RNS Number:3066V
Deep-Sea Leisure PLC
6 December 2000
DEEP-SEA LEISURE PLC
PLACING AND OPEN OFFER TO RAISE UP TO #3.5 MILLION
Deep-Sea Leisure PLC ("DSL"), the aquarium company, today announces a Placing
and Open Offer to raise up to #3.5 million (net of expenses). The funds will
be used to repay a bridging facility agreed with Bank of Scotland as part the
refinancing announced in August 2000 and as to the balance for repayment of
borrowings and to finance additional working capital. In addition, DSL
proposes to buy back all its Deferred Shares for an aggregate consideration of
#1.
Summary
! DSL proposes to raise up to #3.5 million net of expenses through a
Placing and Open Offer.
! 6,665,657 New Ordinary Shares have been placed with certain existing
shareholders at 30p per share. An additional 6,267,063 New Ordinary Shares
are being offered at a price of 30p per share to Qualifying Shareholders under
an Open Offer on the basis of 1 New Ordinary Share for every 1 Ordinary Share.
1,411,009 of the New Ordinary Shares subject to the Open Offer are the
subject of undertakings to subscribe by certain existing Ordinary
Shareholders. On the basis of the undertakings given, the Placing and Open
Offer will raise a minimum of #2.4 million before expenses.
! Funds raised will be used to repay a #2 million bridging facility from
Bank of Scotland which was part of a refinancing package announced on 24
August 2000. To the extent that they are available, funds will also be used
to repay a proportion of the remaining #7 million term loan with Bank of
Scotland and to finance additional working capital.
! DSL also proposes to buy back all of its 2,229,493 Deferred Shares of 45p
each in issue for an aggregate consideration of #1.
! Michael Denny was appointed as a non-executive Director of the Company on
20 November 2000 and Phillip Crane resigned as a Director on 30 November 2000.
Mr Crane has granted an irrevocable undertaking to exercise or procure the
exercise of the votes attaching to the Ordinary Shares (representing 23.59 per
cent. of the existing issued ordinary share capital of the Company), in which
he is beneficially interested, in favour of the resolution on which he is
entitled to vote which is to be proposed at the Extraordinary General Meeting.
! Norman Yarrow will step down as a non-executive director following the
forthcoming Extraordinary General Meeting.
! The Company has been advised by Northern Venture Partnership Fund that it
has entered into an agreement, with a Luxemburg registered company, Net-Ein
S.A. ("Net-Ein") to sell to Net-Ein its entire holding of Ordinary Shares
following the Placing and Open Offer. The Company understands that this will
result in Net-Ein holding 29.9 per cent. of the Company's enlarged issued
ordinary share capital immediately following the Placing and Open Offer in the
event of such sale proceeding.
Expected timetable
Record Date for the Open Offer close of business on 1 December
2000
Latest time and date for
splitting of Application 3.00 pm on 3 January 2001
Forms (only to satisfy bona fide market claims)
Latest time and date for receipt of completed 3.00 pm on 5 January 2001
Application Forms and payment in full under
the Open Offer
Announcement of the results of the Open Offer 8 January 2001
Latest time and date for receipt of Forms of Proxy 10 am on 8 January 2001
for the Extraordinary General Meeting
Extraordinary General Meeting 10 am on 10 January 2001
Dealings expected to commence in New Ordinary Shares 8.30 am on 15 January
2001
Crest Stock Accounts credited with New Ordinary Shares 15 January 2001
Despatch of definitive share certificates for by 19 January 2001
New Ordinary Shares
Application Forms are being sent to shareholders today, and are personal to
shareholders and may not be transferred except to satisfy bona fide market
claims.
This summary should be read in conjunction with the full text of the
announcement.
Enquiries
Deep-Sea Leisure PLC
Alastair Ritchie, Chairman 0131 220 3900
KPMG Corporate Finance
David McCorquodale 0131 222 2000
DEEP-SEA LEISURE PLC
Placing and Open Offer of up to 12,932,720 New Ordinary Shares of 5p Each at
30p per Share.
1 Introduction
The Board announces today that Deep-Sea Leisure PLC ("DSL" or "the Company")
is proposing to raise up to #3.5 million (net of expenses) by way of a placing
and open offer of up to 12,932,720 New Ordinary Shares at 30p per share.
Northern Venture Partnership Fund, Northern Investors Company PLC, Northern
Venture Trust PLC, Scottish Enterprise, Dunedin Enterprise Investment Trust
PLC and AID Investments Limited ("the Placees") have undertaken to the Company
to subscribe for 6,665,657 New Ordinary Shares in aggregate under the Placing.
