Real Good Food PLC Amendment to Shareholders' Agreement (3998C)
19 Octobre 2020 - 8:00AM
UK Regulatory
TIDMRGD
RNS Number : 3998C
Real Good Food PLC
19 October 2020
Real Good Food plc
("RGF" or "the Group")
Amendment to Shareholders' Agreement
Related Party Transaction
Real Good Food plc (AIM:RGD) announces that it has today entered
into a deed of variation (the "Deed") that amends the terms of the
shareholders' agreement dated 4 April 2017 (the "SHA") between,
amongst others, (i) the Group and (ii) each of Robin Williams, Lynn
Regan and Carwen Jones (together the "Minority Shareholders") that
regulates their relationship in relation to Brighter Foods Limited
("Brighter") - the Group holds 84.34% and the Minority Shareholders
hold 15.66% of the issued share capital of Brighter ("Minority
Interest").
The Board of RGF believes that the Deed is in the best interest
of all stakeholders as it reduces the immediate cash outflow of the
Group and aligns the interests of the Minority Shareholders (who
form part of the core management team of Brighter Foods) with RGF
in improving earnings and ultimately maximising the value of the
business to RGF. It also confirms the confidence of the Minority
Shareholders in the strength and resilience of the business and the
potential it has within the snack bar segment.
Under the terms of the SHA, a put option pursuant to which the
Minority Shareholders can compel the Group to acquire 50% of the
Minority Interest has become exercisable (the "2020 Option"). The
price to be paid by the Group based on EBIT and cash flows of
Brighter for the year ended 31 March 2020 is approximately GBP2.8m
(the "2020 Payment").
Pursuant to the Deed the Minority Shareholders have agreed,
amongst other things, to forego their right to exercise the 2020
Option, with the SHA being amended such that the Minority
Shareholders will now have a put option over the whole of the
Minority Interest exercisable following the agreement of the
audited accounts of Brighter for the year ending 31 March 2021 (the
"2021 Option"). The Group retains its call option over the whole of
the Minority Interest, exercisable should the 2021 Option not be
exercised.
In consideration for the changes to the SHA being made by the
Deed, the Group has agreed to pay the Minority Shareholders GBP1.0m
on the date the Deed is entered into and a further GBP500,000 on 20
November 2020. The outstanding balance of the 2020 Payment,
approximately GBP1.3m, has been deferred until the exercise of the
2021 Option. Interest becomes payable on the GBP1.3m at the rate of
10% from March 2021.
Furthermore, it has been agreed that in the event of a corporate
action relating to Brighter which completes in the six months
following the exercise of the 2021 Option, the Group will pay to
the Minority Shareholders a sum equal to the amount by which the
consideration they would have received had they sold their Minority
Interest in that corporate action is greater than the consideration
actually received pursuant to the 2021 Option.
As Robin Williams is a director of Brighter, a subsidiary of
RGF, entry into of the Deed constitutes a related party transaction
pursuant to the AIM Rules for Companies. The Board of RGF (all
being independent for the purposes of the related party
transaction) having consulted with the Group's nominated adviser,
finnCap, consider the terms of the Deed to be fair and reasonable
insofar as the Group's shareholders are concerned.
Mike Holt, Chairman commented:
"Brighter has remained profitable and cash generative during
recent challenging months, demonstrating its resilience and the
benefit of having a lean and flexible cost base but to preserve
cash for the Group until Covid-19 abates this is considered a fair
and balanced agreement between the Group and the Minority
Shareholders. It also further aligns the interests of Brighter's
management team with value creation for the Group "
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
Enquiries :
Real Good Food plc Tel: 0151 541 3790
Mike Holt, Chairman
Maribeth Keeling, Group Finance Director
finnCap Limited (Nomad and Broker) Tel: 020 7220 0500
Carl Holmes / James Thompson (Corporate
Finance)
MHP Communications (Financial PR) Tel: 020 3128 8100
Reg Hoare / Katie Hunt rgf@mhpc.com
About Real Good Food
Real Good Food plc is a food manufacturing business serving several
market sectors including retail (own label and private label),
manufacturing and export. The Group has two businesses, Cake Decoration
(Renshaw and Rainbow Dust Colours) and Food Ingredients (Brighter
Foods), with leading brands in their chosen markets.
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END
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