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Fastrack Group PLC (FTK)

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Monday 05 June, 2000

Fastrack Group PLC

Issue of Equity, etc

Fastrack Group PLC
5 June 2000


RIGHTS ISSUE OF UP TO 41,248,537 NEW ORDINARY SHARES AT 8.5P PER SHARE,
PROPOSED GRANT OF PUT AND CALL OPTIONS TO THE TUFTON FUNDS OVER 6,084,159
ORDINARY SHARES RESECTIVELY, BOTH AT 8.5P PER SHARE, AND PROPOSED AMENDMENTS
OF THE SHARE OPTION SCHEMES

Introduction

The  Company  announced today a fundraising seeking to raise approximately 
£3.5 million by means of a Rights Issue to Qualifying Shareholders.  The
Rights Issue has  been  fully  underwritten  by  the Tufton  Funds.   The 
fund-raising  will strengthen  the Group's balance sheet and reduce its level
of indebtedness.   It will also provide the Group with the additional working
capital that is required for  it  to  continue trading and for the development
of new areas of  business, particularly the exploitation of fulfilment
opportunities provided by e-commerce and the internet.

It  is also proposed to grant the Tufton Options to the Tufton Funds which 
will enable  the  Company  to raise approximately £1 million in  further 
funding  at various times over the next two years.  As the Tufton Funds are a
related  party of the Company by virtue of the size of their shareholding in
the Company, entry into  the  Tufton  Options  by the Company is conditional 
on  the  approval  of Shareholders.

The  Company  also  announced today its audited results for the  year  ended 
31 December  1999.   A circular giving details of the Proposals is being  sent
 out together  with  the Group's audited financial statements for the year 
ended  31 December 1999.  The accounts have been prepared on a going concern
basis on  the assumption  that  the  Rights  Issue  is completed.   The 
auditors'  report  to Shareholders,  whilst  unqualified, contains an 
explanatory  paragraph  drawing Shareholders'   attention  to  the 
uncertainty  surrounding   this   basis   of preparation.

In addition, the Board proposes to amend the individual and scheme limits
within the Share Option Schemes as explained below.

The  Proposals outlined above are all conditional upon approval by
Shareholders.  The  purpose  of  this  document is to provide you with 
information  about  the Proposals  and  to seek your approval and your
authority to allot  New  Ordinary Shares  pursuant to the Proposals.  Notice
of the Extraordinary General  Meeting to  be held at 10.30am on 29 June 2000
is set out at the end of the circular  to Shareholders.

Shareholders  should be in no doubt of the importance of the  Proposals  to 
the future of the Group.  The attention of Shareholders is drawn to the
statement on working capital and the recommendation of your Directors set out
below.

The  Tufton  Funds have indicated their support for the Proposals by giving 
the Company  an undertaking to vote their holding of 52.82 per cent. of the
Existing Ordinary Shares in favour of the Resolutions to be proposed at the
Extraordinary General  Meeting except for resolution number 4, from which they
 will  abstain, and to take up their full pro rata entitlement of 21,787,544
Rights shares under the Rights Issue as well as underwriting the balance of
the issue.  In addition, the  Tufton Funds have served notice on the Company
that they intend to exercise their  right  to  convert  their Convertible Loan
into  6,150,645  New  Ordinary Shares.

Background to and effect of the Proposals

The  Board  has  been  evaluating a number of strategic opportunities  with 
the objective of significantly enhancing shareholder value in the medium term.

In   addition  to  growing  the  Group's  business-to-business  activities 
both organically  and by acquisition, where suitable opportunities arise,
significant scope  exists to expand the Group's home delivery division and
other  e-commerce related activities.

The  infrastructure  investments completed in  1998  and  1999  and  the 
losses incurred  in the year have adversely affected the Group's net asset and
working capital position.

The  net  proceeds  of the rights Issue will provide the Group  with 
additional working capital.  This will both restore the Group's balance sheet
to a positive net  asset position and immediately eliminate the Group's
overdraft, which stood at  £1,097,000 as reported in the Group's audited
accounts at 31 December  1999.
In  addition,  it will support the expansion of the home delivery  division 
and enable  the  Board  to exploit other fulfilment opportunities arising 
from  the growth in e-commerce.

As  part  of Fastrack's commitment to the continued development of home
delivery and  e-commerce fulfilment, the Group has reached commercial
agreement to  enter into  a  strategic relationship with X4i  Limited ('X4i')
which is  an  internet exchange for freight and haulage which will be launched
later this year.

