
Subscription Agreement
"Loan Capitalisation a contract conditional upon
and Subscription Agreement" the passing of the Resolutions
to convert the Loan into
55,656,994 New Ordinary
Shares and for Venture Holdings
to effect the Subscription,
in each case at the Issue
Price as set out in the
Circular
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" the 85,656,994 new Ordinary
Shares to be issued pursuant
to the Issue
"Notice of General Meeting" the notice of General Meeting
set out in the Circular
"Ordinary Shares" ordinary shares of 0.4 pence
each in the capital of the
Company
"Panel" the Panel on Takeovers and
Mergers
"Proposals" the Subscription and Loan
Capitalisation
"Resolutions" the resolutions set out
in the Notice of General
Meeting including the Whitewash
Resolution
"Rule 9" Rule 9 of the Code
"Shareholders" holders of Ordinary Shares
"Subscription" the subscription for 30,000,000
New Ordinary Shares by Venture
Holdings
"Venture Group" the group of companies,
all of which are wholly
owned by the Larry Winget
Living Trust, and including
Venture Holdings
"Venture Holdings" Venture Holdings BV, a company
registered in the Netherlands,
the registered office of
which is at Stravinskylaan
3105, Atrium 7(th) Floor,
107 7ZX, Amsterdam, the
Netherlands
"Whitewash" waiver of the obligation
to make a general offer
to Independent Shareholders
under Rule 9
"Whitewash Resolution" resolution 1 of the Resolutions
in relation to the Whitewash
This information is provided by RNS
The company news service from the London Stock Exchange
END
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