RNS Number:9175T
Virotec International PLC
07 May 2008
Not for release, publication or distribution, in whole or in part in, into
orfrom the United States of America or any of its territories, Canada, or Japan,
or any other jurisdiction where to do so would constitute a violation ofthe
relevant laws of such jurisdiction.
7 May 2008
RECOMMENDED ACQUISITION
by
Hydrodec Group plc ("Hydrodec")
of
Virotec International plc ("Virotec")
to be effected
by means of a scheme of arrangement
under sections 895 to 901 of the Companies Act 2006
Summary
* The Hydrodec Independent Directors and the Virotec Independent
Directors are pleased to announce that they have reached agreement on the terms
of a recommended acquisition of the entire issued and to be issued share capital
of Virotec by Hydrodec. The Acquisition is to be effected by way of a scheme of
arrangement under sections 895 to 901 of the 2006 Act (the "Scheme").
* Under the terms of the Acquisition Virotec Shareholders (other
than Restricted Overseas Persons) will be entitled to receive:
For every Virotec Share held 13 pence in cash
(up to a maximum of 20,000 Virotec (up to a maximum aggregate
Shares) amount
of #2,600)
And thereafter,
for every 3.75 Virotec Shares held 1 New Hydrodec Share
* The consideration under the Scheme is arranged such that the
amount due in respect of the first 20,000 Virotec Shares held by each Virotec
Shareholder is payable in cash. However, a Share Alternative will be made
available to all Virotec Shareholders (other than Restricted Overseas Persons)
who may elect, subject to certain limitations and conditions, to receive New
Hydrodec Shares in lieu of the Cash Consideration to which they would otherwise
be entitled pursuant to the Scheme.
* Based on the Closing Price of 54.75 pence per Hydrodec Share on
6 May 2008 (being the last Business Day prior to this announcement), the
Acquisition (assuming that all Virotec Shareholders validly elect to receive the
Share Alternative) values each Virotec Share at approximately 14.6 pence and the
entire issued share capital of Virotec at approximately #38.57 million.
* The consideration payable under the Scheme values Virotec:
(i) in respect of Virotec Shareholders who receive all of their consideration in
cash, at a premium of approximately:
* 89.1 per cent. to the Closing Price of 6.875 pence per Virotec
Share on 2 April 2008 (being the last business day prior to Hydrodec notifying
Virotec that it had acquired Virotec Shares); and
* 57.4 per cent. to 8.258 pence per Virotec Share being the
average Closing Price for the last 30 days trading before 2 April 2008;
(ii) in respect of Virotec Shareholders who receive all of their consideration
in New Hydrodec Shares, at a premium of approximately:
* 112.4 per cent. to the Closing Price of 6.875 pence per Virotec
Share on 2 April 2008 (being the last business day prior to Hydrodec notifying
Virotec that it had acquired Virotec Shares); and
* 76.8 per cent. to 8.258 pence per Virotec Share being the
average Closing Price for the last 30 days trading before 2 April 2008.
* Subject to the Scheme becoming Effective, the consent of Hydrodec
Shareholders to the Hydrodec Resolutions being obtained at the Hydrodec General
Meeting and the consent of Virotec Shareholders being obtained at the General
Meeting, it is proposed that the Executive Directors acquire for AUD$1 the
entire share capital of the Operating Businesses of the Virotec Group.
* Virotec owns 54.5 million shares in Hydrodec, representing
approximately 26.7 per cent. of Hydrodec's issued share capital, assuming
completion of the Placing. Hydrodec intends to utilise these shares to satisfy
allotments of new Hydrodec Shares in respect of the exercise of options under
the existing Hydrodec option scheme and/or the conversion of the Hydrodec
Convertible Loan Notes. The Hydrodec Convertible Loan Notes are not listed and
are, in aggregate, convertible into approximately 72.63 million new Hydrodec
Shares.
* The Virotec Independent Directors, who have been advised by
Arden, consider that the terms of the Acquisition are fair and reasonable and
intend unanimously to recommend the Acquisition to Virotec Shareholders. In
providing their advice, Arden has relied upon the commercial assessments of the
Virotec Independent Directors.
* The Virotec Independent Directors and Justin Seager, who have
been advised by Arden, consider that the terms of the Disposal are fair and
reasonable in the context of the Acquisition so far as the Virotec Shareholders
are concerned. In forming their advice Arden has relied upon the commercial
assessments of the Virotec Independent Directors and Justin Seager.
