TIDMCTT
RNS Number : 9962W
Cattles PLC
29 November 2010
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
29 November 2010
RECOMMENDED PROPOSAL FOR THE CASH ACQUISITION
OF
CATTLES PLC ("CATTLES")
BY
BOVESS LIMITED ("BOVESS")
to be implemented by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- Cattles today announced that it had received sufficient
support from its key financial creditors to enable it to launch a
restructuring of the Cattles Group (the "Restructuring"). As part
of the Restructuring, it is proposed that the shares in Cattles
will be acquired by Bovess (the "Scheme Proposal").
-- Under the terms of the Scheme Proposal, Cattles Shareholders
will receive 1p in cash for each Cattles Share held.
-- It is intended that the acquisition will be implemented by
way of a Court-sanctioned scheme of arrangement under Part 26 of
the Companies Act.
-- Implementation of the Scheme will be subject to a number of
Conditions including the passing of a resolution by a majority in
number of those Cattles Shareholders present (in person or by
proxy) and voting at the Court Meeting representing at least 75 per
cent. in value of all Cattles Shares held by such Cattles
Shareholders, the passing of a special resolution at the Cattles
General Meeting and the approval of the FSA.
-- Bovess is a newly-incorporated company, established at the
request of Cattles by SFM (an independent corporate services
provider) for the purposes of implementing the Scheme Proposal as
part of the Restructuring. Bovess is ultimately owned by a
discretionary trust for general charitable purposes.
-- The Cattles Board believes that the Scheme Proposal
represents the only opportunity for Cattles Shareholders to receive
any value for their Cattles Shares.
-- If the resolutions to be proposed at the Meetings to approve
the Scheme Proposal are not passed by the Shareholders or any of
the other Conditions are not satisfied, the Board expects that it
will be necessary to place Cattles into administration.
-- If Cattles enters into administration, Shareholders will
receive nothing for their Shares either now or at any time in the
future.
-- The Cattles Directors, who have been so advised by Lexicon,
consider the terms of the Scheme Proposal to be fair and
reasonable. In providing its advice to the Cattles Directors,
Lexicon has taken into account the commercial assessments of the
Cattles Directors (certain details of which are set out in
paragraph 3 of the following announcement).
-- Accordingly, the Cattles Directors intend unanimously to
recommend Cattles Shareholders to vote for the Scheme at the Court
Meeting and in favour of the resolution to be proposed at the
General Meeting, as those Cattles Directors who hold Shares intend
to do in respect of their own beneficial holdings of Shares
representing, in aggregate, 43,809 Shares (being approximately 0.01
per cent. of Cattles' issued share capital).
-- Having stabilised the Group and launched the Restructuring,
Margaret Young, David Haxby, Frank Dee and Alan McWalter have
advised the Board of their intention to resign as Cattles Directors
at an appropriate time shortly after the Restructuring becomes
effective. Robert East and Paul Felton-Smith will remain as
Managing Director and Finance Director, respectively.
Commenting on the Scheme Proposal, the Executive Chairman of
Cattles, Margaret Young said:
"We are pleased to have received sufficient support from our
financial creditors to enable us to launch this Restructuring.
These financial creditors are agreeing to allow the Group to pay
money to Shareholders which would otherwise be returned to them as
a further partial repayment of their debts.
Although the proposed payment of 1p a Share is modest, it
represents the only opportunity for Shareholders to receive any
value for their Cattles Shares now or at any time in the future. I
therefore hope that Shareholders will vote in favour of this
proposal as otherwise we expect that it will be necessary to place
Cattles into administration in which case Shareholders would
receive nothing.
Today's announcement is the culmination of long and complex
discussions. Given the Group's very serious financial difficulties,
we believe that the proposed restructuring represents the best
available outcome for Shareholders. It will also provide a stable
platform to collect out the Welcome Finance loan book and to
continue to develop the businesses of Shopacheck and The Lewis
Group. Since the beginning of 2009, we have collected over GBP1.1
billion from the Welcome Finance loan book and returned Shopacheck
and The Lewis Group to profitability."
This summary should be read in conjunction with the full text of
the following announcement and its appendices. The Scheme Proposal
will be subject to the Conditions set out in Appendix I. Appendix
II contains certain sources of information and bases of
calculations contained in this summary and the following
announcement. Appendix III contains the definitions of certain
terms used in this summary and the following announcement.
In accordance with Rule 19.11 of the City Code, a copy of this
announcement will be published on Cattles' website at
www.cattles.co.uk.
Enquiries
Cattles
Margaret Young, Executive Chairman 020 7269 7252
Lexicon
Matthew Lindsey-Clark 020 7269 7252
Financial Dynamics
Paul Marriott 020 7269 7252
Further Information
This announcement is not intended to, and does not, constitute
an offer or an invitation to purchase or subscribe for any
securities or a solicitation of an offer to buy any securities
pursuant to this announcement, the Scheme Proposal or otherwise.
The Scheme Document will contain the full terms and conditions of
the Scheme (including details of how to vote in respect of the
Scheme). Any vote in respect of the Scheme should be made only on
the basis of the information contained in the Scheme Document.
Cattles Shareholders are advised to read the Scheme Document
carefully, once it has been despatched.
Lexicon, which is authorised and regulated in the UK by the FSA,
is acting exclusively for Cattles and no one else in connection
with the Scheme Proposal and will not be responsible to anyone
other than Cattles for providing the protections afforded to its
clients or for providing advice in relation to the Scheme Proposal
or in relation to the contents of this announcement or any
transaction or arrangement referred to herein.
Shore Capital, which is authorised and regulated in the UK by
the FSA, is acting exclusively for Bovess and no one else in
connection with the Scheme Proposal and will not be responsible to
anyone other than Bovess for providing the protections afforded to
its clients or for providing advice in relation to the Scheme
Proposal or in relation to the contents of this announcement or any
transaction or arrangement referred to herein.
Overseas Jurisdictions
The distribution of this announcement in jurisdictions other
than the United Kingdom may be restricted by law and therefore
persons who are subject to the laws of any jurisdiction other than
the UK into whose possession this announcement comes should inform
themselves about and observe any applicable legal and regulatory
requirements. Any failure to comply with the applicable
requirements may constitute a violation of the securities laws of
any such jurisdiction.
This announcement has been prepared for the purposes of
complying with English law, the City Code and the Listing Rules and
the information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
US Shareholders should note that the Scheme Proposal relates to
the shares of an English company and is being implemented by means
of a scheme of arrangement provided for under English company law.
