Issue of Equity

RNS Number : 1690H

Carclo plc

09 July 2012

 



Carclo plc

("Carclo" or "the Company" or "the Group")

Issue of Equity

Placing to raise up to £13.3 million

9 July 2012

The Board of Carclo is pleased to announce a cash placing with institutional investors (the "Placing") of up to 3,078,240 new ordinary shares of 5 pence each in the Company ("Placing Shares") at a subscription price of 431 pence per share (the "Placing Price").  Assuming allotment of the maximum number of shares under the Placing, the Placing Shares will equate to approximately 4.98 per cent. of the current issued share capital of the Company and immediately following the Placing the Company's issued share capital will consist of 64,877,942 ordinary shares of 5 pence each ("ordinary shares").

The maximum proceeds raised from the Placing will amount to approximately £13.3 million before expenses and such proceeds will be used to fund future capital investment in Conductive Inkjet Technology ("CIT") and the development of Carclo Diagnostic Solutions ("CDS"), and to reduce Group indebtedness.

Trading at Carclo has continued in line with the Board's expectations since the announcement on 12 June 2012 of its results for the year ended 31 March 2012.

Background to and reasons for the Placing

Carclo is a technology led plastics group. The Group's consistent strategy has been to commit some of its capital investment to develop new technologies such as CIT and CDS in order to drive future growth. Its investment in CIT is at the heart of the emerging market for very low cost printed electronics. CIT's Fine Line Technology has now been launched by Atmel Corporation as XSense, which addresses a touch screen market valued at $4.0 billion today and which is forecast to double in size over the next two years.  Based on this opportunity alone, the Board expects CIT to become the largest and fastest growing business within the Group over the next couple of years.  In addition, the Group's strategy is to bring additional focus and resource to three other significant business opportunities in CIT - Printed Electronics, Organic LED Lighting and Organic Photovoltaics. 

CDS was formed last year to hold and develop IPR in a novel, single use, point of care diagnostic device branded micropoc. CDS has three micropoc platforms and is currently seeking to develop commercial relationships in order to generate manufacturing and royalty revenues which the Board believes could be substantial.

Carclo reported group net debt of £18.0 million as at 31 March 2012.  Although this level of gearing reflects a comfortable level of headroom in respect of the Company's total bank facilities, the Board believes that this level of indebtedness acts as a constraint on further investment to expand the Company's technology and growth businesses.

The net proceeds from the Placing (amounting to approximately £12.8m after expenses, assuming allotment of the maximum number of Placing Shares) will be used to:

·      resource the growth and diversification strategy of CIT;

·      fund the Company's development of CDS; and

·      reduce indebtedness to a more acceptable level for a fast growing, technology company.

The Placing is being conducted by Nplus1 Brewin LLP ("N+1 Brewin") under the terms of a placing agreement which has been entered into between the Company and N+1 Brewin (the "Placing Agreement"), whereby N+1 Brewin has agreed to use reasonable endeavours to procure subscribers (the "Placees") for up to 3,078,240 Placing Shares. 

The Placing is subject to certain conditions, including:

·      Admission (as defined below) occurring not later than 8.00 am on 18 July 2012 (or such later time and / or date, being not later than 8.00 am on 23 July 2012, as the Company and N+1 Brewin may agree); and

·      the Placing Agreement not having been terminated prior to Admission.

Directors' proposed share sales

If the Placing is over subscribed, two directors, who have previously announced their intention to retire, Mr Ian Williamson, Chief Executive Officer, and Mr Christopher Ross, Chairman, have indicated their willingness to sell up to 230,000 ordinary shares and 25,000 ordinary shares, respectively, to satisfy investor demand.

Mr Williamson's potential disposal would represent, at the maximum, approximately one third of his total holding, which is held within his personal pension plan, and would facilitate his retirement as Chief Executive Officer in March 2013.  He has no plans for any further share disposals from his current holding. Christopher Ross's potential disposal of shares precedes his retirement as Chairman of the Company in September 2012.

Application for listing and admission to trading

The Placing Shares will be issued fully paid and will rank pari passu in all respects with the existing ordinary shares.  Application will be made to the Financial Services Authority for admission of the Placing Shares to the Official List maintained by the UK Listing Authority and to the London Stock Exchange (the "LSE") for admission to trading of the Placing Shares on the LSE's main market for listed securities (together "Admission"). It is expected that Admission will take place at 8.00 am on 12 July 2012 and that dealings in the Placing Shares on the LSE's main market for listed securities will commence at the same time.

N+1 Brewin is acting as sole bookrunner in respect of the Placing, supported by Liberum Capital.

Carclo plc                                                                                              01924 268040

Ian Williamson, Chief Executive

Robert Brooksbank, Finance Director

N+1 Brewin                                                                                           0131 529 0356

Nick Tulloch

Joe Stroud

Weber Shandwick Financial                                                               020 7067 0700

Nick Oborne

Stephanie Badjonat

Robert Cook

This announcement and the information contained herein is not for publication, release or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which the same would be unlawful. This announcement does not constitute an offer to sell or issue, or the solicitation of an offer to buy or acquire, shares in the capital of the Company in the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which such an offer or solicitation is unlawful. The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States.   There will be no public offer of the Placing Shares in the United States, the United Kingdom or elsewhere.

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 by N+1 Brewin or by any of its affiliates or agents as to, or in relation to, and no responsibility or liability is or will be accepted by N+1 Brewin or by any of its affiliates 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 therefor is expressly disclaimed.

N+1 Brewin, which is authorised and regulated by the Financial Services Authority, is acting for the Company in connection with the Placing and no-one else and will not be responsible to anyone other than the Company (whether or not a recipient of this announcement) for providing the protections afforded to clients of N+1 Brewin or for providing advice in relation to the Placing.

The distribution of this announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or N+1 Brewin that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and N+1 Brewin to inform themselves about, and to observe, such restrictions.

Certain statements in this announcement are forward-looking statements which are based on the Company's current expectations, intentions and projections regarding its future performance, currently anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this announcement is subject to change without notice and neither the Company nor N+1 Brewin assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

Any indication in this announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years will necessarily match or exceed the historical published earnings per share of the Company.

 

END

 

 

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