* Irrevocable undertakings to vote (or procure the vote) in favour
of the Scheme at the Court Meeting (or, if requested by Hydrodec to execute an
agreement consenting to and undertaking to the Court to be bound by the Scheme)
and the resolutions to be proposed at the General Meeting (other than as set out
below) have been received from the following holders of, in aggregate,
116,910,450 Virotec Shares representing approximately 44.26 per cent. of the
existing issued ordinary share capital of Virotec, being;
* the holders (other than Virotec Directors) of 96,516,117 Virotec
Shares, representing approximately 36.54 per cent. of the existing issued
ordinary share capital of Virotec;
* the Virotec Independent Directors and Justin Seager in respect
of their own aggregate beneficial holdings of 1,901,300 Virotec Shares,
representing (as at the date of this announcement) approximately 0.72 per cent.
of the existing issued ordinary share capital of Virotec; and
* the Executive Directors in respect of their own aggregate
beneficial holdings of 18,493,033 Virotec Shares, representing (as at the date
of this announcement) approximately 7.00 per cent. of the existing issued
ordinary share capital of Virotec. The Executive Directors will not vote on the
resolution at the General Meeting relating to the Disposal.
* In addition to the irrevocable undertakings, Hydrodec and
persons acting or deemed to be acting in concert with Hydrodec hold in
aggregate, 8,803,998 Virotec Shares representing 3.33 per cent. of the existing
issued share capital of Virotec, although these shares will not be available to
be voted at the Court Meeting.
* It is expected that the Scheme Document, containing further
details of the Acquisition and Disposal, will be dispatched on or around 12 May
2008 and that the Scheme will become effective on, or shortly after, 25 June
2008, subject, inter alia, to the satisfaction of the conditions set out in
Appendix I to this announcement and to be set out in the Scheme Document.
* Brian Sheeran and Bruno Bamonte, currently non-executive
directors of Hydrodec, have agreed to step down from the board of Hydrodec upon
the Scheme becoming Effective.
* Hydrodec is being advised by Ludgate and Numis and Virotec is
being advised by Arden.
Commenting on the Acquisition, John Gunn, Chairman of Hydrodec Group plc, said:
"The Acquisition will enable Virotec Shareholders to participate directly in
Hydrodec's future growth potential. It will create a broader shareholder base
for the enlarged group and will have a substantial benefit on the future profit
margins of Hydrodec as the Hydrodec Board seeks to deliver on its plans for
creating a major international oil services company."
Commenting on the Acquisition and Disposal, John Glynn, on behalf of the
independent non-executive directors of Virotec International plc, said:
"The Acquisition represents an opportunity for Virotec Shareholders to receive a
significant premium to the share price prior to the announcement of share
purchases by Hydrodec. The Scheme also provides Virotec Shareholders with a
direct investment in the fast developing Hydrodec business as well as giving a
cash exit for smaller shareholders who might otherwise be constrained by dealing
costs."
This summary should be read in conjunction with, and is subject to, the full
text of this announcement and the Appendices to this announcement. Appendix I
contains the conditions to, and certain further terms of, the Acquisition and
the Scheme. Appendix II contains further details of the bases and sources of
information contained in this announcement. Appendix III contains further
details relating to the irrevocable undertakings received by Hydrodec and
Appendix IV contains definitions of certain expressions used in this summary and
in this announcement.
Ludgate and Numis are acting exclusively as financial adviser to Hydrodec. Numis
is also NOMAD and corporate broker to Hydrodec.
Arden is acting exclusively as financial adviser and corporate broker to Virotec
in respect of the Acquisition. Arden is also NOMAD to Virotec.
Enquiries
Hydrodec Group plc Virotec International plc
John Gunn Angus Craig
Tel: +44 (0) 20 7621 5770 Tel: +61 755 733 353
John Dickson
Tel: +61 418 454 818
Ludgate Investments Limited Arden Partners plc
Charles Sebag-Montefiore Christopher Hardie
Robert Petch Matthew Armitt
Tel: +44 (0) 20 7621 5770 Tel: +44 (0) 20 7398 1600
Numis Securities Limited
Anthony Richardson
Nick Westlake
Tel: +44 (0) 20 7260 1000
This announcement is not intended to, and does not, constitute, or form part of,
any offer to sell or any invitation to purchase or subscribe for any securities
or the solicitation of any vote or approval in any jurisdiction. This
announcement does not constitute a prospectus or a prospectus equivalent
document. Any decision in relation to the Acquisition should be made only on the
basis of the information contained in the Scheme Document, Forms of Proxy and
Form of Election or any other document by which the proposals of the Acquisition
are made, which will include the full terms and conditions of the Acquisition.
Virotec and Hydrodec encourage Virotec Shareholders to read the Scheme Document
when it becomes available because it will contain important information relating
to the Acquisition. The proposals of the Acquisition will be made solely through
the Scheme Document.