An additional 6,267,063 New Ordinary Shares are being offered to Qualifying
Shareholders under the Open Offer on a one for one basis, 1,411,009 of which
New Ordinary Shares in aggregate are the subject of undertakings to subscribe
by certain of the Placees. Neither the Placing nor the Open Offer has been
underwritten.
In addition, the Board proposes a share buy-back in terms of which the
2,229,493 Deferred Shares of 45p each in issue would be purchased by the
Company for an aggregate consideration of #1.
A circular setting out further details of these proposals will be posted to
shareholders today, along with notices convening an Extraordinary General
Meeting on 10 January 2001 at which the necessary resolutions can be
considered by shareholders.
2 Background to the Placing and Open Offer and Share Buy-back Proposal
Following the opening of Blue Planet Aquarium, the new aquarium in Cheshire,
in July 1998, the Company announced that the construction and start-up related
costs in connection with this aquarium had overrun. These cost overruns were
financed by increased banking facilities.
Visitor numbers since the opening of Blue Planet Aquarium have been well short
of expectation, particularly during the peak summer seasons. The Directors
believe this is partly as a consequence of the weakness of the Euro resulting
in reduced tourist numbers. Despite this shortfall in expected revenues, the
Board has worked hard to maintain the profitability of the business, reporting
an operating profit before exceptional items for the year ended 29 February
2000 of #1.5 million (1999: #1.7 million). The cash flows generated from
operations have been sufficient to service the debt interest but have not
enabled the Company to meet the scheduled debt repayments.
During the period since the last financial year end, significant effort was
applied to finding a remedy for the breach of the banking agreements with the
Company's former bankers, Allied Irish Bank (GB) and Bank of Ireland. This
resulted in the refinancing announced on 24 August 2000 in which the Company
refinanced its entire banking facilities with Bank of Scotland. The new
facilities take the form of a #7 million term loan and #750,000 overdraft
facilities. As part of the refinancing, the Company's former bankers have
written off #2 million of debt.
In addition, Bank of Scotland has extended a bridging facility of #2 million
which is to be repaid from the proceeds of the Placing and Open Offer.
In conjunction with the refinancing of the Company, it is proposed that all of
the issued Deferred Shares should be purchased by the Company for an aggregate
consideration of # 1.
The Company has been advised by Northern Venture Partnership Fund that it has
entered into an agreement, conditional inter alia on the Placing and Open
Offer proceeding, with a Luxembourg registered company, Net-Ein S.A. ("Net-
Ein") to sell to Net-Ein its entire holding of Ordinary Shares following the
Placing and Open Offer. In view of the arrangement with Northern Venture
Partnership Fund contained in the Placing Agreement (referred to in paragraph
3 below), the Company understands that this will result in Net-Ein holding
29.9 per cent. of the Company's ordinary issued share capital immediately
following the Placing and Open Offer in the event of such sale proceeding.
The Company has been advised by Northern Venture Partnership Fund that Net-Ein
is a subsidiary of Kunkel Investments S.A., another Luxembourg registered
company and that the shareholders of Kunkel Investments S.A. also hold shares
(in broadly the same proportions) in a company called Signet Investments S.A.
which is the ultimate parent company of Grupo Aspro Ocio. The Company has also
been advised that Goupo Aspro Ocio is a leading Spanish Leisure Park operator.
3 The Placing and Open Offer
On the basis of the undertakings given by the Placees in the Placing
Agreement, the Placing will raise #2.0 million (before expenses) through the
issue of 6,665,657 New Ordinary Shares and the Open Offer will raise a minimum
of #0.4 million (before expenses) through the issue of up to 6,276,063 New
Ordinary Shares.
In order to provide Qualifying Shareholders with an opportunity to acquire New
Ordinary Shares, KPMG Corporate Finance has agreed to invite applications
under the Open Offer from Qualifying Shareholders to subscribe for up to
6,267,063 New Ordinary Shares at the Issue Price, payable in full on
application, on the following basis:
1 New Ordinary Share for every 1 Ordinary Share
held on the Record Date. The New Ordinary Shares will, when fully paid, rank
pari passu in all respects with the existing issued Ordinary Shares.
The Open Offer has not been underwritten. It is therefore possible that, save
for the 1,411,009 New Ordinary Shares for which certain Placees have
undertaken to subscribe under the Open Offer, no further New Ordinary Shares
will be subscribed under the Open Offer.
Subject to the arrangement between Bell Lawrie White and Northern Venture
Partnership Fund referred to below, two of the Placees, namely Northern
Venture Partnership Fund and Northern Venture Trust PLC, have irrevocably
undertaken not to take up their entitlement to New Ordinary Shares under the
Open Offer to the extent of 1,450,000 New Ordinary Shares in aggregate.