A transaction effected by means of a scheme of arrangement is not
subject to the proxy solicitation or the tender offer rules under
the US Exchange Act. Accordingly, the Scheme is subject to the
disclosure requirements and practices applicable in the UK to
schemes of arrangement, which differ from the disclosure
requirements of the US proxy solicitation and tender offer rules.
The settlement procedure with respect to the Scheme will be
consistent with UK practice, which differs from US domestic tender
offer procedures in certain material respects, particularly with
regard to date of payment.
It may be difficult for US Shareholders to enforce their rights
and any claim arising out of the US federal securities laws, since
Bovess and Cattles are each located in a non-US jurisdiction, and
some or all of their officers and directors may be residents of a
non-US jurisdiction. US Shareholders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgment.
Each Cattles Shareholder is urged to consult his independent
professional adviser immediately regarding the tax consequences of
the Scheme Proposal.
Forward-Looking Statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Scheme Proposal, and other information published by Bovess and
Cattles contain certain "forward-looking statements" with respect
to the financial condition, results of operations and business of
Cattles and certain plans or objectives of Bovess or Cattles with
respect thereto and are naturally subject to uncertainty and
changes in circumstances. The accuracy and completeness of all such
statements, including, without limitation, statements regarding the
Group's (or any affiliate's, including Cattles') future financial
position, strategy, plans and objectives for the management of
future operations, is not warranted or guaranteed. These statements
typically contain words such as "intends", "expects",
"anticipates", "estimates" and words of similar import. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. Although Cattles believes that the
expectations reflected in such statements are reasonable, no
assurance can be given that such expectations will prove to be
correct. Except to the extent required by applicable law, the City
Code or the Listing Rules, neither Bovess nor Cattles undertakes
any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events
or otherwise.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested
in one per cent. or more of any class of relevant securities of an
offeree company must make a disclosure (an "Opening Position
Disclosure") following the commencement of the offer period. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for,
relevant securities of the offeree company. An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 p.m. on the tenth business day following the
commencement of the offer period. Relevant persons who deal in
relevant securities of the offeree company prior to the deadline
for making an Opening Position Disclosure must instead make a
dealing disclosure (a "Dealing Disclosure").
Under Rule 8.3(b) of the City Code, any person who is, or
becomes, interested in one per cent. or more of any class of
relevant securities of the offeree company must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of the
offeree company save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. on the business day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of the offeree company, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with either of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies, in respect of
whose relevant securities Opening Position Disclosures and Dealing
Disclosures must be made, can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638
0129.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
29 November 2010
RECOMMENDED PROPOSAL FOR THE CASH ACQUISITION
OF
CATTLES PLC ("CATTLES")
BY
BOVESS LIMITED ("BOVESS")
to be implemented by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
1. Introduction
Cattles today announced that it had received sufficient support
from its key financial creditors to enable it to launch a
restructuring of the Cattles Group (the "Restructuring"). The
objectives of the Restructuring are: (1) to maximise cash
collections from the Welcome Finance business; (2) to maximise the
values of The Lewis Group and Shopacheck businesses; and (3) as a
result of the above, to improve the expected return for creditors
of Cattles, WFSL and other members of the Group as compared to that
which would be expected were they to enter into an insolvency
procedure.
As part of the Restructuring, it is proposed that the Cattles
Shares will be acquired by Bovess, a newly-incorporated private
company formed specifically for the purposes of implementing the
Scheme Proposal.
2. The Scheme Proposal
The Scheme Proposal provides for the acquisition of the Cattles
Shares to be effected by way of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act.
The purpose of the Scheme Proposal is to enable Bovess to
acquire the whole of the issued and to be issued ordinary share
capital of Cattles. Under the terms of the Scheme, the Scheme
Shares will be cancelled and Scheme Shareholders will receive:
for each Scheme Share 1p in cash
The Scheme Proposal values the entire issued share capital of
Cattles at approximately GBP5.3 million.
The Scheme Proposal is subject to the conditions set out in
Appendix I to this announcement.
If the Scheme becomes effective, it will be binding on all
Scheme Shareholders irrespective of whether or not they attended or
voted at the Court Meeting or the General Meeting.
3. Background to, and reasons for recommending, the Scheme
Proposal
The Scheme Proposal, together with the wider Restructuring,
represents the culmination of a long and complex process which
commenced when the Group discovered in February 2009 a very
significant shortfall in the Group's impairment provisions. When it
became clear that Cattles could not publish the Group's 2008
accounts within the timeframe required under the UK Listing
Authority's Disclosure and Transparency Rules trading in the Shares
on the London Stock Exchange was suspended on 23 April 2009 (and
has remained suspended since that date). When the Group's audited
results for the year ended 31 December 2008 were published, they
showed a loss before tax of GBP745.2 million.
The Cattles Board, together with its advisers, conducted an
extensive examination of all possible routes to rebuild the Welcome
Finance lending business of Cattles' principal subsidiary, WFSL.
However, it proved impossible in today's consumer lending
environment and economic conditions to construct a viable business
model that the Board could ask Cattles' financial creditors to
support. The Cattles Board therefore recommended to its creditors a
plan that would focus on collecting out the Welcome Finance loan
book. It was envisaged in late 2009 that the collection of the bulk
of the Welcome Finance loan book could take two to three years and
that, during this period, Cattles' cost base would contract to
reflect the reducing size of the book.
Without a viable "go-forward" plan for Welcome Finance and with
no overall plan for the business that envisaged the Group being
able to meet all of its obligations to its financial creditors, the
Board concluded that the prospect for any recovery in economic
value for Cattles Shareholders was negligible. For this reason, the
Board reported to the general meeting of shareholders held on 16
December 2009 that Cattles' Shares were likely to have little or no
value. Cattles has todayannounced the Group's audited consolidated
results for the financial year ended 31 December 2009. These
results show a deficit in Shareholders' funds of approximately
GBP1.1 billion as at 31 December 2009, which represents an
additional deficit of approximately GBP0.7 billion as compared with
the deficit as at 31 December 2008. They also show that the Group
has borrowings of GBP2.4 billion but has receivables with a fair
value of only GBP1.0 billion.
The size of these shortfalls underlines the reality that
Cattles' financial creditors will incur very significant losses and
that there is no realistic prospect that a deficit of such scale in
Shareholders' funds could ever be recovered. It is therefore the
Board's belief that the Shares have no underlying economic value
either for current or future Shareholders (including Bovess).