Ludgate, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Hydrodec and no-one else in connection with the
Acquisition and will not be responsible to anyone other than Hydrodec for
providing the protections afforded to customers of Ludgate or for providing
advice in relation to the Acquisition or any other matter referred to in this
announcement.
Arden, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Virotec and no-one else in connection with the
Acquisition and will not be responsible to anyone other than Virotec for
providing the protections afforded to customers of Arden or for providing advice
in relation to the Acquisition or any other matter referred to in this
announcement.
Numis, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Hydrodec and no-one else in connection with the
Acquisition and will not be responsible to anyone other than Hydrodec for
providing the protections afforded to customers of Numis Securities Limited or
for providing advice in relation to the Acquisition or any other matter referred
to in this announcement.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
into whose possession this announcement comes should inform themselves about,
and observe, any applicable restrictions or requirements. Any failure to comply
with such restrictions or requirements may constitute a violation of the
securities laws of any such jurisdiction. This announcement has been prepared
for the purposes of complying with the AIM 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 City Code or the laws and regulations
of any jurisdiction other than England.
Persons in, or resident in, Australia should note that the Scheme is exempt from
the requirement to issue a prospectus under the provisions of Parts 6D.2 and
6D.3 and sections 1012A, 1012B and 1012C of the Corporations Act 2001 of
Australia (Cth), pursuant to the provisions of the Australian Securities and
Investments Commission (ASIC) Class Order 07/9 ("Prospectus relief for foreign
schemes of arrangement and PDS relief for Pt 5.1 schemes and foreign schemes of
arrangement"). ASIC Class Order 07/9 provides that where securities are offered
for issue under a scheme of arrangement which is between a foreign company and
its members and regulated under a law that is in force in an 'eligible foreign
country' (which includes the United Kingdom) the issuer is exempt from the
requirement to prepare a prospectus under the Corporations Act 2001 (Cth).
US Persons should note that the Scheme relates to the shares of a UK company and
will be governed by English law. Neither the proxy solicitation nor the tender
offer rules under the US Securities Exchange Act of 1934, as amended, will apply
to the Scheme. Moreover, the Scheme will be subject to the relevant disclosure
requirements and practices applicable in the UK to schemes of arrangement, which
differ from the disclosure requirements of the US proxy solicitation rules and
tender offer rules. Financial information included in this announcement and the
Scheme Document has been or will have been prepared in accordance with
accounting standards applicable in the UK that may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in the
United States.
The New Hydrodec Shares that may be issued pursuant to the Scheme have not been
and will not be registered under the US Securities Act or under the relevant
securities laws of any state, district, territory or other jurisdiction of the
United States. Accordingly, New Hydrodec Shares may not be offered or sold in
the United States, except in an offer not subject to, or in reliance on an
exemption from, the registration requirements of the US Securities Act and such
state securities laws.
Any New Hydrodec Shares which may be issued pursuant to the Scheme have not been
and will not be registered under the relevant securities laws of the US, Canada,
Australia, New Zealand, Republic of Ireland or Japan and no regulatory
clearances in respect of the New Hydrodec Shares have been, or will be, applied
for in any jurisdiction. In particular, any relevant clearances and
registrations have not been, and will not be, obtained from the securities
commission of any province of Canada and no prospectus in relation to the New
Hydrodec Shares has been, or will be, lodged with, or registered with, the
Australian Securities and Investments Commission, the Registrar of Companies in
New Zealand or the Japanese Ministry of Finance. Accordingly, unless otherwise
determined by Hydrodec and permitted by applicable law and regulation, the New
Hydrodec Shares may not be, offered, sold, resold, transferred, delivered or
distributed, directly or indirectly in or into the US, Canada, Australia, New
Zealand, Republic of Ireland or Japan or any other jurisdiction where to do so
would violate the laws of that jurisdiction or would require registration or
clearance thereof in such jurisdiction.
No listing authority or equivalent has reviewed, approved or disapproved of this
announcement or any of the proposals described in this announcement.
Virotec confirms that as at the close of business on 6 May 2008 it had
264,168,231 ordinary shares of 1 penny each in issue. The International
Securities Identification Number (ISIN) for Virotec's ordinary shares is
GB00B15PVR02.
Hydrodec confirms that as at the close of business on 6 May 2008 it had
193,845,402 ordinary shares of 0.5 pence each in issue. The International
Securities Identification Number (ISIN) for Hydrodec's ordinary shares is
GB00B02FJF09.
