RNS Number : 8000V
Newfound N.V.
03 June 2008
Newfound N.V.
("Newfound" or the "Company")
Proposed �15 million fundraising and conditional appointment of Jayne McGivern as new CEO
The Board announces today that it is proposing to raise �15.0 million (before expenses) by way of an issue of �15 million 8 per cent.
Guaranteed Secured Notes due 2011, in denominations of �50,000, with Warrants to subscribe for Ordinary Shares in the Company, and to
appoint Jayne McGivern as CEO to lead a new management team. Under the terms of the Issue, Agilo, an investment management company, will
subscribe or procure subscribers for the Issue to the extent that the Issue is not subscribed pursuant to an Offer to subscribe for Secured
Notes and Warrants which will be made to certain Qualifying Shareholders.
Background of the fundraising
At the end of 2007, the Company raised �7.0 million (before expenses) through a subscription of Ordinary Shares by Jeremy White and John
Morgan, and a further �3.6 million (before expenses) through a placing of Ordinary Shares with institutional and other investors. These
fundraisings were intended to meet the immediate working capital requirements of the Company and to allow the Company to pursue a revised
business strategy. In so doing, the Company recognised that in 2008 it would need to raise further capital to meet its longer-term capital
requirements. This has culminated in the announcement today of the proposed �15.0 million fundraising and the proposed appointment,
conditional on Completion, of Jayne McGivern as new Chief Executive Officer. It is intended that the Issue Proceeds will be used to provide
new working capital to the Company and to fund its operational restructuring, further details of which are set out below.
Miss McGivern was previously Chief Executive Officer of Multiplex UK. Prior to joining Multiplex, she was Managing Director of Anschutz
Entertainment Group in the UK, Redrow Commercial Limited and Group Development Director of MWB Group plc. Miss McGivern will subscribe for
�1.0 million of the Issue out of her own funds. The Company intends to seek the appointment of additional independent non-executive
directors following Completion, and Miss McGivern will also seek to recruit further key executives in due course. In addition, under the
terms of the Subscription Agreement, Agilo will (at its discretion) have the right to nominate either an additional Director for appointment
by Shareholders or a consultant to the Company. It is intended that Jeremy White will stand down as interim CEO upon Completion, but he will
remain Chairman for a limited handover period pending the appointment of a successor.
The Board believes that the fundraising and restructured Board are likely to provide, inter alia, the following principal benefits:
* the creation of a strong platform for growth, with an experienced and recognised new CEO with a proven track record; and
* better access to new business opportunities to enable the growth of the Group's business.
The terms of the Issue and the Offer are summarised in more detail below and the conditions of the Secured Notes and Warrants are set
out in Parts II and III of the circular to be sent to Shareholders, respectively (and are also summarised below).
The Issue is subject to a number of conditions, including, inter alia, the granting of security over the assets of the Group, the
passing of the resolutions relating to the Issue to be proposed at the AGM and Admission.
The Company has received irrevocable undertakings to vote in favour of the Resolutions in respect of approximately 70.8 per cent. of the
votes eligible to be cast at the AGM. Shareholders should note that the terms of the Issue provide that, prior to the Issue Date, in the
event of:
* any condition precedent relating to the security to be granted in favour of Noteholders in connection with the Issue being waived by
Agilo; or
* Agilo becoming aware of any fact or circumstance relating to the Group which was not disclosed to it on or prior to the date of the
Subscription Agreement and which means that the Warrants will, upon issue, be materially less valuable than Agilo reasonably believed prior
to becoming aware of that fact or circumstance,
Agilo may, in its absolute discretion, increase the rate of interest payable on the Secured Notes or reduce the exercise price of the
Warrants to the extent which, in either case, Agilo determines (acting in a reasonable commercial manner) will compensate it for the
non-satisfaction of the relevant condition precedent or, as the case may be, will result in Agilo being placed, economically, in materially
the same position as it would have been had the undisclosed fact or circumstance not existed. In the event that either such right is
exercised, some of the irrevocable undertakings to vote in favour of the Resolutions, which have been received by the Company, may not be
valid.
