TIDMLVCG
RNS Number : 7666R
Live Company Group PLC
08 July 2022
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH
AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014. as it
forms part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR").
8 July 2022
LIVE COMPANY GROUP PLC
("LVCG", the "Company" or the "Group")
Conditional placing and proposed acquisition
Notice of General Meeting
Total Voting Rights
Live Company Group plc (AIM: LVCG) (the "Company") announces a
conditional placing ("Fundraise") together with the proposed
acquisition of the remaining shareholding in Start Art Global Ltd
("Start Art") in which the Company currently has a 19.94%
interest(" together the Transaction").
Highlights
-- Placing of new Ordinary Shares of 1p each at a price of 4.0p
per share to raise gross proceeds of GBP0.6 million of which
GBP0.48 million will be used for working capital requirements and
expansion plans for KPOP, BRICKLIVE and LCSE and GBP120,000 for the
initial cash consideration the Acquisition.
-- To provide shareholders and other investors who did not
initially have the opportunity to participate in the Placing to now
do so, the Company has implemented a Broker Option allowing
subscriptions up to GBP0.4 million on the same terms as the Placing
with priority given to existing shareholders of the Company.
-- To strengthen the Company's balance sheet and develop the
Kpop.Flex brand with events confirmed for London and Frankfurt and
discussions ongoing to secure more locations.
-- Acquisition of the remaining 80.06% interest in Start Art (a
Related Party Transaction under the AIM Rules) ("Acquisition").
-- The Acquisition and the Fundraise are conditional upon, inter
alia, the passing of Resolutions to be put to shareholders of the
Company at a General Meeting of the Company to be held on 27 July
2022 ("GM").
-- The Acquisition brings into the Group's full ownership a new
division and allows for the streamlining of costs and
efficiencies.
The Conditional Placing
To provide funding for working capital for the Group and the
initial cash consideration for the Acquisition , the Company has
raised GBP0.6 million (before expenses) by way of a placing of
15,000,000 new Ordinary Shares of 1p each ("Placing Shares")
arranged through Monecor (London) Limited trading as OvalX
("OvalX") at a placing price of 4.0p per share (the "Placing
Price") (the "Placing"). The Placing Price represents a discount of
circa 13% to the closing price per Ordinary Share of 4.6p on AIM on
07 July 2022.
The Company has entered into a placing agreement dated 7 July
2021 (the "Placing Agreement") with Monecor (London) Limited
trading as OvalX ("OvalX") pursuant to which they, as agents for
the Company, have procured placees for the Placing Shares at the
Placing Price.
The obligations of OvalX under the Placing Agreement are
conditional, inter alia, upon the approval of shareholders at a GM
dated 27 July 2022 and the admission of the Placing Shares to
trading on AIM ("Placing Share Admission") having occurred by 8.00
a.m. on 28 July 2022 (or such later time and/or date as may be
agreed, being no later than 8.00 a.m. on 1 August 2022), and there
being no material breach of the warranties given to prior to
admission of the Placing Shares. Following Placing Share Admission,
such Placing Shares will rank pari passu with the existing Ordinary
Shares.
A Circular including the Notice of Meeting for the GM will be
circulated shortly.
OvalX may terminate the Placing Agreement in specified
circumstances (including for breach of warranty at any time prior
to admission of the Placing Shares, if such breach is reasonably
considered by Monecor to be material in the context of the Placing)
and in the event of a force majeure event occurring at any time
prior to admission of the Placing Shares. If the conditions of the
Placing Agreement are not fulfilled on or before the relevant date
in the Placing Agreement, placing monies will be returned to
placees without interest as soon as possible thereafter. If the
Placing Agreement is terminated, the Acquisition will not take
place.
Broker Option
The Broker Option has been granted for primarily shareholders
and other investors who did not initially have the opportunity to
participate in the Placing to now do so on the same terms as the
Placing up to a total of 10,000,000 new ordinary. Shares of 1p each
("Broker Option Shares").
Independent financial advisers, stockbrokers or other firms
authorised by the Financial Conduct Authority may apply to
participate in the Broker Option, on behalf of existing
shareholders and other interested applicants. Independent financial
advisers, stockbrokers, or other firms authorised by the Financial
Conduct Authority, should communicate their interest in
participating in the Broker Option to Oval Money on 020 7392
1432.
