Update to issue of equity
May 20 2009 - 10:44AM
UK Regulatory
TIDMSAM
RNS Number : 5957S
Syndicate Asset Management PLC
20 May 2009
For immediate release:
Syndicate Asset Management plc
("Syndicate", "the Company" or "the Group")
Re: Issue of Equity update
Syndicate Asset Management plc (AIM:SAM), the fund management group with
approximately GBP5.9 billion under management, refers to its Issue of Equity
announcement of 8 May 2009 (the "Announcement").
In the Announcement, the Company stated that it had reached agreement in
principle to settle GBP2.0 million of deferred consideration owed to certain
vendors (or their assignees) (the "Vendors") in respect of businesses previously
acquired by the Group. Under the terms of the agreement, the Company would agree
to issue 200 million new ordinary shares of 0.2p each ("Ordinary Shares")
("Deferred Consideration Shares") to the Vendors in payment of deferred
consideration owing to the Vendors and in consideration for the Vendors agreeing
to an 18 month standstill such that they will not receive any payments in cash
from the Group for 18 months following the admission of the Deferred
Consideration Shares to trading on AIM becoming effective. The Company announces
that final agreement has now been reached with the Vendors and final
,documentation, which is in agreed form, is expected to be signed prior to the
26 May 2009. The issue of the Deferred Consideration Shares will be conditional
upon, inter alia, shareholder approval, which is to be sought at a general
meeting of shareholders to be held on 26 May 2009 ("General Meeting"). The
Deferred Consideration Shares have been conditionally placed by Cenkos
Securities with certain institutional investors at a price of 1p per Deferred
Consideration Share.
In the Announcement, the Company also referred to the conditional subscription
(the "Subscription") by existing shareholders and employees of the Group, for
310,000,000 new Ordinary Shares (the "Subscription Shares"). The Company stated
that the Subscription by one of those existing shareholders, who fall within the
definition of related parties in the AIM Rules because they hold 10 per cent. or
more of the Company's existing Ordinary Shares, was deemed to be a related party
transaction. Pursuant to Rule 13 of the AIM Rules, the Company announces that Al
Bateen Investment Company LLC ("Al Bateen") is a related party by virtue of it
owning approximately 25.4 per cent. of the Company's current issued share
capital. Pursuant to the Subscription, Al Bateen has agreed to subscribe for
129,540,000 shares. Following the passing of the resolutions at the General
Meeting and admission of the Subscription Shares and the Deferred Consideration
Shares, Al Bateen will hold 164,491,613 Ordinary Shares, representing 25.4 per
cent. of the Company's enlarged issued share capital.
Having consulted with the Company's advisers, directors David Pinckney, Peter
Dew and Jane Dumeresque have now elected not to subscribe for any Subscription
Shares. As a result, their holdings will remain 650,000, 100,000 and
95,026 respectively which, following admission to AIM of the Subscription Shares
and Consideration Shares would represent 0.1, 0.02 and 0.01 per cent
respectively of the Company's enlarged share capital.
The Board has, at all times, sought to protect the interests of Shareholders as
a whole by undertaking actions designed to avoid a breach of the Company's
banking covenants, whilst having to operate within the parameters set by RBS. At
the same time, the Board has been mindful of the fact that the solution that it
is proposing requires the approval of Shareholders at the General Meeting and
also of the Vendors. The Board has considered a number of alternative solutions
including having met with parties who have made preliminary approaches either in
relation to the acquisition of all or some of the Company's issued share
capital, or to making a strategic investment in the Company. Having considered
these alternatives in detail, which it should be emphasised were very
preliminary in nature, the Board has concluded that they provide little or no
certainty and/or are undeliverable in the timeframe required, if at all, and
that, accordingly, they should be rejected in favour of the Subscription and the
issue of the Deferred Consideration Shares. The Board continues to believe that
the proposal as set out in the announcement of 8 May 2009 is in the best
interests of Shareholders taken as a whole.
David Pinckney, Chairman of Syndicate, commented:
"Whilst we can understand the concerns raised by certain Shareholders, the Board
is committed to pursuing a strategy that is both in the long term interest of
the Company's Shareholders, clients, staff and which meets the demanding
financial parameters and time constraints set by the bank."
- ends -
For further information:
Syndicate Asset Management plc
David Pinckney (Chairman) Tel: 020 7659 8060
Jonathan Freeman (Interim Joint CEO)
Peter Dew (Interim Joint CEO)
Cenkos Securities
Stephen Keys Tel: 020 7397
8900
GTH Communications
Toby Hall/Christian Pickel Tel: 020
7153 8039
This information is provided by RNS
The company news service from the London Stock Exchange
END
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