Forward Looking Statements
This announcement includes statements that are, or may be deemed to be, 'forward
looking statements' that are based on current expectations or beliefs, as well
as assumptions about future events. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
''believes'', ''estimates'', ''plans'', ''anticipates'', ''targets'', ''aims'',
''continues'', ''expects'', ''intends'', ''hopes'', ''may'', ''will'',
''would'', ''could'' or ''should'' or, in each case, their negative or other
variations or comparable terminology. These forward-looking statements include
matters that are not facts. They appear in a number of places throughout this
announcement and include statements regarding the directors of Hydrodec's
intentions, beliefs or current expectations concerning, amongst other things,
Hydrodec's and/or Virotec's results of operations, financial condition,
liquidity, prospects, growth, strategies and the industries in which Hydrodec
and Virotec operates. By their nature, forward-looking statements involve risk
and uncertainty because they relate to future events and circumstances.
Forward-looking statements contained in this announcement based on past trends
or activities should not be taken as a representation that such trends or
activities will continue in the future. Subject to any requirement under the AIM
Rules or other applicable legislation or regulation, none of Hydrodec, Virotec,
Numis, Ludgate or Arden undertakes any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. Undue reliance should not be placed on forward-looking
statements, which speak only as of the date of this announcement.
There are several factors which could cause actual results to differ materially
from those expressed or implied in forward-looking statements. Among the factors
that could cause actual results to differ materially from those described in the
forward-looking statements are changes in the global, political, economic,
business, competitive, market and regulatory forces, future exchange and
interest rates, changes in tax rates and future business combinations or
dispositions.
Profit Forecasts
Nothing in this announcement is intended, or is to be construed, as a profit
forecast or to be interpreted to mean that earnings per New Hydrodec Share for
the current or future financial years, or those of the combined group, will
necessarily match or exceed the historical published earnings per Hydrodec Share
or Virotec Share.
Not for release, publication or distribution, in whole or in part in, into or
from the United States of America or any of its territories, Canada, or Japan,
or any other jurisdiction where to do so would constitute a violation of
the relevant laws of such jurisdiction.
7 May 2008
RECOMMENDED ACQUISITION
by
Hydrodec Group plc
of
Virotec International plc
to be effected
by means of a scheme of arrangement
under sections 895 to 901 of the Companies Act 2006
1. Introduction
The Independent Directors of Hydrodec Group Plc ("Hydrodec") and the Independent
Directors of Virotec International Plc ("Virotec") are pleased to announce that
they have reached agreement on the terms of a recommended acquisition of the
entire issued and to be issued share capital of Virotec by Hydrodec.
2. Terms of the Acquisition
The Acquisition will be effected by means of a scheme of arrangement between
Virotec and the Virotec Shareholders pursuant to sections 895 to 901 of the 2006
Act. The Acquisition is conditional on the Scheme becoming Effective, the
consent of Hydrodec Shareholders to the Hydrodec Resolutions being obtained at
the Hydrodec General Meeting and the consent of the Virotec Shareholders to the
Disposal being obtained at the General Meeting. The Scheme requires, inter alia,
the approval of Virotec Shareholders at the Court Meeting and the General
Meeting and the sanction of the Court, to become Effective.
Virotec Shareholders (other than Restricted Overseas Persons) will be entitled
to receive:
For every Virotec Share held 13 pence in cash
(up to a maximum of 20,000 Virotec (up to a maximum aggregate amount
Shares) of #2,600)
And thereafter,
for every 3.75 Virotec Shares held 1 New Hydrodec Share
Based on the Closing Price of 54.75 pence per Hydrodec Share on 6 May 2008
(being the last business day prior to this announcement), the Acquisition
(assuming that all Virotec Shareholders validly elect to receive the Share
Alternative) values each Virotec Share at approximately 14.6 pence and the
entire issued share capital of Virotec at approximately #38.57 million.
The consideration payable under the Scheme values Virotec:
(i) in respect of Virotec Shareholders who receive all of their consideration in
cash, at a premium of approximately:
* 89.1 per cent. to the Closing Price of 6.875 pence per Virotec
Share on 2 April 2008 (being the last business day prior to Hydrodec notifying
Virotec that it had acquired Virotec Shares); and
* 57.4 per cent. to 8.258 pence per Virotec Share being the
average Closing Price for the last 30 days trading before 2 April 2008;
(ii) in respect of Virotec Shareholders who receive all of their consideration
in New Hydrodec Shares, at a premium of approximately:
* 112.4 per cent. to the Closing Price of 6.875 pence per Virotec
Share on 2 April 2008 (being the last business day prior to Hydrodec notifying
Virotec that it had acquired Virotec Shares); and
* 76.8 per cent. to 8.258 pence per Virotec Share being the
average Closing Price for the last 30 days trading before 2 April 2008.
