Issue of Debt
26 June 2003 - 8:00PM
UK Regulatory
RNS Number:8063M
Theo Fennell PLC
26 June 2003
Theo Fennell Plc
("the Company")
Proposed issue of #1 million of secured convertible loan stock
Earlier today the Company announced its preliminary financial results for the
year ended 31 March 2003 and that it is seeking to raise #1 million before
expenses through the issue of secured convertible loan stock ("the Loan Stock").
The proceeds of the issue will be used to re-finance the costs of fitting out
the concession at Selfridges, to finance the fit out and stock at Harvey Nichols
in Manchester and to put in place a new IT Management Information System.
The Board does not propose to effect the Loan Stock issue by way of a rights
issue or open offer available to all shareholders of the Company. As such
shareholders in the Company will not have an entitlement to subscribe for the
Loan Stock. The Board has considered that such an offer to all the shareholders
is not in the best interests of the Company given the costs the Company would
need to incur to effect this and the timing requirements for funds being
available to the Company from the offering. It is proposed that the Loan Stock
will be offered for subscription to the Directors of the Company and certain
other private investors.
The Loan Stock will not be capable of being dealt in on any stock exchange in
the United Kingdom or elsewhere and no application has been made to any stock
exchange or regulatory authority for permission to deal in or for an official
listing or other quotation of the Loan Stock.
The Loan Stock will be convertible at the option of the holder into ordinary
shares of 5 pence each in the capital of the Company at a conversion price of 30
pence per share. They will be repayable to the extent not converted on 30 June
2008. The Loan Stock will carry security over the assets or undertaking of the
Company but will rank behind the Company's facility arrangements with Clydesdale
Bank Plc and will yield gross interest of 7 per cent. per annum.
A summary of the proposed terms attaching to the Loan Stock is set out below.
Completion of the Loan Stock offering is conditional on shareholder approval
being obtained in respect of the creation and issue of the Loan Stock at the
Company's AGM which is to be held at 11.00 a.m. on 31 July 2003 at 169 Fulham
Road, London, SW3 6SP.
Seymour Pierce Limited, the nominated adviser to the Company under the AIM
Rules, consider that the terms of the loan note are fair and reasonable insofar
as the Company's shareholders are concerned.
Enquiries:
Richard Northcott, Chairman, Theo Fennell PLC 020 7591 5000
Barbara Snoad, Managing Director, Theo Fennell PLC 020 7591 5000
Mark Percy, Seymour Pierce Limited 020 7107 8000
Ewan Leggat, Seymour Pierce Limited 020 7107 8000
Simon Fielder, Osborne Clarke 020 7809 1020
Summary of the terms of the Loan Stock
1. Form, denomination and title
*The Loan Stock will be in registered form only and issued in
multiples of 30 pence. The Loan Stock will be freely transferable.
*Title to Loan Stocks will pass by transfer and registration and the
registered holder will be recognised by the Company as the absolute
owner(s) thereof and the Company shall not be bound to take notice of
any trust whether express, implied or constructive.
*The receipt by the registered holder or, in the case of joint
registered holders, the receipt by any of them, of interest or of any
other monies payable in respect of the Loan Stocks shall be a good
discharge to the Company.
2. Security
The Loan Stock will carry security over the assets or undertaking of the
Company but will rank behind the Company's facility arrangements with
Clydesdale Bank Plc.
3. Interest
Interest at the rate of 7 per cent per annum (which shall accrue from
day to day) less the deduction of income tax at the applicable rate will
be payable on the principal amount of the Loan Stock by equal quarterly
instalments in arrears on 31 March, 30 June, 30 September and 31
December in each year in respect of the quarters ended on those dates
respectively, provided that the first payment of interest on the Loan
Stock, which will be made on 30 September 2003, will be in respect of
the period from the date of issue of the Loan Stock to 30 September 2003
(both dates inclusive).
4. Redemption
The Company shall redeem at par all Loan Stocks not otherwise converted
or purchased by the Company on 30 June 2008 together with all arrears
and accruals (if any) of interest payable thereon.
