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VirtualInternet.net (VET)

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Tuesday 21 March, 2000

VirtualInternet.net

Proposed Placing at 900p per Share to Raise £27m

VirtualInternet.net PLC
21 March 2000


Not for distribution outside the United Kingdom.  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.

VirtualInternet.net plc

£27.0 million proposed placing at 900 pence per share, move to the Official
List and change of name to Virtual Internet plc
                                                                              
                                                                              
Placing of 3,673,844 Ordinary Shares at 900p per share, raising £27.0 million
gross, for Virtual Internet and selling £6.1 million on behalf of existing
shareholders.

Placing fully underwritten by Hoare Govett.

Proposed admission of ordinary shares to the Official List on 18 April 2000.

Placing and admission conditional, inter alia, on approval of Virtual Internet
shareholders


Jason Drummond commenting said:

'We have a very clear objective to become a dominant provider of retail and
wholesale domain-based services to businesses in Europe and Internet brand and
trade mark protection services globally.  This has been a very successful
fundraising and the move to the main market in London also reinforces the
stature of VirtualInternet as we continue to expand on an international
basis.'

Enquiries:

VirtualInternet.net plc          Tel: 0171 460 4060
Jason Drummond, Chief Executive

Hoare Govett Limited             Tel: 0171 678 8000
Mark Ashurst  Director, Corporate Advisory
Silvio Tavares  Director, Corporate Broking

Holborn Public Relations         Tel: 0171 929 5599
John Bick

Virtual  Internet is a leading European domain-based Internet services company
offering  solutions that enable businesses to communicate, sell  products  and
protect  their  brands  and trade marks on the Internet.  The  Group  provides
Internet  domain  name  registration, e-mail, website hosting  and  electronic
commerce  services that enable business to be undertaken on-line. In addition,
the  Group  provides  Internet  brand and trade mark  protection  services  to
monitor the use and abuse of customers' brands and trade marks on-line.



Not for distribution outside the United Kingdom.  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.

VirtualInternet.net plc

£27.0 million proposed placing at 900 pence per share, move to the Official
List and change of name to Virtual Internet plc
                                       

Introduction

Further to the announcement of the bookbuilding exercise on 13 March, the
board of VirtualInternet.net plc ('Virtual Internet' or the 'Company') is now
pleased to announce that the Company has conditionally agreed to place
3,673,844 Ordinary Shares at 900p per share (the 'Placing') with institutional
investors, of which 3,000,000 New Ordinary Shares are being issued by the
Company to raise up to £25.0 million, net of expenses.  In addition, 673,844
existing Ordinary Shares are being placed on behalf of certain shareholders,
including Jason Drummond, the Company's Chief Executive Officer.  In addition,
the Company proposes to apply for its share capital to be admitted to the
Official List and to change its name to Virtual Internet plc.  The Company's
warrants will remain quoted on AIM.

The Placing has been fully underwritten by Hoare Govett Limited, a member of
the ABN AMRO group, and is conditional upon, inter alia, admission of the
ordinary shares to the Official List ('Admission'), the passing of the first
resolution to be proposed at an Extraordinary General Meeting of the Company
convened for 17 April 2000 ('EGM') and the agreement between amongst others
the Company and Hoare Govett relating to the Placing ('Placing Agreement')
becoming unconditional in all respects and not having been terminated in
accordance with its terms.

In order to effect the Placing, the Directors are seeking authority to allot
the New Ordinary Shares and a waiver of shareholders' rights of pre-emption at
the EGM.


Reasons for Admission and the Placing of the New Ordinary Shares and use of
proceeds

The Directors believe that Admission to the Official List will promote further
awareness of Virtual Internet's names and its brands, both in the UK and
overseas and provide the Company with greater access to additional sources of
capital.  The Directors believe that this increased awareness, together with
the proceeds from the Placing of the New Ordinary Shares, will strengthen the
Group's ability to attract new clients and compete for acquisition
opportunities.

Since January 1999, when Virtual Internet Limited reversed into Charriol plc,
the Group has expanded rapidly.  In April 1999, the Company acquired Net
Searchers and the remaining 66 per cent of VIS.  The Group has continued its
international expansion, opening offices in Milan, New York, Paris and Sydney.
In addition, it has entered into strategic relationships with a number of
companies, including AOL France, Level (3) Communications and Microsoft
Networks.

The overall strategic objective of the Group is to be a global leader in its
core services; being retail and wholesale domain-based services and Internet
brand and trade mark protection services.  In order to achieve this, the Group
intends to concentrate on expanding its network of sales and marketing
offices.  Virtual Internet also intends to acquire or establish new service
operations, which will provide technical support and service provision
capabilities for the Group's offices in different operating regions.

The Group will raise approximately £25.0 million, net of expenses, from the
Placing of the New Ordinary Shares which initially will be used to strengthen
the Group's balance sheet and help finance future expansion of the business in
line with the Group's strategy and objectives.

The Directors intend to use the proceeds of the Placing in developing the
Group's existing business and for acquisitions.  Within the existing business,
the Directors intend to spend approximately:

£3.0 million on the Group's infrastructure, including new web site hosting
equipment;

£1.5 million to fund the costs of additional administration, sales and
technical staff;

£3.5 million on advertising and marketing costs, principally within wholesale
domain-based services and directed mainly at the corporate market; and

£2.0 million on general corporate expenditure, including supporting the
establishment of the Group's existing overseas operations.

In addition, the Directors require approximately £15.0 million for use in
acquisition opportunities.  It is expected that these funds will be used
principally in identifying, acquiring and developing new businesses in the
Group's target markets of Europe, the Asia Pacific region and the US.