The consideration under the Scheme is arranged such that the amount due in
respect of the first 20,000 Virotec Shares held by each Virotec Shareholder is
payable in cash. However, a Share Alternative will be made available to Virotec
Shareholders (other than Restricted Overseas Persons) who may elect, subject to
certain limitations and conditions, to receive New Hydrodec Shares in lieu of
the Cash Consideration to which they would otherwise be entitled pursuant to the
Scheme. Satisfaction of elections under the Share Alternative will be effected
on the basis of one New Hydrodec Share for every 3.75 Virotec Shares.
Restricted Overseas Persons shall not be entitled to receive New Hydrodec Shares
and shall not be eligible to elect for the Share Alternative. Restricted
Overseas Persons will receive a cash payment of 13 pence per Virotec Share.
Virotec currently has 4,860,000 options outstanding, the exercise prices of
which range between 20 and 40 pence per share. All holders of options are to be
offered a cash payment of 1 penny per share to which they would otherwise be
entitled, under the options for the cancellation and surrender of such options.
Full acceptance of this offer would require the payment by Hydrodec of the cash
sum of #48,600.
Virotec also has a Short Term Incentive Plan ("STIP") under the terms of which
the Executive Directors are due to be allotted an aggregate of 5,041,264 Virotec
Shares, and a Long Term Incentive Plan ("LTIP") under which they are due to be
allotted further Virotec Shares. The Executive Directors have agreed, subject to
completion of the Scheme and the Disposal, to waive all their rights under the
LTIP and STIP in return for an aggregate cash payment of approximately #605,000,
which will be payable over six months in equal monthly instalments.
Virotec owns 54.5 million shares in Hydrodec, representing approximately 26.7
per cent. of Hydrodec's issued share capital, assuming completion of the
Placing. Hydrodec intends to utilise these shares to satisfy, in part,
allotments of new Hydrodec Shares in respect of options under the existing
Hydrodec option scheme and the Hydrodec Convertible Loan Notes. The Hydrodec
Convertible Loan Notes are not listed and are, in aggregate, convertible into
approximately 72.63 million new Hydrodec Shares.
The New Hydrodec Shares to be issued under the Scheme will be allotted and
issued credited as fully paid. An application will be made for the admission of
the New Hydrodec Shares to trading on AIM. The New Hydrodec Shares will rank
pari passu in all respects with the Hydrodec Shares in issue at the time such
New Hydrodec Shares are allotted and issued, including the right to receive and
retain dividends and other distributions declared, made or paid after the
Effective Date.
The Virotec admission document dated 1 August 2006 indicated that Virotec was
subject to the provisions of the City Code. As a result of changes that have
taken place since then, the Panel now considers that the place of central
management and control of Virotec is located outside the UK, the Channel Islands
or the Isle of Man and has therefore confirmed that Virotec is no longer within
the jurisdiction of the City Code. The Panel is not, as a result, regulating the
Acquisition.
The Acquisition will be subject to the Conditions and certain further terms set
out in Appendix I to this announcement and to be set out or referred to in the
Scheme Document, Forms of Proxy, Form of Election and any other document by
which the proposals of the Acquisition are made.
3. The Share Alternative
The consideration under the Scheme is arranged such that the amount due in
respect of the first 20,000 Virotec Shares held by each Virotec Shareholder is
payable in cash. There are just under 3,000 shareholders who each hold 20,000 or
less Virotec Shares and approximately 2,600 shareholders are either resident in
Australia or New Zealand. For Hydrodec, the cost of administering a large number
of overseas shareholders is relatively expensive. Consequently, the provision of
the Cash Consideration will both allow such shareholders to realise the value of
their investments in full without incurring any costs in selling in the market
and also result in lower administrative costs for Hydrodec going forward.
However, as an alternative to the Cash Consideration which would otherwise be
receivable under the Scheme, a Share Alternative is being made available to all
Virotec Shareholders other than Restricted Overseas Persons. Under the Share
Alternative, Virotec Shareholders will, subject to the conditions and further
terms which will be set out in the Scheme Document and the Form of Election, be
able to elect to receive New Hydrodec Shares on the following basis:
For every 3.75 Virotec Shares held 1 New Hydrodec Share
The New Hydrodec Shares to be issued under the Share Alternative will be
allotted and issued credited as fully paid. An application will be made for the
admission of the New Hydrodec Shares to trading on AIM. The New Hydrodec Shares
will rank pari passu in all respects with the Hydrodec Shares in issue at the
time such New Hydrodec Shares are allotted and issued, including the right to
receive and retain dividends and other distributions declared, made or paid
after the Effective Date.
Elections under the Share Alternative will only be capable of being made in
respect of all (and not part only) of the Cash Consideration. Fractions of New
Hydrodec Shares will not be allotted and issued to holders of Scheme Shares who
make an election under the Share Alternative. Fractional entitlements to New
Hydrodec Shares will be retained and sold in the market for the benefit of the
enlarged Hydrodec Group.
