Armour Group PLC Disposal (7091M)
18 July 2014 - 5:51PM
UK Regulatory
TIDMAMR
RNS Number : 7091M
Armour Group PLC
18 July 2014
Armour Group plc
("Armour" or the "Group")
Disposal and proposal for the Group to become an Investing
Company
Armour Group plc announces the proposed disposal of Armour Home
and Armour Hong Kong ("the Disposal") to AHE 100 Limited ("AHE").
AHE is a company set up by George Dexter, Armour's Chief Executive,
and the management of Armour Home for the purpose of acquiring
Armour Home and Armour Hong Kong. Armour Group will receive in
consideration 250 Ordinary Shares of 1 pence each in the capital of
AHE, which represents 25 per cent. of the total share capital of
AHE and AHE will assume responsibility for approximately GBP3.5
million of debt due to GE Commercial Finance Limited, the Group's
principal lender. The Group has also lent GBP1.0 million to Armour
Home on a five year term loan at an annual interest rate of 10% per
annum.
The sale is conditional upon shareholder approval. A circular
containing a Notice of General Meeting, to be held at 12:30pm on 4
August 2014 at the offices of Arnold & Porter (UK) LLP, Tower
42, 25 Old Broad Street, London, EC2N 1HQ, has today been posted to
shareholders setting out details of the transaction.
On completion of the sale to AHE it has been agreed that George
Dexter will step down from the Group's Board. Following the
proposed Disposal the Group will have no debt, the GBP1.0 million
loan referred to above, and approximately GBP4.0 million of cash.
It then intends to become an investing company, specialising in the
technology sector.
In the year to 31 August 2013, Armour Home had sales of GBP17.6
million and made an operating profit of GBP0.1 million. Armour Home
is not expected to achieve profitability in the current financial
year and in the six months to 28 February 2014 incurred a loss of
GBP114,000, before central overheads, on revenues of GBP9.0
million.
Irrevocable Undertakings
The Company has received irrevocable undertakings to vote in
favour of the Resolutions from Shareholders representing 48.3 per
cent. of the outstanding issued share capital. This includes
irrevocable undertakings from George Dexter and certain of the
Independent Directors of the Group (being Bob Morton, Steve Bodger
and Mark Wilson).
Related Party Transaction
George Dexter will hold 350 shares in AHE representing 35 per
cent. of the share capital, is a director of AHE and will be a
director of the Group until Completion. Under the AIM Rules, George
Dexter's interest in AHE and the proposed Disposal is deemed a
related party transaction.
The Independent Directors of the Company consider, having
consulted with finnCap, that the terms of the proposed Disposal are
fair and reasonable insofar as shareholders of the Company are
concerned.
Bob Morton, Chairman, commented: "We are pleased to announce the
proposed disposal of Armour Home to AHE. Market conditions remain
challenging and growth has been limited over recent years. Given
the current prospects of the sector, we believe the proposed terms
represent a fair price for Armour Home. Following the Disposal we
believe we will be able to achieve greater returns for shareholders
by using the Group's cash and AIM listing to invest in high growth
opportunities. The Group will retain a 25 per cent interest in
Armour Home through its ownership of 25 per cent of the share
capital of AHE 100. It will therefore benefit from any return that
AHE can generate from the continuing turnaround of Armour Home. The
Independent Directors believe that it will be beneficial for the
Company and its shareholders to proceed with the Disposal and have
recommended shareholders vote in favour as they have done."
The shareholder circular will be posted on the Group's website
later today at www.armourgroup.uk.com
Further Details:
Armour Group plc Tel: 01892 502700
George Dexter, Chief Executive
Mark Wilson, Finance Director
finnCap Limited Tel: 0207 220 0500
Geoff Nash
Ben Thompson
Stephen Norcross (Broking)
Newgate Threadneedle Tel: 0207 653 9850
Graham Herring
Robyn McConnachie
Appendix - Further information (as contained in the circular to
shareholders)
Investing Policy
Following the Disposal, the Company will be an investing
company.
The board, as it will be following the proposed Disposal, has
determined that the Company's Investing Policy will be to seek
opportunities in the technology sector. The Company's objective is
to generate an attractive rate of return for Shareholders by taking
advantage of opportunities. There will be no limit on the number of
projects into which the Company may invest and the Company's
financial resources may be invested in a number of propositions, or
in just one investment, which is likely to be deemed to be a
reverse takeover pursuant to Rule 14 of the AIM Rules.
The Company will seek investment opportunities in the technology
sector that offer good value and the potential for capital growth
and/or income. The Company will seek to achieve this through
acquisitions, partnerships or joint venture arrangements and such
investments may result in the Company acquiring the whole or part
of a company.
The strategy of the Company will be to leverage the expertise
and the contacts of the New Board to investigate opportunities
available to it.
In particular the Board will seek to identify target investments
with some or all of the following characteristics:
-- a clear market opportunity;
-- significant growth prospects;
-- likely to benefit from access to additional equity funding; and
-- the likelihood of benefits accruing from being part of a group with publicly traded shares.
The Company's Investing Policy is intended to be long-term but
if circumstances arise whereby an acquired business or company may
be floated in its own right, or disposed of at a suitable premium,
such opportunities will be considered by the Board.
Under the AIM Rules, the Company is required to make an
acquisition or acquisitions which constitute a reverse takeover
under the AIM Rules or otherwise implement its Investing Policy
within 12 months of the date of the General Meeting, failing which
the Ordinary Shares would be suspended from trading on AIM in
accordance with Rule 40 of the AIM Rules.
If the Company's Investing Policy has not been implemented
within 12 months of the date of the General Meeting, then the
admission to trading on AIM of the Ordinary Shares would be
suspended and the Directors would convene a general meeting of the
Shareholders to consider whether to continue seeking investment
opportunities or to wind up the Company and distribute any surplus
cash to Shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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