Proposed Placing and Notice of General Meeting

RNS Number : 3697U

Cyan Holdings Plc

02 December 2013

 



Cyan Holdings plc

("Cyan" or "the Company")

Proposed Placing, Directors' Dealings &

Notice of General Meeting

Cyan Holdings plc (AIM:CYAN.L), the integrated system and software design company delivering mesh based flexible wireless solutions for utility metering and lighting control, announces raising, subject to certain conditions, approximately £1.1 million before expenses, by way of a share placing ("Placing") pursuant to which 733,333,333 Ordinary Shares (the "Placing Shares") will be issued at 0.15 pence each (the "Placing Price"). The Placing was managed by XCAP Securities plc ("XCAP") as joint broker to the Company. It is intended that the net proceeds from the Placing will be used for general working capital requirements, business development and other product development work as set out below.

The Placing is conditional, inter alia, on the passing of resolutions at a General Meeting ("GM") to be held at 1.00 p.m. on 19 December 2013. A circular containing the notice of the GM (the "Circular") will be posted to all shareholders in the Company today and will be available to view on the Company's website at: www.cyantechnology.com.

Assuming Shareholders approve the necessary resolutions at the GM it is anticipated that the Placing Shares will be admitted to trading on AIM and that dealings will commence at 8.00 a.m. on 20 December, 2013 ("Admission"). Following Admission, the Company will have 3,402,700,256 Ordinary Shares in issue, assuming all of the Placing Shares are subscribed for by the Placees.

Commenting on the Placing, John Cronin, Executive Chairman said "We are pleased to be able to continue to attract interest in the Company and its prospects. The net proceeds from the Placing will provide the Company with additional stability and cash resources to allow us to pursue our activities in India, Brazil and China as we look to take advantage of the pipeline of opportunities in these emerging markets. To demonstrate the board's confidence in these opportunities and our commitment to the Company the directors of Cyan have agreed to subscribe in the Placing for an aggregate amount of £100,000."

Enquiries:

Cyan Holdings plc John Cronin, Chairman www.cyantechnology.com	Tel: [phone]
Allenby Capital Limited NOMAD and Joint Broker Jeremy Porter / Mark Connelly	Tel: [phone]
XCAP Securities plc Joint Broker Jon Belliss / Adrian Kirk	Tel: [phone]
Walbrook PR Financial PR Paul Cornelius	Tel: [phone]

Background to and reasons for the Placing

We realise that Shareholders will be disappointed that Cyan is seeking to raise additional funding at a proposed price which is significantly less than the previous funding rounds. Whilst the Company still has sufficient funds to trade into 2014, the timing of material orders from Cyan's prospective customers in India, Brazil and China remains uncertain. The Board of Cyan has decided that it is in the best interests of Shareholders to raise a limited amount of cash as quickly and as inexpensively as possible to provide further funding for the continued development of the Company's activities in India, Brazil and China.

Over the previous six months, and following the lodging of the Tamil Nadu Electricity Board ("TNEB") tender, Cyan has significantly broadened its pipeline of opportunities and is now well positioned in the three key emerging markets of India, Brazil and China.

The Placing Shares will be issued at a price of 0.15 pence per Ordinary Share. The Directors believe that this price represents the best price achievable to raise additional working capital and development funding. Without the proceeds of the Placing, the Directors believe that the Company would not have sufficient funds to take advantage of these opportunities as an independent company.

The Cyan management team and Board of Directors remain highly motivated and confident that the opportunities in the pipeline will be converted into revenues in 2014. This confidence is reflected in the significant participation in the Placing by the whole Board of Cyan who, in aggregate, are subscribing for £100,000 of Placing Shares in the Placing.

Therefore, Shareholders are requested to vote in favour of the Resolutions in order to safeguard their investment and to allow the Company to demonstrate a suitable level of financial strength to its partners. The Directors believe that Cyan remains in a strong position to secure substantial revenues from a very large market.

We would like to take this opportunity to welcome the new Shareholders and thank our existing Shareholders for their continued support.

