TIDMPOS
RNS Number : 9643A
Plexus Holdings Plc
13 June 2016
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
Plexus Holdings PLC ('Plexus' or 'the Company')
Conditional Placing to raise GBP6 million
Plexus Holdings PLC, the AIM quoted oil and gas engineering
services business and owner of the proprietary POS-GRIP(R)
friction-grip method of wellhead engineering, is pleased to
announce that it has agreed the terms of a conditional placing (the
"Placing") to raise GBP6,000,000 before expenses, by way of a
placing of 9,230,770 new Ordinary Shares ("Placing Shares") at a
price of 65 pence per Ordinary Share to new and existing
investors.
The Placing is intended to strengthen Plexus' balance sheet
during the current down cycle and to provide Plexus with the
flexibility to support the capital requirements of its long term
strategy of becoming a leading international oil and gas services
company, supplying a new and superior standard of wellhead
equipment and associated products for exploration, production and
subsea applications.
The proceeds of the Placing will be applied across a number of
the Company's areas of activity to ensure that Plexus is well
placed to take advantage when sector activity resumes. In
particular, the Board believes that the net proceeds of the Placing
will enable Plexus to:
-- pursue existing global opportunities (beyond the Company's
on-going North Sea operations) and to continue to support Plexus'
activities in new regions - Asia, Russia and North/South
America;
-- progress the Python Subsea Wellhead development programme
towards a target trial in 2016;
-- support on-going development of POS-GRIP product suite
(including production and subsea applications);
-- strengthen Plexus' working capital position during the down cycle; and
-- channel targeted R&D spend towards complementary products
(such as WellTree(TM) , Xmas Trees) and the decommissioning
market.
The Placing is conditional upon Shareholders' approval being
obtained for the granting of the authorities required to allot
shares for cash on a non pre-emptive basis. In addition to the
authorities required to conclude the Placing, the Company is
seeking authority from Shareholders to issue and allot new Ordinary
Shares over and above the Placing Shares, representing 10 per cent.
of the Enlarged Ordinary Share Capital following the Placing, which
is consistent with the 10 per cent. authority which was approved at
the last Annual General Meeting of the Company.
Accordingly, the Company is convening a General Meeting, to be
held at 2.00 p.m. on 28 June 2016 at the offices of Fox Williams
LLP, 10 Finsbury Square, London EC2A 1AF, at which the Resolutions
will be proposed. Further information on, inter alia, the Placing,
the Resolutions and why the Board considers the Placing to be in
the best interests of the Company is contained in the circular
("Circular") which will be posted to Shareholders today.
Subject to the passing of the Resolutions at the General
Meeting, application will be made to the London Stock Exchange for
the Placing Shares to be admitted to trading on AIM. It is expected
that Admission will occur at 8:00 a.m. on 29 June 2016.
Plexus' Chief Executive Ben van Bilderbeek said, "We view the
successful raising of GBP6 million as testament to Plexus' standing
as the provider of superior POS-GRIP jack-up rental wellhead
equipment to the international oil and gas industry, and I would
like to thank those existing and new shareholders who have
supported this initiative and who recognise the Company's
significant growth prospects, particularly as we begin to focus on
moving into the significantly larger land and platform and subsea
markets.
"This strategy involves replicating, globally, the success we
have traditionally enjoyed in the North Sea, where Plexus is the
go-to provider of wellheads, particularly for the most challenging
HP/HT wells such as the Total Solaris well which is being drilled
currently and which we believe to be the highest pressure well ever
drilled in the North Sea. Such capabilities and expertise are
centred on our firm view that one of the key requirements for
wellhead equipment and wellhead seals is the need to ensure that
they are not a weak link in the well architecture chain and that it
is therefore critical that qualification standards for casing
hangers and annular seals are aligned with those for casing and
tubing couplings. Importantly Plexus is uniquely able to deliver
such a higher standard unlike conventional technology. The
importance of such a goal was recognised some time ago by a major
international oil company who provided a newly drafted Casing
Hanger qualification test procedure guidelines for Surface and
Subsea Wellhead and Christmas Tree Equipment, which we chose to
adopt as the new standard for the Python(R) prototype subsea
wellhead system.
"At its core, Plexus is an IP driven oil and gas engineering
services company. The funds raised today will ensure that we will
be able to continue to invest in our proprietary technology and
products during the current oil and gas down cycle, and at the same
time support our new partners in overseas markets such as Russia.
