RNS Number:2640K
MICAP PLC
10 October 2006
MICAP Plc
10 October 2006
Contact:
Micap plc
Michael Norris, CEO Tel: 01942 625 590 / 07966 341 802
Teather & Greenwood Tel: 020 7426 9000
Robert Naylor
Adventis Financial PR
Tarquin Edwards/Chris Steele Tel: 020 7034 4758/020 7034 4759
07879 458 364/07979 604 687
MICAP PLC
("Micap" or the "Company")
Notice of Extraordinary General Meeting and
Placing of 59,500,000 Placing Shares
at 1p per share
PLacing Statistics
The Placing comprises 59,500,000 Placing Shares, valued at #595,000 at the
Placing Price to raise approximately #525,000 net of expenses.
Placing Price 1p
Number of Placing Shares 59,500,000
Discount to the closing mid market price as at 5 October 2006* 55.6 per cent.
Estimated gross proceeds of the Placing #595,000
Estimated net proceeds of the Placing #525,000
* being the mid market price on the date that the Company's shares were
suspended.
EXPECTED TIMETABLE OF EVENTS
Latest time and date for receipt of Form of Proxy for EGM 11:00 a.m. on 31 October 2006
Extraordinary General Meeting 11:00 a.m. on 2 November 2006
Admission and commencement of dealings in the Placing Shares and 3 November 2006
CREST accounts credited
Despatch of share certificates in respect of Placing Shares 17 November 2006
The following has been extracted from the Circular sent to Shareholders today:
Dear Shareholder
It was today announced that Micap has conditionally raised #595,000, #525,000
net of expenses, by way of the Placing. The net proceeds of the Placing will be
used to initiate the lease assignment, repay the overdraft facility and as
additional working capital by the Company, and to satisfy the reverse premium
payable on assignment of the lease of the Company's former head office, all as
detailed below. The purpose of this document is to provide you with further
details of, and the reasons for, the Placing and to give notice of the EGM which
have been convened for 11.00am on 2 November 2006.
Trading in the Company's Ordinary Shares was suspended at 13.00 on 5 October
2006. Further to the announcement of the Placing, the Directors will request
that the suspension of trading is lifted and trading in the Company's Ordinary
Shares is resumed.
Shareholders should be aware that if the Resolution to be proposed at the EGM is
not passed and Admission does not take place, the net proceeds of the Placing
will not be received by the Company. Unless funds are received pursuant to the
Placing there is a material risk that the Company will not be able to meet its
debts as they fall due and that it will become insolvent. These debts include
#150,000 required to initiate the lease assignment which is due for payment by
3rd November 2006, #150,000 in respect of the reverse premium on the assignment
of the lease which is due for payment by 28th December 2006 and an overdraft
facility of a #100,000, which is due for repayment by 11th November 2006. The
Directors have been unable to procure funding for the Company from other sources
and therefore the Placing is the only tenable financing option.
The Company's ability to meet its working capital requirements over the next
12months is dependent, inter alia, on it converting a production trial and other
potential trials at its spray drying plant in Ireland, into firm orders. If
insufficient orders are received the Company is likely to require further
funding.
The following has been extracted from the announcement made by the Company on 25
September 2006 at 7.00am.
Lease assignment
Following the reorganisation of the business in autumn 2005, Micap has been
negotiating the assignment of the lease on its former Head Office in Newton le
Willows, Merseyside. The annual rent and rates bill for the property was in
excess of #200,000 and there were 13 years remaining on the lease. This was a
significant liability and a continuing drain on the Company's cash flow.
The Board of Micap is today delighted to announce that, subject only to
Landlord's consent, the Company has assigned the lease for a reverse premium of
c.#150,000 to a software company, (which is part of a major electronics Group).
Following this agreement, there will be no ongoing liabilities for Micap from
this property.