The Share Alternative will remain open until the time and date specified in the
Scheme Document and may be closed then without prior notice. If the Share
Alternative has been closed, Hydrodec reserves the right to reintroduce a share
alternative.
No election under the Share Alternative will be valid unless a valid Form of
Election, duly completed in all respects and accompanied by all relevant share
certificates(s) in respect of Scheme Shares held in certificated form or, if the
Scheme Shares are in uncertificated form, a settlement of a TTE instruction in
relation to those shares in accordance with the procedures to be set out in the
Scheme Document, are duly received and/or made by the time and date on which the
Share Alternative closes.
Further details of the Share Alternative will be set out in the Scheme Document.
4. Background to and reasons for the Acquisition
The principal assets of Virotec are related to, and reliant upon, the success or
otherwise of Hydrodec. Virotec owns 54.5 million shares (the "Reserve Shares")
in Hydrodec (which represent approximately 26.7 per cent. of Hydrodec's existing
issued share capital assuming completion of the Placing) and is entitled to
receive a royalty of 5 per cent. on Hydrodec revenues derived from the use of
its technology. Virotec's interest in Hydrodec results from the sale of Hydrodec
Development Corporation Pty Ltd by a former subsidiary of Virotec to Hydrodec in
return for the allotment of Hydrodec Shares and the royalty as part
consideration.
The Acquisition will eliminate the cost of the royalty to the Hydrodec Group.
This will have a substantial benefit on the future profit margins of Hydrodec,
which in turn will benefit Virotec Shareholders that become holders of New
Hydrodec Shares, as well as existing Hydrodec Shareholders.
Virotec has made substantial losses of AUD$7.57 million (#3.57 million) and AUD
$13.37 million (#6.31 million) respectively in the six months ended 31 December
2006 and the year ended 31 December 2007. Despite, the award of the Nyrstar
Hobart Pty Ltd contract which is expected to generate up to AUD$3.5 million
(#1.65 million) in revenue in 2008, there is no certainty that Virotec would
record a profit for the current year or in the near future.
In December 2007, Virotec sold 5.5 million shares in Hydrodec to fund its near
term requirements and the business is expected to require further funding to
make its future secure. Furthermore, the major Virotec Shareholders have
indicated that they would not support any further significant fundraisings in
Virotec. As a result, the Directors of Virotec may need to make further sales of
Hydrodec Shares, or other assets. The Acquisition will both remove this
potential overhang in Hydrodec Shares and will broaden the shareholder base of
the enlarged group.
5. The Disposal
The Operating Businesses comprise environmental remediation services for the
mining, agriculture and aquaculture industries, applications for the treatment
of water and waste-water and services relating to the treatment of alumina
refinery residue.
These businesses have to date been consistently loss making and cash consuming.
Whilst Virotec has recently announced a significant contract to supply solid
waste treatment services to Nyrstar Hobart Pty Ltd which is expected to generate
up to AUD$3.5 million (#1.65 million) in revenue in 2008, there is no certainty
that the Virotec Group will record a profit for the current year or in the near
future.
The board of Hydrodec has informed Virotec that it intends to focus all of the
enlarged Hydrodec Group's resources on the development of Hydrodec as a major
international oil services company. Consequently, Virotec is proposing to sell
and the Executive Directors are proposing to acquire the Operating Businesses,
subject to the Scheme becoming Effective, Hydrodec Shareholders consenting to
the Hydrodec Resolutions at the Hydrodec General Meeting and Virotec Shareholder
consent being obtained in respect of the Disposal at the General Meeting.
The consideration for the Disposal will be the sum of AUD$1 payable to Virotec
in cash and the assumption of the liabilities of the Operating Businesses. The
Operating Businesses reported combined operating losses of AUD$6.43 million
(#3.05 million) and AUD$11.75 million (#5.54 million) and combined turnover of
AUD$1.47 million (#0.70 million) and AUD$3.52 million (#1.66 million)
respectively in the six months ended 31 December 2006 and the year ended 31
December 2007. The total liabilities and the total assets of the Operating
Businesses were approximately AUD$5.3 million (#2.5 million) and AUD$7.9 million
(#3.7 million) respectively, as at 31 December 2007.
Further information on the Virotec Group appears in Section 7 and further
details of the Disposal will appear in the Scheme Document.
6. Information on Hydrodec
Hydrodec is a public company, whose shares are admitted to trading on AIM, with
a market capitalisation of approximately #106.1 million based on the current
issued share capital as at 6 May 2008 (the last dealing day prior to this
announcement). Hydrodec's technology is an oil refining process that produces
new speciality oils using spent transformer oil as the primary feedstock. The
process also removes dangerous contaminants such as PCB's from oil and similar
fluids.