Shareholders should be aware that, should Completion not occur for any reason, the Issue Proceeds would not be received and the Company
would face a working capital shortfall in the near term which would have a material adverse effect on the Company's operations. As noted in
the auditors' report set out in the annual report and accounts for the financial year ended 31 December 2007 , there is a material
uncertainty in relation to the proposed fundraising and therefore the ability of the Group to continue as a going concern, should Completion
not occur.
A circular is expected to be posted to shareholders shortly. The formal notice convening the AGM, to be held at 1.00 pm (Central
European Time) on 26 June 2008, together with a copy of the Annual Report and Accounts, will be enclosed with the circular sent to
Shareholders. Subject, inter alia, to the passing of the AGM Resolutions, Admission to trading and commencement of dealings in the Secured
Notes and Warrants on the Euro MTF market of the Luxembourg Stock Exchange is expected to commence on 27 June 2008.
Notice of the AGM, the circular regarding the Issue and the Company's Annual Report and Accounts for the financial year ended 31
December 2007 will also shortly be available to view on the Company's website: www.newfoundresorts.com.
The above summary should be read in conjunction with the full text of this announcement.
Enquiries:
Newfound N.V.
Simon Longfield +44 (0)20 7470 2490
Collins Stewart Europe Limited
Adrian Hadden +44 (0)20 7523 8350
TRANSACTION STATISTICS
Denomination of Secured Notes �50,000
Number of Secured Notes to be issued 300
Exercise price of the Warrants 12 pence
Number of Warrants issued for each �50,000 of Secured Notes 416,666
Number of existing issued Ordinary Shares 179,709,687
Number of existing issued Special Voting Shares 54,174,928
Number of existing issued Shares 233,884,615
Number of Warrants to be issued 124,999,800
Enlarged Share Capital assuming exercise of all Warrants* 358,884,415
Ordinary Shares issued on exercise of Warrants as a percentage of the Enlarged Share Capital* 34.8 per cent.
Gross proceeds receivable by the Company (before any exercise of Warrants) �15,000,000
Note:
*Assumes exercise of all Warrants (each exercisable into one new Ordinary Share) and includes existing issued Ordinary Shares and Special
Voting Shares
EXPECTED TIMETABLE OF EVENTS
2008
Latest time and date for receipt of Forms of Direction and Forms of Instruction
1.00 p.m. on 23 June
Latest time and date for receipt of Forms of Proxy
1.00 p.m. on 24 June
Annual General Meeting
1.00 p.m. on 26 June
Admission to trading and commencement of dealings in the Secured Notes and Warrants on Euro MTF
8.00 a.m. on 27 June
Notes:
* Each of the times and dates above are subject to change. If any of the above times and/or dates change, the revised times and/or dates
will be notified to Shareholders
by announcement on a Regulatory Information Service.
* Each of the times above is a reference to Central European Time.
1. Introduction
The Board announced today that it is proposing to raise �15.0 million (before expenses) by way of the Issue of Secured Notes and
Warrants and to appoint Jayne McGivern as CEO to lead a new management team.
At the end of 2007, the Company raised �7.0 million (before expenses) through a subscription of Ordinary Shares by Jeremy White and John
Morgan, and a further �3.6 million (before expenses) through a placing of Ordinary Shares with institutional and other investors. These
fundraisings were intended to meet the immediate working capital requirements of the Company and to allow the Company to pursue a revised
business strategy. In so doing, the Company recognised that in 2008 it would need to raise further capital to meet its longer-term capital
requirements. This has culminated in the announcement today of the proposed �15.0 million fundraising and the proposed appointment,
conditional on Completion, of Jayne McGivern as new Chief Executive Officer. It is intended that the Issue Proceeds will be used to provide
new working capital to the Company and to fund its operational restructuring, further details of which are set out below.
