Statement re Placing and Open Offer
Alpha Returns Group plc
(the "Company" or "Alpha Returns")
Placing of 340,000,000 Ordinary Shares and
Open Offer of up to 184,136,030 Ordinary Shares at an issue price of 0.15p per share
The Company is pleased to announce its intention to raise up to approximately £0.79 million (before expenses) by means of a Placing, with certain existing shareholders, of 340,000,000 Ordinary Shares at a price of 0.15p per Ordinary Share (to raise £0.51 million before expenses) and by way of an Open Offer to Eligible Shareholders of up to 184,136,030 Open Offer Shares at an issue price of 0.15p per share (to raise up to a further £0.28 million). The Placing Shares have been placed firm and are not subject to completion of the Open Offer. The Open Offer is not being underwritten. The Open Offer is being made to Eligible Shareholders to allow them to participate in the Fundraising in the Company at the same price as Placees.
A circular (the "Circular") outlining the background to and reasons for, and to explain the terms of and action to be taken by Shareholders in respect of the Open Offer is expected to be posted to Eligible Shareholders on 15 August 2013 together with Application Forms to Eligible Non-CREST Shareholders.
For further information please contact:
Alpha Returns Group plc 020 7469 0930
Angus Forrest, Chairman
ZAI Corporate Finance Ltd (Nomad) 020 7060 2220
Peter Trevelyan-Clark/Wei Wang
Peterhouse Corporate Finance Ltd (Broker) 020 7469 0935
Reasons for the Fundraising
The net proceeds of the Placing together with the Company's existing cash resources will, in the opinion of the Directors, provide the Company with sufficient funds to make its first investment(s) and provide the Company with working capital for at least the next 12 months.
Any net proceeds derived from the Open Offer will provide further funding to support the Company's business development.
Information on the Company and Investing Policy
The Company is an investment company which is seeking to build a portfolio of investments consisting of companies with strong growth and performance prospects, mainly within the Asia-Pacific region, with the intention to create and sustain long-term value for all Shareholders. The Company's investing policy was approved by Shareholders on 1 August 2013 and is set out at the end of this announcement.
Company Voluntary Arrangement and further share issues
On 14 November 2012 the Company proposed the terms of a CVA to its creditors and members. The CVA was approved on 3 December 2012 and it was agreed that the Company would issue 6,694,546 Ordinary Shares to preferential and unsecured creditors of the Company in return for them giving up their rights to claim against the Company for monies owed. The CVA Shares have still to be issued by the Company and do not form part of the Existing Ordinary Shares. It is expected that the CVA Shares will be issued during the current quarter.
The Directors intend that an open offer will be made to the CVA Shareholders in respect of their holdings of CVA Shares once those shares have been issued. This offer will be made on terms equivalent to those set out in this announcement in respect of the Open Offer.
Audited accounts for the Company for each of the three years ended 31 December 2012 are available on the Company's website www.alpharet.com as are the unaudited interim accounts for the 6 months ended 30 June 2013.
The Company's cash balance currently stands at approximately £47,000 with no debt, equivalent to approximately 0.097 pence per Existing Ordinary Share.
Details of the Placing
The Company has placed firm 340,000,000 Ordinary Shares at 0.15 pence per share with certain existing Shareholders to raise £0.51 million before expenses, subject only to admission. The Placing Shares are not subject to clawback and do not entitle participation in the Open Offer. Moreover, the Open Offer is not being made to Placees, who currently hold 29,995,000 Ordinary Shares.
The Placing Shares will, when issued, rank pari passu with the then existing Ordinary Shares including the right to receive all dividends thereafter declared, made or paid.
Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is expected that admission will be effective on 20 August 2013.
Principal terms of the Open Offer
A total of up to £0.28 million is to be raised through the Open Offer pursuant to which up to 184,136,030 Ordinary Shares are being offered at an issue price of 0.15p per share to Eligible Shareholders on the terms and conditions set out in the Circular and in the Application Form. The Open Offer Price represents a discount of 85.00 per cent. to the closing mid-market price of 1.00p per Existing Ordinary Share on 13 August 2013.
The Open Offer is only being made to Shareholders, excluding Placees, whose names appear on the register of members of the Company on the Record Date as holders of Existing Ordinary Shares. Each Eligible Shareholder's entitlement has been calculated on the basis of 10 Open Offer Shares for every 1 Existing Ordinary Share held at the Record Date.
