Arrangement for the provision of additional working capital
Appointment of Executive Chairman
In its recent announcements made on 14th and 18th March 2011, the Company stated that it was in continuing discussions concerning its future working capital requirements. The Company now confirms that it expects to require a working capital facility of £3-4 million after the receipt of the £16 million gross proceeds from the equity placing which is the subject of today's general meeting and that the board's preference to meet this requirement is to arrange suitable new bank facilities, but that this has not been possible prior to the placing.
As a contingency to ensure that adequate working capital is available in the future, the Company has received indications of financial support from funds advised by North Atlantic Value LLP (a part of J O Hambro Capital Management Group) ("NAV"), Gartmore Investment Limited and Utilico Investments Limited ("Utilico") (the "Investors") that they would be prepared to provide additional funding of up to £3.33 million each, £10 million in total, in consideration for a further issue of ordinary shares at a price of 10 pence per share. This support would be available at the Company's request until the earlier of the Company notifying the Investors that the support is no longer required and 12 months from the date of this announcement (the "Support Period"). In addition, the Investors and the Company intend to allow other shareholders to participate in such issue as far as reasonably practicable.
In the event that the Company seeks this financial support from the Investors, the Investors have agreed amongst themselves that they may seek from the Company that the £15 million of preference shares of £1 each in AssetCo Abu Dhabi Limited be redeemed in exchange for an issue of ordinary shares at10 pence per share and cancellation of the warrants issued at the time of the issue of such preference shares.
Both of the potential share issues would be subject to shareholder and all other requisite approvals at the relevant time.
As a condition of these arrangements, the Company has agreed to appoint Tudor Davies as an executive chairman of the Company. In addition, each of NAV and Utilico has the right during the Support Period to appoint an additional non-executive director of the Company provided that there is an equal number of independent non-executive directors.
Tudor Davies will replace Tim Wightman who will step down as Chairman and a Director as soon as practical after the conclusion of the Placing announced on 3 March 2011.
Tudor Davies is an experienced Chairman, executive and non-executive director with a track record of delivering shareholder value in the UK and on an international basis, through business development, repositioning businesses, and turning them around. Tudor is currently Non-executive Chairman of Zytronic Plc a touchscreen and electronic displays manufacturer and was Chairman of Dowding and Mills Plc the international electromechanical repair services business and also Chief Executive of its subsequent owner Castle Support Services Plc until its successful sale to Sulzer Ag in June 2010 for £128million; Chairman of Stratagem Plc the diversified industrial group from 2000 until 2002; and from 1990 Chief Executive and subsequently Chairman of Hicking Pentecost Plc the world leader in technical threads until its successful sale to Coats Viyella in 1999. He was also a Corporate Recovery partner with Arthur Young (now Ernst & Young) and qualified as an accountant.
The Company received a claim late last night from its chief executive, John Shannon, asserting that he is not bound by his irrevocable undertaking to vote in favour of the resolutions to be proposed at this morning's general meeting. The Company has been advised that this claim is without merit. In the event that Mr Shannon seeks to breach his undertaking, the Company will take appropriate action.
For further information please contact:
AssetCo plc +44 (0) 20 7614 5917
Tim Wightman, Chairman
Arden Partners plc +44 (0) 20 7614 5917
Cadogan PR +44 (0) 777 171 3608
This information is provided by RNS
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