The near doubling in the price of oil from its January lows to
circa US$50 per barrel demonstrates how supply and demand
equilibrium can swiftly move towards a point where a balance
between exploration and production and consumption can prevail.
With this in mind, we were encouraged to hear the new Saudi energy
minister Khalid Al Falih say earlier this month that oil prices
could hit US$60 by year end and that prices could rise further in
2017 as supply and demand converge. Needless to say, we are keen to
be in a position to hit the ground running once activity in the
sector picks up; the funds raised today will help ensure that we
will be there to play our role in servicing the needs of the
industry with our superior method of engineering and where our
jack-up rental wellhead inventory is ready to be deployed.
"Looking beyond the current cycle, we see demand for oil and gas
underpinned by a structural shift in the world's fuel mix: a move
away from dirtier fossil fuels, particularly coal, to cleaner
hydrocarbons such as natural gas. If this is to happen new wells
will need to be drilled and with our equipment and HG(R) metal to
metal seals being ideally suited to the high pressures and high
temperatures associated with gas wells, Plexus stands to play a
major part in this transition. Despite the challenging trading
conditions, we believe that the prospects for Plexus are excellent:
proven technology and equipment that has been used in over 400
wells worldwide; partners secured in new larger markets; a growing
family of Plexus products based on our patent protected technology;
a product offering that is ideally suited to the shifting energy
mix towards gas; and a strong debt free balance sheet. I look
forward to providing further updates on our progress as we focus on
generating value for all our shareholders, both new and old."
**S**
For further information please visit www.posgrip.com or
contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795 6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795 6890
Nick Tulloch Cenkos Securities PLC Tel: 0131 220 9772
Derrick Lee Cenkos Securities PLC Tel: 0131 220 9100
Frank Buhagiar St Brides Partners Ltd Tel: 020 7236 1177
Isabel de Salis St Brides Partners Ltd Tel: 020 7236 1177
Conditional Placing of 9,230,770 new Ordinary Shares
at a Placing Price of 65 pence per share to raise GBP6
million
and authority to issue shares
1. INTRODUCTION
The Company has today announced that it has conditionally raised
GBP6,000,000.50, before expenses, by way of a placing of 9,230,770
new Ordinary Shares at a price of 65 pence per Ordinary Share to
new and existing investors.
The allotment and issue of the Placing Shares would exceed the
Directors' existing authorities to allot shares for cash on a non
pre-emptive basis and therefore a General Meeting is being convened
to seek Shareholders' approval to grant new authorities to enable
the Directors to implement the Placing.
In addition to the authorities required to conclude the Placing,
the Company is seeking authority from Shareholders to issue and
allot new Ordinary Shares over and above the Placing Shares,
representing 10 per cent. of the Enlarged Ordinary Share Capital
following the Placing. This would enable the Company to satisfy the
issue of shares pursuant to the Jereh Option, should it be
exercised before expiry on 30 June 2016 and provide the Board with
the flexibility to issue further shares if required. The authority
in place following the Placing, if approved by Shareholders, would
be consistent with the 10 per cent. authority which was approved at
the last Annual General Meeting of the Company.
Accordingly, the Company is convening the General Meeting, to be
held at 2.00 p.m on 28 June 2016, at which it will seek authority
for the Directors to allot Ordinary Shares up to an aggregate
nominal amount of GBP197,674.10 and to disapply pre-emption rights
in relation to those allotments. The Resolutions to be proposed at
the General Meeting are set out in the Circular.
The circular, which will be posted to Shareholders today,
provides further information about the background to and the
reasons for the Placing, to explain why the Board considers the
Placing to be in the best interests of the Company and its
Shareholders as a whole and why the Directors recommend that
Shareholders vote in favour of the Resolutions to be proposed at
the General Meeting.
2. BACKGROUND TO AND REASONS FOR THE PLACING
Introduction
Plexus Holdings plc is an AIM-traded oil and gas engineering
services business and owns the proprietary POS-GRIP(R)
friction-grip method of wellhead engineering. The Company rents for
exploration and sells for production wellhead equipment and
associated tooling to a number of major oil and gas operators
across the world. Plexus' POS-GRIP method of engineering enables
the Company to deliver superior solutions to the industry, across a
number of applications in oil and gas wellheads and connectors.
Background
During the last 12 months the Company has achieved a number of
significant milestones, despite the difficulties currently being
experienced by the wider oil and gas sector, where the industry saw
a steep decline in operator activity at the end of 2015 calendar
year and into the first three months of 2016.