Hydrodec reported revenues of approximately #0.8 million and #1.9 million with
an operating loss of #2.9 million and #2.3 million for the years ended 31
December 2006 and 2007 respectively.
Hydrodec is currently developing two new production facilities in the US. The
first of these in Canton, Ohio received its first feedstock of transformer oil
at the end of February 2008 and Hydrodec expects the plant to be fully
operational early in the second half of 2008. Construction of the second
production facility at Laurel, Mississippi, is due to start in the third quarter
of 2008, with commercial operations commencing within a further twelve months.
Each plant is expected to have a minimum production capacity per day in excess
of 80,000 litres of SuperfineTM transformer oil.
SuperfineTM is continuing to receive considerable support from the Australian
transformer industry. This includes an agreement with Schneider Electric, a key
manufacturer of distribution transformers which supplies major power utilities
across the country. Schneider Electric has targeted conditional allocation of up
to 75 per cent. of its annual new transformer oil purchase in Australia to
SuperfineTM. In addition Australian power utilities including the two largest
electricity distribution companies in Victoria and Queensland, the largest
electricity distributor in New South Wales and a major South Australian
distribution utility have approved SuperfineTM transformer oil for use in their
new transformers.
The market feedback for SuperfineTM in the USA is very positive and the recently
announced purchase commitment by one of the largest purchasers of transformer
oil in the US supports Hydrodec's expansion plans and shows the confidence of
the US power industry in Hydrodec's SuperfineTM product.
In addition to its encouraging progress in the US, Hydrodec is now looking to
expand in Japan and Europe. In particular, Hydrodec has validated market data
that confirms the competitiveness of its re-refining model in the Japanese
market and has secured interest from key market players. Hydrodec expects that
the Japanese market will comfortably support a Hydrodec production capacity in
excess of 160,000 litres per day in the near future. In Europe, Hydrodec is
investigating scope for further growth through Turkey, which is a major European
transformer manufacturing centre and into which Hydrodec is already exporting
from its plant in Australia.
The treatment of other spent or used speciality oils (e.g. hydraulic oils) for
refining is being evaluated at the request of major producers and users in this
sector. The directors of Hydrodec consider that the market opportunity for
Hydrodec in these areas is many times the size of the transformer oil market.
Hydrodec expects to reach a conclusion on the viability of these market sectors
within twelve months.
7. Information on Virotec
Virotec provides environmental services in the following areas:
*Environmental Remediation - application developed for the mining,
agricultural, fertiliser and aquaculture industries;
*Drinking Water, Wastewater and Solids Treatment - applications developed
for the treatment of drinking water, wastewater from industrial sites and
the sewage industry; and
*Other Services - services to the alumina industry relating to the
treatment of refinery residue.
Operations are conducted in three geographical areas: (i) USA; (ii) Australia
and Asia; and (iii) Europe.
Other than the Operating Businesses, Virotec: (i) owns the Reserve Shares which
represent approximately 26.7 per cent. of the existing issued share capital of
Hydrodec assuming completion of the Placing; (ii) is entitled to receive a 5 per
cent. royalty payable on Hydrodec's sales derived from the use of its technology
; and (iii) owns 30 million shares in the capital of The Greenhouse Fund
representing approximately 19.3 per cent. of the issued share capital of that
company.
On 18 April 2008, Virotec announced its results for the year ended 31 December
2007 which showed revenues of AUD$3.52 million (#1.66 million) compared with
AUD$1.57 million (#0.74 million) for six months ended 31 December 2006. The loss
after tax for the year ended 31 December 2007 was AUD$13.37 million (#6.32
million), compared to a loss of AUD$7.57 million (#3.58 million) for the six
months ended 31 December 2006.
Virotec's balance sheet disclosed net assets of AUD$17.4 million (#8.21 million)
with limited borrowings and significant investments in two listed companies
(Hydrodec and The Greenhouse Fund). These are recorded at their book value in
the balance sheet of AUD$9.7 million (#4.58 million) whilst their current market
value is in excess of AUD$69.6 million (#32.8 million). The cash balance at the
year end was AUD$0.4 million (#0.2 million), but this does not include
approximately AUD$2.0 million (#0.94 million) relating to the sale of Hydrodec
Shares in December 2007, which was received in January 2008.
In March 2008, Virotec announced a significant new contract to supply solid
waste treatment services to Nyrstar Hobart Pty Ltd (formerly part of Zinifex
Ltd) using its ViroFlowTM Technology. The contract is to treat mercurous filter
cake and is expected to generate up to AUD$3.5 million (#1.65 million) in
revenue in 2008.
Following a restructuring, all US operations are now being managed directly by
Dr Lee Fergusson on a much reduced headcount of five employees. The Directors
believe the US operations are now both financially and operationally structured
to resemble more closely Virotec's Australian operations.
