ARC Capital Holdings Limited Update on Fortress Group (2841Q)
29 August 2014 - 1:40AM
UK Regulatory
TIDMARCH
RNS Number : 2841Q
ARC Capital Holdings Limited
28 August 2014
28 August 2014
ARC Capital Holdings Limited
Fortress Group Limited - Put Option
On 27 August 2014, ARCH Digital Holdings Limited ("ARCH
Digital"), a wholly owned subsidiary of ARC Capital Holdings
Limited ("ARCH"), received a letter from Fortress Group Limited
("FGL"), which enclosed a notice dated 25 August 2014 (the "Put
Option Notice") issued by PAGAC Fortress Holding I Limited
("PAGAC") to exercise the put option (the "Put Option") referred to
in the shareholder agreement dated 25 August 2011 (the "Shareholder
Agreement") that ARCH Digital entered into at the time of the
privatisation of Funtalk China Holdings Limited ("Funtalk").
According to the Put Option Notice, the put price as at 25
August 2014 was USD388,323,141 and from 26 August 2014 the put
price will increase by an amount of USD191,502 per day.
As set out in ARCH's announcement dated 25 April 2014, if FGL
did not consummate an exit of Funtalk by 25 August 2014 then PAGAC
(who assumed all of the rights and obligations of PAG Asia I LP in
an agreement dated 14 September 2012) would have the right to
require FGL to repurchase PAGAC's holding in the preferred shares
(the "Preferred Shares") and convertible bonds (the "Convertible
Bonds") issued by FGL. This right was secured by PAGAC on ARCH
Digital's equity holding in FGL pursuant to a share charge
agreement dated 25 August 2011.
If FGL fails to perform its obligation under the Put Option, the
requirement to repurchase PAGAC's Preferred Shares and Convertible
Bonds falls to the shareholders of FGL other than the PAGAC
pro-rata, including ARCH Digital.
Mr Borrelli, ARCH's representative on the FGL Board, has been
informed by FGL that FGL currently does not have the necessary cash
or liquid assets to meet its obligation in full under the Put
Option. ARCH Shareholders should note that, in the event that FGL
is unable to meet any obligations under the Put Option, there is a
risk that the value of ARCH Digital's interest in FGL could in
principle be fundamentally impaired notwithstanding that the value
of the interest in ARCH Digital has already been written down to
zero.
Mr Borrelli has advised that the Board of FGL is working with
its legal advisor with respect of the Put Option. The board of ARCH
is also considering its options with its legal advisors.
A further announcement will be made in respect of any material
developments on this matter.
For more information please contact:
ARC CAPITAL HOLDINGS LIMITED:
Steve Feniger, Chairman of the Board
E: steve.feniger@gmail.com
Cosimo Borrelli
Managing Director, Borrelli Walsh Limited
Consultant to the Board
T: (852) 3761 3800
E: cb@borrelliwalsh.com
NOMINATED ADVISER:
Philip Secrett, Grant Thornton UK LLP
T: (44) 20 7383 5100
E: Philip.J.Secrett@uk.gt.com
BROKER:
David Benda / Hugh Jonathan, Numis Securities Limited
T: (44) 20 7260 1000
E: d.benda@numiscorp.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLLFVETTITFIS
Arc Capital (LSE:ARCH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Arc Capital (LSE:ARCH)
Historical Stock Chart
From Jul 2023 to Jul 2024