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Vanco PLC (VAN)

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Wednesday 28 September, 2005

Vanco PLC

Issue of Equity

Vanco PLC
28 September 2005

Wednesday, 28 September 2005



   NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
                           CANADA, AUSTRALIA OR JAPAN


                                   Vanco plc

   Placing of new ordinary shares at 450 pence per share to raise £20 million


Introduction



Vanco plc ('Vanco' or the 'Company') announces that it has raised £20 million by
the issue of 4,444,444 new ordinary shares of 5 pence each at 450 pence per
share (the 'Placing Shares') to institutional investors (the 'Placing')
representing in aggregate 8.05 per cent. of the issued share capital of Vanco.



Background to and reasons for the Placing



On 1 August 2005, Vanco completed the acquisition of substantially all of the
business and assets of Universal Access Global Holdings Inc. ('Universal Access
').  The consideration was $18.7 million (£11.0 million) in cash which was
funded from bank debt. In addition, Vanco acquired liabilities capped at $3.5
million (£2.0 million). Costs associated with the acquisition of Universal
Access amounted to £0.5 million.



Universal Access, which was founded in 1997, is based in Chicago and is a
provider of network provisioning and management services to US and international
carriers and integrators.  It has also developed sophisticated software to
optimise efficiencies in the design and costing of customer networks.  Vanco
believes Universal Access will complement its existing operations.



Vanco continues to find significant growth opportunities in the market for
corporate network services.  This contrasts with the recent announcements of
various Asset Based Carriers (ABCs) who continue to find the market conditions
challenging.  Vanco believes this reflects the growing demand from large
enterprises for the flexibility, global scale and service quality offered by
Vanco's virtual network operator approach.



The purpose of the Placing is to strengthen Vanco's balance sheet following the
acquisition of Universal Access.  The Directors of Vanco believe that the
Placing will enhance the Company's capital base and allow the Company to develop
/pursue the significant growth opportunities in the market, particularly with
additional channel partners following the recent landmark deals with ARINC and
Swisscom.  In the short term, the proceeds of the Placing will be used to reduce
the Company's borrowings.



Current trading of Vanco



On 12 September 2005, Vanco announced its interim results for the six months
ended 31 July 2005.  Allen Timpany, Chief Executive, said at the time:



'The drivers for growth are strong and they can be summarised as follows:



-    Continued increased recognition of the Vanco brand globally

-    A larger sales force which is more widely distributed globally and is
incentivised to deliver larger contracts

-    Technical developments including Voice over IP and MPLS Matrix

-    Increased use of outsourcing and carrier partners as a sales channel

-    Delivery of extended services to Universal Access' carrier marketplace

-    Growth within existing accounts

-    Benefits of increased global scale



In previous years there has been a significant weighting of turnover and
operating profit in the second half of the financial year and we expect this
trend to continue this year.  We believe that Vanco's business is well placed to
continue its record of success and remain confident about the prospects for the
full year.



In the year ending 31 January 2007, some new business sales resource will be
re-directed from sales to end users to provide training to our channel partners
in order to leverage the effect of their sales forces in the year ending 31
January 2008 and subsequent years.'



There has been no material change to the Company's current trading or prospects
since that announcement.



The Placing



The Placing Shares will be issued credited as fully paid and will rank pari
passu in all respects with the existing ordinary shares of Vanco including the
right to receive all dividends and other distributions declared, made or paid
after the date of issue.



Application will be made to the UK Listing Authority and to the London Stock
Exchange plc for the new ordinary shares, which will rank pari passu in all
respects with the existing ordinary shares in Vine, to be admitted to the
Official List maintained by the UK Listing Authority, and to be admitted to
trading by the London Stock Exchange plc on its market for listed securities. It
is expected that such admissions will become effective at 8 am on 3 October
2005.



Enquiries:


Vanco                                                 020 7636 1700
Allen Timpany, Chief Executive
Simon Hargreaves, Finance Director

Dresdner Kleinwort Wasserstein                        020 7623 8000
Chris Treneman
James Rudd




This announcement has been issued by Vanco and is the sole responsibility of
Vanco.  This announcement is for information purposes only and does not
constitute an offer to sell or issue any securities or a solicitation of an
offer to buy or acquire any securities or investment advice in any jurisdiction
including, without limitation, the United Kingdom, the United Sates, Canada,
Australia or Japan.



The Placing Shares have not been and will not be registered under the US
Securities Act of 1933 and many not be offered or sold within the United States
absent registration or an exemption from registration.  No public offering of
securities will be made in the United States.



Dresdner Kleinwort Wasserstein Securities Limited, which is authorised and
regulated by the Financial Services Authority, is acting for Vanco and for no
one else in connection with the Placing and will not be responsible to anyone
other than Vanco for providing the protections afforded to clients of Dresdner
Kleinwort Wasserstein Securities Limited nor for affording advice in relation to
the Placing or any other matters referred to in this document.



Neither this document nor any copy of it may be taken, transmitted or
distributed, directly or indirectly, in or into the United States, Canada,
Australia or Japan or in any jurisdiction in which such transmission or
distribution is unlawful.  Any failure to comply with this restriction may
constitute a violation of US, Canadian, Australian or Japanese securities laws
or the securities laws of other states as the case may be.



This announcement includes 'forward-looking statements'.  All the statements
other than statements of historical facts included in this announcement,
including, without limitation, those regarding Vanco's financial position,
business strategy, plans and objectives of management for future operations
(including development plans and objectives relating to Vanco's products and
services) are forward-looking statements.  Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors that
could cause the actual results, performance or achievements of Vanco or those
markets and economies to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements.  Such forward-looking statements are based on numerous assumptions
regarding Vanco's present and future business strategies and the environment in
which Vanco will operate in the future and such assumptions may or may not prove
to be correct.  These forward-looking statements speak only as at the date of
this announcement.  Vanco expressly disclaims any obligation (other than
pursuant to the Listing Rules of the UK Listing Authority) or undertaking to
disseminate any updates or revisions to any forward-looking statements contained
herein to reflect any change in Vanco's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.








                      This information is provided by RNS
            The company news service from the London Stock Exchange