The Company's core business of renting proprietary POS-GRIP(R)
friction-grip exploration wellhead equipment, particularly for High
Pressure/High Temperature ('HP/HT') applications, performed well in
the year to 30 June 2015, and achieved record revenue, EBITDA,
profit before tax and profit after tax. Plexus' core business has
historically held a market leading position in the European and UK
North Sea markets.
During the last 12 to 18 months the Company has focused on
growing its international business, and has successfully secured
new international oil and gas customers in new territories around
the world.
In July 2015 Plexus signed a licence agreement with Jereh in
China to facilitate the rental, sale, and manufacture of Plexus'
wellhead equipment to supply the major Chinese, wider Asian,
Brazil, Indian and Middle East oil and gas markets. A further
strategic initiative in the region was announced shortly
afterwards, when a collaboration agreement with China Oilfield
Services Limited, a major integrated oilfield service solution
provider which is majority owned by Chinese state owned company
CNOOC Group (the largest producer of offshore crude oil and natural
gas in China), Red Sea Technologies Ltd, a leading oilfield design
and services company in South East Asia, and Jereh, to explore
commercial opportunities for shallow water subsea and crossover
wellhead production systems for oil and gas field activities in
China.
In July 2015 Plexus Products (Asia) Sdn Bhd ('PPA'), the
Company's Malaysian joint venture ('JV') secured a local PETRONAS
licence to manufacture and supply Plexus' POS-GRIP wellhead
equipment in Malaysia. With this licence it is expected that PPA
will be able to develop and grow the supply of Plexus POS-GRIP
rental exploration and production wellhead equipment to the
Malaysian market, which the Plexus board believes offers
significant growth opportunities for the Company.
Most recently, in January 2016, the Company confirmed that it
had entered into an exclusive licence agreement with Gusar and
Konar, two independent Russian oil and gas equipment manufacturers,
to undertake the rental, manufacture and servicing of Plexus'
jack-up drilling wellhead exploration equipment into the Russian
Federation and the other CIS states oil and gas markets. This was a
significant strategic milestone for Plexus as it provides the
Company with low cost access to these important oil and gas regions
without the requirement to make significant investment in capital
intensive assets such as manufacturing.
The Company was further encouraged by the recent equity
investment in Plexus by Gusar, who subscribed US$5 million for a
circa 7 per cent. stake in the Company. At the same time, Plexus
entered into a commercial agreement with Gusar and Konar, designed
to, inter alia, accelerate the arrangements set out in the existing
licence agreement to enable Gusar and Konar to manufacture and sell
POS-GRIP surface production wellhead systems in the Russian
Federation and other CIS states.
The Company anticipates that, in due course, the arrangements
with Gusar, Konar and Jereh will enable the Company to accelerate
its strategy of expansion into major global markets beyond its
traditional North Sea market by partnering with established local
manufacturers and service providers who have existing relationships
with key local operators, including national oil and gas
companies.
POS-GRIP Python(R) Subsea Wellhead
Plexus has also made good progress with its new POS-GRIP Python
Subsea Wellhead ('Python Subsea Wellhead'), which has been designed
to address key technical issues and requirements highlighted by
regulators and operators following the Gulf of Mexico incident in
April 2010 and to achieve a new best in class standard for subsea
wellheads that can for the first time match those of premium
couplings. The Python Subsea Wellhead was launched in September
2015 at the Aberdeen Oil Show and testing has now been
substantially completed, including qualifying the Python Subsea
Wellhead hanger system to a new proposed higher Shell standard. The
Company is currently undertaking a process to identify and secure
the running of a Python Subsea Wellhead prototype.
Current Market Conditions
Despite the encouraging progress described above, Plexus has not
been immune to the on-going global economic downturn and in
particular the oil price decline to a low of below US$30 per barrel
in January 2016, which has impacted drilling activity across the
sector. The Company stated in January 2016 that it had seen a
significant slowdown in planned activity by its customers to the
extent that it cannot see the reduced activity levels being
recovered in the current financial year as a result of a number of
projects being delayed, postponed or cancelled. The Company also
stated that it expected its financial results for the year to 30
June 2016 to be significantly below market expectations.
As a result, Plexus implemented a number of cash conservation
steps to stabilise the Company during the difficult oil market
cycle, as well as undertaking a series of cost cutting measures
which saw significant headcount and general overhead reductions.
