TIDMFDBK
RNS Number : 6119E
Feedback PLC
14 May 2013
14 May 2013
Feedback plc
("Feedback", the "Company" or the "Group")
Disposal of Feedback Data plc
The Company announces that it has today entered into a
conditional sale and purchase agreement, subject to Shareholder
approval, to dispose of its wholly owned subsidiary Feedback Data
plc ("Feedback Data") to Belgravium Technologies plc
("Belgravium"). Completion is expected to take place on 31 May
2013.
Following the disposal of Feedback Instruments Limited and
Feedback Inc. in May 2012 Feedback Data has been the Company's only
revenue generating operation. After removing the results of
Feedback Instruments Limited from the Company's accounts for the
year ended 31 May 2012, Feedback Data contributed 91% of the
Company's revenues. Consequently, the disposal of Feedback Data
(the "Disposal") constitutes a fundamental change of business under
Rule 15 of the AIM Rules and is therefore conditional on the
approval of Shareholders.
Reasons for the Disposal
Over the last few years the Company has found the markets it has
been operating in to be very challenging and despite significant
efforts to develop new products, the Company has struggled to
compete effectively. In May 2012 the decision was taken to dispose
of the Company's loss making education businesses, Feedback
Instruments Limited and Feedback Inc. and restructure the remaining
business. The disposal of the education businesses has left the
Company with significant debts, which are currently secured against
the Company's premises. Negotiations to dispose of these premises
are on-going with completion expected in 2013. On completion of the
property disposal, the Board expect to repay all the Company's
outstanding indebtedness.
The Board are now of the opinion that the revenue and profits
derived from Feedback Data are not sufficient to fully offset the
central costs associated with the Company being on AIM.
Notwithstanding the potential injection of capital from the sale of
the Company's premises, the Board believe that the Company does not
have the necessary capital or the ability to raise further capital
to maintain a competitive product offering in the access control
and attendance monitoring market. As such, the Disposal represents
the best chance for the Company to realise some value for that
business for Shareholders.
The Disposal
Pursuant to the Sale and Purchase Agreement between (1) Feedback
plc and (2) Belgravium Technologies plc, Belgravium has
conditionally agreed to acquire the entire issued share capital of
Feedback Data. The Consideration payable by Belgravium for Feedback
Data is GBP600,000 in cash on completion (subject to adjustment on
the basis of the cash and debt position of Feedback Data at
Completion). The Disposal comprises all of the asset and
liabilities of Feedback Data. Feedback Data is being sold on a cash
free debt free basis such that a proportion of the consideration
will be used to repay the indebtedness of Feedback Data and such
that the Company will receive a payment in cash equal to the amount
of cash held by Feedback Data at completion of the Disposal.
The proceeds of the Disposal will be used to pay down the
Company's debt with the remainder retained for working capital
purposes while the Company looks for suitable opportunities in the
near future.
Investing Policy
If the Disposal is approved, Feedback will have disposed of all
of its trading businesses. In this situation under Rule 15 of the
AIM Rules the Company will be reclassified as an Investing Company.
Under the AIM Rules Investing Companies are required to adopt an
Investing Policy that must be approved by Shareholders.
The Company's proposed Investing Policy is as follows:
The Directors intend to seek to acquire a direct interest in one
or more entities in the technology sector. The Company will focus
on opportunities in Europe and the UK in particular but will
consider possible opportunities anywhere in the world in any
sector. In particular the Company will consider ventures that:
-- operate in the software and computer services sector;
-- require little or no funding in excess of the cash resources
available to the Company following the Disposal and
-- one whose growth prospects, if achieved, will be earnings enhancing for Shareholders.
The Company may invest by way of purchasing equity, debt,
convertible or other instruments in listed or unlisted companies,
outright acquisition or by the acquisition of assets, including the
intellectual property, of a relevant business, or by entering into
partnerships or joint venture arrangements. Such investments may
result in the Company acquiring the whole or part of a company
(which may be private and/or may be pre-revenue) and such
investments may constitute a minority stake in the venture in
question although this is not the Board's preferred option. The
Company will not have a separate investment manager.
The Company intends to be an active investor but may consider a
passive investment depending on the nature of the individual
investment. Although the Company intends to be a medium to
long-term investor, the Directors will place no minimum or maximum
limit on the length of time that any investment may be held.
There will be no limit on the number of investments which the
Company may make, and the Company's financial resources may be
invested in a number of propositions but the Board's preferred
option is that just one investment will be made, which is likely to
be deemed to be a reverse takeover pursuant to Rule 14 of the AIM
Rules. The Company will carry out an appropriate due diligence
exercise on all potential investments and, where appropriate, with
professional advisers assisting as required. The Board's principal
focus will be on achieving capital growth for Shareholders.
Investments may be in all types of assets class and there will
be no investment restrictions on asset classes although the Board's
preference will be for debt or equity investments.
The Board between them have the experience of working in and
running businesses in a variety of sectors including the technology
sector. This combined with the accountancy expertise of one of the
members of the board leaves them well placed to assess potential
investments.
The Company may require additional funding as investments are
made and new opportunities arise. The Directors may offer new
ordinary shares by way of consideration for investments as well as
cash, thereby helping to preserve the Company's cash resources for
working capital. The Company may, in appropriate circumstances,
issue debt securities or otherwise borrow money to complete an
investment. The Directors do not intend to acquire any
cross-holdings in other corporate entities that have an interest in
the ordinary shares.
If the Company has not implemented its Investment Policy within
one year of becoming an investing company, the Company's ordinary
shares will be suspended from trading on AIM and the Board will
consult shareholders on whether to continue to be an investing
company or return funds to shareholders. If the Company's
Investment Policy has still not been implemented 18 months after
becoming an investing company the admission to trading on AIM of
the Ordinary Shares would be cancelled.
Irrevocable Undertakings
Certain of the Directors and certain other shareholders have
irrevocably undertaken to vote in favour of the Resolution to be
proposed at the General Meeting, in respect of their beneficial
holdings totalling 50,731,161 ordinary shares in aggregate, which
represent approximately 38.74 per cent. of the Company's issued
ordinary shares.
Notice of a General Meeting
Today, the Company will be posting to Shareholders a Circular
and Notice of General Meeting calling a general meeting for 10:00
a.m. on 30 May 2013 at the offices of Sanlam Securities UK Limited,
10 King William Street, London EC4N 7TW.
Nick Shepheard, Executive Chairman, commented:
"Feedback has experienced very difficult trading conditions over
recent years, which has resulted in the Company's indebtedness
increasing and forced the Company to manage its cash reserves very
carefully. The disposal of Feedback Data will clear the Company's
bank debt and give the Group the freedom to focus on new
opportunities. The Board will begin actively seeking such
opportunities from completion of this transaction whilst continuing
to push forward with the disposal of the Company's remaining
property asset."
For further information contact:
Feedback plc
Nick Shepheard Tel: 0845 3379
155
Sanlam Securities UK Limited (Nominated Adviser and Broker)
Simon Clements/Lindsay Mair Tel: 020 7628
2200
This information is provided by RNS
The company news service from the London Stock Exchange
END
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