Each application should state the number of Broker Option Shares
that the interested party wishes to acquire at the Issue Price and
should be submitted to OvalX no later than 12pm on 25 July
2022.
It is expected that, following allocations by OvalX (in
consultation with the Company), application will be made to the
London Stock Exchange for the relevant amount of Broker Option
Shares to be admitted to trading on AIM ("Broker Option
Admission"). Broker Option Admission is expected to become
effective and trading of the Broker Option Shares will commence at
8.00 a.m. BST on 1 August 2022. Following Broker Option Admission,
such Broker Option Shares will rank pari passu with the existing
Ordinary Shares.
Start Art Acquisition
The concept of Start Art as an online platform was launched by
David Ciclitira in 2020 as part of the Global Eye Programme (first
launched as a physical concept in Korea in 2009) and was given
further impetus by the financing, strategic vision and knowledge of
the Asian art market by Ranjit Murugason, the deputy chairman of
Start Art. Currently, David Cicilitira (Chairman of LVCG) owns
54.08% of the shares in Start Art with the remaining 25.97% of the
shares held by Ranjit Murugason (a non-executive director of LVCG)
who provided some initial funding for the Start.art business in
2021. LVCG currently owns 19.94% following a capital restructure of
Start Art.
For the period ended 31 December 2021 Start Art reported
unaudited turnover of GBP0.554 million and had at that date net
assets of GBP1.5 million. (GBP1.2 May 2022) Going forward, the core
strategy of Start Art will consist of three main streams these
being art and art related physical shows, on-line and off-line
sales of art and K-Pop related merchandise and NFTs. There is also
the opportunity for sponsorship revenue for each event being held.
The synergy between art, popular culture including KPOP and live
events further validates the acquisition.
An independent valuation was conducted which valued the entire
business at between GBP5.0 and GBP5.5 million and the element of
the deferred consideration which is performance related is tied
into the projections inherent in that valuation.
Terms of the Acquisition
The Company has agreed, subject to the passing of the
Resolutions to be proposed at the forthcoming General Meeting, to
acquire the remaining 80.06% of the issued share capital of Start
Art for a total maximum consideration of GBP4,002,804
("Consideration")
This comprises an initial cash consideration of GBP120,000
payable to Ranjit Murugason on completion of the transaction
together with, GBP1,061,402 and GBP35,699 to be satisfied by the
issue at a price of 6p per share of 17,690,036 and 594,991 new
ordinary shares ("Consideration Shares") to Mr Ciclitira and Mr
Murugason respectively.
A further cash consideration of GBP300,000 and GBP200,000
payable on 31 December 2022 to Mr Ciclitira and Mr Murugason
respectively.
The balance of GBP1,342,769 and GBP942,934, being the deferred
consideration, is payable to Mr Ciclitira and Mr Murugason in cash
or shares issued at 6p per share at the Company's option no later
than 30 June 2023, 65% of which being subject to EBIT as reported
in the audited accounts of Start Art for the year ending 31
December 2022 exceeding GBP488,000.
In the event the 2022 EBIT threshold is not met the deferred
consideration remains payable no later than 30 June 2024, 65% being
subject to EBIT as reported in the audited accounts of Start Art
for the year ending 31 December 2023 exceeding GBP1,482,000. In the
event the 2023 EBIT threshold is not met only the 35% of the
deferred consideration not subject to the EBIT threshold will be
payable.
In the situation where a significant value crystalisation event
occurs which reflects a value for Start.art greater than the
consideration paid by LVCG this will also trigger the immediate
payment of the deferred consideration.
If the Broker Option raises GBP400,000, then the GBP120,000
payable to Ranjit Murugason as initial consideration will be
increased to GBP200,000, with a correspondening decrease in the
deferred consideration payable to him.
This would result in the following shareholdings, also taking
into account the issue of the Placing Shares, the Fees Shares, the
Consideration Shares and the EMHL Deferred Consideration Shares,
but not the Broker Option Shares or any shares to be issued under
the deferred consideration arrangements described above:
Number of % of Number of Ordinary % of then
Ordinary issued Shares on admission issued
Shares currently share share capital
held capital
pre-Admission
David Ciclitira 36,684,874 19.94 54,374,910 24.99
------------------ --------------- --------------------- ---------------
Ranjit Murugason 6,367,937 3.46 6,962,928 3.20
------------------ --------------- --------------------- ---------------
Related Party Transaction
David Ciclitira is a Director of the Company and a substantial
shareholder, together with Maria Serena Papi (Serenella Ciclitira)
holding 19.94% of the Company's issued share capital. Ranjit
Murugason is also a Director of the Company. Accordingly, they are
defined as Related Parties under the AIM Rules for Companies (the
"AIM Rules").