The Loan Stock shall otherwise become immediately due and repayable upon
demand on the occurrence of certain events of default
Events of default include non-payment by the Company or breach of its
obligations under the Loan Stock Instrument, cross default in respect of
the Company's other indebtedness, the insolvency of the Company,
enforcement proceedings being brought in respect of the Company, the
Company commencing a winding-up or equivalent, any encumbrance in
respect of the assets of the Company becoming enforceable, the cessation
of the Company's business, any action not being taken which is required
to enable the Company to enter into the Loan Stock Instrument, or ensure
its obligations are enforceable under it or to make it admissible in
evidence in England & Wales or it becomes unlawful for the Company to
comply with any of its obligations under the Loan Stock Instrument.
5. Conversion Rights
*Each holder may convert all or such amount of his Loan Stock as he
may specify into shares credited as fully paid at the rate of one
ordinary share of 5 pence each into Company (Ordinary Share) for each 30
pence nominal of Loan Stock at any time by serving notice in writing
upon the Company at its registered office specifying the nominal amount
of the Loan Stock to be so converted and accompanied by the certificate
in respect of the relevant Loan Stock. A conversion notice once given
shall not be withdrawn without the consent in writing of the Company and
the conversion will take place on the date specified in the conversion
notice which shall be no earlier than 5 business days after the service
of the notice.
*If, whilst any of the Loan Stock remains capable of being converted,
any offer is made to all or, as nearly as practicable, all shareholders
of the Company (or to all, or as nearly as practicable all, such
shareholders other than the offeror and/or any associate of the offeror)
to acquire the whole or any part of the issued ordinary share capital of
the Company on terms that control of the Company would be obtained by
the offeror and/or such associates on full acceptance thereof ("control"
for these purposes being as defined in section 840 of the Income and
Corporation Taxes Act 1988), the Company shall notify the holders within
7 days of becoming aware of the same, following which the holders have a
period of 30 days from such notification to conditionally exercise their
conversion rights at the conversion rate specified above.
*If any holder does not exercise such conversion rights and any such
offeror and/or its associates obtains control of the Company, the
Company shall notify all holders of this fact within 7 days of such
control being obtained, following which either the holders or the
Company have a period of 30 days from such notice to, in the case of the
Company, elect to repay or, in the case of the holders, require the
Company to repay the whole or such part of the Loan Stock as they
specify.
*The Company shall, as at the relevant conversion date allot and issue
Ordinary Shares in respect of the Loan Stock so converted, and shall,
within 28 days of such date, despatch to the persons entitled
certificates for the Ordinary Shares and (if applicable) separate
certificates for any balance of the Loan Stock not converted. Any
fractional entitlement will accrue to the benefit of the Company.
*Interest on Loan Stock converted shall be paid up to and including
the relevant conversion date. Ordinary Shares allotted shall carry the
right to participate in full in all dividends and other distributions
declared, made or paid on the Ordinary Shares by reference to a record
date falling on or after the relevant conversion date (but not
otherwise) and shall rant pari passu in all other respects and form one
class with the Ordinary Shares in issue on the relevant conversion date.
6. Share Capital
The Company shall at all times procure that it has sufficient authorised
and unissued share capital to satisfy in full the rights of conversion
of the holders.
7. Adjustment of Conversion Rights
In the event of any sub-division or consolidation of Ordinary Shares or
any allotment of Ordinary Shares pursuant to a capitalisation of profits
or reserves, the right of conversion shall be adjusted in due proportion
as certified by the auditors of the Company. The Company shall forthwith
give notice to the holders of such adjustment to the conversion price.
8. Modification of Rights
Holders will have the power by Extraordinary Resolution to, inter alia,
sanction any modification, abrogation or compromise of any arrangement
in respect of their rights against the Company and to consent to any
modification to the rights of the holders.
9. General
The Loan Stock are governed and construed in accordance with English
Law.
This information is provided by RNS
The company news service from the London Stock Exchange
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