Commonly, in circumstances such as these, the creditors would
seek to convert some of their debt into shares in order to acquire
direct control of the business concerned and to secure whatever
value remained. However, as the Shares have no underlying economic
value, this was not a realistic option for Cattles' creditors.
Accordingly, in March 2010, the Cattles Board approached SFM, a
corporate services provider, with a view to it forming Bovess for
the purposes of acquiring Cattles, with the intention of giving the
creditors certainty as to the ownership of the Shares without them
having to take direct ownership themselves. The Scheme Proposal
would also have the benefit of giving Cattles Shareholders some
value for their Shares and would allow them to crystallise any
capital gains tax losses they may have incurred. In addition, there
are advantages in Cattles being de-listed from the London Stock
Exchange (and thereby no longer having to comply with the on-going
compliance requirements of a listed company) and re-registered as a
private company, providing a more appropriate structure for the
Group to maximise cash collections and wind down its business.
The funding of the consideration payable to Shareholders by
Bovess under the Scheme Proposal is being made available from
WFSL's funds that would otherwise be paid to its creditors.
If the resolutions to be proposed at the Meetings to approve the
Scheme Proposal are not passed by the Shareholders or any of the
other Conditions are not satisfied, the Board expects that it will
be necessary to place Cattles into administration.
Pursuant to the Restructuring and Lock-Up Agreement, certain of
the key financial creditors of Cattles and WFSL have confirmed
their support for the Board to place Cattles into administration in
such circumstances.
If Cattles enters into administration, the Board expects to
implement what it refers to as Plan B. Under this plan, the
administrator of Cattles will sell all the direct subsidiaries of
Cattles (other than Cattles Staff Pension Fund Limited) to Bovess
for a nominal payment to Cattles (with no offer to Cattles
Shareholders). The Cattles Creditor Scheme would then not be
effected but the WFSL Creditor Scheme and the other elements of the
Restructuring (as described in paragraph 7 below) would
continue.
If Cattles enters into administration, Shareholders will receive
nothing for their Shares either now or at any time in the
future.
Given the very substantial deficit in Shareholders' funds, the
absence of any realistic prospect of a business plan which
envisages full repayment of Cattles' creditors and the complexity
involved in achieving agreement among the Group's different
creditors, the Board does not consider there to be any likelihood
of any other offer or proposal being made to Shareholders by any
other third party.
The Board therefore believes that the Scheme Proposal represents
the only opportunity for Shareholders to receive any value for
their Shares. Accordingly, the Board considers that the Scheme
Proposal is in the best interests of Shareholders as a whole and
intends to recommend that Shareholders vote in favour of the Scheme
Proposal.
4. Structure of the Scheme Proposal
It is intended that the Scheme Proposal will be implemented by
way of a scheme of arrangement between Cattles and its
Shareholders, under Part 26 of the Companies Act. This procedure
involves, amongst other things, an application by Cattles to the
Court to sanction the Scheme and confirm the cancellation of the
Scheme Shares subject to the Scheme by way of the reduction of
Cattles' share capital as provided for by the Scheme (the "Capital
Reduction"). The purpose of the Scheme is to provide for Bovess to
become the owner of the entire issued share capital of Cattles. The
cancellation and the subsequent issue of new shares in Cattles to
Bovess provided for in the Scheme will result in Cattles becoming a
wholly-owned subsidiary of Bovess, in consideration for which
Scheme Shareholders on the register at the Scheme Record Time will
receive cash on the basis described in paragraph 2 above.
The implementation of the Scheme will be subject to the
Conditions set out in Appendix I to this announcement, and to be
set out in the Scheme Document. To become effective, the Scheme
will require, amongst other things, the following events to occur
on or before 31 May 2011 or such later date (if any) as Bovess and
Cattles (with the consent of the Panel and (if required) the
approval of the Court) may agree:
-- the Scheme being approved by a majority in number,
representing three-quarters or more in value, of the Cattles
Shareholders present and voting, either in person or by proxy, at
the meeting approving the Scheme (the "Court Meeting") (or at any
adjournment thereof);
-- the resolution necessary to implement the Scheme being duly
passed by Cattles Shareholders representing not less than 75 per
cent. of the votes cast at the General Meeting (or at any
adjournment thereof); and
-- the sanction (without modification or, as agreed by Cattles
and Bovess, with modification) of the Scheme and the confirmation
of the Capital Reduction by the Court.
The Scheme is also conditional upon:
-- the FSA having notified its approval of, or being deemed to
have approved, Bovess (and any other person who would acquire
control as a result of the Scheme becoming effective) acquiring
control over WFSL (such approval being unconditional or subject to
conditions reasonably satisfactory to Bovess and Cattles);
-- an office copy of the Court order sanctioning both: (i) the
WFSL Creditor Scheme; and (ii) the Financial Assistance Payments
that form part of the WFSL Creditor Scheme, having been delivered
to the Registrar of Companies pursuant to section 899 of the
Companies Act;
-- the Cattles Creditor Scheme having been sanctioned by the
Court pursuant to section 899 of the Companies Act and the Cattles
Directors having confirmed that, subject to no Insolvency Event
having occurred, the Court order sanctioning the Cattles Creditor
Scheme will be delivered for registration to the Registrar of
Companies immediately upon the WFSL Creditor Scheme having become
effective;
-- no Insolvency Event having occurred; and
-- an office copy of the Court Orders and the Statement of
Capital having been delivered to the Registrar of Companies (and,
if the Court so orders for the Scheme to become effective, the
registration of the Reduction Court Order and the Statement of
Capital by the Registrar of Companies).
Upon the Scheme becoming effective:
-- it will be binding on all Cattles Shareholders, irrespective
of whether or not they attended or voted at the Court Meeting or
the General Meeting (and, if they attended and voted, whether or
not they voted in favour); and
-- share certificates in respect of Cattles Shares will cease to
be valid and entitlements to Cattles Shares held within the CREST
system will be cancelled.
If the Scheme does not become effective on or before 31 May
2011, or such later date (if any) as Bovess and Cattles may agree
(with the consent of the Panel and (if required) the approval of
the Court), it will lapse and the Scheme Proposal will not
proceed.