Accordingly, the Acquisition of the remaining 80.06%
shareholding, in Start Art where David Ciclitira is currently a
54.08% shareholder and Ranjit Murugason is a 25.97% shareholder, is
classified as a Related Party Transaction pursuant to Rule 13 of
the AIM Rules ("Rule 13").
Bryan Lawrie through CFO Partners Limited has provided certain
consulting services to Start Art and is therefore also considered
to have an involvement in the transaction for the purposes of Rule
13.
The Directors of the Company, other than David Ciclitira, and
Maria Serena Papi, Ranjit Murugason and Bryan Lawrie, being Stephen
Birrell ("Independent Director") consider, having consulted with
the Company's Nominated Adviser, Beaumont Cornish Limited, that the
terms of the Transaction are fair and reasonable insofar as the
Company's Shareholders are concerned.
In forming his view, the Independent Director has taken into
account an independent valuation of the interest being acquired by
the Company which has indicated a value range in excess of the
consideration being paid and has also taken into account the
desirability of adding a further revenue stream to the Company's
existing business.
The Independent Director also considers that :
-- The cost and time efficiencies of having Start.art fully
under the LVCG are advantageous to the Group
-- The revenue producing physical art fairs complement the
BRICKLIVE; KPOP and E-fest Events with opportunities for cross sell
of merchandise
-- Sponsorship revenue for art based events and alignment with
key sponsors such as major Korean electronics brands is
advantageous to the enlarged Group
-- The original online art sales concept of Startart can be
developed into a more directly revenue generating concept as well
as complementing and deriving revenue from the physical art shows
which are being expanded beyond the annual Saatchi Gallery
show.
In considering these facts and after careful deliberation, the
Independent Director concluded that the Acquisition is beneficial
to the Company and that the consideration being lower than the
independent valuation range offers potential value to Shareholders
and will therefore be recommending that Shareholders vote for the
necessary resolutions to approve the Acquisition at the forthcoming
General Meeting.
Warrants
The Company will issue warrants of 7,500,000 to subscribe for a
total of 7,500,000 new ordinary shares of 1p each ('new Ordinary
Shares") on a ratio of 1 warrant per two Placing Share ("Placing
Warrants") in relation to the Placing and up to 5,000,000 warrants
on similar terms in relation to the Broker Option. (together the
"Warrants")
Each Warrant will provide the holder the right to one new
Ordinary Share on its exercise. The Warrants will be exercisable at
a price of 8.0p for a two-year period from the date of admission
oof the placing shares and the Broker Option Shares respectively,
subject to any extension in accordance with the Warrant instrument.
If exercised in full, the Warrants would result in the issue of up
to a further 12,500,000 new Ordinary Shares.
Issue of consideration shares for E-Movement Holdings Ltd
("EMHL")
As previously announced, the Company entered into an agreement
to purchase the entire issued share capital of EMHL in December
2020, the Company has now entered into an agreement whereby
GBP10,000 of the outstanding deferred consideration shall be
satisfied by the issue 250,000 new Ordinary Shares of 1p each at
the placing price ("EMHL Deferred Consideration Shares") to Iain
Banner and Bruce Parker-Forsyth, a further GBP105,000 remains
outstanding..
Issue of Fee Shares
The Company will also issue 80,000 new Ordinary Shares of 1p
each for payment of professional services amounting to GBP3,200 at
the Placing Price ("Fee Shares").
David Ciclitira, Chairman of LVCG said : "I believe that
bringing 100% of Start Art into LVCG creates a unique investment of
a content led multi-divisional Company that owns all its own brands
on AIM. I see significant growth potential across the divisions and
new revenue coming from the art division with Start Art in Seoul
profitable from year one (2022). We are looking to develop our art
offering further on a year on year basis and see potential
opportunities for revenue growth by leveraging with complementary
tech platforms in the block chain space. Brand ownership will be
key. I look forward to updating shareholders in due course on the
development of further KPOP and Art shows"
AIM Application and Total Voting Rights
The Placing Shares, Consideration Shares, Fee Shares and EMHL
Deferred Consideration Shares amounting in aggregate to 33,615,027
and with the Broker Option Shares up to 43,615,027 new ordinary
shares of 1p each ("New Shares") will, when issued, be credited as
fully paid and will rank pari passu in all respects with the
existing Ordinary Shares, including the right to receive all
dividends or other distributions made, paid or declared in respect
of such shares after the date of issue.
