Amendment to the Terms of Convertible Loan Stock
9 December 2010
SOPHEON PLC
AMENDMENT TO THE TERMS OF CONVERTIBLE LOAN STOCK
& RESCHEDULING OF BLUECREST TERM LOAN
Sopheon plc ("Sopheon" or "the Group") announces that it has reached agreement
with counterparties to adjust key aspects of the Group's debt financing. These
adjustments improve the maturity profile of the Group's convertible loan stock,
and introduce $2.7 million of additional working capital from the Group's
existing corporate lenders.
Chairman Barry Mence said:
"As evidence of rising demand for our products and services continues to mount,
we wish to ensure that we are well positioned to take advantage of an improving
business climate. This will entail a controlled acceleration of recruitment, as
well as securing the ability to react rapidly to market opportunities that
arise. To support these priorities, we have effected a major improvement to
working capital. This has been accomplished without material dilution to
shareholders. We look forward to higher growth, and further strengthening of
our strategic position."
Changes to convertible loan stock
On 2 October 2009, the Company announced that it had issued £850,000 of
convertible unsecured loan stock (the "Loan Stock") to a group of investors
including key members of the Board and senior management team, maturing on 2
October 2011. The holders of the Loan Stock have unanimously agreed to extend
the maturity date of the loan stock by sixteen months to 31 January 2013 and to
remove the provision under which, if the Company undertook a placing or other
issue of Shares at a lower price per Share than the Conversion Price, the
Conversion Price would be adjusted to the placing price (the "Placing
Provision"). This amendment was coupled with modification of the conversion
price of the loan stock to 7.75p per share, being the current market price,
from 10p per share. These changes improve the net current asset position of the
group, while also removing a potential source of income statement volatility
linked to the accounting treatment of the Placing Provision under the rules of
International Accounting Standard 39.
In accordance with the AIM Rules for Companies, Daniel Metzger, having
consulted with the Company's Nominated Adviser, Seymour Pierce Limited, has
acted as independent director with respect to this transaction and considers
that the amendment to the terms of the convertible loan stock are fair and
reasonable insofar as the Company's shareholders are concerned.
Renegotiation of BlueCrest debt
In June 2007, the group entered into a $3.5 million 48-month mezzanine term
loan with BlueCrest Capital Finance ("BlueCrest"), in connection with its
acquisition of Alignent Software Inc. This term loan was repayable in equal
monthly instalments through to July 2011 and had a carrying value at the end of
November 2010 of $611,000.
The Company has come to agreement with BlueCrest to refresh the mezzanine term
loan back up to $3.5 million, for a new 39-month term, repayable in equal
monthly instalments of $90,000 plus interest through March 2014. The loan bears
interest at 13% per annum and incurs a facility fee of 3.75%. After expenses
and deducting the carrying value of the original loan, this transaction brings
a net cash injection of $2.7 million to the Group. No warrants are being issued
to BlueCrest in connection with the transaction.
In addition to the term loan, for a number of years the Group has had access to
a revolving line of credit with BlueCrest, secured against the trade
receivables of Sopheon's North American business and with a maximum draw
capacity of $1.25 million. This facility was renewable annually on 30 June, but
in conjunction with the changes to the term loan, the next renewal date for the
facility has been extended to 30 November 2011.
Sopheon plans to issue its next trading update providing initial indications of
2010 performance, on 27 January.
For further information contact:
Barry Mence, Chairman Sopheon plc Tel : + 44 (0) 1483 685 735
Arif Karimjee, CFO Sopheon plc Tel : + 44 (0) 1483 685 735
Justine James / Kirsty Hansard Communications Tel : + 44 (0) 20 7245 1100
Corcoran
Floor van Maaren Citigate First Financial Tel : + 31 (0) 205 754 010
Catherine Leftley / Sarah Seymour Pierce Corporate Tel: +44 (0) 20 7107 8000
Jacobs / Richard Redmayne Finance
About Sopheon
Sopheon (LSE: SPE) is an international provider of software and services that
help organisations improve the business impact of product innovation. Sopheon's
solutions automate and govern the innovation process, enabling companies to
increase revenue and profits from new products. Sopheon's solutions are used by
industry leaders throughout the world, including BASF, Burger King, Corning,
Electrolux, Honeywell, Motorola and SABMiller. Sopheon is listed on the AIM
Market of the London Stock Exchange and on the Euronext in the Netherlands. For
more information, please visit www.sopheon.com.
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