The Scheme Document containing details of the Scheme and notices
of the Court Meeting and the General Meeting, together with the
Forms of Proxy, will be posted to Cattles Shareholders, and, for
information only, to persons with information rights and to
participants in the Cattles Share Incentive Schemes, within 28 days
of the date of this announcement, unless otherwise agreed with the
Panel. It is expected that the Court Meeting and the General
Meeting to approve the Scheme Proposal will be held in Nottingham
in late January/early February 2011. Subject to the approval of
Cattles Shareholders and the satisfaction of the other Conditions,
it is expected that the Scheme will become effective in February
2011.
5. Recommendation
The Cattles Directors, who have been so advised by Lexicon,
consider the terms of the Scheme Proposal to be fair and
reasonable. In providing its advice to the Cattles Directors,
Lexicon has taken into account the commercial assessments of the
Cattles Directors (certain details of which are set out in
paragraph 3 above).
The Cattles Directors consider that the Scheme Proposal is in
the best interests of Cattles Shareholders as a whole. Accordingly,
the Cattles Directors intend unanimously to recommend that
Shareholders vote for the Scheme at the Court Meeting and in favour
of the resolution to be proposed at the General Meeting, as those
Cattles Directors who hold Shares intend to do in respect of their
own beneficial holdings of Shares representing, in aggregate,
43,809 Shares (being approximately 0.01 per cent. of Cattles'
issued share capital).
6. Financing of the Scheme Proposal
The amount of GBP5,300,000, being the total amount required to
be paid to the Shareholders under the Scheme and to participants in
the Cattles Share Incentive Schemes in connection with the Scheme
Proposal, has already been transferred by WFSL into an account in
the name of Bovess. The terms of a funding letter between WFSL and
Bovess provide that: (i) if the Scheme becomes effective, this
amount will be used by Bovess to pay the cash consideration due to
the Shareholders under the Scheme and to enable the payments to be
made to such participants in the Cattles Share Incentive Schemes;
and (ii) if the Scheme does not become effective, Bovess will
return this amount to WFSL.
Shore Capital, financial adviser to Bovess, has confirmed that
it is satisfied that sufficient resources are available to Bovess
to satisfy in full the cash consideration payable to Scheme
Shareholders under the terms of the Scheme.
7. Overview of the Restructuring
The Scheme Proposal is one part of the Restructuring, which also
includes:
-- the Cattles Creditor Scheme; and
-- the WFSL Creditor Scheme.
Details of these two schemes are set out below.
The Cattles Creditor Scheme
The Cattles Creditor Scheme is a Court-sanctioned scheme of
arrangement pursuant to Part 26 of the Companies Act. The Cattles
Creditor Scheme is between Cattles and all its creditors (other
than in respect of certain specific excluded liabilities), which
include Cattles' bank lenders, bondholders, noteholders and hedging
counterparties.
Under the terms of the Cattles Creditor Scheme, it is proposed
that each Cattles creditor subject to the Cattles Creditor Scheme
will agree not to bring any proceedings against Cattles in respect
of its potential claim other than in specific circumstances
permitted under the Cattles Creditor Scheme. In consideration for
this, each will receive a pro rata share (being the proportion that
its claim against Cattles bears to all creditors' claims against
Cattles) of: (i) the net amount that Cattles is expected to receive
under the WFSL Creditor Scheme; (ii) approximately GBP5 million
projected to be received from the disposal of a property owned by
Cattles Properties (Ruddington) Limited, which is currently
occupied by WFSL; (iii) approximately GBP2 million in cash held by
Cattles; and (iv) the proceeds of any successful claims that
Cattles may have against third parties.
In order to become effective, the Cattles Creditor Scheme must
be approved by a majority in number of the Cattles creditors
present and voting at a Court-convened meeting (either in person or
by proxy), representing not less than 75 per cent. in value of the
Cattles creditors present and voting at such Court-convened
meeting. Following the Court-convened meeting, the Cattles Creditor
Scheme must be sanctioned by the Court. The Cattles Creditor Scheme
will only become effective on delivery to the Registrar of
Companies of the Court order sanctioning the Cattles Creditor
Scheme.
The Board will not deliver the Court order sanctioning the
Cattles Creditor Scheme to the Registrar of Companies unless and
until: (i) the WFSL Creditor Scheme has become effective in
accordance with its terms; and (ii) the Scheme has been sanctioned
by the Court and the Cattles Directors have confirmed that, subject
to no Insolvency Event having occurred, the Court Orders will be
delivered for registration to the Registrar of Companies
immediately upon the WFSL Creditor Scheme having become
effective.
The WFSL Creditor Scheme
Like the Scheme and the Cattles Creditor Scheme, the WFSL
Creditor Scheme is a Court-sanctioned scheme of arrangement
pursuant to Part 26 of the Companies Act. The WFSL Creditor Scheme
is between WFSL and all its creditors (other than in respect of
certain specific excluded liabilities). This includes Cattles' bank
lenders, noteholders and certain hedging counterparties, each of
whom is a creditor of WFSL by virtue of holding the benefit of
guarantees given by WFSL of Cattles' financial obligations, and
Cattles itself.
Under the terms of the WFSL Creditor Scheme, WFSL creditors
subject to the WFSL Creditor Scheme will have their claims against
WFSL compromised in return for a pro rata share of: (i) future cash
collections of WFSL (subject to costs and expenses to be deducted
from such amount, including with respect to working capital) and
any existing proceeds of cash collections in WFSL's possession; and
(ii) the proceeds of any successful claims that WFSL may have
against third parties.
Cattles will form a separate class of creditor in the WFSL
Creditor Scheme in respect of its GBP2.4 billion inter-company debt
(and will vote in favour of the WFSL Creditor Scheme). That debt
will be compromised and Cattles will instead receive an amount
under the WFSL Creditor Scheme, part of which will be used to fund
the payment to its creditors under the Cattles Creditor Scheme.
In order to become effective, the WFSL Creditor Scheme must be
approved by a majority in number of the WFSL creditors (other than
Cattles) present and voting at a Court-convened meeting (either in
person or by proxy), representing not less than 75 per cent. in
value of the WFSL creditors present and voting at such
Court-convened meeting, and by Cattles. Following the
Court-convened meeting, the WFSL Creditor Scheme must be sanctioned
by the Court. The WFSL Creditor Scheme will only become effective
on delivery to the Registrar of Companies of the Court order
sanctioning the WFSL Creditor Scheme. Such delivery to the
Registrar of Companies is expected to take place shortly before the
Scheme becomes effective.
The approval of the Financial Assistance Payments will also form
part of the WFSL Creditor Scheme.
The effectiveness of the WFSL Creditor Scheme is not conditional
upon either the Scheme or the Cattles Creditor Scheme becoming
effective.