On behalf of the Company, Bell Lawrie White has agreed under the Placing
Agreement to use all reasonable endeavours to place up to 4,856,054 New
Ordinary Shares at a price of 30p per share to the extent that they are not
taken up under the Open Offer. Of these New Ordinary Shares, under the Placing
Agreement, up to a maximum of 1,450,000 will be placed with Northern Venture
Partnership Fund to ensure that Northern Venture Partnership Fund's holding of
the enlarged issued ordinary share capital of the Company immediately after
the Placing and Open Offer will equal but not exceed 29.9 per cent.
The Placing and Open Offer is conditional, inter alia, on the passing of
resolutions to be proposed at the Extraordinary General Meeting, the Placing
Agreement having become unconditional in all respects and not having been
rescinded or terminated in accordance with its terms and Admission becoming
effective on or before 8.30 am on 15 January 2001 (or such later date as KPMG
Corporate Finance, the Company and the Placees may agree being not later than
8.30 am on 7 February 2001). The Placing and Open Offer is not conditional
upon the Share Buy-back Proposal proceeding. Attention is also drawn to the
proposed sale of Ordinary Shares to Net-Ein S.A. which has been intimated to
the Company described in paragraph 2 above.
4 Directors' Intentions
Only two of the Directors are Ordinary Shareholders. Malcolm Flinn intends to
take up his entitlement to 6,250 New Ordinary Shares under the Open Offer.
Norman Yarrow, who is stepping down as non-executive Director of the Company
does not intend to take up his entitlement under the Open Offer. Alastair
Ritchie and Michael Denny each propose to subscribe for 100,000 New Ordinary
Shares in the placing by Bell Lawrie White of those New Ordinary Shares not
taken up under the Open Offer, subject to such shares being available.
5 Share Buy-back Proposal
Under the Act, a company may, with appropriate authority from its
shareholders, purchase its own shares.
In accordance with the Act, a special resolution is to be proposed at the
Extraordinary General Meeting to approve the terms of the agreement proposed
to be entered into between the Company and each holder of Deferred Shares, for
the purchase of all of the Deferred Shares for an aggregate consideration of #
1.
The Share Buy-back Proposal will only be implemented if all holders of
Deferred Shares enter into the Share Buy-back Agreement. The Share Buy-back
Agreement even if approved at the forthcoming Extraordinary General Meeting
will be conditional upon all holders of Deferred Shares agreeing to sell their
Deferred Shares to the Company.
If the special resolution to approve the Share Buy-back Agreement is passed at
the Extraordinary General Meeting, it is intended that the Agreement will be
entered into immediately following the meeting and thereafter the Deferred
Shares will be bought back and then cancelled.
If the special resolution to approve the Share Buy-back Agreement is not
passed at the Extraordinary General Meeting or the Share Buy-back Agreement is
not signed by all the parties thereto, the Deferred Shares will remain in
issue.
6 Financial effects of the Placing and Open Offer
At 29 February 2000, the Group had net borrowings of #11.0 million. After
taking into account the debt refinancing with Bank of Scotland announced on 24
August 2000 and the net proceeds of the Placing and Open Offer, assuming that
the minimum amount undertaken to be subscribed is raised, the Group's net
borrowings will be reduced by #4.0 million. This has a positive impact on the
Group's level of gearing, with the attendant reduction in interest costs.
7 Board changes
Michael Denny was appointed as a non-executive Director of the Company on 20
November 2000 and Phillip Crane resigned as a Director on 30 November 2000.
Mr Crane has granted an irrevocable undertaking to exercise or procure the
exercise of the votes attaching to the 1,478,405 Ordinary Shares in which he
is beneficially interested (representing 23.59 per cent. of the existing
issued ordinary share capital of the Company) in favour of the resolution on
which he is entitled to vote to be proposed at the Extraordinary General
Meeting.
Following the Extraordinary General Meeting on 10 January 2001 Norman Yarrow
will step down as a non-executive Director of the Company. He has agreed to
waive any entitlement to further remuneration.
8 Current trading and future prospects
As anticipated, trading in the current year has been affected by the weakness
of the Euro, with resultant reduced tourist numbers in common with similar
visitor attractions. Inevitably, this has impacted on the cash available for
marketing and other expenditure. Partly as a consequence of this, visitor
numbers, particularly at North Queensferry, were somewhat below the reduced
expectations.
The purpose of the Placing and Open Offer is to address the existing cash
constraints, which the Directors anticipate will lead to a resumption of
normal operations which will be further assisted by the attendant reduction in
interest costs.
