Date: 01 March 2024
Increased tender offer
announcement
The
information contained within this announcement is deemed to
constitute inside information as stipulated under Article 7 of the
Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act
2018.
Gama Aviation Plc (AIM:
GMAA)
("Gama Aviation" or the "Company" or "Group")
Increased scale of
proposed Tender Offer at 95p to enable all shareholders that wish
to do so to sell the entirety of their holdings
Gama Aviation is today announcing an
increase in the size of the proposed capital return by way of
tender offer to allow the Company to acquire all shares tendered by
shareholders without the need to scale back.
Increased Tender Offer at 95 pence per share
On 5 February 2024, the Board of
Gama Aviation announced the completion of its review of capital
requirements and the intention to make a phased return of capital
to shareholders, with an initial return of £16.5 million to be
effected by means of a Tender Offer at a price of 95 pence per
share. Given the £16.5 million amount of that proposed
return, the maximum number of shares that could have been acquired
by the Company would have been circa 17.5 million shares
representing approximately 27% of the current issued share
capital. Accordingly, the number of shares that shareholders
could sell to the Company would have been scaled back compared with
the number of shares tendered, depending on the level of interest
in tendering shares from other shareholders.
The Board has been asked to consider
the potential for shareholders not to be scaled back. The
Board has considered this and has further reviewed the impact for
smaller shareholders of the changes to the investment profile of
the Company's shares as a result of the changes to the nature of
the Group's overall business having sold the Jet East business and
determining to continue with substantial capital
projects.
As described in the announcement of
5 February 2024, the £16.5 million amount of capital return
was calibrated in order to retain sufficient funds in the Company
to meet its near-term capital requirements, pending the securing of
the appropriate level of debt on favourable terms. Any
increase in the size of the capital return would reduce funds
available for capital requirements; a tender offer at 95 pence
capable of acceptance by all shareholders would, if fully
subscribed, leave the Company with insufficient funds to invest in
strategic capital projects.
However, as described below, two
shareholders (Marwan Khalek and Bermesico Holdings Limited who
together hold 41.1% of the issued share capital) have indicated
that they would be prepared to undertake not to tender any of their
existing shares so as to ensure that sufficient funds will be
retained in the Company to meet the
investment capital requirements of these strategic
projects.
Against this background, the Board
has decided to accelerate the return of capital to shareholders and
increase the amount to be returned in the short term to
shareholders by way of Tender Offer at 95 pence per share to up to
£37.6 million equivalent to up to circa. 40.6 million shares
representing approximately 61% of the share capital (issued and
under option). Taking into account the proposed undertakings from
Marwan Khalek and Bermesico Holdings Limited this would now enable
the Company to acquire all shares tendered by shareholders
(excluding Marwan Khalek and Bermesico Holdings Limited) without
the need for any scaling back. The Board
expects to make an appropriate offer to holders of options over
shares in the Company. This may involve enabling those option
holders that wish to do so to cancel the ability to exercise their
options in return for a cash amount equal to the amount by which
the Tender Offer price of 95 pence exceeds the exercise price of
those options.
This would effectively give all
shareholders, other than Marwan Khalek and Bermesico Holdings
Limited, the choice between selling 100% of their shares at 95
pence per share or remaining invested in the Company (in whole or
in part), in effect contributing the Tender Offer proceeds that
they might otherwise have received to the cash that the Company
will have available to invest in capital projects.
Undertakings from major shareholders
The Company's three largest
shareholders representing in aggregate 70.7% of the current issued
share capital have indicated that, conditional on the posting of
the Shareholder Circular (as described below), they are willing to
give certain undertakings as described below.
Hutchison Capital Holdings Limited,
the holder of 18,954,520 shares representing 29.6% of the issued
share capital has indicated that it intends to give an irrevocable
undertaking to tender all of its shares in the Company.
Accordingly, if the Tender Offer proceeds, it will no longer be a
shareholder in the Company.
Marwan Khalek, the holder of
14,179,607 shares representing 22.1% of the issued share capital
has indicated that he intends to give an irrevocable undertaking to
tender none of his existing shares in the Company.
Accordingly, if the Tender Offer proceeds, his percentage holding
in the Company will increase to between
29.6% (assuming that no shareholder other than Hutchison Capital
Holdings Limited tenders any shares) and 53.9% (assuming that all
shareholders other than Marwan Khalek and Bermesico Holdings
Limited tender all their shares).