Other elements of the Restructuring
In addition, there are other elements to the Restructuring,
which are expected to include:
-- the Co-Guarantor Creditor Scheme to compromise the claims of
those creditors who hold the benefit of guarantees issued by
certain members of the Group in order to facilitate a solvent
restructuring of those members of the Group;
-- a bilateral agreement with the Financial Services
Compensation Scheme (the "FSCS") under which a payment of GBP90
million (subject to certain adjustments) is proposed to be made by
WFSL to the FSCS in connection with the liabilities of WFSL in
respect of certain regulated products sold by WFSL;
-- the compromise of all claims of the pension trustee
(including liability under section 75 of the Pensions Act 1995) in
respect of the Cattles Group pension fund against members of the
Group (in particular Cattles, WFSL and The Lewis Group Limited) and
clearance provided from the pensions regulator that it will not
issue a contribution notice or financial support direction in
relation to any of the steps taken pursuant to a pension compromise
agreement between, amongst others, WFSL and Cattles Staff Pension
Fund Limited; and
-- the establishment of an employee retention fund in order to
secure the payment of specified employee benefits that WFSL is
contractually obliged to pay to its employees.
8. Information on Bovess, Bovess Holdco, the Share Trustee and
the Corporate Services Provider
Bovess
Bovess is a private company limited by shares incorporated in
England and Wales on 6 September 2010. Bovess was incorporated as a
special purpose vehicle by SFM, at the request of Cattles, for the
purposes of implementing the Scheme Proposal. Bovess has not traded
prior to the date of this announcement (except for the purposes of
entering into transactions relating to the Scheme Proposal). Bovess
is a wholly-owned direct subsidiary of Bovess Holdco. The directors
of Bovess have been provided by SFM. SFM also provides corporate
administration services to Bovess pursuant to the Corporate
Services Deed.
Bovess Holdco
Bovess Holdco is a private company limited by shares
incorporated in England and Wales on 6 September 2010. Bovess
Holdco was incorporated as a special purpose vehicle by SFM, at the
request of Cattles, for the purposes of implementing the Scheme
Proposal. Bovess Holdco has not traded prior to the date of this
announcement (except for the purposes of entering into transactions
relating to the Scheme Proposal). The shares in Bovess Holdco are
held by the Share Trustee. The directors of Bovess Holdco have been
provided by SFM. SFM also provides corporate administration
services to Bovess Holdco pursuant to the Corporate Services
Deed.
The Share Trustee
SFM Corporate Services Limited acts as the Share Trustee. The
Share Trustee is a dormant entity wholly owned by SFM. The Share
Trustee has created a charitable trust over the shares it holds in
Bovess Holdco via the execution of a share trust deed. The
charitable trust was established as a discretionary trust for one
or more registered charities.
The Corporate Services Provider
SFM is an independent corporate services provider. SFM provides
independent directors, corporate administration and governance
services to special purpose vehicles used primarily in
securitisation and structured finance transactions. The SFM group
currently manages over 700 special purpose vehicles associated with
international capital markets transactions typically arranged by
leading global financial institutions. The SFM Group has offices in
the United Kingdom, the Channel Islands, Germany, Ireland, Italy,
Luxembourg, the Netherlands and Spain.
9. Information on Cattles
The Group is a consumer finance group providing instalment
credit and other financial services to consumers with non-standard
credit profiles in the UK.
Cattles is the ultimate parent of the Group. There are three
trading companies in the Group: WFSL, The Lewis Group Limited and C
L Finance Limited. The remaining Group companies are non-trading,
dormant or holding companies.
WFSL (trading as Welcome Finance and Shopacheck) operates the
Group's principal lending business, providing secured and unsecured
personal loans to individuals who may not have access to mainstream
facilities, usually due to shortcomings in their employment,
residency or credit histories. The business currently has
approximately 600,000 customers and operates from approximately 175
branches in the United Kingdom.
The Lewis Group business, operated by The Lewis Group Limited
and C L Finance Limited, provides debt recovery and investigation
services to corporates, banks, building societies and local
authorities.
On 16 December 2009, the Cattles Board announced that there
would be no further lending in Welcome Finance and that instead the
business would focus on a plan of collecting out Welcome Finance's
customer loans. Cash collections in the first ten months of 2010
met management's expectations and WFSL also took further steps to
reduce its cost base through the closure of branches and reductions
in staff.
Shopacheck continues to lend to both new and existing customers.
Despite lower volumes as a result of the decision made in late 2009
to tighten its credit issuance criteria, Shopacheck has made good
progress in 2010 and current performance is in line with
management's expectations.
The Lewis Group, having ceased to acquire debt portfolios in
2009, has made progress in developing its contingent debt
collection business in 2010 although this market remains highly
competitive.
Notwithstanding the satisfactory cash collection rates in the
first ten months of 2010, the Group continues to incur substantial
losses as a result of increased impairment and other
provisions.
10. Management and employees
Bovess is a special purpose vehicle incorporated for the purpose
of implementing the Scheme Proposal. Bovess has no management or
employees other than the Bovess Directors, and will therefore be
highly reliant on the skills and experience of the existing
management and employees of the Group. If the Scheme becomes
effective, Cattles' business will continue to be run by its board
of directors, who will, together with the directors of its
subsidiaries, continue to run the Group's businesses in line with
the Group's previously stated strategy.
Bovess is limited in the actions it can take with respect to
Cattles. However, Bovess has been given assurances by Cattles and
WFSL that, on the Scheme becoming effective, the existing
employment rights, including pension rights, of all management and
employees of the Group will not be prejudiced as a result of
Bovess' ownership of the Group (except to the extent that pension
rights are affected by the compromise of claims of the pension
trustee in respect of the Cattles Group pension fund as part of the
Restructuring). Although Cattles can confirm that it has no plans
to make any changes to the conditions of employment of the Group's
employees, the Board expects that some headcount reduction will
continue to occur from time to time in line with the Group's
previously stated strategy.
Having stabilised the Group and launched the Restructuring,
Margaret Young, David Haxby, Frank Dee and Alan McWalter have
advised the Board of their intention to resign as Cattles Directors
at an appropriate time shortly after the Restructuring becomes
effective. Robert East and Paul Felton-Smith will remain as
Managing Director and Finance Director, respectively.
