TIDMGGA
RNS Number : 5778O
Georgica PLC
10 March 2009
Not for release, publication or distribution, in whole or in part, in or into or
from Australia, Canada, Japan, South Africa or the United States or any other
jurisdiction where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction
10 March 2009
PROPOSED SCHEME OF ARRANGEMENT
to establish
GEORGICA PUBLIC LIMITED
COMPANY ("GEORGICA")
as a wholly owned subsidiary of
ESSENDEN PUBLIC LIMITED
COMPANY ("ESSENDEN")
to be effected by means of a scheme of arrangement
under part 26 of the Companies Act 2006
and
PROPOSED ADMISSION TO TRADING ON AIM OF THE ENTIRE ISSUED SHARE CAPITAL OF
ESSENDEN
and
PROPOSED ADMISSION TO TRADING ON PLUS-QUOTED OF THE LOAN NOTES TO BE ISSUED BY
ESSENDEN
Introduction
The Georgica Board is pleased to announce a proposed re-organisation of
Georgica in order to facilitate the return of cash to shareholders.
No satisfactory offer has been received for Georgica and accordingly the
Georgica Board has decided that excess cash generated by Georgica will, in
future, be returned to shareholders.
To facilitate this, the Georgica Board is proposing to change the corporate
structure of the Group by establishing Georgica as a wholly-owned subsidiary of
a newly incorporated parent company, named Essenden Public Limited Company, by
means of a scheme of arrangement under Part 26 of the Companies Act 2006 (the
"Scheme"). This will result in shareholders of Georgica receiving new ordinary
shares in Essenden and loan notes to be issued by Essenden (the "Essenden
Notes"), in exchange for their existing ordinary shares in Georgica. It is also
proposed that, immediately following the Scheme becoming effective, there will
be a consolidation of the new ordinary shares in Essenden on a 5-for-1 basis
(post-consolidation, the "Essenden Shares"). The principal purpose of the
proposals is to facilitate the return of cash to shareholders. It is envisaged
that, at the discretion of the Essenden Board, cash will in due course be
returned to shareholders through the redemption or repurchase in the market by
Essenden of the Essenden Notes or the Essenden Shares.
Essenden will be permitted under the terms of the Group's banking facility
agreement, as amended in connection with the proposals, to spend up to
GBP500,000 initially, on the purchase of Essenden Shares and Essenden Notes. It
is intended that Essenden will seek to amend the facility agreement to permit
the return of further capital to shareholders or will repay the debt outstanding
under the facility agreement.
Summary of the proposal
Under the terms of the proposals, which will be subject to the terms and
conditions to be set out in the circular addressed to shareholders providing
details of the Scheme and the proposals (the "Scheme Document"), holders
of ordinary shares in Georgica at the relevant record time for the Scheme will
be entitled to receive (post-consolidation):
for each 5 Georgica Ordinary Shares 1 Essenden Share and GBP1 principal
value
of Essenden Notes
The Georgica Board considers that issuing the Essenden Notes will make it easier
to return cash through the redemption or purchase in the market by Essenden of
the Essenden Notes. The Essenden Notes will be GBP1 principal amount, zero
coupon, perpetual notes ranking pari passu amongst themselves and pari passu
with all other unsecured and unsubordinated obligations of Essenden. The
Essenden Notes will be fully repayable at par on the occurrence of certain
specified events, including a change of control, an insolvency event or a change
in operating activity. The Essenden Noteholders will have the power to agree to
certain amendments to the terms of the Essenden Notes including the terms of
repayment on the occurrence of specified events, by passing a resolution at a
duly convened meeting.
Upon the Scheme becoming effective the existing ordinary shares in Georgica will
be cancelled and exchanged for Essenden Shares and Essenden Notes, the
consolidation of Essenden's share capital will be effected and Georgica will be
re-registered as a private limited company. Application will be made, in due
course, for the Essenden Shares to be admitted to trading on AIM and for the
Essenden Notes to be admitted to trading on PLUS-quoted and accordingly Georgica
will prepare and publish an admission document (the "Admission Document").
The Scheme requires, and will be conditional upon, the approval of holders of
ordinary shares in Georgica by the passing of a resolution at a meeting convened
by the Court (the "Court Meeting"). This resolution must be approved by a
majority in number of the holders of ordinary shares in Georgica present and
voting, either in person or by proxy, representing not less than three-fourths
in value of the ordinary shares in Georgica held by such holders. The Scheme and
the associated reduction of capital also require to be, and will be conditional
upon being, sanctioned by the Court at a Court hearing. All holders of ordinary
shares in Georgica (including those who also hold convertible shares in
Georgica) are entitled to attend the Court Meeting in person or through counsel
to support or oppose the sanctioning of the Scheme and the associated reduction
of capital. The Scheme also requires, and will be conditional upon, certain
additional resolutions being passed by the requisite majorities at a general
meeting of Georgica (the "General Meeting") at which holders of ordinary shares
in Georgica and holders of convertible shares in Georgica are entitled to attend
and vote. Further details of the Court Meeting and the General Meeting, will be
set out in the Scheme Document.
