Proposed Placing and Notice of General Meeting
19 March 2010 - 6:00PM
UK Regulatory
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RNS Number : 8294I
Mavinwood PLC
19 March 2010
Mavinwood plc
("Mavinwood" or the "Company")
Proposed Placing of New Ordinary Shares and Notice of General Meeting
The Board of Mavinwood announces a proposal to raise GBP8 million (before
expenses of GBP40,000) to strengthen the Company's balance sheet by a
conditional placing (the "Placing") of 1,066,666,666 ordinary shares of 0.1
pence each in the Company ("New Ordinary Shares") at a price of 0.75p per share
(the "Placing Price"). The Placing Price represents a premium of approximately
57.9 per cent. to the closing price of 0.475p on 18 March 2010. The placing has
been underwritten by Geraldton Services Inc ("Geraldton"). It is expected that
Geraldton will subscribe for the entire Placing. The proceeds of the Placing
will be used to pay down debt due to Geraldton.
A circular has today been sent to Mavinwood shareholders to convene a General
Meeting at 5.00pm on 12 April 2010 at Marble Arch Tower, 55 Bryanston Street,
London W1H 7AA, to seek, amongst other things, the approval of Shareholders to
allot the New Ordinary Shares. Application will be made for the New Ordinary
Shares to be admitted to trading on AIM, which is expected to commence on 13
April 2010. The New Ordinary Shares will, upon issue, rank pari passu in all
respects with the existing issued Ordinary Shares.
At the General Meeting, Resolutions are also being proposed to give the
Directors authority to issue further Ordinary Shares and to disapply pre-emption
rights in line with common market practice. Resolutions are also being proposed
to make minor amendments to Mavinwood's constitution to take advantage of some
of the provisions of the new Companies Act.
Background to the Placing and use of Proceeds
As at the date of this announcement, the Company owes to Geraldton a total of
approximately GBP10.3 million consisting of GBP9.1 million of drawn down loans,
GBP261,780 of interest and GBP900,000 of fees (the "Debt"). The proceeds of the
Placing will be used to pay down the Debt. After such payment the Company will
owe Geraldton approximately GBP2.3 million.
The Board remains keen to obtain investment in the Company from any other
parties who may be interested in future.
Following completion of the Placing, the issued share capital of the Company
will comprise 1,532,937,811 Ordinary Shares, of which Geraldton will own up to
1,333,102,919 Ordinary Shares representing 86.96 per cent. of the issued share
capital.
Related Party Transaction
Geraldton is a substantial holder of the Ordinary Shares under the AIM Rules
and, that being the case, the Placing constitutes a related party transaction
for the purposes of Rule 13 of the AIM Rules. The Directors consider, having
consulted with Cenkos, that the terms of the transaction are fair and reasonable
insofar as the Shareholders are concerned.
Trading Statement
For the year ended 31st December 2009, trading was weaker than management
forecasts. Restore and Wansdyke, our document storage businesses, continued to
trade robustly in line with expectations. However DCS, our document scanning
business, continued to experience delays in orders which adversely impacted the
outturn for the year with sales approximately 35% lower than in 2008. Peter Cox,
the timber treatment and damp proofing specialist, had a weaker than expected
finish to the year. Head Office costs were below budget.
Performance in document storage in the current year has been broadly in line
with budget. DCS has traded slightly better than in the second half of last year
although volumes are still below historic levels. Peter Cox was adversely
affected by the weather conditions at the start of the year but is now trading
in line with expectations.
Major cost reductions have been made particularly in the financial reporting
costs of the company. This, together with the restructuring required since the
appointment of a wholly new board to the company last year, means that the
company's full year results will be announced in June.
For further information, please contact:
+----------------------------------------+--------------------+
| Mavinwood | |
+----------------------------------------+--------------------+
| Charles Skinner, Chief Executive | Tel: 07966 234 075 |
+----------------------------------------+--------------------+
| | |
| Cenkos Securities | |
+----------------------------------------+--------------------+
| Nicholas Wells / Beth McKiernan | Tel: 020 7397 8900 |
+----------------------------------------+--------------------+
| | |
| Threadneedle Communications | |
+----------------------------------------+--------------------+
| John Coles | Tel: 020 7653 9848 |
+----------------------------------------+--------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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