The Open Offer Shares have not been and are not intended to be registered or qualified for sale in any jurisdiction other than the United Kingdom. Accordingly, unless otherwise determined by the Company and effected by the Company in a lawful manner, the Application Form will not be sent to existing Shareholders with registered addresses in any jurisdiction other than the United Kingdom since to do so would require compliance with the relevant securities laws of that jurisdiction. Applications from any such person will be deemed to be invalid. If an Application Form is received by any Shareholder whose registered address is elsewhere but who is in fact a resident or domiciled in a territory other than the United Kingdom, he/she should not seek to take up his/her entitlement.
Eligible non-CREST Shareholders should be aware that the Application Form is not a negotiable document or a document of title, and cannot be traded. Shareholders should also be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market nor will they be placed for the benefit of Shareholders who do not participate in the Open Offer.
Eligible CREST Shareholders should note that, although Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Eligible Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit.
Intentions of the Directors in relation to the Placing and the Open Offer and Related Party Participation
The Placees are all existing shareholders and in total are interested in 29,995,000Existing Ordinary Shares representing approximately 62.0% of the Company's issued ordinary share capital. In addition, one placee, Sze Thye Group Limited, which is subscribing for 310,000,000 Placing Shares, is interested in 28,000,000 Existing Ordinary Shares representing approximately 57.8% of the Company's ordinary share capital and as such falls to be treated as a related party under the AIM Rules. Following admission of the Placing Shares and prior to completion of the Open Offer, Sze Thye Group Limited will be interested in 338,000,000 Ordinary Shares, representing approximately 87.0% of the Company's then issued ordinary share capital, potentially reducing to approximately 59.0% assuming the maximum number of Open Offer Shares are allotted pursuant to the Open Offer.
The Directors, none of whom are participating in the Placing, having consulted with ZAI Corporate Finance Ltd, consider that the terms of the Placing are fair and reasonable insofar as Shareholders are concerned.
Mr Christopher Neo, Executive Director, intends to take up his full entitlement under the Open Offer of 11,600,000 Open Offer Shares. Other directors do not intend to participate.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
|Record Date for Open Offer||5.00 pm on 13 August|
|Announcement of Open Offer and Placing ||15 August|
|Posting of this document and the Application Forms||15 August|
|Existing Ordinary Shares marked 'ex' by London Stock Exchange||8.00 am on 15 August|
|Open Offer Entitlements credited to stock accounts in CREST of Eligible CREST Shareholders||8.00 am on 16 August|
|Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST||4.30 pm on 28 August|
|Latest time for depositing Open Offer Entitlements into CREST||3.00 pm on 29 August|
|Latest time for splitting of Application forms|
(to satisfy bona fide market claims only)
|3.00 pm on 30 August|
|Latest time and date for receipt of Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions||11.00 am on 3 September|
|Announcement of results of the Open Offer through a Regulatory Information Service ("RIS")||4 September|
|Admission and commencement in dealings in the Open Offer Shares on AIM||8.00 am on 5 September|
|CREST accounts credited with Open Offer Shares||5 September|
|Definitive share certificates for Open Offer Shares despatched by||17 September|
References to times in are to London time (unless otherwise stated).
The dates and timing of the events in the above timetable are indicative only and may be subject to change at the absolute discretion of the Company. If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement to an RIS.
In order to subscribe for Open Offer Shares under the Open Offer, Eligible Shareholders will need to follow the procedure set out in Part II of the Circular and, where relevant, complete the accompanying Application Form.
OPEN OFFER and PLACING STATISTICS
|Market price per Existing Ordinary Share1|| 1.00p |
|Discount to Existing Ordinary Shares|| 85.00% |
|Number of Existing Ordinary Shares2|| 48,408,603 |
|Number of Placing Shares to be issued by the Company||340,000,000|
|Number of Ordinary Shares available under the Open Offer|| Up to 184,136,030 |
|Number of Ordinary Shares in issue on Admission3||572,544,633|
|Offer price per Open Offer Share||0.15p|
|Market capitalization of the Company on Admission at the Open Offer Price3||£0.86 million|
|Approximate percentage of the Enlarged Share Capital3|
Represented by the Existing Ordinary Shares
Represented by the Placing Shares
Represented by the Open Offer Shares4
|Gross proceeds of the Placing||£0.51 million|
|Estimated gross proceeds of the Open Offer3||£0.28 million|
|Estimated net proceeds of the Open Offer and Placing3||£0.74 million|
|Number of CVA Shares|| 6,694,546 Ordinary Shares |
|CVA shares as a percentage of Ordinary Shares in issue at Admission3||1.17%|
The closing price on 13 August 2013, being the last practicable Business Day prior to the publication of this announcement.
As at the close of business on 13 August 2013, being the last practicable Business Day prior to the publication of this announcement.
Assuming the maximum number of Open Offer Shares is allotted pursuant to the Open Offer.