The Scheme is also conditional on Georgica not having received any indication
from AIM or PLUS-quoted of there being any circumstances which would prevent the
Essenden Shares or the Essenden Notes from being admitted to trading on AIM or
PLUS-quoted respectively ("Admission").
Following completion of the proposals, including conversion of the Georgica
convertible shares, Essenden is expected to have 21,515,000 Essenden Shares and
21,515,000 Essenden Notes in issue, excluding the impact of fractions.
Background and reasons for the proposals
During the last two years Rileys, Georgica's cue sports business, has been sold
and the freehold and long leasehold bowling outlets have been sold and leased
back, at 17.4 times annual rent (an initial yield of 5.7 per cent.). Net debt
has been reduced from a peak of approximately GBP100 million to approximately
GBP4 million as at 28 December 2008. Substantially all of those bowling centres
that would benefit from refurbishment have been refurbished, four new sites are
in operation, three sites have been sold and two sites have been closed. The
portfolio now comprises high quality, prime location destinations, all in
satisfactory condition, which support Tenpin Limited's position as the leading
bowling operator in the UK market, with 38 sites compared to 33 for the next
largest operator. The Group is now focussed on operating the existing portfolio
of bowling centres. Although revenue has fallen in the last few months, it has
been possible to reduce costs, with such cost savings amounting to up to
approximately GBP3.5 million per annum.
In the future, the Georgica Board expect the Group to generate substantial
surplus cash. As previously announced, the Georgica Board intends to use this
cash to make bank debt repayments and return this cash to shareholders. The
proposals described in this announcement are the means by which the Georgica
Board intends to do so.
Irrevocable undertakings
Georgica has received irrevocable undertakings from North Atlantic Value LLP,
Trefick Limited and all of the holders of convertible shares in Georgica (the
"Georgica Convertible Shareholders") to vote in favour of the Scheme at the
Court Meeting (in the case of the Georgica Convertible Shareholders, in respect
of the ordinary shares in Georgica held by them at the relevant record time for
voting) and in favour of the resolutions at the General Meeting. None of, North
Atlantic Value LLP, Trefick Limited or the Georgica Convertible
Shareholders will continue to be bound by the terms of their respective
irrevocable undertakings in the event that an offer is made for the whole of the
capital of Georgica that has been duly recommended by a majority of the Georgica
Board voting in accordance with its usual procedures, provided that such
recommendation is not subsequently withdrawn, modified or varied.
North Atlantic Value LLP and Trefick Limited hold 27,057,520 and 20,777,138
ordinary shares in Georgica respectively representing approximately 27.8 and
21.3 per cent. of the issued ordinary share capital of Georgica.
The Georgica Convertible Shareholders hold in aggregate 539,000 ordinary shares
in Georgica and 2,538,075 convertible shares in Georgica, representing
respectively, in aggregate, approximately 0.6 per cent. of the issued ordinary
share capital of Georgica and 100 per cent. of the issued Georgica Convertible
Shares.
The Georgica Board unanimously intends to recommend that all holders of ordinary
shares in Georgica vote in favour of the Scheme at the Court Meeting and that
all holders of ordinary shares and/or convertible shares in Georgica vote in
favour of the resolutions at the General Meeting as each of the Directors of
Georgica intend to do in respect of their holdings in Georgica amounting, in
aggregate, to 1,791,243 ordinary shares in Georgica, representing approximately
1.84 per cent. of the existing issued ordinary share capital of Georgica.
The Scheme Document containing the formal terms and conditions of the Scheme and
the Admission Document relating to the applications for the Essenden Shares to
be admitted to trading on AIM and for the Essenden Notes to be admitted to
trading on PLUS-quoted will be posted to Georgica shareholders in due course.
The Scheme and the proposals described in this announcement are not subject to
the City Code on Takeovers and Mergers.
+-----------------------------------------------+------------------------------+
| Enquiries: | |
+-----------------------------------------------+------------------------------+
| Cenkos | Tel: 020 7397 8900 |
| Nomad to Georgica plc | |
| Nicholas Wells | |
| | |
+-----------------------------------------------+------------------------------+
| Georgica plc | Tel: 0207 600 7900 |
| Nicholas Oppenheim | |
+-----------------------------------------------+------------------------------+
Cenkos, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively for Georgica and no one else in
connection with the Scheme and is acting as Nomad to Essenden in relation to the
proposed admission of the Essenden Shares to trading on AIM and Corporate
Advisor to Essenden in relation to the proposed admission of the Essenden Notes
to trading on PLUS-quoted and is not acting for any other persons and will not
be responsible to anyone other than Georgica and Essenden for providing the
protections afforded to customer of Cenkos or advising them on the Scheme or
Admission.
