TIDMSWAP
RNS Number : 0182A
MoneySwap Plc
21 March 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
21 March 2017
MoneySwap plc
("MoneySwap" or the "Company")
Proposed subscription, proposed board changes and statement re
suspension
Introduction
Further to the discussions with Wraith Holding B.V. ("Wraith"),
as announced by the Company on 6 March 2017, and the publication
today of the Company's annual report and accounts for the financial
year ended 31 March 2016 (the "FY 2016 Results") and its
half-yearly results for the six months ended 30 September 2016 (the
"Interims") (together, the "2016 Results"), the board of MoneySwap
is pleased to announce a conditional subscription for ordinary
shares of GBP0.001 each in MoneySwap ("Ordinary Shares") by Wraith
to raise up to c. GBP3.6 million (the "Subscription").
The Company is also providing an update on proposed board
changes, the revision of certain arrangements with directors, a
former director and a substantial shareholder of MoneySwap and an
update on the suspension from trading in Company's shares on
AIM.
The Subscription
The Company and Wraith have, on 20 March 2017, entered into a
conditional subscription agreement (the "Subscription Agreement")
which contains a number of conditions, further details of which are
set out below, and provides for:
i) an initial investment by Wraith of GBP2,443,420 (the "Initial
Subscription") through the issue of 2,443,420,775 new Ordinary
Shares (the "Initial Subscription Shares") at GBP0.001 per new
Ordinary Share (the "Subscription Price"); and
ii) the grant to Wraith of an option (the "Subscription
Option"), exercisable at the Subscription Price, to acquire (when
taken together with the Ordinary Shares held by Wraith at that
date) up to 75% of the fully diluted share capital of the Company,
which would result (assuming that the Company does not issue
Ordinary Shares to anyone other than Wraith in the interim period
and assuming exercise in full) in the issue of a further
1,149,845,071 new Ordinary Shares (the "Subscription Option
Shares"), which would raise an additional GBP1,149,845 for the
Company. The Subscription Option is exercisable (in whole or in
part) by Wraith at any time during the two years following the
issue and admission to trading on AIM of the Initial Subscription
Shares ("Completion").
Following the issue of the Initial Subscription Shares, Wraith
will hold a 67.11% interest in the enlarged issued share capital of
the Company. If Wraith exercises the Subscription Option in full,
it would hold 3,593,265,846 new Ordinary Shares, equivalent to 75%
of the Company's fully diluted share capital (assuming no other new
Ordinary Shares are issued by the Company following the Initial
Subscription).
The Subscription is conditional on, inter alia:
(i) approval by MoneySwap's shareholders (the "Shareholders") of
resolutions to be proposed at an extraordinary general meeting of
the Company (the "General Meeting"), further details of which are
set out below;
(ii) the lifting of the suspension from trading of the Ordinary
Shares on AIM (the "Suspension"), the continued admission of the
Company's Ordinary Shares to trading on AIM and the continued
engagement of Allenby Capital Limited as the Company's nominated
adviser;
(iii) the provision by the United Kingdom Financial Conduct
Authority of a letter of no objection to the changes in qualifying
holding in the Company's subsidiary, MoneySwap Limited; and
(iv) there having been no breach of certain warranties contained
in the Subscription Agreement and no material adverse change in the
financial markets.
The General Meeting
Given the level of dilution that Shareholders would experience
as a result of the Subscription, the Directors consider that it is
appropriate that Shareholders are provided the opportunity to vote
on whether or not to proceed with the Subscription. A circular (the
"Circular") setting out the background to and details of the
Subscription and its associated proposals (together the
"Proposals") and a notice convening the General Meeting ("Notice of
GM") will be published and sent to Shareholders shortly.
Fee conversion arrangements
In connection with the Subscription, the Company has agreed to
issue options over 224,634,146 new Ordinary Shares (the "Fee
Conversion Options") in connection with certain unpaid fees (which
total approximately GBP224,634) due from the Company to Emma Xu (a
Non-Executive Director), Kung Min Lin (a former Director) and Heng
Jui Lin (a substantial shareholder in the Company) (together, the
"Option Holders"). The Fee Conversion Options will be exercisable
at the Subscription Price and will be exercisable at any time after
3 months following Completion until the date being 15 months
following Completion, at the election of the Option Holders. The
aggregate subscription amount for the Fee Conversion Shares is
equal to the amount of the outstanding fees currently owed to each
of the Option Holders, such that upon the exercise of the Fee
Conversion Options by each individual, the amount of the fees owed
to the relevant individual by MoneySwap will be set-off against the
relevant individual's obligation to pay the exercise price for
exercise of the Fee Conversion Options. The options over the Fee
Conversion Shares will be issued as follows:
Option Holder Outstanding Fee Conversion
fees (GBP) Options
Emma Xu 81,301 81,300,813
Kung Min Lin 45,772 45,772,358
Hen Jui Lin 97,561 97,560,976
TOTAL 224,634 224,634,146
The Option Holders will agree on Completion that, during the
period of the Fee Conversion Options, he or she will not be
entitled to make any demand of MoneySwap for the outstanding fees,
but if any Option Holder does not exercise the Fee Conversion
Options during the Fee Conversion Options period, at the end of
that period the fees owed by MoneySwap to that individual will be
payable on demand.