The Company also confirmed that it was actioning the optimal
allocation of its resources to enable it to continue to progress
the existing range of future opportunities which were broader and
more international than ever before, including the investment in
on-going R&D and POS-GRIP(R) product extensions at a time when
the industry continues to actively pursue innovative cost saving
disciplines and safety driven initiatives.
The Board has concluded that, whilst it is difficult to predict
how long the downturn will last, it is likely that lower levels of
activity in the oil and gas sector will continue over the next 12
to 18 months. However, the Board has every expectation that once
activity in the sector resumes Plexus will see a recovery in its
order book. The Company holds a fast response rental wellhead
inventory, comprising in excess of 60 wellhead sets, and has a
strong reputation with a large number of blue chip customers around
the world who recognise the benefits and significant cost savings
achievable through the use of Plexus' POS-GRIP(R) technology.
Furthermore, Plexus has the only wellhead technology which has
passed a new proposed higher Shell standard, which the Board
believes will result in additional interest in the Company's
wellhead designs, and its ability to match the seal and test
standards of premium couplings.
Proposed Placing
As a result of the downturn in market conditions described
above, and the impact this had had on Plexus' financial
performance, the Company has elected to complete a conditional
fundraise to raise GBP6,000,000.50 at this time. This is intended
to strengthen Plexus' balance sheet during the current down cycle
and to provide Plexus with the flexibility to support the capital
requirements of its long term strategy of becoming a leading
international oil and gas services company, supplying a new and
superior standard of wellhead equipment for exploration, production
and subsea applications.
The proceeds of the Placing will be applied across a number of
the Company's areas of activity to ensure that Plexus is well
placed to take advantage when sector activity resumes. In
particular, the Board believes that the net proceeds of the Placing
will enable Plexus to:
-- take advantage of existing global opportunities (beyond the
Company's on-going North Sea operations) and to continue to support
Plexus' activities in new regions - Asia, Russia and North/South
America;
-- progress the Python Subsea Wellhead development programme towards a trial in 2016;
-- support on-going development of POS-GRIP product suite
(including production and subsea applications);
-- strengthen Plexus' working capital position during the down cycle; and
-- channel targeted R&D spend towards complementary products
(WellTree(TM) , Xmas Trees) and decommissioning market.
3. CURRENT FINANCIAL POSITION AND FUTURE PROSPECTS
Financial Results
The Company released its interim financial results for the six
months ended 31 December 2015 on 30 March 2016.
Although in line with market expectations, the results confirmed
that the Company had suffered from the contraction in exploration
activity, particularly in its organic North Sea market which is a
consequence of the current low oil price. This has impacted on its
core business of renting its proprietary POS-GRIP(R) friction-grip
exploration wellhead equipment to oil and gas customers around the
world and has resulted in a sharp year on year reduction in
sales.
Future prospects
There have, however, been recent encouraging signs of an oil
price recovery. Major industry players have said that they see the
oil price returning to US$50 per barrel or above by the end of 2016
and this viewpoint has been brought sharply into focus as the price
hovers around US$50 per barrel before the mid-year point. Industry
experts have also predicted that demand for energy will rise
strongly over the next few decades as emerging nations continue to
move up the development curve, and oil and gas is required to
satisfy much of this growth. Significantly more energy will be
required over the next twenty years to enable the world economy to
grow.
During the down turn operators have had to recalibrate their
break even costs, conserve cash and cut capex, which has impacted
in terms of a significant reduction in new projects, and
exploration activity in particular. The current fall in exploration
and production activity sits alongside oilfields that deplete at
five to seven per cent. per annum, which has led commentators to
form the view that there is a real risk of a strategic oil crisis
later in the decade with a resultant price spike.
There are significant potential opportunities for Plexus in the
future. The Company's POS-GRIP technology is able to deliver
significant time and cost savings on the surface and, in due course
and even more significantly, subsea in addition to offering unique
safety and operational advantages. Plexus is targeting
international markets and regions such as Russia, where it has been
reported for example that Rosneft increased drilling activity by 30
per cent. in 2015 and plans a further increase in 2016. In
addition, alongside the day to day gyrations and volatility there
are signs that both OPEC and non-OPEC producers wish to see a
return to stability and a higher oil price that can support
necessary investment and planned capex.
Therefore, in the opinion of the Directors, there is a positive
long term outlook across the industry particularly for oil and gas
as opposed to coal, which in turn is underpinned by future
population growth.