This relationship will enable X4i to offer its clients home delivery
fulfilment. To  strengthen  this relationship, the Group intends to apply 
£200,000  of  the proceeds of the Rights Issue to acquire a small shareholding
in X4i.

Proposed Director

It  is  proposed  that  following the completion  of  the  Rights  Issue 
Jeremy Brassington  (aged  48)  will  be appointed to  the  Board  as  a 
non-executive director.

Mr  Brassington  is  the managing partner of Bulldog Partners  Limited,  a 
fund management  company which he co-founded and which now advises the Tufton 
Funds. He was previously managing director of Tufton Capital Limited and was a
founding partner  of Baring Venture Partners in 1984.  He has been an investor
in  and  a director of a wide range of companies.

Details of the Rights Issue

The  Rights Issue provides Qualifying Shareholders with the opportunity to
apply for rights shares at the Issue Price on the following basis:

20 Rights Shares for every 39 Existing Ordinary Shares

registered in their names at the close of business on the Record Date and so 
in proportion  for  any  greater number of shares so registered.  
Entitlements  to apply  for New Ordinary Shares will be rounded down to the
nearest whole number.  Fractions of New Ordinary Shares will be disregarded in
the calculation  of  the qualifying  Shareholders' entitlement.  Applications,
together with  payment  in full, must be received by 21 July 2000.

The rights Issue is conditional, inter alia, upon the passing of the
resolutions to  be proposed at the Extraordinary General Meeting set out at
the end of  this document  and upon Admission becoming effective by not later
than 30  July  2000 (or  such  later  date, not later than 31 August 2000, as
the Tufton  Funds  and Fastrack  may  agree).  The New Ordinary Shares to be
issued in connection  with the  Rights Issue will, when issued fully paid,
rank pari passu in all  respects with the Existing Ordinary shares.

The  Rights  Issue will raise net proceeds of approximately £2.9 million, 
after the expenses of the Proposals, which will be applied as set out above.

The  Rights  Issue has been fully underwritten by the Tufton Funds.  The 
Tufton Funds  are being paid a commission of 0.25 per cent. on their
commitment.   This consideration has been determined by negotiation and not by
competitive  tender. Due  to the size and circumstances of the Company there
would be an insufficient number of participants to enable a competitive tender
to be carried out.  Rights Shares  not taken up by Qualifying Shareholders or
purchased in the market  'nil paid'  will  be taken up by the Tufton Funds
under the terms of the Underwriting Agreement.

Details of the Tufton Options

The  Tufton  Options  have  been designed to provide  further  flexible 
working capital facilities to the Group.  The Put Option will allow the
Company, at  any time between 1 January and 30 June 2001 to require the Tufton
Funds to subscribe for 6,084,159 Ordinary Shares at the Issue Price of 8.5p. 
The Tufton Funds will not  be required to subscribe for these Ordinary Shares
if the net assets of the Group  have  decreased between 30 June and 31
December 2000.  In  addition,  the Directors must exercise reasonable
endeavours to obtain an alternative source of funding before recourse may be
made to the Put Option.

The  Call Option will allow the Tufton Funds at any time up to a date two 
years after Admission to subscribe for 6,084,159 Ordinary shares at the Issue
Price of 8.5p.

If  any  Ordinary  Shares  are issued under the Tufton Options,  those 
Ordinary Shares  will, when issued, rank pari passu with all Ordinary Shares
in issue  at that  time.   Applications will be made at the earliest
practicable  opportunity for any Ordinary Shares so issued to be admitted to
the Official List of the  UK Listing  Authority  and  to trading on the London
Stock  Exchange's  market  for  listed securities.

Information on Fastrack

The  Group  operates  a  next  day  delivery service  for  parcels  and 
freight throughout  the  UK and the Republic of Ireland.  Most of Fastrack's 
activities are   business-to-business  although  the  home  delivery 
division,  which  was established  recently to exploit the opportunities
provided  by  e-commerce  and retailing over the internet, is growing rapidly.

The Group currently operates more than 400 vehicles from 55 locations across
the UK  (of  which  46 are franchised or operated by agents), with  a 
workforce  of approximately 400 people, excluding franchisees and agents.  The
head office  is in  Nuneaton,  where  the central distribution hub and sorting
 centre  is  also located.