Under the terms of the Issue, Agilo will subscribe or procure subscribers for the Issue to the extent that the Issue is not subscribed
by Qualifying Shareholders pursuant to the Offer. Agilo is an investment management company, authorised and regulated in the UK by the
Financial Services Authority. Subject to any Qualifying Shareholder being permitted by Agilo (at its sole discretion) to subscribe for
additional Secured Notes and Warrants, the maximum aggregate number of Secured Notes and Warrants that can be taken up by Qualifying
Shareholders under the Offer is 69 and 28,749,954 respectively, representing �3,450,000 in total or 23 per cent. of the Issue Proceeds. Miss
McGivern will subscribe for �1.0 million of the Issue out of her own funds.
The Offer is not being made to all Shareholders on a fully pre-emptive basis, as this would require the production of a prospectus which
would have to comply with the Prospectus Directive and be vetted and approved by the Dutch competent authority; the Directors believe that
the costs of compliance with the Prospectus Directive, and the time involved, would be disproportionate to the size of the Issue. In
addition, the Issue Proceeds represent the only source of funds available to satisfy the Company's current working capital requirements.
Accordingly, the Offer is only being made available to Qualifying Shareholders.
Jayne McGivern, formerly the CEO of Multiplex UK, is proposed to be appointed as Chief Executive Officer of the Company to lead a new
management team, upon (and subject to) Completion. Miss McGivern has extensive experience in delivering large development schemes in several
market sectors. The Company intends to seek the appointment of additional independent non-executive directors following Completion, and Miss
McGivern will also seek to recruit further key executives in due course. In addition, under the terms of the Subscription Agreement, Agilo
will (at its discretion) have the right to nominate either an additional Director for appointment by Shareholders or a consultant to the
Company. It is intended that Jeremy White will stand down as interim CEO upon Completion, but he will remain Chairman for a limited handover
period pending the appointment of a successor. John Morgan and Robert Weisz will continue as non-executive Directors.
The terms of the Issue and the Offer are summarised in more detail in Section 4 of this announcement and the conditions of the Secured
Notes and Warrants are set out in Parts II and III of the shareholder circular, respectively (and are also summarised in Sections 5 and 6 of
this announcement, respectively).
The Issue is subject to a number of conditions, including, inter alia, the granting of security over the assets of the Group, the
passing of the resolutions relating to the Issue to be proposed at the AGM (which is being convened for 1.00 p.m. (Central European Time) on
26 June 2008 by the notice accompanying the shareholder circular) and Admission.
The Company has received irrevocable undertakings to vote in favour of the Resolutions in respect of approximately 70.8 per cent. of the
votes eligible to be cast at the AGM. Shareholders should note that the terms of the Issue provide that, prior to the Issue Date, in the
event of:
* any condition precedent relating to the security to be granted in favour of Noteholders in connection with the Issue being waived by
Agilo; or
* Agilo becoming aware of any fact or circumstance relating to the Group which was not disclosed to it on or prior to the date of the
Subscription Agreement and which means that the Warrants will, upon issue, be materially less valuable than Agilo reasonably believed prior
to becoming aware of that fact or circumstance,
Agilo may, in its absolute discretion, increase the rate of interest payable on the Secured Notes or reduce the exercise price of the
Warrants to the extent which, in either case, Agilo determines (acting in a reasonable commercial manner) will compensate it for the
non-satisfaction of the relevant condition precedent or, as the case may be, will result in Agilo being placed, economically, in materially
the same position as it would have been had the undisclosed fact or circumstance not existed. In the event that either such right is
exercised, some of the irrevocable undertakings to vote in favour of the Resolutions, which have been received by the Company, may not be
valid.
Shareholders should be aware that, should Completion not occur for any reason, the Issue Proceeds would not be received and the Company
would face a working capital shortfall in the near term which would have a material adverse effect on the Company's operations. As noted in
the auditors' report set out in the annual report and accounts for the financial year ended 31 December 2007 which, there is a material
uncertainty in relation to the proposed fundraising and therefore the ability of the Group to continue as a going concern, should Completion
not occur.
2. Background to and reasons for the Issue and the Offer
Following the fundraisings in the last quarter of 2007, the Company has continued to develop the three existing resorts at Humber Valley
in Canada, Pinney's Estate in Nevis and Ocean's Edge in St. Kitts. This strategy continues to focus on the proposed transaction to sell land
at Nevis for the development of a 5-star hotel and bulk land sale opportunities in Nevis. However, it was always envisaged that the Company
would require further sources of capital in the near term and ideally a new management team in order to secure the long-term future of the
Group.