The Company is proprietary technology driven and its patent
protected IP has been successfully deployed in more than 400 wells
around the world. Its superior performance, safety and best in
class properties have given it a strong market position in the
niche jack-up exploration space, and the Directors are confident
that this success can be extended into the much larger land and
platform, and subsea applications space. As a result the IP which
the Company owns means that it is not subject to cyclical risk to
the same extent as many other businesses in this sector. The
Company has a strong R&D ethic and is continuously developing
new patented technology and even where earlier patents eventually
expire the Company has an extensive body of knowledge and
know-how.
Recent Developments
The Company now has a proven technology and POS-GRIP(R) method
of engineering reputation which has resulted in a strong market
position in the North Sea which forms a strong base from which to
expand into other territories, including China and Russia. In
addition, significant progress has been made in developing new
Plexus products based on the existing POS-GRIP(R) technology
including the new Python Subsea Wellhead which was launched in
September 2015 as a new best in class and safest standard for the
multi-billion dollar subsea market, and has a combination of key
features not previously seen in a subsea wellhead. The development
of this new product has been supported in a Joint Industry Project
by major international oil companies including BG, eni, Maersk,
Total and Shell.
In addition to the Gusar arrangements and the matters set out
above, the Company has also secured a US$0.6m well contract in
January 2016 with a new customer, Masirah Oil Limited for oil
exploration in offshore Oman, and an order from Talisman Malaysia
Limited in February 2016 for an exploration well in offshore
Malaysia. It has also received a further GBP0.6m purchase order
from Det Norske in May 2016 to supply surface wellhead and mudline
equipment services for a well in offshore Norway.
Existing Bank Facilities
The Company's existing bank facilities with Bank of Scotland
comprise: (i) a GBP5 million three year revolving credit facility
(which is renewable in September 2016): (ii) a GBP1 million
overdraft facility re-payable on demand; and a reducing five year
GBP1.5 million term loan (to September 2019), with a current
balance of approximately GBP1.1 million at the date of the
Circular.
Future planning
The Board believes that by sensible financial and commercial
planning and the nature of its core rental wellhead inventory
business model the Company will be in a good position, particularly
relative to its competitors, to take advantage of improving
conditions in the sector. The Company has developed a strategy
which should see it able to enter the next upturn in a strong
position as a consequence of having a full suite of rental
equipment ready to deploy and an expanded product base.
Faced, however, with lower orders and revenues, the Company is
not waiting for a significant pick-up in exploration activity to
return to positive cash flow. With this in mind, Plexus has
implemented a series of cost cutting and personnel reduction
measures designed to ensure it comes through this cycle much leaner
and in a position to capitalise on the opportunities that Plexus
believes will present themselves when new projects come back on
stream. These measures have been structured in a manner which does
not jeopardise the long-held commitment to essential research and
development, which we recognise as being key to the long term
success of the Company. Similarly we are also mindful to safeguard
our core competencies to ensure that when growth returns, we are
well placed to take advantage.
The Company has achieved these substantial savings in areas of
capital expenditure, operating expenditure, non-essential research
and development and expenditure on personnel. A reduction in the
headcount from 150 to 80 has been implemented which will reduce
payroll costs from GBP8.15m in 2015/16 to GBP4.27m for 2016/17.
There has also been a reduction in capital expenditure of just
under 20 per cent. during the same period. The Board has focussed
on seeking to ensure the Company is cash generative for the
remainder of the current downturn.
Management continues to remain confident about long term growth
and shareholder value creation prospects, particularly in relation
to the major surface production wellhead and subsea exploration and
production markets, whilst recognising the importance of
structuring and positioning Plexus to ensure that it operates
through the current cycle and emerges fully able to participate in
a recovery in the sector.
4. USE OF PROCEEDS
The Board intends to use the gross proceeds of the Placing,
expected to be GBP6,000,000.50, to ensure that the matters
described in the Circular can be implemented and it is anticipated
that these funds will be deployed as detailed below:
Use of Proceeds
----------------------------------------------------- --------
Support for activities in new regions - Asia, GBP1.0m
Russia and N./S. America
----------------------------------------------------- --------
Financing of Python subsea wellhead trial well GBP2.0m
development programme
----------------------------------------------------- --------
Ongoing development of POS-GRIP product suite GBP1.0m
----------------------------------------------------- --------
General working capital (incl. retention of key GBP0.5m
personnel)
----------------------------------------------------- --------
Further R&D towards complementary products GBP1.5m
(e.g. WellTree(TM), Xmas Trees) and decommissioning
market
----------------------------------------------------- --------
5. DETAILS OF THE PLACING
The Company has conditionally raised GBP6,000,000.50 before
expenses (GBP5,650,000.50 net of expenses), by way of the issue of
the Placing Shares at the Placing Price, subject to the passing of
the Resolutions at the General Meeting.
