TIDMTNT
RNS Number : 2527Q
Tintra PLC
26 October 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310.
26 October 2021
TINTRA PLC
("Tintra", the "Group" or the "Company")
Revised Arrangements with MDC Nominees Ltd
On 12 July 2018 the Company (then called Boxhill Technologies
plc) announced a restructuring (the "Restructuring") that involved
the disposal of certain subsidiaries, one of which was Emex
Technologies Ltd. ("Emex"), to MDC Nominees Ltd. ("MDC").
Under that Restructuring, MDC issued the Company a GBP2m,
10-year, zero-coupon, secured loan note (the "Loan Note"). At the
same time, it entered into a commercial arrangement with the
Company in relation to various "non-conforming" payment services
customers that were transferred at that time (the "Commercial
Agreement").
The Loan Note was intended to be repaid via a sinking fund made
up of a combination of amounts generated by the Commercial
Agreement and the proceeds from any successful legal actions that
were expected to be pursued by Emex (the "Legal Claims").
As part of a change management process previously announced by
the Company, this arrangement was reviewed. It was assessed that
during the period since the Restructuring nothing has been achieved
in relation to the Commercial Agreement.
However, it was assessed that one of the Legal Claims was
material and as such a considerable amount of work was undertaken
to progress that Legal Claim. As result of that progress Emex is
now in possession of a Legal Opinion (the "Opinion") from a leading
QC stating the potential success of the action as being greater
than 50% (fifty percent).
As a result of the Opinion, Emex has entered into a contingent
fee arrangement with solicitors to progress this matter further.
The amount referred to in the Opinion under this Legal Claim is
considerably in excess of the GBP2,000,000 due under the Loan
Note.
Due to the work undertaken by the Company it has favourably
renegotiated the terms of the Loan Note and the Commercial
Agreement (together, the "Transaction") as follows:
1) As per the original Restructuring the first GBP2m received by
Emex (after the deductions set out below) under the Legal Claim to
repay the Loan Note.
2) Emex's contingent fee arrangement with its solicitors
provides that they will receive 30% of the gross amount received
(made up of the Legal Claim plus any recovered costs).
3) Under Emex's company voluntary arrangement, 20% of the
balance after legal costs will be due to historical creditors.
4) The Company will on top of the amount due under the Loan Note
now receive 60% of any amounts recovered after the payments made in
1-3) above.
5) The Loan Note is to be additionally secured by way of a
debenture over Emex directly, including a fixed charge over the
proceeds of this Legal Claim, as well as the existing debenture
over MDC which will remain.
6) All other terms of the Restructuring, the Loan Note and the
Commercial Agreement are to remain unchanged.
The Company expects Emex to initiate the action before the end
of the year and the Company is providing assistance by way of human
resources to this endeavour as part of the Transaction.
Richard Shearer, Chief Executive of Tintra, said: "A lot of work
has gone into arriving at this revised solution, working with
solicitors and Queen's Counsel, to build out a strategy that I now
feel provides a tangible chance of the debenture being settled,
which is not something I thought three months ago. Further still,
the Company taking direct security over the Legal Claims and Emex
gives an enhanced security of the Company's liability and removes
layers of exposure that made me uncomfortable.
Whilst a lot of my focus is on forward looking scaling of our
business, I am very pleased with the progress we have been able to
make in this historical matter. I must confess to being a convert,
having been somewhat dismissive of the realities of recovering any
funds from this liability at the outset, I am now optimistic about
the fact that whilst it will take some time, the Company will
eventually see the return from the original Restructuring and
perhaps even further benefits."
MDC is owned by John Botros, a director of certain Group
subsidiaries. The Transaction therefore constitutes a related party
transaction under the AIM Rules. The Board consider, having
consulted with Allenby Capital Limited, the Company's nominated
adviser, that the terms of the Transaction are fair and reasonable
insofar as its shareholders are concerned.
For further information, contact:
Tintra PLC
Richard Shearer, CEO
Website www.tintra.com 020 3795 0421
Allenby Capital Limited
(Nomad, Financial Adviser & Broker)
John Depasquale / Nick Harriss / Vivek
Bhardwaj 020 3328 5656
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END
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