11. Cattles Share Incentive Schemes
The effect of the Scheme on all awards and options granted under
the Cattles Share Incentive Schemes will be set out in the Scheme
Document. Participants in such plans will also be sent further
details (where relevant) of the actions they can take in respect of
their outstanding awards and options.
12. Implementation Agreement
Bovess and Cattles have entered into the Implementation
Agreement which provides, amongst other things, for the
implementation of the Scheme, and contains certain assurances and
confirmations between the parties. In particular, the parties have
agreed to take all steps and actions, and to prepare all documents,
necessary for the implementation of the Scheme on a timely basis
(and in accordance with an agreed timetable) and in accordance with
the requirements of the City Code, the Court and applicable law and
regulation.
13. Disclosure of interests in Cattles relevant securities
As at the date of this announcement, neither Bovess nor any
Bovess Director nor any person acting, or presumed to be acting, in
concert with Bovess owns or controls any Cattles Shares, has any
interest in any Cattles Shares, or right to subscribe for any
Cattles Shares, or any short position in respect of Cattles
Shares.
14. Delisting and re-registration
Trading in Cattles Shares on the London Stock Exchange's market
for listed securities was suspended on 23 April 2009 and has
remained suspended since that date.
Prior to the Scheme becoming effective, applications will be
made to the UK Listing Authority for the listing of the Cattles
Shares to be cancelled and to the London Stock Exchange for the
Cattles Shares to cease to be admitted to trading on the London
Stock Exchange's market for listed securities immediately upon the
Scheme becoming effective. It is expected that such cancellation
and cessation will take place on the Effective Date. Accordingly,
if the Court makes the Court Orders on 21 February 2011, the
delisting will become effective on 22 February 2011.
It is also proposed that, as part of the Scheme Proposal,
Cattles will be re-registered as a private limited company under
the relevant provisions of the Companies Act.
15. Overseas Shareholders
The availability of the Scheme Proposal or the distribution of
this announcement to persons who are not resident in the UK may be
affected by the laws of the relevant jurisdictions in which they
are located. Persons who are not resident in the UK should inform
themselves of, and observe, any applicable requirements.
This announcement does not constitute an offer for sale of any
securities or an offer or an invitation to purchase any securities.
Cattles Shareholders are advised to read carefully the Scheme
Document once it has been despatched.
16. General
The Scheme Proposal will be subject to the Conditions set out in
Appendix I to this announcement and the further terms and
conditions to be set out in the Scheme Document and the Forms of
Proxy. The Scheme Document will include full details of the Scheme
Proposal, together with notices of the Court Meeting and the
General Meeting and the expected timetable of the Scheme
Proposal.
The Scheme Document will be posted to Cattles Shareholders as
soon as practicable. The Scheme Proposal will be subject to the
applicable requirements of the City Code, the Panel, the London
Stock Exchange and the FSA.
The bases and sources of certain information contained in this
announcement are set out in Appendix II to this announcement.
Certain terms used in this announcement are defined in Appendix III
to this announcement.
Further Information
This announcement is not intended to, and does not, constitute
an offer or an invitation to purchase or subscribe for any
securities or a solicitation of an offer to buy any securities
pursuant to this announcement, the Scheme Proposal or otherwise.
The Scheme Document will contain the full terms and conditions of
the Scheme (including details of how to vote in respect of the
Scheme). Any vote in respect of the Scheme should be made only on
the basis of the information contained in the Scheme Document.
Cattles Shareholders are advised to read the Scheme Document
carefully, once it has been despatched.
Lexicon, which is authorised and regulated in the UK by the FSA,
is acting exclusively for Cattles and no one else in connection
with the Scheme Proposal and will not be responsible to anyone
other than Cattles for providing the protections afforded to its
clients or for providing advice in relation to the Scheme Proposal
or in relation to the contents of this announcement or any
transaction or arrangement referred to herein.
Shore Capital, which is authorised and regulated in the UK by
the FSA, is acting exclusively for Bovess and no one else in
connection with the Scheme Proposal and will not be responsible to
anyone other than Bovess for providing the protections afforded to
its clients or for providing advice in relation to the Scheme
Proposal or in relation to the contents of this announcement or any
transaction or arrangement referred to herein.
Overseas Jurisdictions
The distribution of this announcement in jurisdictions other
than the United Kingdom may be restricted by law and therefore
persons who are subject to the laws of any jurisdiction other than
the UK into whose possession this announcement comes should inform
themselves about and observe any applicable legal and regulatory
requirements. Any failure to comply with the applicable
requirements may constitute a violation of the securities laws of
any such jurisdiction.
This announcement has been prepared for the purposes of
complying with English law, the City Code and the Listing Rules and
the information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
US Shareholders should note that the Scheme Proposal relates to
the shares of an English company and is being implemented by means
of a scheme of arrangement provided for under English company law.
A transaction effected by means of a scheme of arrangement is not
subject to the proxy solicitation or the tender offer rules under
the US Exchange Act. Accordingly, the Scheme is subject to the
disclosure requirements and practices applicable in the UK to
schemes of arrangement, which differ from the disclosure
requirements of the US proxy solicitation and tender offer rules.
The settlement procedure with respect to the Scheme will be
consistent with UK practice, which differs from US domestic tender
offer procedures in certain material respects, particularly with
regard to date of payment.
It may be difficult for US Shareholders to enforce their rights
and any claim arising out of the US federal securities laws, since
Bovess and Cattles are each located in a non-US jurisdiction, and
some or all of their officers and directors may be residents of a
non-US jurisdiction. US Shareholders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgment.
Each Cattles Shareholder is urged to consult his independent
professional adviser immediately regarding the tax consequences of
the Scheme Proposal.
Forward-Looking Statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Scheme Proposal, and other information published by Bovess and
Cattles contain certain "forward-looking statements" with respect
to the financial condition, results of operations and business of
Cattles and certain plans or objectives of Bovess or Cattles with
respect thereto and are naturally subject to uncertainty and
changes in circumstances. The accuracy and completeness of all such
statements, including, without limitation, statements regarding the
Group's (or any affiliate's, including Cattles') future financial
position, strategy, plans and objectives for the management of
future operations, is not warranted or guaranteed. These statements
typically contain words such as "intends", "expects",
"anticipates", "estimates" and words of similar import. By their
nature, forward- looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. Although Cattles believes that the
expectations reflected in such statements are reasonable, no
assurance can be given that such expectations will prove to be
correct. Except to the extent required by applicable law, the City
Code or the Listing Rules, neither Bovess nor Cattles undertakes
any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events
or otherwise.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested
in one per cent. or more of any class of relevant securities of an
offeree company must make a disclosure (an "Opening Position
Disclosure") following the commencement of the offer period. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for,
relevant securities of the offeree company. An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 p.m. on the tenth business day following the
commencement of the offer period. Relevant persons who deal in
relevant securities of the offeree company prior to the deadline
for making an Opening Position Disclosure must instead make a
dealing disclosure (a "Dealing Disclosure").