These plans have culminated in the announcement today of the proposed �15.0 million fundraising and the proposed appointment,
conditional on Completion, of Jayne McGivern as new Chief Executive Officer.
Miss McGivern was previously Chief Executive of Multiplex UK. Prior to joining Multiplex, she was Managing Director of Anschutz
Entertainment Group in the UK, Redrow Commercial Limited and Group Development Director of MWB Group plc.
The Board believes that the fundraising and restructured Board are likely to provide, inter alia, the following principal benefits:
* the creation of a strong platform for growth, with an experienced and recognised new CEO with a proven track record; and
* better access to new business opportunities to enable the growth of the Group's business.
The Issue Proceeds are required to provide new working capital to the Company and to fund its operational restructuring, including:
* to make payments of approximately CDN$2.6 million (approximately �1.3 million) in aggregate regarding the lease of land at Humber
Valley;
* to make a payment of approximately US$5.875 million (approximately �2.966 million) to the Nevis Island Administration in order to
obtain freehold title to land in Nevis adjacent to land already owned by the Company, as part of the Company's development plans; and
* the balance to repay other outstanding financial indebtedness of the Company and to enable the Group's developments in Newfoundland,
Nevis and St. Kitts.
3. Current trading and prospects
The Company has today announced its final audited results for the financial year ended 31 December 2007. The formal notice convening the
AGM, together with a copy of the Annual Report and Accounts, are enclosed with the circular to be posted to Shareholders shortly.
For the year ended 31 December 2007, Newfound had revenues of US$34.1 million (2006: US$27.9 million) and an operating loss before
exceptional items of US$14.1 million (2006: US$10.0 million). These results included increased construction revenues due to work being
carried out on over 60 individual units at Humber Valley Resort and the benefit of an increase in guest nights of 18 per cent. during the
financial year ended 2007 (compared to the same period in 2006). However, the Group's increased loss arose from lower land sales and a
significant increase in overheads. There have been a small number of plot and condominium sales during the first five months of 2008 and the
Directors believe that further sales will be achieved in the Summer and Autumn of 2008.
In an initiative to increase occupancy levels, terms have been agreed with a number of tour operators for the sale of vacations at
Humber Valley Resort. The Directors believe that this initiative, together with a number of recent awards for its golf course and a new
agreement with Monarch for higher capacity charter flights to Deer Lake from Gatwick, is expected to result in increased traffic, in
particular for the 2008 / 2009 ski season.
At Pinney's Estate Resort in Nevis, the master plan designs are progressing and discussions with a leading hotel operator continue. The
Environmental Impact Assessment on the villa master plan has been submitted and the Company is expecting to receive planning approval
shortly.
At Ocean's Edge Resort in St. Kitts, the first units in the first phase of construction are due to be completed within the next few
weeks. A second construction contract has now been signed for a further 14 hillside and 16 beachfront apartments and a contract for the
construction of the first four villas is expected to be agreed shortly.
4. Details of the Issue and the Offer
Agilo will subscribe or procure subscribers for the Issue to the extent the Issue is not subscribed by Qualifying Shareholders pursuant
to the Offer; Agilo also reserves the right to sub-underwrite, sub-participate or otherwise syndicate the Issue at its discretion. Jayne
McGivern will subscribe for �1.0 million of the Issue. The Issue is not being made pre-emptively, as the Directors consider the time and
costs associated with a pre-emptive offer to Shareholders to be excessive.