The financial record of the Group for the three years ended 31 December 1999 
is summarised below:

                                 Year ended 31 December
                                   1997      1998       1999
                                   £000      £000       £000
Turnover                         24,207    23,138     26,229
                                -------  -------     -------
Operating profit/(loss)              34       329    (1,627)
Interest payable and similar                                
charges                           (243)     (254)      (429)
                                -------   -------    -------
Profit/(loss) on ordinary                                   
activities before taxation        (209)        75    (2,056)
                                -------   -------    -------
Net assets/(liabilities)            944     1,250      (174)
                                -------   -------    -------

Current Trading and Prospects

The  audited  results  of the Group for the year ended  31  December  1999 
were announced  today  and  show a loss after taxation of £1,956,000  (1998: 
£85,000 profit) on increased turnover of £26,229,000 (1998: £23,138,000).

The  audited  balance sheet of the Group shows increased net current
liabilities of  £2,228,000  (1998:  £729,000).  As stated  above,  the 
accounts  have  been prepared on a going concern basis on the assumption that
the Rights Issue, or  a similar  fundraising,  are successful.  The auditors' 
report  to  Shareholders, whilst  unqualified,  contains  an explanatory 
paragraph  drawing  Shareholders attention to this basis of preparation.

Proposed amendments to the limits under the Share Option Schemes

The Board is seeking shareholders' approval at the Extraordinary General
Meeting to  amend  the  individual and scheme limits within the  Share  Option
 Schemes.  Further   details  of  these  amendments  are  provided  in  the  
circular   to Shareholders.   The Board intends that all options granted in
the  future  under the  1993  Senior  Executive Share Option Scheme will be 
subject  to  demanding performance criteria, which have been or will be
designed to enhance shareholder value.   If Shareholders approve these
amendments at the EGM, the Board  intends to  grant  options to directors and
other managers of the Group over up  to   11 million  Ordinary Shares shortly
after the EGM, equivalent to approximately  8.6 per cent. of the issued share
capital of the Company following Admission.

The Tufton Funds and the issue of Conversion shares

As  at  the close of business yesterday, the Tufton Funds were interested in 
an aggregate  of  42,485,710  Existing Ordinary Shares  representing 
approximately 52.82 per cent. of the current issued share capital of the
Company.

The  Tufton  Funds  have undertaken to vote in favour of the Resolutions  to 
be proposed  at the Extraordinary General Meeting except for resolution 4,
relating to  the  Tufton Options, from which they will abstain.  In addition,
the  Tufton Funds  have  also undertaken to take up their pro rata entitlement
to 21,787,544 Rights  Shares under the Rights Issue and have underwritten the
balance  of  the Issue.

On  2  June 2000, the Tufton Funds notified the Company under the terms  of 
the agreement  relating to the Convertible Loan that they wished to  exercise 
their right  to convert all the amounts due to them into 6,150,645 New
Ordinary Shares under  the  authority granted to the Board by Shareholders at 
an  extraordinary general  meeting of the Company held on 23 March 2000.  The
New Ordinary  Shares to  be  issued in connection with the conversion of the
Convertible  Loan  will, when  issued, rank pari passu in all respects with
the Existing Ordinary  Shares and  rank  for all future dividends declared on
the Ordinary Shares.   Following Admission  and  assuming that the Tufton
Funds are required  to  take  up  their underwriting  commitment  in  full,
the Tufton Funds  will  hold  a  maximum  of 89,438,467  Ordinary  shares
representing 69.96 per cent. of  the  issued  share capital of the Company
following Admission.

Application has been made to the UK Listing Authority for the Admission  to 
the Official  List  of  the Conversion Shares.  It is expected that  the 
Conversion Shares will be admitted to the Official List and that dealings will
commence  on the London Stock Exchange's market for listed securities on 30
June 2000.

Extraordinary General Meeting

Set  out  at  the end of the circular to Shareholders is a notice convening 
the Extraordinary General Meeting of Fastrack to be held at 10.30am on 29 June
 2000 at  the offices of Herbert Smith, Exchange house, Primrose Street,
London,  EC2A 2HS  at  which the Resolutions will be proposed to approve the
allotment of  New Ordinary  Shares  pursuant  to the Rights Issue,  the 
Tufton  Options  and  the proposed  amendments to the individual and scheme
limits under the Share  Option Schemes.