Under Rule 8.3(b) of the City Code, any person who is, or
becomes, interested in one per cent. or more of any class of
relevant securities of the offeree company must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of the
offeree company save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. on the business day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of the offeree company, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with either of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies, in respect of
whose relevant securities Opening Position Disclosures and Dealing
Disclosures must be made, can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638
0129.
APPENDIx I CONDITIONS to THE Scheme Proposal
Conditions to the Scheme Proposal
1. The Scheme Proposal is conditional upon the Scheme becoming
unconditional and becoming effective by no later than 31 May 2011,
or such later date (if any) as Bovess and Cattles may, with the
consent of the Panel, agree and (if required) the Court may
approve.
2. The Scheme is conditional upon:
(a) approval of the Scheme by a majority in number, representing
75 per cent. or more in value, of the Scheme Shareholders present
and voting, either in person or by proxy, at the Court Meeting or
at any adjournment of that meeting;
(b) the resolution necessary to implement the Scheme, to be set
out in the notice of the General Meeting in the Scheme Document,
being duly passed by the requisite majority of Cattles Shareholders
at the General Meeting or at any adjournment of that meeting;
(c) the sanction (without modification or, as agreed by Cattles
and Bovess, with modification) of the Scheme and the confirmation
of the Capital Reduction by the Court; and
(d) the delivery to the Registrar of Companies for registration
of an office copy of the Court Orders and the Statement of Capital
attached thereto and, if the Court so orders for the Scheme to
become effective, the registration by the Registrar of Companies of
the Reduction Court Order and the Statement of Capital.
3. In addition, Bovess and Cattles have agreed that, subject to
paragraph 4 below, the Scheme will also be conditional upon, and
accordingly the necessary actions to make the Scheme become
effective will only be taken upon, the satisfaction of the
following Conditions:
(a) an office copy of the Court order sanctioning both: (i) the
WFSL Creditor Scheme; and (ii) the Financial Assistance Payments
that are to form part of the WFSL Creditor Scheme, having been
delivered to the Registrar of Companies pursuant to section 899 of
the Companies Act;
(b) the Cattles Creditor Scheme having been sanctioned by the
Court pursuant to section 899 of the Companies Act and the Cattles
Directors having confirmed that, subject to no Insolvency Event
having occurred, the Court order sanctioning the Cattles Creditor
Scheme will be delivered for registration to the Registrar of
Companies immediately upon the WFSL Creditor Scheme having become
effective;
(c) no Insolvency Event having occurred; and
(d) the relevant period established under section 191 of the
FSMA not having expired and the FSA having notified in writing its
approval under section 189(4) of the FSMA of Bovess (and any other
person who would acquire control as a result of the Scheme becoming
effective) acquiring control over WFSL (in each case in respect of
the level of control that would result from the Scheme becoming
effective), such approval being either unconditional in all
respects (save as to the period within which the change in control
must occur) or subject to conditions reasonably satisfactory to
Bovess and Cattles (acting reasonably and in good faith) or the FSA
being treated as having approved the acquisition of control by each
such person in accordance with section 189(6) of the FSMA (the "FSA
Condition").
4. The FSA Condition must be fulfilled by 11.59 p.m. on the date
immediately preceding the Court Hearing, failing which the Scheme
Proposal shall lapse.
APPENDIX II Sources of information and bases of calculations
(a) Unless otherwise stated: (i) information relating to the
Cattles Group has been provided by the Cattles Directors; (ii)
financial information relating to the Cattles Group has been
extracted without material adjustment from relevant published
reports and accounts of Cattles; and (iii) information relating to
Bovess, Bovess Holdco, the Share Trustee and SFM has been provided
by the Bovess Directors.
(b) The value under the Scheme Proposal attributed to the
existing issued share capital of Cattles is based upon 526,066,902
Shares in issue as at the date of this announcement.
APPENDIX III Definitions
The following definitions apply throughout this announcement,
unless the context requires otherwise.
"GBP", "pence" or "p" the lawful currency of the UK;
"Bovess" Bovess Limited, a company incorporated
in England and Wales with registered
number 7366975;
"Bovess Directors" the directors of Bovess from time
to time;
"Bovess Holdco" Bovess Holding Limited, a company
incorporated in England and Wales
with registered number 7366959;
"Business Day" a day (excluding Saturdays, Sundays
and UK public holidays) on which
banks are generally open for business
in London;
"Capital Reduction" the reduction of Cattles' share capital
under section 648 of the Companies
Act to be provided for by the Scheme;
"Cattles" or "Company" Cattles plc, a public limited company
incorporated in England and Wales
with registered number 543610;
"Cattles Board or "Board" the board of directors of Cattles;
"Cattles Creditor Scheme" the scheme of arrangement to be proposed
between Cattles and certain of its
creditors;
"Cattles Directors" the directors of Cattles;
"Cattles Group" or "Group" Cattles and its subsidiaries from
time to time;
"Cattles Option Plans" the Cattles Long Term Incentive Plan
2005, the Cattles Management Share
Plan 2007, the Cattles Employee Sharesave
Scheme and the Cattles Executive
Share Option Scheme 1994;
"Cattles Share Incentive the Cattles Option Plans and the
Schemes" Cattles Employee Share Incentive
Plan;
"Cattles Shareholders" holders of Cattles Shares;
or "Shareholders"
"Cattles Shares" or ordinary shares of 10 pence each
"Shares" in the capital of Cattles;
"City Code" the City Code on Takeovers and Mergers;
"Co-Guarantor Creditor the proposed scheme of arrangement
Scheme" under Part 26 of the Companies Act
between Ewbanks Mail Order Limited
and certain of its creditors in relation
to its obligations as a guarantor
under various financing arrangements;
"Companies Act" the Companies Act 2006 (as amended);
"Conditions" the conditions to the implementation
of the Scheme Proposal which are
set out in Appendix I to this announcement;
"Corporate Services a corporate services deed dated 29
Deed" November 2010 between, amongst others,
Bovess, Bovess Holdco, the Share
Trustee, SFM, Cattles and WFSL;
"Court" the High Court of Justice in England
and Wales;
"Court Hearing" the hearing by the Court to sanction