9 Participants in the Company's Executive Share Option Scheme
In due course, the holders of options (if any) under the Company's Executive
Share Option Scheme will be sent an explanatory letter advising whether it is
appropriate for adjustments to be made to their subsisting options as a result
of the Open Offer.
10 Conclusion and recommendation
The Directors of DSL , who have received financial advice from KPMG Corporate
Finance, consider that the resolutions to be proposed at the Extraordinary
General Meeting are fair and reasonable so far as the Company and its
shareholders are concerned and are recommending that Ordinary Shareholders
vote in favour of the necessary resolutions.
11 Responsibility
The Directors of the Company accept responsibility for the information
contained in this announcement and to the best of the knowledge of the
Directors the information contained in this announcement is in accordance with
the facts and this announcement makes no omission likely to affect the import
of such information.
APPENDIX I
Definitions
The following definitions apply throughout this announcement unless the
context otherwise requires:
"Act" the Companies Act 1985 (as amended)
"Admission" the admission of the New Ordinary Shares
to trading on AIM becoming effective in
accordance with paragraph 16.6 of
chapter 16 of the Rules of the London Stock
Exchange
"AIM" the Alternative Investment Market of the
London Stock Exchange
"Application Form" the application form relating to the Open
Offer being sent to Qualifying Shareholders
with the Circular
"Bell Lawrie White" Bell Lawrie White (a trading division of
Brewin Dophin Securities Limited)
"Blue Planet Aquarium" the Company's aquarium visitor attraction
at Cheshire Oaks, Cheshire
"Board" or "Directors" the directors of the Company
"Circular" the formal document to be issued
subsequent to this announcement detailing the
terms and conditions of the
Placing and Open Offer
"Company" Deep-Sea Leisure PLC
"Deferred Shares" the deferred non-voting shares of 45p
each in the capital of the Company
"Extraordinary General Meeting" the extraordinary general meeting of the
Company to be held at Level 2, Saltire Court,
20 Castle Terrace, Edinburgh EH
1 2ET at 10 am on 10 January 2001
"Group" the Company and its subsidiary
undertakings
"Issue" the issue of New Ordinary Shares
pursuant to the Placing and Open Offer
"Issue Price" 30p per New Ordinary Share
"New Ordinary Shares" up to 12,932,720 new ordinary shares of 5p
each in the capital of the Company to be
issued pursuant to the Placing and
Open Offer
"Official List" Official List of the UK Listing
Authority
"Open Offer" the conditional offer by KPMG Corporate
Finance on behalf of the Company to
Qualifying Shareholders of 6,267,063 New
Ordinary Shares on the terms and conditions
to be set out in the Circular and
in the Application Form
"Ordinary Shares" ordinary shares of 5p each in the capital
of the Company
"Ordinary Shareholders" holders of Ordinary Shares
"Placees" Northern Venture Partnership Fund,
Northern Investors Company PLC, Northern
Venture Trust PLC, Scottish
Enterprise, Dunedin Enterprise Investment
Trust PLC and AID Investments
Limited
"Placing" the firm placing 6,665,657 New Ordinary
Shares pursuant to the Placing Agreement
"Placing Agreement" the conditional agreement relating to the
Placing and Open Offer dated 5 December 2000
between the Company, the Placees,
KPMG Corporate Finance and Bell Lawrie White
"Qualifying Shareholders" Shareholders on the register of members of
the Company on the Record Date excluding
certain overseas shareholders to be
set out in the Circular
"Record Date" Close of business on 1 December 2000
"Share Buy-back Agreement" the agreement proposed to be entered into
between the Company and each holder of
Deferred Shares for the purchase by the
Company of all the issued Deferred Shares
"Share Buy-back Proposal" the proposed purchase by the Company of an
aggregate of 2,229,493 Deferred Shares
Enquires
Deep-Sea Leisure PLC
Alastair Ritchie, Chairman 0131 220 3900
KPMG Corporate Finance
David McCorquodale 0131 222 2000
KPMG Corporate Finance, a division of KPMG which is authorised to carry on
investment business by The Institute of Chartered Accountants in England and
Wales, is acting exclusively for Deep-Sea Leisure PLC and no-one else in
relation to the Placing and Open Offer. KPMG Corporate Finance is not acting
for any other person (including any recipient of this document) and will not
be responsible to any person, other than Deep-Sea Leisure PLC, for providing
the protections afforded to clients or customers of KPMG Corporate Finance or
for providing advice in connection with the arrangements described in this
announcement or any investment in Deep-Sea Leisure PLC.
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