The Placing Price of 65 pence per New Ordinary Share represents
a discount of 3.35 per cent. to the Closing Price of 67.25 pence
per Existing Ordinary Share on 8 June 2016.
In setting the Placing Price, the Board has considered the price
at which the Placing Shares need to be offered to investors to
ensure the success of the Placing and have held discussions with a
number of institutional and other investors who have agreed to
subscribe for the Placing Shares at that price pursuant to the
Placing. In structuring the Placing, the Board has had regard,
amongst other things, to the current market conditions and the
level of the Company's share price.
The Placing Shares would represent approximately 8.76 per cent.
of the Company's issued share capital immediately following the
Placing.
Director Participation in the Placing
Nazdar Limited, which is ultimately controlled by Jerome Jeffrey
Thrall, has agreed to invest GBP1,034,482 (US$1,500,000) in the
Placing by subscribing for 1,591,512 Placing Shares.
Ben van Bilderbeek has agreed to invest GBP200,000 in the
Placing by subscribing for 307,693 Placing Shares.
The Placing is conditional upon:
-- the passing of the Resolutions as set out in the notice convening the General Meeting;
-- the Placing Agreement having become unconditional in all
respects and not having been terminated; and
-- Admission of the Placing Shares to trading on AIM.
The Placing is not being underwritten.
Placing Agreement
Cenkos Securities has entered into a Placing Agreement with the
Company under which it has agreed to use its reasonable endeavours,
as agent for the Company, to procure placees for the Placing
Shares.
The placing of the Placing Shares is conditional upon, inter
alia, the Resolutions being duly passed at the General Meeting and
Admission becoming effective on or before 8:00 a.m. on 29 June 2016
or such later time and/or date as the Company and Cenkos Securities
may agree, but in any event by no later than 8:00 a.m. on 6 July
2016.
The Placing Agreement contains warranties from the Company in
favour of Cenkos Securities in relation to, inter alia, the
accuracy of the information in the Circular and other matters
relating to the Company and its business. In addition, the Company
has agreed to indemnify Cenkos Securities in relation to certain
liabilities it may incur in respect of the Placing. Cenkos
Securities has the right to terminate the Placing Agreement in
certain circumstances prior to Admission, in particular, in the
event of a material breach of the warranties.
The Placing Agreement provides that a commission and corporate
finance fee shall be payable to Cenkos Securities in relation to
its obligations under the Placing Agreement.
Dealings
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is expected
that Admission will occur at 8:00 a.m. on 29 June 2016.
The Placing Shares will, when issued, rank pari passu in all
respects with the Existing Ordinary Shares including the right to
receive dividends and other distributions declared following
Admission.
6. GENERAL MEETING
Set out at the end of the Circular is a notice convening the
General Meeting to be held at the offices of Fox Williams LLP, 10
Finsbury Square, London EC2A 1AF, at 2.00 p.m. on 28 June 2016 to
consider the Resolutions.
The Resolutions deal with the following matters:
Resolution 1 - Authority to allot shares
Resolution 1, which will be proposed as an ordinary resolution,
authorises the Directors to allot Ordinary Shares up to an
aggregate nominal amount of GBP197,674.10, being the maximum
aggregate nominal amount of the Placing Shares and a further number
of new Ordinary Shares which will represent 10 per cent. of the
Enlarged Ordinary Share Capital following the issue of new Ordinary
Shares pursuant to the Placing.
Resolution 2 - To dis-apply pre-emption rights
Resolution 2, which will be proposed as a special resolution,
and will be conditional on the passing of Resolution 1 above,
allows the Directors to allot equity securities on a non
pre-emptive basis, which is limited to (i) the issue and allotment
of up to an aggregate nominal amount of GBP197,674.10, being the
maximum aggregate nominal amount of the Placing Shares and (ii) a
further number of new Ordinary Shares which will represent 10 per
cent. of the Enlarged Ordinary Share Capital following the issue
and allotment of new Ordinary Shares pursuant to the Placing.