the Scheme and to confirm the Capital
Reduction;
"Court Meeting" the meeting of the Scheme Shareholders
to be convened by order of the Court
pursuant to section 896 of the Companies
Act to consider and, if thought fit,
approve the Scheme (with or without
amendment) (and any adjournment thereof);
"Court Orders" the Scheme Court Order and the Reduction
Court Order;
"CREST" the system for the paperless settlement
of trades in securities and the holding
of uncertificated securities operated
by CRESTCo in accordance with the
Regulations;
"CRESTCo" Euroclear UK & Ireland Limited;
"Effective Date" in relation to the Scheme, the date
on which the Scheme becomes effective
in accordance with its terms;
"Financial Assistance the payments by WFSL:
Payments"
(a) to Bovess of GBP5,300,000, being
the total amount required to pay
the cash consideration due to the
Shareholders under the Scheme and
to make any payments to be made to
participants in the Cattles Share
Incentive Schemes in connection with
the Scheme Proposal;
(b) to Bovess and/or SFM of the fees,
costs and expenses incurred and to
be incurred by SFM and/or Bovess
in connection with the implementation
of the Restructuring under the terms
of an engagement letter between WFSL
and SFM; and
(c) to Bovess of GBP2,500,200 for
the fees, costs and expenses estimated
to be incurred by Bovess, Bovess
Holdco and SFM under the terms of
the Corporate Services Deed;
"Forms of Proxy" the form of proxy for use at the
Court Meeting and the form of proxy
for use at the General Meeting to
be despatched with the Scheme Document;
"FSA" the UK Financial Services Authority;
"FSMA" the Financial Services and Markets
Act 2000 (as amended);
"General Meeting" the general meeting of the Shareholders
to be convened by the notice to be
set out in the Scheme Document (including
any adjournment thereof);
"Implementation Agreement" the implementation agreement dated
29 November 2010 between Bovess and
Cattles;
"Insolvency Event" the occurrence of any of the
following in relation to the Company:
(a) winding-up, dissolution or
administration (whether out of court
or otherwise); (b) the appointment of
a liquidator, receiver, administrator
or similar officer (in each case,
whether out of court or otherwise);
(c) a resolution of the Company or
its directors being passed to
petition or apply for the Company's
winding-up or administration (whether
out of court or otherwise); or (d)
any person presenting a petition or
an application for its winding-up or
administration (whether out of court
or otherwise) which has not been
dismissed or struck out within 14
days of it being presented;
"Lexicon" Lexicon Partners Limited, a private
limited company incorporated in England
Wales under registered number 03970046,
being the independent financial adviser
to Cattles for the purposes of Rule
3 of the City Code;
"Listing Rules" the rules and regulations made by
the FSA in its capacity as the UK
Listing Authority under Part VI of
FSMA and contained in the UK Listing
Authority's publication of the same
name (as amended);
"London Stock Exchange" London Stock Exchange plc or its
successor;
"Meetings" the Court Meeting and/or the General
Meeting, as the context requires;
"Order Date" the date on which the Court makes
the Court Orders;
"Panel" the Panel on Takeovers and Mergers;
"Reduction Court Order" the order of the Court confirming
the Capital Reduction;
"Registrar of Companies" the registrar of companies in England
and Wales;
"Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755);
"Restructuring" the proposed restructuring of the
Group and certain of its liabilities,
a description of which is set out
in paragraph 7 of this announcement;
"Restructuring and Lock-Up a restructuring and lock-up agreement
Agreement" dated 29 November 2010 between Cattles,
WFSL, certain other members of the
Group, The Royal Bank of Scotland
plc as lock-up agent, and certain
of the Group's financial creditors;
"Scheme" the scheme of arrangement under Part
26 of the Companies Act between Cattles
and the Scheme Shareholders, to be
set out in the Scheme Document, with
or subject to any modification, addition
or condition approved or imposed
by the Court and agreed by Cattles
and Bovess;
"Scheme Court Order" the order of the Court sanctioning
the Scheme under section 899 of the
Companies Act;
"Scheme Document" the document to be addressed to,
among others, Cattles Shareholders
containing, among other things, the
Scheme and the notices of the Meetings;
"Scheme Proposal" the proposed acquisition of Cattles
by Bovess pursuant to the Scheme
and the other matters relevant thereto
to be considered at the Court Meeting
and the General Meeting;
"Scheme Record Time" 6.00 p.m. on the day immediately
before the Effective Date;
"Scheme Shareholders" holders of Scheme Shares;
"Scheme Shares" Shares:
(a) in issue at the date of the Scheme Document;
(b) (if any) issued after the date
of the Scheme Document and before
the Voting Record Time; and
(c) (if any) issued at or after the
Voting Record Time and before 6.00
p.m. on the day before the Order
Date, in respect of which the
original or any subsequent holders
thereof are, or shall have agreed in
writing to be, bound by the Scheme,
in each case other than any Cattles
Shares which are beneficially held
by Bovess or Bovess Holdco;
"SFM" or "the Corporate Structured Finance Management Limited,
Services Provider" a provider of independent directors,
corporate administration and governance
services to special purpose vehicles
used primarily in securitisation
and structured finance transactions;
"Share Trustee" SFM Corporate Services Limited, as
share trustee;
"Shore Capital" Shore Capital and Corporate Limited,
financial adviser to Bovess;
"Statement of Capital" the statement of capital approved
by the Court and showing with respect
to Cattles' share capital, as altered
by the Court Order confirming the
Capital Reduction, the information
required by section 649 of the Companies
Act;
"UK Listing Authority" the FSA acting in its capacity as
the competent authority for listing
under FSMA;
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland;
"US" the United States of America, its
possessions and territories, all
areas subject to the jurisdiction
thereof, any state of the United
States of America and the District
of Columbia;
"US Exchange Act" the United States Securities Exchange
Act of 1934 as amended;
"Voting Record Time" 6.00 p.m. on the day prior to the
day immediately before the Meetings
(or any adjournment thereof), as
the case may be;
"Welcome Finance" the principal lending business of
WFSL;
"WFSL" Welcome Financial Services Limited,
an indirect subsidiary of Cattles;
and
"WFSL Creditor Scheme" the scheme of arrangement to be proposed
between WFSL and certain of its creditors.
All times referred to are London time unless otherwise
stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFBBLBDBXGDBGGC
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