The allocations and uses of the proceeds described above may change
substantially from the Group's current strategic plans, if market conditions,
the competitive environment or the regulatory environment were to change, or
if there are new technical innovations, or if other unforeseen or unpredicted
events were to transpire.  In such circumstances any material change in the
Group's strategy would be notified to the London Stock Exchange. The Directors
believe that the Group has sufficient financial resources to undertake the
Group's current objectives for the next 24 months.

The Directors will continue to evaluate opportunities to expand the Group by
way of acquisition and strategic investment.  In the event that such
transactions occur, Virtual Internet will utilise its cash, bank facilities,
and / or its equity as consideration.


Details of the Placing

3,673,844 Ordinary Shares are being made available in the Placing at 900p per
share, of which 673,844 Ordinary Shares, representing 18.3 per cent of the
Placing Shares, are being sold by existing shareholders, including 562,733
shares being sold by Jason Drummond and 3,000,000 New Ordinary Shares,
representing 81.7 per cent of the Placing Shares, are being issued by the
Company.  The New Ordinary Shares being issued by the Company will raise
approximately
£25.0 million, net of expenses, and will represent 12.3 per cent of the
enlarged issued share capital of the Company following the Placing.

Following Admission, Jason Drummond will hold 13,026,156 Ordinary Shares
(representing 53.4 per cent of the enlarged issued share capital of the Company
following the Placing) and has undertaken, subject to certain limited
exceptions, not to dispose of any of his remaining holding of Ordinary Shares
until after the announcement of the preliminary results of the Company for the
year ending 31 October 2001, except with the consent of Hoare Govett Limited. 
In addition, certain senior managers including Nicholas Wood and Douglas Teggin
are subject to existing lock-in arrangements which were put in place at the time
of the acquisition of Net Searchers Limited and Virtual Internet SARL, which
will remain in place following Admission.  Other substantial shareholders are
not subject to any lock-in arrangements.

The Placing has been fully underwritten by Hoare Govett and is conditional
upon, inter alia, Admission becoming effective by not later than 18 April 2000
or such later date as Hoare Govett Limited may agree, the passing of the first
resolution in connection with the Placing at the EGM and the Placing Agreement
becoming unconditional in all respects and not being terminated in accordance
with its terms.

The Placing price represents a discount of 7.0 per cent to the closing mid
market price of an ordinary share as at 20 March 2000, as derived from the AIM
section of the Daily Official List of the London Stock Exchange.

The Company's shareholding profile immediately following the Placing is
expected to be as follows:

                        Number of    Percentage  Percentage of
                         Ordinary     of issued  fully diluted
                           Shares         share   issued share
                                        capital        capital
                                %                            %
                                              %
                                                              
Directors             13,036,156*          53.5           50.9
Institutional           9,601,659          39.4           37.5
investors
Other shareholders      1,741,101           7.1            6.8

*Includes the acquisition of 10,000 shares by William Slee, Chairman of
Virtual Internet, in the Placing, the transfer by Jason Drummond of 11,111
Ordinary Shares on 20 March 2000 to his brother, Nigel Drummond and the sale
by Jason Drummond of 562,733 shares in the Placing.


Employee share participation

The Directors believe that a key element in the Group's future success will be
its ability to attract and retain its employees and have therefore approved
new Share Option Schemes for adoption subject to the approval of shareholders
at the EGM.  The Directors believe that employee incentivisation pursuant to
the new Share Option Schemes will align employee and shareholder objectives.
Since no options have been granted under the existing Share Option Scheme and
because the Directors believe its terms are now inappropriate for the Company,
it is intended that this scheme will be wound up immediately following
Admission.

Full details of the new Share Option Schemes are set out in a circular to
shareholders of the Company, which is being posted today.


Change of Name

The Directors believe that it is appropriate to simplify the name of the
Company.  A resolution will therefore be proposed at the EGM to change the
Company's name to Virtual Internet plc.


Extraordinary General Meeting

An EGM has been convened for 10:00am on 17 April 2000.  At that meeting,
resolutions will be proposed, inter alia, to approve the Placing and the new
Share Option Schemes and to change the Company's name. Irrevocable
undertakings to vote in favour of the resolutions to be proposed at the EGM
have been obtained in respect of approximately 63.7 per cent of the Company's
issued share capital.


General

A circular setting out details of the Placing and Admission and containing a
notice of EGM is being posted to shareholders today.


Enquiries:

VirtualInternet.net plc            Tel: 0171 460 4060
Jason Drummond  Chief Executive

Hoare Govett Limited               Tel: 0171 678 8000
Mark Ashurst  Director - Corporate Advisory
Silvio Tavares  Director - Corporate Broking

Holborn Public Relations           Tel: 0171 929 5599
John Bick

This  announcement does not constitute or form part of any offer or invitation
to sell or issue or any solicitation of any offer to purchase or subscribe for
any  securities in any jurdistriction, nor shall it (or any part of  it)  form
the a basis of, or be relied upon in connection with, or act as any inducement
to  enter  into,  any contract or commitment whatsoever with  respect  to  the
Placing.  Any person who intends to purchase or subscribe for ordinary  shares
in  the Company in the Placing will only make such purchase or subscription on
the  basis  of  the  information contained in the  circular  being  posted  to
shareholders today.

Hoare Govett Limited is acting as financial adviser to Virtual Internet and
no-one  else  in connection with the Placing and will not be responsible  to 
any other  person  for  providing the protections afforded to customers  of 
Hoare Govett Limited or for providing advice in relation to the Placing.


                                                                  

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