Distribution of announcement and other matters
The information contained in this announcement may not be the same as that
required under the laws of jurisdictions outside England and Wales. The
distribution of this announcement in jurisdictions other than England and Wales
may be restricted by law and therefore persons into whose possession this
announcement comes should inform themselves about and observe such restrictions.
Any failure to comply with the restrictions may constitute a violation of the
securities laws of any such jurisdiction.
This announcement does not constitute an offer to sell or issue, or the
solicitation of an offer to buy or subscribe for, securities in any jurisdiction
in which such offer or solicitation is unlawful.
Securities may not be offered or sold in the United States unless they are
registered under the US Securities Act or are exempt from such registration. The
Essenden Shares will not be registered under the US Securities Act, and will be
issued in the United States pursuant to the Scheme or Admission in reliance on
the exemption from registration provided by Section 3(a)(10) of that Act. In
addition, the Essenden Shares have not been and will not be registered under the
securities laws of any state of the United States, and will be issued in the
United States pursuant to the Scheme or Admission in reliance on available
exemptions from such state law registration requirements. Neither the SEC nor
any US state securities commission has reviewed or approved this document,
Admission, the Scheme, or the issue of the Essenden Shares or the Essenden
Notes, and any representation to the contrary is a criminal offence in the
United States.
Georgica shareholders (whether or not US persons) who are affiliates (as defined
in the US Securities Act) of Essenden or Georgica prior to, and/or become
affiliates of Essenden or Georgica on or after, the implementation of the Scheme
or Admission of the Essenden Shares or the Essenden Notes will be subject to
certain US transfer restrictions relating to the Essenden Shares and the
Essenden.
The Essenden Notes that may be issued pursuant to the Scheme have not been and
will not be registered under the US Securities Act or under the relevant
securities laws of any state or territory or other jurisdiction of the United
States. Accordingly, Essenden Notes may not be offered or sold in the United
States, except in a transaction not subject to, or in reliance on an exemption
from, the registration requirements of the Securities Act and such state
securities laws.
Any Essenden Notes which may be issued pursuant to the Scheme have not been and
will not be registered under the relevant securities laws of Japan and any
relevant clearances and registrations have not been, and will not be, obtained
from the securities commission of any province or territory of Canada. No
prospectus in relation to the Essenden Notes has been, or will be, lodged with,
or registered with, the Australian Securities and Investments Commission, the
Japanese Ministry of Finance or the Companies and Intellectual Property
Registration Office of South Africa. Accordingly, unless otherwise determined by
Essenden and permitted by applicable law and regulation, the Essenden Notes may
not be, offered, sold, resold, transferred, delivered or distributed, directly
or indirectly in or into Canada, Australia, Japan, South Africa or any other
jurisdiction where to do so would violate the laws of that jurisdiction or would
require registration thereof in such jurisdiction.
The statements contained herein are made as at the date of this announcement,
unless some other time is specified in relation to them, and the issue of this
announcement shall not give rise to any implication that there has been no
change in the facts set forth herein since that date. Nothing contained herein
shall be deemed to be a forecast, projection or estimate of the future financial
performances of Georgica or Essenden, except where otherwise stated.
No person has been authorised to make any representations on behalf of Georgica
or Essenden concerning the Scheme which are inconsistent with the statements
contained herein and any such representations, if made, may not be relied upon
as having been so authorised.
This announcement does not constitute a prospectus or prospectus equivalent
document.
No person should construe the contents of this document as legal, financial or
tax advice and should consult their own advisers in connection with the matters
contained herein.
Forward looking statements
This announcement contains statements with respect to the financial condition,
results of operations and business of Georgica and certain plans and objectives
of the Boards of Directors of Georgica and Essenden that are or may be
forward-looking statements. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current facts.
Forward-looking statements often use words such as "anticipate", "target", "
expect", "estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words of similar meaning. These statements
are based on assumptions and assessments made by the Boards of Directors of
Georgica and Essenden in light of their experience and their perception of
historical trends, current conditions, expected future developments and other
factors they believe appropriate. By their nature, forward-looking statements
involve risk and uncertainty, and the factors described in the context of such
forward-looking statements in this document could cause actual results and
developments to differ materially from those expressed in or implied by such
forward-looking statements.
Should one or more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in this document. Georgica and Essenden assume no obligation to
update or correct the information contained in this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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