Proposed new loan facilities
November 20 2009 - 2:00AM
UK Regulatory
TIDMINFS
RNS Number : 8088C
Infoserve Group PLC
20 November 2009
Infoserve Group Plc
Proposed new loan facilities and conversion of debt into equity
Infoserve Group Plc ("Infoserve" or the "Company") is pleased to announce that
it has reached agreement in principle with David Hood, the Company's major
shareholder and a non-executive director of the Company, on the terms by which
David Hood will provide additional funding for Infoserve and for the conversion
of part of the Company's existing indebtedness to David Hood into new equity in
the Company (the "Proposals"). The Proposals are subject to the negotiation and
execution of legally binding contractual documentation. A further announcement
will be made when these agreements have been entered into.
Under the Proposals, David Hood will provide additional funding to the Company
amounting to GBP0.8 million, comprising a loan, which would be available for
immediate drawdown, of GBP0.55 million and a further facility of GBP0.25 million
to be made available in the event of the Company's existing overdraft facility
being withdrawn. The interest rate on both the new loan and the further
facility would be 10% per annum. In addition, David Hood has agreed to the
continued deferment of payments due to himself and his associate companies,
amounting to GBP0.30 million and the writing off of other sundry trading
liabilities amounting to GBP50,000.
These new funding arrangements will enable the Group to continue to fund its
ongoing and improving trading activities and to pursue other growth
opportunities available to it.
As part of the Proposals, the Company is proposing to issue 40 million new
ordinary shares of 5p each in the capital of the Company ("Ordinary Shares") to
David Hood at an issue price of 5p per share in satisfaction of loans to the
value of GBP2 million, currently owing by the Company to David Hood.
The effect of the Proposals will be to increase David Hood's interest in the
ordinary share capital of the Company from 46.86% to 82.84% and to reduce the
value of the loans outstanding from David Hood to the Company, which at 31
October 2009 amounted to GBP3.52 million, by GBP1.45 million (or GBP1.2 million
if the further facility is taken up).
The Company intends to seek a waiver from the Panel on Takeovers and Mergers of
the obligation that would otherwise arise, as a result of the issue of the new
Ordinary Shares, for David Hood to make an offer to acquire all of the Ordinary
Shares not already owned by him. If granted, any such waiver would be subject
to approval of independent shareholders.
A circular setting out details of the Proposals and convening a General Meeting
of the Company for this purpose will be sent to shareholders as soon as legally
binding contracts have been entered into.
For further information, please contact:
+--------------------------------------+---------------------------------+
| Infoserve Group plc | www.infoservegroup.com |
| Steve Barnes, Chief Executive | Tel: 0113 238 6200 |
| steve.barnes@infoserve.com | |
+--------------------------------------+---------------------------------+
| Jonathan Simpson, Finance Director | Tel: 0113 238 6200 |
| jonathan.simpson@infoserve.com | |
| | |
+--------------------------------------+---------------------------------+
| Nominated Adviser | Tel: 0161 832 2174 |
| WH Ireland Limited | |
| Robin Gwyn | |
+--------------------------------------+---------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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