Cancellation of existing management options
All present and past directors of the Company who hold options
over Ordinary Shares have agreed that, conditional on Completion,
they will enter into a deed of waiver in favour of the Company
pursuant to which each such person will waive in full their
existing options over Ordinary Shares (the "Option Waivers").
Pursuant to the Option Waivers outstanding options over 13,507,053
Ordinary Shares will be cancelled.
Related party transactions
The issue of the Fee Conversion Options each constitutes a
related party transaction under the AIM Rules for Companies. The
Board (excluding Emma Xu), having consulted with Allenby Capital
Limited, the Company's nominated adviser, considers the terms of
the issue of the Fee Conversion Options to be fair and reasonable
insofar as the Shareholders are concerned.
The Option Waivers each constitutes a related party transaction
under the AIM Rules for Companies. As all members of the Board are
agreeing to cancel any and all options held by each of them
pursuant to the Option Waivers, Allenby Capital Limited, the
Company's nominated adviser, considers that the terms of the Option
Waivers are fair and reasonable insofar as the Shareholders are
concerned. The Option Waivers will be subject to approval by
Shareholders at the General Meeting.
Proposed board changes
Subject to Completion, Emma Xu will resign from her position as
Non-Executive Director on the Company's board. It is proposed that
Calvin Yan, MoneySwap's current financial controller, and William
Morro, a Director of Wraith, will be appointed to the Board.
Following Completion, the board of the Company will be as
follows:
Craig Niven Chairman and Interim
Chief Executive
Calvin Yan Chief Financial Officer
Javier Amo Fernandez Non-Executive Director
de Avila
William Morro Non-Executive Director
Further details on Mr Yan and Mr Morro will be contained in the
Circular.
Use of proceeds
The proceeds of the Initial Subscription will be used to repay
transaction costs not already funded from monies advanced by Wraith
under the Wraith loan, the trade and other creditors of the Group,
including Wraith, and the remainder of the proceeds will be used
for the general working capital purposes of the Company. As at the
date of this announcement, the Company has drawn down a total of
US$435,000 under the loan agreement with Wraith, details of which
were announced on 6 March 2017.
Information on Wraith
Wraith is a Netherlands based investment company wholly owned by
Mr Gilbert Armenta and incorporated for the purpose of investing in
MoneySwap. It has not traded to date and is funded by Mr Armenta
and other affiliated entities under his control. Mr Armenta has
considerable experience in the payments sector and is the founder
and chief executive officer of Fates Group, a family office
management enterprise, created to bring traditional venture capital
operating methodologies and private equity financial sophistication
to mid-market investments. Fates Group is focused on investment in
three core market segments: (i) real estate supporting
telecommunications infrastructure; (ii) renewable energy; and (iii)
process management systems in the financial services sector.
Following Completion, Wraith expects to work closely with
MoneySwap to assist MoneySwap in developing its payment process
business, both by providing technical and business development
assistance and in introducing opportunities for new business. The
Company and Wraith intend to formalise these working arrangements
through certain commercial agreements, further details of which
will be announced in due course.
The directors of Wraith are Gilbert Armenta and William
Morro.
Suspension from trading in the Ordinary Shares on AIM
The Ordinary Shares were suspended from trading on AIM on 21
September 2016 due to the Company's failure to publish its FY 2016
Results within six months of the Company's year-end. In addition,
the Company was required under the AIM Rules for Companies to
publish the Interims before 31 December 2016.
Following the publication of the 2016 Results today, these
suspension conditions have now been addressed. However, the Company
has recently been informed by its registrars that, as a result of
unpaid fees due to the Company's working capital constraints, the
depositary interest ("DI") facility put in place at the time of the
admission of the Company's Ordinary Shares to trading on AIM in
2011 has been cancelled. As the Company is incorporated in
Gibraltar, its ordinary shares are not eligible for electronic
settlement in the UK. The DIs were put in place in order to provide
holders of Ordinary Shares with a mechanism of electronic
settlement using the CREST system.
The AIM Rules for Companies require that all AIM companies must
ensure that their securities are eligible for electronic settlement
and the Company is currently unable to comply with its obligations
under AIM Rule 36 is this regard. As a result, the Company's shares
will remain suspended from trading on AIM until such time as the
Company has put in place a replacement DI facility. The Company has
engaged its registrars to implement a new DI facility and
anticipates that it will be in place prior to the General Meeting
date, which is expected to be on or around 19 April 2017. The
Company's legal advisers are preparing certain legal opinions which
will be provided to Euroclear shortly. Once received by Euroclear,
the Company anticipate that the new DI facility will be in place 10
business days later.
Once a new DI facility has been set up the Board anticipate that
trading in the Ordinary Shares on AIM will be restored. An update
will be provided in due course.
- Ends-
For further information, please contact:
MoneySwap Plc Allenby Capital Limited
------------------------ ------------------------
Interim Chief Executive Nominated Adviser
------------------------ ------------------------
Craig Niven Nick Naylor
James Reeve
------------------------ ------------------------
+44 7767 497400 +44 20 3328 5656
------------------------ ------------------------
About MoneySwap (www.moneyswap.com)
MoneySwap provides payment solutions and gateways to merchants,
which allow both online and point of sale transactions to be
settled using UnionPay cards in the UK. In addition, UnionPay has
licensed MoneySwap for its MoneyExpress service, which enables
overseas persons to send funds directly to UnionPay cardholders in
China. More information can be found at www.moneyswap.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCOKDDDKBKKPNB
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