Bermesico Holdings Limited, the
holder of 12,145,726 shares representing 19.0% of the issued share capital has indicated that it intends to
give an irrevocable undertaking to tender none of its shares in the
Company. Accordingly, if the Tender Offer proceeds, its
percentage holding in the Company will increase to between 26.5%
(assuming that no shareholder other than Hutchison Capital Holdings
Limited tenders any shares) and 46.1% (assuming that all
shareholders other than Marwan Khalek and Bermesico Holdings
Limited tender all their shares).
Each of the above parties have
indicated that they intend to submit irrevocable undertakings to
vote in favour of the resolutions to effect the Tender Offer (as
described below) except to the extent they are not permitted to do
so under the Takeover Code. No binding irrevocable
undertakings have been entered into at the date of this
announcement and so there can be no guarantee that the enlarged
Tender Offer will take place.
Impact on the Company's balance sheet
The total cost to the Company of the
increased Tender Offer will depend on the level of tenders by
shareholders. However, if all shareholders other than Marwan
Khalek and Bermesico Holdings Limited (as well as options holders
as described above) were to elect to tender all their shares then
the total cost is expected to be approximately £37.6m.
This will be funded from the cash
balances of the Company which at 31 December 2023 were $92 million
(approximately £72 million).
The Board believes that the Company
will continue to have adequate resources to meet its working
capital requirements. Furthermore, the Company expects to
have sufficient funding to continue to deliver on its strategic
objectives including capital projects through a combination of
utilisation of its cash resources and selectively accessing third
party funding where that can be delivered on favourable
terms. Further detail on the capital projects and the future
prospects of the Company will be included in the Shareholder
Circular.
In determining whether to tender
shares or to retain an interest in the Company (at an increased
proportionate shareholding), shareholders should take into account,
inter alia, the changed financial profile of the Group going
forwards, the increased proportionate shareholdings of Marwan
Khalek and Bermesico Holdings Limited and
the likely reduced stock market liquidity in the Company's
shares.
Potential De-Listing
In view of the likely significant
increase in shareholder concentration coupled with the likely
reduction in stock market liquidity in the Company's shares, that
may result from the Tender Offer, the Board believes that a
de-listing from AIM will be in the best interest of the
Company. However, the Board is evaluating whether this should
be a matter for the current shareholders or the shareholders
remaining following the Tender Offer to determine. The Board
will continue to evaluate this in consultation with its
shareholders and will provide additional information in the
Shareholder Circular in due course.
Shareholder Circular
The proposed Tender Offer remains
conditional on review by the Takeover Panel and shareholder
approval. When the Tender Offer arrangements have been
finalised, a further announcement will be made and a circular
containing a more detailed explanation of the impact of the capital
return, the Tender Offer and the resolutions required to be passed
(including, if required, certain resolutions to disapply Rule 9 of
the Takeover Code and to enable release of the share premium
account for the purposes to making the Tender Offer if it is
determined that the level of potential share tenders means that the
level of distributable reserves are not sufficient) will be sent to
shareholders in due course. It is expected that a shareholder
meeting will be convened during April 2024 and subject to
regulatory requirements (which may include a Court process to
release the share premium account) that the Tender Offer can become
effective by May 2024.
Dial Partners LLP is acting as
Financial Adviser to the Company.
ENDS
Contacts
Gama Aviation Plc
Marwan Khalek, Chief Executive
Officer
Michael Williamson, Chief Financial
Officer
Tel: +44 125 298 4515
Dial Partners LLP, Financial
Adviser
Angus Russell, Partner
Sandor de Jasay, Managing
Director
Tel: +44 207 098 7098
WH Ireland, Nominated Adviser and
Broker
James Joyce, Director
Sarah Mather
Tel: +44 207 220 1666
Camarco, PR
Geoffrey Pelham-Lane
Ginny Pulbrook
Tel: +44 203 757 4992
Gama Aviation - Notes to
Editors
Founded in 1983 with the simple
purpose of providing aviation services that equip its customers
with decisive advantage, Gama Aviation Plc (LSE AIM: GMAA) is a
highly valued global partner to blue chip corporations, government
agencies, healthcare trusts and private individuals.
The Group has three global
divisions: Business Aviation (Aircraft Management, Charter, FBO
& Maintenance), Special Mission (Air Ambulance & Rescue,
National Security & Policing, Infrastructure & Survey,
Energy & Offshore); and Technology & Outsourcing (Flight
Operations, FBO, CAM software, Flight Planning, CAM & ARC
services).
More details can be found at:
http://www.gamaaviation.com/