Trading update
Over the past few months, the Company has made further significant progress in
all parts of its trading divisions. Micap GmbH, Germany the wholly owned
subsidiary which provides bespoke microencapsulation solutions to industry, is
now operating at a profit, and also has a growing pipeline of new relationships
in sectors ranging from food and personal care to steel and industrial paints.
Micap Specialties
Progress with the large and internationally-focused Agrochemical partners who
have taken option agreements on the yeast technology as announced on the 5 July
2006 and 8 August 2006, has been positive. Over the period of these
relationships, Micap will receive access and milestone payments and the Company
will be entitled to royalties on all sales of products containing Micap's
Technology, if it is subsequently commercialised.
Micap Encapsulates Ltd
The investment made in Micap Encapsulates Ltd, which operates a spray drying
plant in Ireland, is now starting to pay dividends, as the first trial
production runs for new customers start to take place. Negotiations are underway
with a number of other new customers, and orders are anticipated in the near
future. This is in addition to continued business supplying encapsulated mustard
flavour utilising our patented yeast technology. Following the end of our
trading relationship with Firmenich, which restricted our ability to sell yeast
encapsulated ingredients, we are now free to promote sales of mustard, garlic
and other flavours directly to the food industry.
As a result of these and other developments, the Group's turnover for the six
months to 30th September 2006 will be in excess of #450,000, an increase of 200
per cent. over the corresponding period last year and 25per cent. over the
immediately preceding six months. With Micap Encapsulates Ltd, the spray drying
business, making good progress, turnover is expected to continue to grow.
With the assignment of the lease on the former Head Office, the company has
concluded its initial cost reduction, programme which has included a reduction
in the Group headcount from 31 to 18 over the last 2 years. This, coupled with
the revenue growth highlighted above, is expected to allow the company to reach
a monthly break even position by the end of this financial year. This is three
months later than anticipated by the board. The Company is considering various
financing options, and is confident that with the progress made in recent months
it will be able to raise adequate funding for its short term working capital
commitments to take it through to break even."
*: It should be noted that the above announcement was incorrect and should have
read "As a result of these and other developments, the Group's turnover for the
six months to 30th September 2006 will be in excess of #450,000, an increase of
150 per cent. over the corresponding period last year and 25per cent. over the
immediately preceding six months."
Reasons for the Placing
As noted above the Company has been considering its financing options over
recent weeks.
The net proceeds of the Placing will be used to initiate the lease assignment,
repay the overdraft facility and to provide working capital, allowing the Group
to continue trading. Subject to certain assumptions, including those detailed
below about product orders, the Directors believe that the Placing should
generate sufficient revenues to allow the Company to reach a monthly break even
position by the end of the current financial year and to provide sufficient
working capital for the next 12 months.
The Company's ability to meet its working capital requirements over the next 12
months is dependent, inter alia, on it converting a production trial and other
potential trials at its spray drying plant in Ireland, into firm orders. If
insufficient orders are received the Company is likely to require further
funding.
Details of the Placing
Under the terms of the Placing Agreement, Teather & Greenwood, as agent for the
Company, has agreed to use its reasonable endeavours to place the Placing Shares
with institutional and other investors at the Placing Price. The Placing, which
is not underwritten, is conditional, amongst other things, on Admission taking
place by 3 November 2006, or such later time, not being later than 17 November
2006, as Teather & Greenwood and the Company agree.
The Placing has conditionally raised approximately #595,000 gross for the
Company or #525,000 net of expenses. The proceeds will provide additional
working capital for the Company.
Application will be made to the London Stock Exchange for the Placing Shares to
be admitted to trading on AIM. It is expected that the Placing Shares will be
admitted to trading on AIM on 2 November 2006. The Placing Shares will rank pari
passu in all respects with all existing New Ordinary Shares in the Company
including the right to receive all dividends and other distributions thereafter
declared made or paid.