The Offer is only being made to Qualifying Shareholders, being those Shareholders resident in the UK, other than Jeremy White and John
Morgan, who on the date of this announcement hold at least 779,616 Shares, being that number of Shares which, if the Offer were made on a
pre-emptive basis, would entitle such Shareholders to subscribe for Secured Notes with a value of at least �50,000 (being the denomination
of the Secured Notes) and associated Warrants. Subject to any Qualifying Shareholder being permitted by Agilo (at its sole discretion) to
subscribe for additional Secured Notes and Warrants, the maximum aggregate number of Secured Notes and Warrants that can be taken up by
Qualifying Shareholders under the Offer is 69 and 28,749,954 respectively, representing �3,450,000 in total or 23 per cent. of the Issue
Proceeds. Jeremy White and John Morgan (who are both Directors) would fall within this group of Qualifying Shareholders due to the size of
their respective shareholdings but they have formally renounced their right to participate in the Offer. However, John Morgan has separately agreed to pledge his entire shareholding (as referred to
in Section 8 of this announcement below) for the benefit of Noteholders.
Agilo will be paid an arrangement fee of �700,000 in respect of the Issue (in addition to the reimbursement of its professional fees and
certain other costs associated with the Issue).
Application will be made for the Secured Notes and the Warrants to be listed on the official list of the Luxembourg Stock Exchange and
to be admitted to trading on the Euro MTF, at which point they will be freely tradeable. Upon exercise of any of the Warrants, application
will be made by the Company to the London Stock Exchange for the Ordinary Shares issued as a result of the exercise of such Warrants to be
admitted to trading on AIM. Further details of the Secured Notes, Warrants and the Offer are set out below.
5. Summary of the conditions of the Secured Notes
The Secured Notes will bear interest on their outstanding principal amount at a rate of 8 per cent. per annum, payable monthly in arrear
commencing on the Issue Date. Under the terms of the Subscription Agreement, Agilo may by notice to the Company increase the rate of
interest payable on the Secured Notes in the circumstances set out at the end of Section 1 of this announcement. Except to the extent
previously redeemed or purchased and cancelled, the Secured Notes will be redeemed in full by the Company on the Maturity Date at their
outstanding principal amount together with accrued interest. The Company may at any time prior to the Maturity Date (i) in the case of
redemptions up to and including one year after the Issue Date, redeem Secured Notes in whole or in part at 110 per cent. of the outstanding
principal amount of the Secured Notes, (ii) in the case of redemptions from and excluding one year after the Issue Date to and including two
years after the Issue Date, redeem Secured Notes in whole or in part at 105 per cent. of the outstanding principal amount of the Secured Notes and (iii) thereafter redeem Secured Notes, in whole or in
part, at 100 per cent. of the outstanding principal amount of the Secured Notes, in each case together with accrued interest. The Company
will be required to redeem Secured Notes in whole or in part out of net sale proceeds received by it or any of its subsidiaries from the
disposal of any real estate, or the realisation of any development, by any member or affiliate of the Group. The Company will also be
required to redeem the Secured Notes in whole but not in part if instructed to do so by the Note Trustee (as defined in the circular to
shareholders) (acting on the instructions of the majority Noteholders) following a change of control of the Company. In addition, the
Company is required to redeem any Secured Notes surrendered for redemption by holders of Warrants who are also Noteholders in payment of the
exercise price for the Warrants which they hold. Any redemption of some only of the Secured Notes will, as near as possible, represent a pro rata proportion of each Noteholder's holding of Secured Notes.
The obligations of the Company under the Secured Notes will be guaranteed by certain of its subsidiaries and will be secured by security
granted by the Company and certain of its subsidiaries over their respective assets. The Company and such subsidiary guarantors will give
various covenants and undertakings in the terms and conditions of the Secured Notes to the Noteholders, including covenants as to the ratio
of the Group's tangible net asset value to its financial indebtedness and undertakings, inter alia, to provide information as to incurrence
of indebtedness, giving of security and provision of valuations of the Group's real estate assets. The Secured Notes will become immediately
due and repayable upon notice being given by the Note Trustee following an Event of Default (as such terms are defined in the circular to
shareholders), which may include non-payment, breach of the covenants referred to above, breach of other obligations, breach of material
contracts and changes in ownership.
The terms and conditions of the Secured Notes are set out in full in Part II of the shareholder circular.