7. ACTION TO BE TAKEN BY SHAREHOLDERS
A Form of Proxy for use at the General Meeting accompanies the
Circular. The Form of Proxy should be completed and signed in
accordance with the instructions printed on it and returned to the
Company's registrars, SLC Registrars of 42-50 Hersham Road,
Walton-on-Thames, Surrey KT12 1RZ as soon as possible and, in any
event, so as to be received by no later than 2.00 p.m. on 26 June
2016, being 48 hours before the time appointed for holding the
General Meeting.
Further details on the action to be taken by Shareholders are
set out in the Circular, including information on the appointment
of a proxy.
8. RECOMMATION
The Directors believe that the Placing and the issue and
allotment of further new Ordinary Shares will promote the success
of the Company for the benefit of its Shareholders as a whole.
The Directors unanimously recommend Shareholders to vote in
favour of the Resolutions to be proposed at the General Meeting as
they intend to do so in respect of their own beneficial holdings
amounting, in aggregate, to 57,807,468 Existing Ordinary Shares,
representing approximately 60.12 per cent. of the existing issued
share capital of the Company.
DEFINITIONS
The following definitions apply throughout this announcement and
the Circular, unless the context requires otherwise:
"Admission" admission of the Placing Shares
to trading on AIM becoming effective
in accordance with Rule 6 of the
AIM Rules;
"AIM" AIM, a market operated by the London
Stock Exchange;
"AIM Rules" the AIM rules for companies published
by the London Stock Exchange from
time to time;
"Board" the board of Directors of the Company
for the time being, including a
duly constituted committee of the
Directors;
"Cenkos Securities" Cenkos Securities plc, a company
incorporated in England and Wales
with company number 05210733 whose
registered office is at 6.7.8 Tokenhouse
Yard, London EC2R 7AS;
"Company" or "Plexus" Plexus Holdings plc, a company incorporated
in England and Wales with company
number 03322928 whose registered
office is at 42-50 Hersham Road,
Walton-on-Thames, Surrey KT12 1RZ;
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001 SI 2001: No.3755
(as amended)) in respect of which
Euroclear UK & Ireland Limited is
the operator (as defined in those
regulations);
"Directors" the directors of the Company whose
names are set out on page 1 of the
Circular;
"Enlarged Ordinary Share the entire issued ordinary share
Capital" capital of the Company immediately
following Admission;
"Existing Ordinary Shares" the Ordinary Shares in issue as
at the date of the Circular;
"Form of Proxy" the form of proxy for use at the
General Meeting, which accompanies
the Circular;
"FCA" the UK Financial Conduct Authority;
"FSMA" the Financial Services and Markets
Act 2000 (as amended);
"General Meeting" the general meeting of the Company
to be held at the offices of Fox
Williams LLP, 10 Finsbury Square,
London, EC2A 1AF at 2.00 p.m. on
28 June 2016;
"Gusar" LLC Gusar (OOO Gusar) a company
incorporated in the Russian Federation
with its principal office at 57
Transportnaya St, Gus-Khrustalny,
Vladimir Region, Russia 601506;
"Jereh" Jereh International (Hong Kong)
Co., Ltd, a company incorporated
and registered in Hong Kong, China
with company number 51169712-000-09-13-5
whose registered office at RMS 05-15
13A/F South Tower World Finance
CTR Harbour City, 17 Canton Road,
TSIM Sha Tsui, Hong Kong;
"Jereh Option" the option for Jereh to subscribe
for such number of new Ordinary
Shares as would result in Jereh
owning a further 5 per cent. of
the entire issued share capital
of the Company (in addition to the
4,468,537 new Ordinary Shares for
which Jereh subscribed on 1 July
2015) following exercise of the
Jereh Option;
"Konar" CJSC Konar (Zao Konar), a company
incorporated in the Russian Federation
with its principal office at 4-B
Lenin Ave, Chelyabinsk, Russia 454085;
"London Stock Exchange" London Stock Exchange plc;
"Notice of General Meeting" the notice convening the General
Meeting, which is set out at the
end of the Circular;
"Ordinary Shares" ordinary shares of 1p each in the
capital of the Company;
"Overseas Shareholders" Shareholders who are resident in,
or citizens or nationals of, jurisdictions
outside the United Kingdom;
"Placing" the placing by Cenkos Securities
of the Placing Shares on behalf
of the Company at the Placing Price
pursuant to and on the terms of
the Placing Agreement;
"Placing Agreement" the conditional agreement dated
10 June 2016 between the Company
and Cenkos Securities for the placing
of the Placing Shares at the Placing
Price;
"Placing Price" 65 pence per Ordinary Share;
"Placing Shares" 9,230,770 new Ordinary Shares to
be issued pursuant to the Placing;
"Regulatory Information one of the regulatory information
Service" services authorised by the United
Kingdom Listing Authority to receive,
process and disseminate regulatory
information in respect of listed
companies;
"Resolutions" the resolutions set out in the Notice
of General Meeting;
"Shareholders" persons who are registered as holders
of Ordinary Shares from time to
time;
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland;
"United Kingdom Listing the FCA, acting in its capacity
Authority" as the competent authority for the
purposes of Part IV of FSMA; and
"US" or "United States" the United States of America, its
territories and possessions, any
state of the United States of America,
the District of Columbia and all
other areas subject to the jurisdiction
of the United States of America.