Action to be taken

Shareholders will find enclosed with the circular a form of Proxy for use at
the EGM.   Whether  or  not  they intend to be present at the Extraordinary 
General Meeting, they are requested to complete and return the enclosed form
of proxy in accordance  with  the  instructions printed thereon  so  as  to 
arrive  at  the Company's  registrars, IRG plc, Balfour House, 390-398 High
Road, Ilford,  Essex IG1  1NQ, as soon as possible and in any event not later
than 10.30am on 27 June 2000.

Completion  and  return of the form of Proxy will not prevent Shareholders 
from attending  the  Extraordinary General Meeting and voting in person 
should  they wish to do so.

To  take  up  their maximum shares in the Rights Issue, Qualifying 
Shareholders must  lodge  their Provisional allotment Letter, together with a
remittance  for the  full amount payable, by post or by hand to IRG plc so as
to arrive no later than 3.00 p.m. on 21 July 2000.

Working Capital

Fastrack  is of the opinion that, taking into account available bank  and 
other facilities and the estimated net proceeds to be received by the Company
from the Rights  Issue, the working capital available to the Group is
sufficient for  its requirements for the period until 31 December 2000. 
However, the working capital available to the Group, on the basis stated
above, may not be sufficient for its requirements between 1 January and 30
June 2001.

In  order  to  address  the possibility that the Group may not  have 
sufficient working  capital between 1 January and 30 June 2001, Fastrack has 
entered  into the  Put  Option with the Tufton Funds, subject to the approval
of Shareholders.  However,  Shareholders should be aware that the Company will
 only  be  able  to require  the Tufton Funds to subscribe for Ordinary Shares
under the Put  Option if  the  performance criterion referred to above is met
by the Group.   If  this performance  criterion  is  not  met the Directors 
would  need  to  arrange  an alternative source of finance, which has not yet
been identified, in  order  for the  Group  to be certain of having sufficient
working capital for  its  present requirements, that is, for a period of at
least the next 12 months from the date of this document.

Recommendation

The  Proposals  are very important to the future of the Group and  require 
your close  attention.   Your  Directors  are of  the  view  that  the  Rights
 Issue represents the only available means of enabling the Group to continue
trading on the  basis of its current plans and with appropriate levels of
working  capital. Whether or not you intend to take up your entitlement under
the rights Issue you are  strongly urged to vote in favour of the Resolutions
to be proposed  at  the Extraordinary General Meeting set out at the end of
this document by filling  in and returning the Form of Proxy in accordance
with the section headed 'Action to be  taken' above.  If the Rights Issue is
not implemented in full then,  in  the absence  of  any  alternative proposal,
the Company  will  have  to  enter  into negotiations  with  its  lenders and
other potential  providers  of  finance  in relation  to  both  its  existing
indebtedness and its further  working  capital requirements.   If  such
negotiations were to prove unsuccessful  the  Directors would  have  to 
consider whether the Group was able to  continue  to  trade  or whether
insolvency procedures should be initiated.

Your  Directors  consider that the Proposals are in the best  interests  of 
the Company  and  the  Shareholders as a whole.  Your Directors, who  have 
been  so advised by Brewin Dolphin Securities, also consider that the terms of
the Tufton Options  are  fair and reasonable so far as the Shareholders are
concerned.   In giving  its  advice,  Brewin  Dolphin Securities  has  taken 
into  account  the commercial assessment of the Directors.

Accordingly, the directors unanimously recommend the shareholders of the
Company to  vote  in  favour of all the Resolutions to be proposed at the 
Extraordinary General  Meeting,  as  they  intend to do in respect  of  their 
own  beneficial holdings amounting to in aggregate 591,522 Existing Ordinary
Shares representing 0.74 per cent. of the current issued share capital of the
Company.

The  Tufton Funds, have undertaken to vote in favour of the Resolutions, 
except as  disclosed  below,  to be proposed at the Extraordinary  General 
Meeting  in respect  of  their  holding  amounting to 42,485,710  Existing 
Ordinary  Shares representing  approximately 52.82 per cent. of the current
issued share  capital of  the Company.  The Tufton Funds will abstain from
voting on resolution number 4  relating to the Tufton Options and will take
all reasonable steps  to  ensure that its associates, if any, will also
abstain from voting on that resolution.

The  Directors,  the Proposed Director and the Tufton Funds intend  to  take 
up their entitlements in full under the Rights Issue.



                        

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