The issuance of the New Shares is conditional upon, inter alia,
the passing of resolutions to be put to shareholders of the Company
at the GM to be held on 27 July 2022 ("the GM") to provide
authority to the Directors to issue and allot the required shares
on a non-pre-emptive basis. A circular, containing a notice of the
GM, will be posted to shareholders shortly.
Conditional on the passing of the resolutions at the GM,
application will be made for the New Shares to be admitted to
trading on AIM and it is expected that their admission to AIM will
take place on or around 27 July 2022. ("Admission").
Following Admission, the enlarged issued share capital of the
Company will comprise 217,569,604 (up to 227,569,604 including the
Broker Option Shares) ordinary shares of 1p each ("Ordinary
Shares"). Each Ordinary Share has one voting right. No Ordinary
Shares are held in treasury. The above figure may be used by LVCG
shareholders as the denominator for the calculation by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the Company under the FCA's
Disclosure Guidance and Transparency Rules.
Post GM approval of the issuance of new shares the Directors
will have the following interest in the Company (assuming no
take-up of the Broker Option Shares).
Number of % of Number of Ordinary % of then
Ordinary issued Shares on admission issued
Shares currently share share capital
held capital
pre-Admission
David Ciclitira 36,684,874 19.94 54,7374,910 24.99
------------------ --------------- --------------------- ---------------
Maria Serena
Papi (Serenella
Ciclitira) 1,562 0.00 1,562 0.00
------------------ --------------- --------------------- ---------------
Ranjit Murugason 6,367,937 3.46 6,962,928 3.20
------------------ --------------- --------------------- ---------------
Bryan Lawrie 838,051 0.46 838051 0.39
------------------ --------------- --------------------- ---------------
Stephen
Birrell 428,572 0.23 428,572 0.20
------------------ --------------- --------------------- ---------------
Beaumont Cornish Limited ("Beaumont Cornish"), which is
authorised and regulated in the United Kingdom by the FCA, is
acting as Nominated Adviser ("Nomad") to the Company in connection
with the matters contained in this announcement, and will not be
acting for any other person or otherwise be responsible to any
person for providing the protections afforded to clients of
Beaumont Cornish or for advising any other person in respect of the
matters set out in this announcement or any transaction, matter or
arrangement referred to in this announcement. Beaumont Cornish's
responsibilities as the Company's Nomad are owed solely to London
Stock Exchange and are not owed to the Company or to any Director
or to any other person in respect of his or her decision to acquire
any shares in the Company.
Enquiries:
Live Company Group Plc Tel: 020 7225 2000
Sarah Ullman , Chief Operating Officer
Beaumont Cornish Limited (Nominated Adviser) Tel: 020 7628 3396
Roland Cornish/Rosalind Hill Abrahams
Oval Money (London) Limited (Broker) Tel: 020 7392 1436
Thomas Smith
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014. as it
forms part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR").
LIVE COMPANY GROUP
Live Company Group Plc ("LVCG", the "Company" or the "Group") is
a live events, entertainment and sports events company, that has
been trading on AIM since 2017.
The Group is divided into four divisions; BRICKLIVE, consisting
of a network of partner-driven fan-based and touring shows using
BRICKLIVE created content worldwide. The Company owns the rights to
BRICKLIVE - an interactive experience built around the creative
ethos of the world's most popular construction toy bricks. The
Group is an independent producer of BRICKLIVE and is not associated
with the LEGO Group. The second is Kpop Europa (KPE), which
operates the KPOP.flex Festival in Frankfurt. KPOP.flex Frankfurt
is Europe's first ever Mega KPOP music festival. The third is Live
Company Sports and Entertainment, which manages a number of global
sports, entertainment and lifestyle events. LCSEs main focus for
2022 will be Cape Town Cycle Tour and the successful one year out
launch of the Formula E Cape Town race for series 9 in 2023. The
fourth division is StART Art Global, in which LVCG holds a minority
stake. StART Art Global is a combination of both physical art shows
and a digital art platform.
Website: www.livecompanygroup.com .
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