6. Summary of the conditions of the Warrants
Under the terms of the Subscription Agreement and the Offer, one Warrant will be issued for every 12 pence subscribed to the Secured
Notes; the number of Warrants which will be issued in respect of each Secured Note of �50,000 denomination will be 416,666. The Warrants
will be separate from the Secured Notes and the right to exercise the Warrants will expire three years from the Issue Date. Subject to
adjusting for circumstances that have a dilutive or concentrative effect on the value of Shares, the Warrants will have an exercise price of
12 pence and will be exercisable at any time up until their expiry in 2011 into one new Ordinary Share ranking pari passu with the existing
Ordinary Shares (including as to dividends). Under the terms of the Subscription Agreement, Agilo may by notice to the Company reduce the
exercise price of the Warrants in the circumstances set out at the end of Section 1 of this announcement. If all the Warrants are exercised,
the total number of new Ordinary Shares issued would be 124,999,800, representing approximately 34.8 per cent. of the Enlarged Share Capital. The Warrants may be exercised for cash, including by
exchanging an equivalent amount of Secured Notes.
The terms and conditions of the Warrants will contain certain restrictions on the ability of the Company to reduce its share capital or
capital redemption reserve and to modify the rights attaching to Ordinary Shares. The terms and conditions of the Warrants will also contain
certain undertakings to provide a copy of financial statements, notices and other information to holders of Warrants, insofar as this is in
compliance with applicable laws. In addition, holders of Warrants and options over Shares (other than options held under the new management
incentive arrangements referred to in Section 7 of this announcement below) will be entitled to participate pre-emptively in any new issue
of Shares.
The terms and conditions of the Warrants are set out in full in Part III of the shareholder circular.
7. Details of the appointment of Jayne McGivern and management incentive arrangements
The proposed service contract for Jayne McGivern provides that she will act as the Chief Executive Officer of the Company at a salary of
�500,000 per annum. Her employment is conditional, and will commence, on Completion. The contract is terminable by 12 months' notice in
writing by either party. Under the contract, Miss McGivern is entitled to 30 paid working days' holiday each year and she will be subject to
non-solicitation covenants for a period of six months following termination of her employment with the Company and to a confidentiality
undertaking that is without limit in time.
Following Completion, Miss McGivern will be entitled to participate in a long-term incentive plan to be established by the Company which
will provide benefits equivalent to a holding of 12 per cent. of the total issued share capital of the Company at Completion, by way of
either a direct holding of shares or an interest in an employees' trust or other arrangement holding such shares, subject to professional
advice on the optimum structure taking account of taxation, company law requirements, the rules applying to companies whose shares are
traded on AIM and any other relevant legal or regulatory matters. Her entitlement will be subject to the average closing middle market price
of a share in the Company reaching, over a period of 90 consecutive business days, 20 pence (as adjusted for any consolidation or
sub-division of the total issued share capital of the Company at any time). In addition, Miss McGivern will not be permitted to dispose of
any such shares or interest in shares, either from her personal holding or from any other arrangement referred to above (as the case may be), for a period of three years from Completion.
It is envisaged that certain key executives recruited by Miss McGivern following Completion will also be given the opportunity to
participate in the incentive plan referred to above, on terms to be agreed with each new executive as appropriate (and subject to, inter
alia, all applicable laws and regulations).
These proposed incentive arrangements are in addition to any existing bonus or other incentive arrangements currently available to
Directors and/or senior management, and will be made in accordance with the outline remuneration policy proposed to be adopted at the AGM.
