Placing
SURGICAL INNOVATIONS GROUP PLC
("Surgical Innovations", the "Company" or the "Group")
PLACING TO RAISE £4 MILLION
The Directors of Surgical Innovations (AIM: SUN), the designer and manufacturer
of innovative surgical devices, are pleased to announce that the Company has
carried out a conditional placing (the "Placing") through Hanson Westhouse
Limited ("HansonWesthouse") to raise approximately £4 million through the issue
of, in aggregate, 114,285,714 new ordinary shares at 3.5p per share.
Background to and reasons for the Placing
The Directors intend to apply the net proceeds of the Placing, which are
expected to be approximately £3.8 million, primarily in three areas:
£000
Product development 750
Product licences 1,800
Working capital for US operations 1,250
3,800
Product development
As set out in the announcement of preliminary results for the year ended 31
December 2006 which was released on 30 April 2007, the Group's product
development programme has been focused primarily on the minimally invasive
surgery product ranges. The results of the test marketing of a new range of the
YelloPort Plus laparoscopic port access system have been encouraging and the
product has been well received by surgeons in both the US and South Africa.
Patents have been successfully filed on the technology which is intrinsic to
one of the new products. Further funding is now required to accelerate the
development of this range of products and put the necessary manufacturing
capability in place.
Product licences
The Directors consider that the Group has developed the necessary sales
channels to deliver its products to the key North American and European markets
where purchasing procedures are varied and differing marketing strategies are
required. The Group is now seeking to capitalise on the sales channels which
have been developed with the introduction of further complementary product
ranges to be sold under licence from third parties, a number of which have been
identified. Funding is therefore required to enable the Group to enter into
such licence agreements.
Working capital for US operations
The Directors consider that the Group has made a significant breakthrough in
penetrating the laparoscopic market in the US, where 1.5 million general
laparoscopic surgery cases were performed in 2006. Surgical Innovations has
established relationships with several major suppliers of procedural trays
which will now incorporate the YelloPort Plus laparoscopic port access system.
In addition, the Group has established a direct relationship with the North
Shore group of hospitals, New York as announced on 18 December 2006. The Group
requires additional funding to expand its marketing efforts in the US to build
on recent successes.
The Placing
The Group is proposing to raise £4 million (before expenses) through a
conditional placing by HansonWesthouse of the 114,285,714 new ordinary shares
(the "Placing Shares") at 3.5p per share. The Placing Shares will represent
30.57 per cent. of the enlarged issued share capital immediately following
completion of the Placing (the "Enlarged Issued Share Capital").
In order to enable the Company to satisfy the issue of the Placing Shares, the
Company is seeking approval from its shareholders to increase its authorised
share capital, increase its current authority to allot ordinary shares and
disapply pre-emption rights in respect of the issue of the Placing Shares. It
is also proposed to seek the renewal of the Company's annual authority to allot
ordinary shares up to an agreed limit, including on a non-pre-emptive basis, at
the Extraordinary General Meeting to be held on 11 June 2007 (the "EGM") rather
than its annual general meeting..
Under the terms of a placing agreement with the Company (the "Placing
Agreement"), HansonWesthouse has agreed to use its reasonable endeavours to
procure placees for the Placing Shares at 3.5p per Placing Share. The Placing
Agreement, is conditional, inter alia, on:
(a) admission of the Placing Shares to AIM occurring by not later than 8.00
a.m. on 12 June 2007 (or such later time and/or date as HansonWesthouse and the
Company may agree but in any event not later than 26 June 2007);
(b) the resolution to be proposed at the EGM having been passed;
(c) the receipt by the Company (in a form reasonably satisfactory to
HansonWesthouse) of written confirmation from the HM Revenue & Customs that the
Placing Shares will be a qualifying holding for the taxation advantages offered
under both HM Revenue & Customs' Venture Capital Trust and Enterprise
Investment Schemes; and
(d) the obligations of HansonWesthouse not having been terminated prior to
admission.
The Directors and the Medical Adviser to the board, Professor Michael McMahon,
have agreed conditionally to subscribe in aggregate for 1,428,570 Placing
Shares in the Placing. The table below details their individual subscriptions
and shareholdings post Placing:
Placing Shares to Shareholding % of Enlarged
be subscribed for immediately Issued Share
following the Capital
Placing
Douglas Liversidge 285,714 3,071,821 0.82
Graham Bowland 142,857 258,749 0.07
Stuart Moran 142,857 3,341,862 0.89
Colin Glass 285,714 2,781,602 0.74
Ray Simkins 285,714 1,269,461 0.34
Directors' total 1,142,856 10,723,495 2.87
Michael McMahon 285,714 9,801,934 2.62
Extraordinary General Meeting
An EGM will be held at the offices of Walker Morris at Kings Court, 12 King
Street, Leeds LS1 2HL at 10.00 a.m. on 11 June 2007. At the EGM, shareholders
will be asked to consider the resolution which will be proposed as follows:
1. to increase the authorised share capital of the Group from £3,250,000 to £
6,000,000 by the creation of 275,000,000 new ordinary shares;
2. to authorise the Directors to allot securities pursuant to section 80 of
the Companies Act 1985 up to a maximum nominal amount of £2,388,996.81 (£
1,142,857.14 of which relates to the Placing) representing approximately
48.01 per cent. of the existing ordinary shares as at the date of this
document; and
3. to disapply the pre-emption rights contained in section 89(1) of the
Companies Act 1985 in connection with (i) the issue of the Placing Shares
pursuant to the Placing; and (ii) generally further up to an aggregate
nominal amount of £747,683.80.
An electronic copy of the circular, which is being posted to shareholders
today, can be downloaded from the Group's website at www.sigroupplc.com.
For further information please contact:
Surgical Innovations Group plc
Douglas Liversidge CBE (Chairman) 0113 230 7597
Graham Bowland (Finance Director) graham.bowland@surginno.co.uk
Hanson Westhouse Limited 0113 246 2610
Tim Feather tim.feather@hansonwesthouse.com
Matthew Johnson matthew.johnson@hansonwesthouse.com
Media enquiries
Abchurch 020 7398 7700
Justin Heath justin.heath@abchurch-group.com
HansonWesthouse, which is regulated by the Financial Services Authority, is
acting on behalf of Surgical Innovations. HansonWesthouse is not acting for any
other persons and will not be responsible to anyone other than Surgical
Innovations for providing the protections afforded to customers of
HansonWesthouse or for providing advice in relation to the Placing or any other
matter referred to in this announcement.
This announcement is for information only and does not constitute an offer to
sell or issue or the solicitation of an offer to buy, subscribe or acquire any
securities in any jurisdiction. This announcement does not constitute an offer
to sell or issue or the solicitation of an offer to buy, subscribe or acquire
any securities in the capital of the Company in the United States, Canada,
Australia, Japan or South Africa or in any jurisdiction in which such offer
would be unlawful and should not be relied upon in connection with any decision
to acquire Placing Shares or any other securities in the capital of the
Company. The information contained in this announcement is not for release,
publication or distribution, directly or indirectly, to or into the United
States, Canada, Australia, Japan or South Africa or in any jurisdiction in
which such publication or distribution would be unlawful.
This announcement has been issued by, and is the sole responsibility of, the
Company. No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by HansonWesthouse or by any of its affiliates, directors, employees
or agents as to or in relation to, the accuracy or completeness of this
announcement, or any other written or oral information made available to or
publicly available to any interested party or its advisers, and any liability
therefore is hereby expressly disclaimed.