The Placing is not a rights issue or an open offer and Placing Shares will not
be offered generally to Shareholders, whether on a pre-emptive basis or
otherwise. The Directors believe that the considerable extra cost and delay
involved in a rights issue or open offer would not be in the best interests of
the Company in the present circumstances.
The Directors believe that without the Placing, the Company will not have
sufficient working capital to continue trading for the next 12 months. If the
Placing does not take place, the Directors believe that they will have no
alternative but to recommend that the Company is put into administration.
Directors and other interests
The interests of the Directors (all of which are, unless otherwise stated,
beneficial) in the issued share capital of the Company as at the date of this
document and immediately following admission, such interests being those which
are required to be notified by each Director to the Company under the provisions
of section 324 or 328 of the Act or which are required to be entered in the
register of interests required to be maintained pursuant to section 325 of the
Act or which are interests of persons connected with the Director within the
meaning of section 346 of the Act, the existence of which is known or which
could, with reasonable diligence, be ascertained by a Director are, and will be
as follows:
At the date of this document Following Admission
Number of Percentage of Number of Percentage of
Ordinary Shares issued ordinary Ordinary issued ordinary
share capital Shares share capital
I McManus1 13,600 0.0% 1,013,600 0.9%
M Norris2 350,174 0.6% 2,350,174 2.0%
N Crabb3 5,548,546 9.9% 6,548,546 5.7%
S Delaney4 4,142,856 7.4% 5,142,856 4.5%
1 I McManus is subscribing #10,000 for 1,000,000 Ordinary Shares in the Placing.
2 M Norris is subscribing #20,000 for 2,000,000 Ordinary Shares in the Placing.
3 N Crabb is subscribing #10,000 for 1,000,000 Ordinary Shares in the Placing.
3 S Delaney is subscribing #10,000 for 1,000,000 Ordinary Shares in the Placing
Shareholder meeting
In order to issue the Placing Shares it is proposed that the authorised share
capital be increased to #19,000,000 and the Directors be given authority to
allot shares in the capital of the Company and that statutory pre-emption rights
are disapplied. Accordingly, there is set out at the end of this document a
notice convening an EGM to be held at 11.00am on 2 November 2006 at the offices
of Sigma Technology Management Limited, 6th Floor, Bucklersbury House, Cannon
St, London EC4N 8ST. At this meeting, the following resolution will be proposed:
* to increase the authorised share capital of the Company to #19,000,000 by
the creation of 100,000,000 new Ordinary Shares;
* to authorise the Directors to allot relevant securities (for the purposes
of and pursuant to section 80 (1) of the Act) up to an aggregate nominal
amount of #1,000,000; and
* to authorise the Directors to allot equity securities otherwise than on a
pre-emptive basis in the circumstances as set out in the notice of the EGM.
Action to be taken
You will find enclosed with this document the form of proxy for use at the EGM
to be held at 11.00am on 2 November 2006 at the offices of Sigma Technology
Management Limited, 6th Floor, Bucklersbury House, Cannon St, London EC4N 8ST.
The forms of proxy should be completed and returned so as to be received by the
Company Secretary at the Company's registered office not later than 48 hours
before the appointed time of the meeting.
Completion and return of a form of proxy will not prevent a Shareholder from
attending the meeting and voting in person if he/she wishes to do so.
Recommendation
Your Directors believe that the Resolution is in the interests of the Company
and its Shareholders as a whole and unanimously recommend that all Shareholders
vote in favour of the Resolution, as they have irrevocably undertaken to do so
in respect of their own beneficial holdings, amounting in aggregate to
10,055,176 Ordinary Shares representing 17.9 per cent. of the existing issued
ordinary share capital of the Company.
Shareholders should be aware that if the Resolution is not passed and the
Placing does not proceed, the Company will not have adequate working capital to
meet its debts as they fall due and is likely to become insolvent.
Yours faithfully
I D McManus
Chairman
This information is provided by RNS
The company news service from the London Stock Exchange
END
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