Agcert International plc: Proposed placing to raise £20.5m and capitalisation of £10.0m of debt to finance revised business strategy
27 April 2007
AgCert International plc announces that it proposes to raise approximately £20.5 million (€30.0 million), gross of expenses, by way of a
fully underwritten placing of new Ordinary Shares and, at the same time, the Company announces that it proposes to capitalise approximately £10.0 million (€14.6 million)
of debt owed to three major shareholders into new Ordinary Shares.
The proceeds of the proposed fundraising are to be used to fund the Company’s revised, lower capital investment business strategy.
Financing
- Placing to raise proceeds of approximately £20.5 million (before expenses)
- Placing of 51,177,072 new Ordinary Shares at a price of 40 pence per new Ordinary Share subject to Shareholder approval
- Placing Price represents a discount of 15.8 per cent to the average middle market closing price on 26 April 2007
- £10.0 million of debt owed to three major shareholders to be capitalised into 24,948,337 new Ordinary Shares at the same time as the Placing at a price of 40 pence
per Ordinary Share
- Placing and Capitalisation of Debt will result in a total of 76,125,409 new Ordinary Shares being issued, representing approximately 45.07 per cent of the issued share
capital of the Company
- The Placing has been fully underwritten by Nomura Code Securities Limited and Hoare Govett Limited
- Proposed entry into convertible loan of €5 million to be provided by XLTG
- Capitalisation of Debt and XLTG Loan Facility are related party transactions for the purposes of the Listing Rules and are subject to Shareholder approval
- A document comprising a circular to Shareholders and a Prospectus relating to the Placing, the Capitalisation of Debt and the XLTG Loan Facility is expected to be
posted to Shareholders on 30 April 2007
Revised strategy
- Group business strategy to be substantially revised from being a business developer/operator to a partnership/consultative model leveraging the Group’s technical
expertise, regulatory and market knowledge and experience
- Revised strategy will focus on new sources of CERs including strategic accounts, joint ventures and agency agreements
- Shift in business strategy will significantly reduce capital requirements
- Annualised operating expenses for existing business expected to be cut from €31m to €20m with additional €5m and €9m of operating expenses to be incurred for the new
strategy in 2007 and 2008 respectively
Commenting on the proposed Placing and Capitalisation of Debt and the revised strategy, Merrick Andlinger, Chairman, said:
“Over the last two years, whilst the Company has made significant progress with regard to its planned business roll out, we have fallen short of the targets that
we set ourselves and which our shareholders expected. A number of factors, internal and external, technical and regulatory, have held back progress and led the Board
to examine alternative means of creating value.
We have learnt much along the way and are now putting in place a strategy which will enable AgCert to exploit our full compliment of skills to best advantage. The
refinancing will enable us to complete the Group’s current roll-out of Biodigesters and to fund the operating expenses of the Group while it moves to being cash flow
positive under the revised strategy.”
Enquiries:
| AgCert International plc | +3531 245 7400 |
| Bill Haskell, Chief Executive | |
| Paul D’Alton, Finance Director | |
| Nomura Code Securities Limited | 020 7776 1200 |
| Richard Potts | |
| Gerard Harper | |
| Hoare Govett Limited | 020 7678 8000 |
| Justin Jones | |
| Hugo Fisher | |
| John Garrad-Cole | |
| College Hill | 020 7457 2020 |
| Anthony Parker | |
