TIDMDTE
RNS Number : 5731F
Seven Technologies Holdings Limited
24 May 2013
Not for release, publication or distribution, in whole or in
part, directly or indirectly in, into or from the united states,
australia, canada, the republic of south africa or japan or any
other jurisdiction where to do so would constitute a violation of
the relevant laws or regulations of such jurisdiction
24 May 2013
RECOMMENDED CASH offer by
SEVEN TECHNOLOGIES HOLDINGS LIMITED
FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF
Datong PLC
New Bank Facilities
In the announcement on 10 May 2013 of Seven Technologies
Holdings Limited's ("Seven") intention to make a recommended cash
offer (the "Offer") to acquire the entire issued and to be issued
share capital of Datong plc ("Datong") at the offer price of 50
pence per Datong Share, it was disclosed that as soon as possible
Seven intended to raise long term (more than 5 years) debt of up to
GBP5.6 million and short term (1 year) debt of up to GBP1 million
from a single bank on terms acceptable to Seven and YFM, with the
new debt being used to refinance up to GBP5.3 million of YFM's
investment in Seven, including an existing loan of GBP2
million.
Seven is now able to announce that a facility agreement dated 21
May 2013 (and countersigned by Seven on 24 May 2013) ("VCT and
Acquisition Facilities Letter") for the provision of a GBP2 million
bank facility ("VCT Facility") and a GBP3.6 million bank facility
("Acquisition Facility") (together the "VCT and Acquisition
Facilities") has been entered into between Seven and Danske Bank
("Danske"). The purpose of the VCT Facility is to fund the
refinancing of existing YFM loan notes. The purpose of the
Acquisition Facility is to finance part of the acquisition cost of
ordinary shares in Datong pursuant to the Offer. The term of the
VCT and Acquisition Facilities Letter is seven years.
A copy of this announcement, the Offer Document and the VCT and
Acquisitions Facilities Letter, will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, for inspection on Seven's website at
http://www.Seventechnologies.co.uk and the Datong website
(http://www.datong.co.uk/investor_relations.htm) and will remain so
during the course of the Offer. For the avoidance of doubt, the
content of the websites referred to is not incorporated into and
does not form part of this announcement.
The VCT and Acquisition Facilities will be secured against the
assets of the Seven Group prior to the proposed re-registration of
Datong as a private limited company. Following the re-registration,
Danske will take a floating charge over all of the assets of the
Enlarged Group.
Draw down of the Acquisition Facility is conditional on the
Offer for Datong having become unconditional in all respects. Seven
is also obliged to ensure that Datong will be de-listed from the
AIM market of the London Stock Exchange and re-registered as a
private limited company as soon as reasonably practicable after
completion of the Acquisition.
Under the VCT and Acquisition Facilities Letter, Danske is
entitled to withdraw the VCT and Acquisition Facilities and/or
demand repayment of all sums owing to it, on the fifth anniversary
of the first draw down date (the "Early Termination Date"). Seven,
equally, has a right to terminate the VCT and Acquisition
Facilities on the Early Termination Date. Additionally, it is
possible for Seven to repay the amount owing to Danske earlier than
agreed, but early repayment may incur a break cost.
The interest rate payable on the VCT and Acquisition Facilities
is the aggregate of LIBOR and 2.85 per cent. per annum.
The VCT and Acquisitions Facilities Letter contains customary
undertakings and representations. Seven must also procure that each
member of the Enlarged Group complies with the following financial
covenants:
(a) Solvency (being the capital and reserves of STL divided by
the total assets of STL) must exceed 30 per cent;
(b) Debt Service Cover (as defined in the VCT and Acquisition
Facilities Letter) must exceed 1.5 times of this cover;
(c) no dividend payments may be made by Seven in respect of its
ordinary shares without the prior written consent of Danske;
and
(d) 50 per cent. of Excess EBITDA (as defined in the VCT and
Acquisition Facilities Letter) is to be applied in reduction of
term debt, measured annually against consolidated financial
statements of the Enlarged Group.
Seven has also entered into overdraft facility letters dated 20
May 2013 (and countersigned by Seven on 24 May 2013) with Danske in
the amounts of GBP1,000,000 and GBP300,000. Both overdrafts are
on-demand facilities, as is customary for overdrafts. Interest on
each overdraft accrues at a rate of 3 month LIBOR from day to day
plus a margin of 2.85 per cent. The GBP1,000,000 overdraft may be
used to finance some of the acquisition cost of ordinary shares in
Datong plc pursuant to the Offer, but this is not expected to be
needed. The GBP300,000 overdraft is for working capital
purposes.
Following draw down of the Acquisition Facility, it is envisaged
that the terms of the Investment Agreement described in the Offer
Document will be varied such that on completion of the
Acquisitionthe shareholdings in Seven will be:
Shareholder Number of Number of Number of Number of
A Ordinary B Ordinary Preference EIS Preference
Shares of Shares of Shares of Shares of
GBP1.00 each GBP1.00 each GBP1.00 each GBP1.00 each
-------------------- -------------- -------------- -------------- ----------------
James Hook Nil 3,066,715 Nil Nil
-------------------- -------------- -------------- -------------- ----------------
David Anderson Nil 3,066,715 Nil Nil
-------------------- -------------- -------------- -------------- ----------------
British Smaller
Companies
VCT PLC 992,175 Nil 992,175 Nil
-------------------- -------------- -------------- -------------- ----------------
British Smaller
Companies
VCT 2 PLC 619,130 Nil 619,130 Nil
-------------------- -------------- -------------- -------------- ----------------
Chandos Fund,
L.P. 1,970,361 Nil 1,970,362 Nil
-------------------- -------------- -------------- -------------- ----------------
YFM British
Smaller Companies
EIS Fund) 185,000 Nil Nil 185,000
-------------------- -------------- -------------- -------------- ----------------
TOTAL 3,766,666 6,133,430 3,581,667 185,000
-------------------- -------------- -------------- -------------- ----------------
Acceptances
As indicated in the Offer Document, the Offer will initially
remain open for acceptance until 1.00 pm (London time) on 4 June
2013.