A presentation will be made to Shareholders at the General Meeting, and this information will be published simultaneously on the Company's website, where there will be an opportunity to ask questions as well as interact with the management and Board.

Details of the Placing

The Company intends to raise approximately £1.1 million, before expenses, through the issue of 733,333,333 Placing Shares at the Placing Price pursuant to the Placing.

The Placing Price represents a discount of approximately 28.6 per cent. to the closing mid-market price of 0.21 pence per Ordinary Share as at 29 November 2013, the latest practicable date prior to the announcement of the Placing. The Placing Shares will, when issued, rank pari passu in all respects with the Ordinary Shares, including the right to receive dividends and other distributions declared following Admission.

The Placing Shares will represent approximately 21.6 per cent. of the Company's issued share capital immediately after the completion of the Placing ("Enlarged Share Capital").

The Placing is being made on a non pre-emptive basis as the time delay and costs associated with a pre-emptive offer are considered by the Directors to be excessive.

Application will be made by the Company for the Placing Shares to be admitted to trading on AIM. Subject to completion of the Placing, it is expected that the Placing Shares will be admitted to trading on AIM and that dealings will commence at 8.00 a.m. on 20 December 2013.

The issue of the Placing Shares, is conditional, inter alia, upon:

(a)    the approval of the resolutions at the GM;

(b)      the conditional placing agreement dated 2 December 2013 between  XCAP and the Company (the "Placing Agreement") becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms at any time prior to Admission; and

(c)    Admission,

in each case occurring no later than 8.00 a.m. on 20 December 2013 (or such time and date as the Company and XCAP may agree, being not later than 14 January 2014).

Pursuant to the terms of the Placing Agreement, XCAP has conditionally agreed to use its reasonable endeavours, as agent to the Company, to place the Placing Shares at the Placing Price with certain institutional and other investors. The above obligations are subject to certain conditions including those listed above. The Placing is not being underwritten by XCAP.

The Placing Agreement contains customary warranties given by the Company with respect to its business and certain matters connected with the Placing. In addition, the Company has given certain indemnities to XCAP in connection with the Placing and XCAP's performance of services in relation to the Placing. XCAP is entitled to terminate the Placing Agreement in specified circumstances including where there has been a material breach of the warranties.

In accordance with the terms of the Placing Agreement, XCAP will be issued with corporate finance warrants in addition to corporate finance fees and commissions charged by them to the Company in connection with their services relating to the Placing.

Directors' shareholdings

The current beneficial and non-beneficial interests of the Directors in Ordinary Shares (not including Ordinary Shares held by the Cyan Employee Benefit Trust) and the beneficial and non-beneficial interests following the Placing are set out below:

	Date of this document		Placing Shares subscribed	Following the Placing
	Number of Ordinary Shares	Percentage of Ordinary Share capital	Number of Ordinary Shares	Number of Ordinary Shares	Percentage of Ordinary Share capital
Director
John Cronin Dr. John Read	50,696,884 25,892,621	1.90% 0.97%	28,402,307 4,306,480	79,099,191 30,199,101	2.32% 0.89%
Simon Smith Stephen Newton	24,221,424 -	0.91% -%	28,402,307 5,555,573	52,623,731 5,555,573	1.55% 0.16%

The following Ordinary Shares held by the Cyan Employee Benefit Trust are beneficially owned by the following Directors to the extent the share price of the Company exceeds 2.5 pence per Ordinary Share, however the rights to such Ordinary Shares shall expire on 18 December 2013:

Director	Number of Ordinary Shares
Dr. John Read	1,000,000

The Directors intend to subscribe for, in aggregate, 66,666,667 Placing Shares which represents, in aggregate, 9.1 per cent. of the Placing Shares being issued pursuant to the Placing. Following the Placing, the Directors will hold, in aggregate, 167,477,596 Ordinary Shares, accounting for 4.92 per cent. of the Enlarged Share Capital.

 

END

 

 

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