With its Asia-centric focus, the Company will actively seek to acquire and consolidate holdings in companies operating in high-growth Asian economies, with the intention to create and sustain long-term value. The Company may invest in any business sector within its targeted geographic focus.
The Directors see Asia-Pacific as having considerable growth potential for the foreseeable future and many of the prospects they have identified are in this region. The Directors will focus on investments and the opportunities would generally have some or all of the following characteristics, namely:
a majority of their revenue derived from the Asia-Pacific, and strongly positioned to benefit from the region's growth;
a trading history which reflects past profitability or potential for significant capital growth going forward; and
where all or part of the consideration could be satisfied by the issuance of new Ordinary Shares or other securities in the Company. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate.
It is anticipated that the main driver of success for the Company will be its focus, during the investment screening process, on the management involved in the potential investee companies and the potential value creation that the team of people is capable of realising. The Company will identify and assess potential investment targets and where it believes further investigation is required, intends to appoint appropriately qualified advisers to assist in the due diligence process.
The Company intends to be an active investor, and the Directors will seek representation on the board of the investee company where they feel that an investee company would benefit from their skills and expertise.
Investments may be made in all types of assets falling within the remit of the Investing Policy and there will be no sector-driven investment restrictions. Investments may be made in either quoted or unquoted companies and structured as a direct acquisition, joint venture or as a direct interest in a project.
New investments will be held for the medium to longer term, although shorter term disposal of any investments cannot be ruled out. There will be no limit on the number of projects into which the Company may invest and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules. Where the Company builds a portfolio of related assets it is possible that there may be cross-holdings between such assets.
The Company intends to deliver Shareholder returns principally through capital growth rather than capital distribution via dividends.
The Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of becoming an investing company under AIM Rule 15, failing which the Ordinary Shares would then be suspended from trading on AIM. If the Investing Policy has not been implemented within a further six months the admission to trading on AIM of the Ordinary Shares would be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.
The Directors believe that their broad collective business and investing experience will assist them in the identification and evaluation of suitable opportunities and will enable the Company to achieve its investing objectives.
The following definitions apply throughout this announcement, except where the context requires otherwise.
| "Admission" || the admission of the Open Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules |
| "AIM" || the AIM market operated by the London Stock Exchange |
| "AIM Rules" || collectively the AIM Rules for Companies and the AIM Rules for Nominated Advisers |
| "Application Form" || the application form being sent to Eligible Non-CREST Shareholders with this document |
| "Company Voluntary Arrangement" of "CVA" || the voluntary arrangement entered into by the Company with certain of its creditors on 3 December 2012 |
| "CVA Shares" || the 6,694,546 Ordinary Shares proposed to be issued to creditors pursuant to the CVA |
| "CVA Shareholders" || holders of Ordinary Shares to be issued to creditors pursuant to the CVA |
| "Eligible CREST Shareholders" || Eligible Shareholders holding Ordinary Shares in uncertificated form |
| "Eligible Non-CREST Shareholders" || Eligible Shareholders holding Ordinary Shares in certificated form |
| "Eligible Shareholders" || Shareholders, excluding Placees, whose names appear on the register of members of the Company on the Record Date as holders of Existing Ordinary Shares and who are eligible to be offered Open Offer Shares under the Open Offer in accordance with the terms and conditions set out in this document and, where relevant, in the Application Form |
| "Existing Ordinary Shares" || the 48,408,603 Ordinary Shares in issue at the date of this document |
| "Fundraising" || together the Placing and the Open Offer |
| "Investing Policy" || the investing policy of the Company as approved by Shareholders on |
1 August 2013
| "New Ordinary Shares" || the Placing Shares and Open Offer Shares |
| "Open Offer" || the open offer to Eligible Shareholders of up to 184,136,030 Ordinary Shares at the Open Offer Price |
| "Open Offer Entitlements" || an Eligible Shareholder's pro rata entitlement to Open Offer Shares |
| "Open Offer Price" || 0.15p per Open Offer Share |
| "Open Offer Shares" || the Ordinary Shares to be issued pursuant to the Open Offer |
| "Ordinary Shares" || ordinary shares of 0. 01p each in the capital of the Company |
| "Placees" || persons subscribing for Ordinary Shares as part of the Placing |
| "Placing" || the placing of the Placing Shares on behalf of the Company |
| "Placing Shares" || 340,000,000 Ordinary Shares to be issued pursuant to the Placing |
| "Record Date" || 5.00 pm on 13 August 2013 |
| "Shareholders" || holders of Ordinary Shares |
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(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Alpha Returns Group plc via Thomson Reuters ONE