In order to accept the Offer, Datong Shareholders who hold their
Datong Shares in certificated form (that is, not in CREST) should
complete, in accordance with the instructions printed on it, sign
and return the Form of Acceptance (together with their share
certificate(s) and any other documents of title) as soon as
possible and, in any event, so as to be received by no later than
1.00 pm (London time) on 4 June 2013 by Neville Registrars Limited,
Neville House, 18 Laurel Lane, Halesowen, B63 3DA. The procedure
for acceptance of the Offer in respect of certificated Datong
Shares is set out in paragraph 13(a) of the letter from Seven which
forms Part II of the Offer Document and Appendix 1 to the Offer
Document and in the accompanying Form of Acceptance.
In order to accept the Offer, Datong Shareholders who hold their
DatongShares in uncertificated form (that is, in CREST), should
make their acceptance electronically through CREST so that the TTE
instruction(s) settles not later than 1.00 pm (London time) on 4
June 2013. If you are a CREST sponsored member you should refer to
your CREST sponsor before taking any action. Only your CREST
sponsor will be able to send the TTE Instruction(s) to Euroclear in
relation to your Datong Shares in uncertificated form. The
procedure for acceptance of the Offer in respect of uncertificated
Datong Shares is set out in paragraph 13(b) of the letter from
Seven which forms Part II of the Offer Document and Appendix I to
the Offer Document.
Copies of the Offer Document, the Form of Acceptance and the VCT
and Acquisitions Facilities Letter will be available for inspection
at the offices of Osborne Clarke at One London Wall, London, EC2Y
5EB, during normal business hours on any weekdays (Saturdays,
Sundays and public holidays excepted).
If the Offer is declared unconditional in all respects with 75
per cent. or more acceptances, Seven intends to procure the making
of an application by Datong to the London Stock Exchange for the
cancellation of the admission of the Datong Shares to trading on
AIM. It is anticipated that such cancellation of trading will take
effect no earlier than 20 Business Days after the Offer becomes or
is declared unconditional in all respects.
The cancellation of the trading of the Datong Shares would
significantly reduce the liquidity and marketability of any Datong
Shares not asserted to the Offer and their value may be affected in
consequence.
It is also intended that, following the Offer becoming or being
declared unconditional in all respects, Datong will be
re-registered as a private company.
Capitalised terms used but not defined in this announcement have
the same meaning as given to them in the Offer Document.
Enquiries
Seven Technologies Holdings Limited Tel: 028 9263
5620
Richard Moon
Gavin Williamson
BDO LLP, Financial Adviser to Seven Tel: 020 7486
5888
John Stephan
David Abbott
BDO, which is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, is acting exclusively for Seven,
as financial adviser in relation to the Offer, and is not acting
for or advising any other person and accordingly will not be
responsible to any other person other than Seven for providing the
protections afforded to the clients of BDO or for providing advice
in relation to the contents of this announcement or any offer or
arrangement referred to herein or in the Offer Document and Form of
Acceptance. Neither BDO nor any of its affiliates owns or accepts
any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of BDO in connection with this
announcement, any statement contained herein or otherwise.
Disclosure requirements of the Code
Under Rule 8.3(a) of the City Code, any person who is interested
in 1 per cent. or more of any class of relevant securities of an
offeree company or of any paper offeror (being any offeror other
than an offeror in respect of which it has been announced that its
offer is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. on the 10th Business Day following the commencement of
the offer period and, if appropriate, by no later than 3.30 p.m. on
the 10th Business Day following the announcement in which any paper
offeror is first identified. Relevant persons who deal in the
relevant securities of the offeree company or of a paper offeror
prior to the deadline for making an Opening Position Disclosure
must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. on the Business Day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Overseas jurisdictions
The availability of the Offer in, and the release, publication
or distribution of this announcement in or into, jurisdictions
other than the United Kingdom may be restricted by law. Therefore
persons into whose possession the Offer Document or this
announcement comes who are not resident in the United Kingdom
should inform themselves about, and observe, any applicable
restrictions. Datong Shareholders who are in any doubt regarding
such matters should consult an appropriate independent adviser in
the relevant jurisdiction without delay. Any failure to comply with
such restrictions may constitute a violation of the securities laws
of any such jurisdiction. This announcement has been prepared for
the purposes of complying with English law and the Code and the
information disclosed may not be the same as that which would have
been disclosed if the announcement had been prepared in accordance
with the laws of jurisdictions outside the United Kingdom.
In particular, unless otherwise determined by Seven and
permitted by applicable law and regulation, the Offer will not be
made, directly or indirectly, in or into, or by the use of mails or
any means of instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce
of, or any facilities of a national securities exchange of any
Restricted Jurisdiction (including the United States, Australia,
Canada, the Republic of South Africa and Japan). Accordingly,
except as required by applicable law, copies of the Offer Document
and this announcement are not being, and may not be, mailed or
otherwise forwarded, distributed or sent in, into or from any
Restricted Jurisdiction. Persons receiving the Offer Document or
this announcement (including without limitation nominees, trustees
or custodians) must not forward, distribute or send it into any
Restricted Jurisdiction.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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