NOTES:
Plexus Holdings PLC
Plexus Holdings PLC, which began trading on AIM in December
2005, is an oil and gas engineering and services business, which
supplies wellhead and mudline suspension equipment together with
associated equipment and services for exploration and production
applications. Based in Aberdeen, with offices in London, Cairo,
Kuala Lumpur, Singapore and a presence in Houston, Texas, it has
developed and patented a friction-grip method of engineering for
oil and gas field wellheads and connectors, POS-GRIP(R), which
involves deforming one tubular member against another to effect
gripping and sealing.
The Company plans to accelerate the roll out of POS-GRIP
wellhead equipment as a superior alternative to current technology
and for it to become the future industry standard for wellhead
design. In particular, the technology has advantages in High
Pressure/High Temperature (HP/HT) and Extreme HP/HT (X-HP/HT) oil
and gas environments, for which there is growing global demand and
where Plexus is being increasingly recognised as the supplier of
choice.
To date, POS-GRIP wellhead systems have been used or selected to
be used in over 350 oil and gas wells by international companies
including ADTI, AGR, Apache Energy Australia, BHP Billiton, BG
International, BP, Brunei Shell Petroleum, Cairn Energy, Centrica,
ConocoPhillips, Dana Petroleum, Dubai Petroleum, ENI, GDF SUEZ,
Global Santa Fe, Maersk, Niko Resources, Petro-Canada Trinidad
& Tobago, Premier Oil Norge, Red Sea Petroleum Operating
Company, Repsol, RWE, Senergy Limited, Shell China, Shell Egypt,
Statoil, Silverstone Energy, Talisman Energy, Total, Tullow Oil,
and Wintershall.
Importantly, the Company is focussed on extending its
proprietary POS-GRIP technology into an increasing number of subsea
applications. In line with this, in March 2011 the Company launched
a Joint Industry Project ('JIP') initiative to develop a new subsea
wellhead design, the 'Python Subsea Wellhead' utilising its
friction-grip technology in collaboration with key oil and gas
operators and service companies. BG, Royal Dutch Shell,
Wintershall, Maersk, TOTAL, Tullow Oil, ENI, Senergy, ADTI and Oil
States Industries Inc. The JIP is nearing completion with final
qualification testing of all key features of the product under way,
and the resultant Python Subsea Wellhead design will include a
combination of key features never before seen in a subsea wellhead
which include being rated to 15,000 psi, 4,000,000 pounds of
'instant' casing lockdown capacity, and importantly rigid metal
annular seal technology qualified to match the performance of
premium connectors. The building of a single string Python Subsea
Wellhead system prototype commenced in February, and was launched
at the SPE Offshore Europe Exhibition and Conference in Aberdeen
('OE2015') in September 2015.
Plexus is an innovative technology company always looking for
opportunities to apply its proprietary POS-GRIP friction grip
method of engineering to new products both within and outside the
oil and gas industry. For example Plexus have recently completed a
JIP in conjunction with Maersk to develop a downhole HPHT Tieback
connector which for the first time allows the reconnection of
production casing to HPHT exploration and production wells. In
addition the Company has developed and qualified a new product
called POS-SET Connector(TM) which is designed to re-establish a
connection onto rough conductor casing previously cut above the
seabed to facilitate tieback or abandonment operations. The market
for permanent plugging and abandonment of wells is increasing in
the North Sea and beyond, and could be an important new revenue
stream for the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEGGUCCQUPQUAW
(END) Dow Jones Newswires
June 13, 2016 02:00 ET (06:00 GMT)
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