8. Directors' and officers' shareholdings
The beneficial and non-beneficial interests of the Directors and officers of the Company in respect of Shares (not including unexercised
options over Ordinary Shares) on the date of this announcement and following the Issue are set out in the tables below:
(a) Ordinary Shares
Prior to the Issue Following the Issue
Ordinary Percentage of Ordinary Percentage of
Shares* issued Shares* enlarged
ordinary issued
share ordinary
capital* share
capital*
Directors and officers
Jeremy White 44,299,307 24.70 44,299,307 14.54
Simon Longfield 34,197 0.02 34,197 0.01
John Morgan 46,909,482 26.10 46,909,482 15.39
Robert Weisz - - - -
The following options over Ordinary Shares are also held by the Directors and officers of the Company:
Number of Latest date Exercise price
Ordinary for exercise (�)
Shares
subject to
options
Directors and officers
Jeremy White 333,333 23/11/2008 0.50
(b) Shares
Prior to the Issue Following the Issue
Shares* Percentage Shares* Percentage of
of issued Enlarged
share Share Capital*
capital*
Directors and officers
Jeremy White 44,299,307 18.94 44,299,307 12.34
Simon Longfield 34,197 0.01 34,197 0.01
John Morgan 46,909,482 20.10 46,909,482 13.07
Robert Weisz - - - -
Note to the above tables:
* As at the date of this announcement, the Company has in issue 179,709,687 existing Ordinary Shares which are admitted to trading on
AIM. Subsidiaries controlled by the Company have in issue 54,174,928 Exchangeable Securities and the Company has in issue the same number of
Special Voting Shares. Special Voting Shares and Exchangeable Securities were issued to certain Shareholders as part of the consideration
for the acquisition of the Newfound group by the Company pursuant to an acquisition agreement dated 31 August 2006. At the time of exchange
of the Exchangeable Securities, an application will be made for the new Ordinary Shares issued to be admitted to trading on AIM and an equal
number of Special Voting Shares will be cancelled or repurchased for nil consideration. Although the AIM Rules for Companies only apply to
Ordinary Shares admitted to trading on AIM, the Directors of the Company regard the aggregate of the Ordinary Shares in issue from time to
time and the number of Ordinary Shares that would be issued if all Exchangeable Securities were exchanged as being the number of shares to be used for the calculation of earnings per
share and the market capitalisation of the Company. Following the Issue, the issued share capital of the Company will not change, but if all
the Warrants were exercised, the Enlarged Share Capital would be 358,884,415.
9. Annual General Meeting
Enclosed with the circular sent to shareholders is a notice convening the Annual General Meeting. In addition to the proposed adoption
of annual accounts and the discharging of other business commonly attended to in annual general meetings, the AGM has been called for the
purpose of considering and (if thought fit) passing resolutions to effect the Issue and the Offer and which relate to the other matters
referred to in this announcement.
Specifically, the AGM will consider resolutions to: (i) approve the resolutions of the Board (raad van bestuur) with regard to the Issue
and the Offer; (ii) authorise the Board to resolve to grant the Warrants and options referred to in Section 7 of this announcement above;
(iii) authorise the Board to resolve to disapply the pre-emption rights set out in the Articles in respect of the issue of the Warrants and
such options and future exercise for the purposes of (ii) above; (iv) increase the Company's ordinary share capital and to amend the
Articles as a consequence; (v) exclude any obligation arising as a result of the Issue to make a general offer for the shares of the Company
pursuant to Rule 9 of the City Code as incorporated into the Articles; (vi) approve the annual report, adopt statutory accounts, adopt
non-statutory accounts for the purpose of reporting to AIM and discharge the Board from liabilities received during the first financial year
and reappoint the auditors; (vii) approve the remuneration policy of the Board; (viii) approve the general dis-application of pre-emption rights and the ability of the Company to buy back its
share capital; and (ix) appoint Jayne McGivern as a director, conditional upon Completion. The authorities at (ii), (iii) and (viii) shall
expire following the conclusion of the annual general meeting of the Company to be held in 2009.
Please refer to the notice convening the AGM for further details of the Resolutions.
10. Recommendation
The Board is of the opinion that the Issue, the Offer and the passing of the Resolutions are in the best interests of Shareholders as a
whole and recommends that Shareholders vote in favour of the Resolutions.
The Directors in their capacity as Shareholders have irrevocably undertaken to vote in favour of the Resolutions in respect of their
beneficial holdings. Such holdings, when added to other shareholdings in respect of which irrevocable undertakings to vote in favour of the
Resolutions have been received, amount to 165,691,338 Shares in aggregate, representing approximately 70.8 per cent. of the Company's
existing issued share capital (subject to the qualification made in Section 1 of this announcement).
