Placing & Subscription
18 April 2008 - 5:00PM
UK Regulatory
18 April 2008
RETEC DIGITAL
Placing and Subscription to raise �0.71 million
Retec Digital Plc ("Retec" or the "Company"), the multi-channel marketing
services company, is pleased to announce that, subject inter alia to the
approval of its shareholders, it proposes to raise approximately �0.71 million
by way of a placing and subscription of 28,226,000 new Ordinary Shares ("New
Ordinary Shares") at a price of 2.5 pence per ordinary share ("Placing and
Subscription").
The Placing and Subscription has been undertaken to provide additional capital
to:
* accelerate product development (either organically or through third party
licenses);
* develop sales and channel partnerships; and
* make selective acquisitions.
Background to and reasons for the Placing and Subscription
Retec is a multi-channel marketing services company engaged in the design and
delivery of kiosks and screens to provide information to consumers. Over the
past 18 months, the demand for Retec's Guided Selling and Self Service
solutions has grown significantly amongst blue chip retail customers. These
solutions are gaining traction with major retailers, most notably in the areas
of entertainment, wine and electrical. In turn these innovations have opened up
the opportunity to penetrate other areas of the store, and additional funding/
resources will significantly improve our ability to bring these new ideas to
market. This will take the form of both development resource and sales account
teams.
In addition, we are seeing greater demand from our business partners,
specifically to launch our products and services into other territories within
Europe.
Finally, as we grow, there are certain key skills that we can infill within the
business that will further enhance our ability to take products and services to
our customer base. We would therefore benefit from being in a stronger position
to exploit any possible opportunities to acquire businesses that operate in
similar or associated markets to us. This would give access to new customers,
enable us to cross-sell products and services, and reduce unit costs.
The Board has identified a number of opportunities that it believes would
accelerate Retec's growth plans, and help to keep pace with the demands of its
customers and partners.
Details of the Placing and Subscription
The Company is proposing to raise approximately �0.65 million (net of
expenses), by way of a Placing and Subscription of an aggregate of 28,226,000
new ordinary shares at 2.5 pence per share with institutional and other
investors. The Placing and Subscription are both conditional on the passing of
the resolutions set out in a notice of extraordinary general meeting, which
will be posted to shareholders today.
The New Ordinary Shares will represent approximately 18.32 per cent. of the
fully diluted share capital of the Company as enlarged by the Placing and
Subscription. The placing price of 2.5 pence per ordinary share represents a
9.1 per cent. discount to the mid market closing price of 2.75 pence per
ordinary share on 17 April 2008.
The Placing and Subscription is not a rights issue or open offer and the New
Ordinary Shares will not be offered generally to shareholders on a pre-emptive
basis. 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 circumstances, and accordingly, the Board considers that it
is in the best interests of the Company and Shareholders as a whole for the
funds to be raised through the Placing and Subscription.
Conditional on the passing of the resolutions at the extraordinary general
meeting, application will be made to the London Stock Exchange for the New
Ordinary Shares to be admitted to trading on AIM. It is expected that Admission
will become effective and that trading in the New Ordinary Shares will commence
on AIM at 8.00am on 13 May 2008.
The New Ordinary Shares will, when issued and fully paid, rank equally in all
respects with the existing ordinary shares, including the right to receive any
dividend or other distribution declared, made or paid after the date of their
unconditional allotment.
Following Admission the Company will have 154,060,141 ordinary shares in issue.
Of the Directors, Sir Brian Ivory, John Cole, Ian Deste and Charles McKay, have
participated in the Subscription. The Directors' respective interests in
Ordinary Shares are set out in the table below.
As at the date of this document and following completion of the Placing and
Subscription, the Directors will have the following interests in ordinary
shares:
Name of Existing Percentage SubscriptionShares Enlarged Percentage
Director of of
shareholding subscribed shareholding
existing share
following capital
ordinary the
share following
Placing and the
capital Subscription
Placing and
Subscription
J Cole 4,800,422 3.88% 800,000 5,600,422 3.64%
I Deste - - 80,000 80,000 0.05%
B J Ellis 1,145,833 0.91% - 1,145,833 0.74%
R Hayim - - - - -
Sir Brian 2,150,000 1.71% 400,000 2,550,000 1.66%
Ivory
C R H 440,000 0.35% 800,000 1,240,000 0.80%
McKay
Other than the Directors referred to above, as at the date of this document and
following completion of the Placing, the Directors are aware of the following
interests that are or will be held directly or indirectly in 3 per cent. or
more of the issued ordinary share capital of the Company:
Name of Existing Percentage Placing or Enlarged Percentage
Shareholder of Subscription of
shareholding Shares shareholding
existing share
subscribed following capital
ordinary the
share following
Placing and the
capital Subscription
Placing and
Subscription
Meadowside 18,617,166 14.80% 10,000,000 28,617,166 18.58%
Leasing
Limited
C Dunkerley 4,964,610 3.95% - 4,964,610 3.19%
Related Party Transaction
As set out above, Meadowside Leasing Limited, Sir Brian Ivory, John Cole, Ian
Deste and Charles McKay have participated in the Placing and Subscription and
as such are considered to be related parties for the purposes of the AIM Rules.
The Independent Directors, having consulted with Charles Stanley, the Company's
Nominated Adviser, consider that the Placing and Subscription and the
participation by Meadowside Leasing Limited, Sir Brian Ivory, John Cole, Ian
Deste and Charles McKay is fair and reasonable insofar as shareholders are
concerned.
Extraordinary General Meeting
In order to give effect to the Placing and Subscription, an extraordinary
general meeting of the Company, to be held at the offices of Edwin Coe, 2 Stone
Buildings, Lincoln's Inn, London WC2A 3TH is being convened at 11.00 am on 12
May 2008.
Irrevocable undertakings
The Company has received irrevocable undertakings to vote in favour of the
resolutions from shareholders holding 40,533,277 ordinary shares in aggregate,
representing approximately 32.21 per cent. of the existing ordinary shares.
Timetable
Latest time and date for receipt of Forms 11.00 a.m. on 10 May 2008
of Proxy for use at the Extraordinary
General Meeting
Extraordinary General Meeting 11.00 a.m. on 12 May 2008
Expected date of admission and 8.00 a.m. on 13 May 2008
commencement of trading of the New
Ordinary Shares
A circular setting out details of the Placing and Subscription has been posted
to shareholders today. Copies of the circular will be available free of charge
during normal business hours on weekdays (excluding public holidays) from the
date hereof until the date falling one month after the date of Admission from
the offices of Charles Stanley Securities, 25 Luke Street, London EC2A 4AR.
For further information please contact:
Retec Digital PLC 01455 222260
John Cole, Chief Executive
Charles McKay, Finance Director
Hogarth Partnership Ltd 020 7357 9477
Fiona Noblet / Ian Payne
Charles Stanley Securities (Nominated Adviser) 020 7149 600
Mark Taylor
END
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