DEFINITIONS
The following definitions apply throughout this announcement unless the context requires otherwise:
"Admission" the admission to trading on the Euro MTF of the Secured Notes and
Warrants becoming effective
"Agilo" Agilo Limited (registered in England with number 5965340), acting as
delegate investment manager for Agilo Master Fund Limited
"AGM" or "Annual General the annual general meeting of shareholders (jaarlijkse algemene
Meeting" vergadering van aandeelhouders) of the Company convened for 1.00 p.m.
(Central European Time) on 26 June 2008 (or any adjournment thereof)
"AIM" the AIM market operated by the London Stock Exchange
"Articles" the articles of association of the Company
"Board" or "Directors" the board of directors (raad van bestuur) of the Company, being Jeremy
White, John Morgan and Robert Weisz
"Company" or "Newfound" Newfound N.V.
"Completion" completion of the Issue in accordance with the Subscription Agreement
"DIs" the depositary interests representing an entitlement to Ordinary Shares
"Enlarged Share Capital" the number of Ordinary Shares and Special Voting Shares in issue,
assuming the exercise of all the Warrants (and before taking account of
the exercise of any outstanding share options)
"Euro MTF" the Euro MTF market of the Luxembourg Stock Exchange
"Exchangeable Securities" the securities in issue in subsidiaries of the Company that are
exchangeable in certain circumstances for Ordinary Shares
"Form of Direction" the form of direction for use at the Annual General Meeting by holders
of DIs held through the nominee service in respect of DIs
"Form of Instruction" the form of instruction for use at the Annual General Meeting by holders
of DIs
"Form of Proxy" the proxy form for use at the Annual General Meeting by Shareholders
"Group" the Company and its subsidiary undertakings
"Issue`" the proposed issue of the Secured Notes and the Warrants
"Issue Date" the date of issue of the Secured Notes and the Warrants
"Issue Proceeds" the �15 million proposed to be raised by the Company pursuant to the
Issue, before expenses
"London Stock Exchange" London Stock Exchange plc
"Maturity Date" the third anniversary of the Issue Date
"Noteholders" holders of Secured Notes following completion of the Issue and the Offer
"Offer" the offer to subscribe for Secured Notes and Warrants which is being
made available to Qualifying Shareholders by the Company
"Ordinary Shares" ordinary shares with a nominal value of EUR0.01 each in the capital of
the Company
"Qualifying Shareholders" the Shareholders to whom the Offer is being made available, being those
Shareholders resident in the UK, other than Jeremy White and John
Morgan, who on the date of this announcement hold at least 779,616
Shares, being that number of Shares which, if the Offer were made on a
pre-emptive basis, would entitle such Shareholders to subscribe for
Secured Notes with a value of at least �50,000 and associated Warrants
"Registrars" Computershare Investor Services PLC, The Pavilions, Bridgwater Road,
Bristol BS13 8AE, UK
"Resolutions" the resolutions to be proposed at the AGM
"Secured Notes" the �15,000,000 8 per cent. Guaranteed Secured Notes due 2011, in
denominations of �50,000, to be issued pursuant to the Subscription
Agreement or the Offer
"Shares" Ordinary Shares and Special Voting Shares
"Shareholders" holders of Shares
"Special Voting Shares" the special voting shares with a nominal value of EUR0.01 each in the
capital of the Company
"Subscription Agreement" the conditional agreement dated 3 June 2008 between the Company and
Agilo relating to the Issue
"UK" the United Kingdom of Great Britain and Northern Ireland
"US" or "United States" the United States of America, its possessions and territories, all areas
subject to its jurisdiction or any political sub-division thereof, any
state of the United States of America and the District of Columbia
"Warrants" the warrants in respect of the Secured Notes exercisable into Ordinary
Shares to be issued pursuant to the Subscription Agreement or the Offer
Unless otherwise indicated, all references in this announcement to "�" or "pence" are to the lawful currency of the United Kingdom, to
"euro" or "EUR" are to the lawful currency of The Netherlands and to "US$" are to the lawful currency of the United States and to "CDN$" are
to the lawful currency of Canada.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEAEKDELFPEEE
Newfound (LSE:NFND)
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