8. Recommendations
The Virotec Independent Directors are John Glynn and David McConchie. The
Executive Directors cannot be treated as independent directors of Virotec as
they are directors of Hydrodec and are proposing to acquire the Operating
Businesses from the Virotec Group under the Disposal. Justin Seager is
interested in 1,000,000 Hydrodec Shares, representing approximately 0.51 per
cent. of the issued share capital of Hydrodec prior to completion of the Placing
and cannot therefore be treated as independent in relation to the Acquisition.
Accordingly, the Executive Directors and Justin Seager have absented themselves
from the deliberations in connection with the Acquisition and a committee of the
Board, comprising the Virotec Independent Directors has been established for the
purpose of progressing and considering the terms of the Acquisition and making
the recommendation in relation to the Acquisition. In addition, the Executive
Directors have absented themselves from the deliberations in connection with the
Disposal and a committee of the Board, comprising the Virotec Independent
Directors and Justin Seager has been established for the purpose of progressing
and considering the terms of the Disposal and making the recommendation in
relation to the Disposal.
8.1 Recommendation of the Acquisition
The Virotec Independent Directors recommend the Acquisition to Virotec
Shareholders. The Virotec Independent Directors recognise that the Acquisition
represents an opportunity for Virotec Shareholders to realise a premium for
their Virotec Shares and to receive shares in a larger company which the Virotec
Independent Directors believe should have greater liquidity than Virotec Shares.
The Virotec Independent Directors believe that Hydrodec has a valuable
technology which has been successfully exploited in Australia and which has
demonstrated very substantial potential in the US by virtue of the advance
orders from its initial plant and the decision to proceed with a second
facility. Other opportunities worldwide add to the attractive growth prospects
of Hydrodec.
In coming to these views the Virotec Independent Directors have considered the
following factors:
* the Virotec Operating Businesses have made substantial losses in the
past three years and despite the recent award of the Nyrstar solid waste
treatment contract, there is no certainty that Virotec would record a profit for
the current year or in the near future;
* Virotec has raised approximately #18.43 million in aggregate from
shareholders on four separate occasions since July 2001 and the business will
require further funding to make its future secure. The major shareholders have
indicated that they would not support a major fundraising. The alternative is to
consider further sales of Hydrodec Shares, its holding in The Greenhouse Fund or
other assets of the Virotec Group;
* the Hydrodec royalty arrangements entitle Virotec to a 5 per cent.
share in relevant sales achieved by Hydrodec. Valuing such a stream of income is
inherently uncertain and subjective. It is also the case that, to the extent
that Virotec Shareholders become shareholders of Hydrodec, they will share in
the enhanced profitability of Hydrodec arising from the cancellation of the
royalty. Nevertheless the value which the Virotec Independent Directors
calculate has been attributed to the royalty is at the lower end of their views
of its valuation;
* Virotec Shareholders with holdings of less than 20,000 Virotec
Shares will be entitled to receive cash in respect of their holding thus
providing a cost-effective exit for such shareholders at a significant premium
to the price prior to the announcement of an approach for the Company; and
* 44.26 per cent. of shareholders in Virotec have provided irrevocable
undertakings to vote (or procure the vote) in favour of the Scheme at the Court
Meeting (or, if requested by Hydrodec to execute an agreement consenting to and
undertaking to the Court to be bound by the Scheme) and the resolutions to be
proposed at the General Meeting, save that the Executive Directors will not vote
in the resolution to approve the Disposal.
Shareholders are being offered a cash price of 13 pence per share in respect of
their holding up to a maximum of 20,000 Virotec Shares. The offer of 13 pence
currently represents a lesser consideration than that being offered under the
Share Alternative offer which, based on the Closing Price of Hydrodec of 54.75p
on the last business day before the announcement of the Acquisition, valued each
Virotec Share at 14.6 pence.
Whilst the cash offer is currently 11.0 per cent. lower than the Share
Alternative, Virotec Shareholders should be aware that the share price of
Hydrodec may increase or decrease in the period up to the conclusion of the
Acquisition in which case this difference in consideration may increase or
decrease, accordingly. Virotec Shareholders will need to be aware of the
Hydrodec share price at the time when they make their election for cash or
shares but should take into account the costs of any subsequent sale of their
Hydrodec Shares in such a decision.
After considering the above factors, the Virotec Independent Directors, who have
been advised by Arden Partners plc, consider the terms of the Acquisition to be
fair and reasonable. In providing their advice Arden have relied upon the
commercial assessments of the Virotec Independent Directors.
8.2 Recommendation in respect of the Disposal
The rationale and detail of the transaction involving the disposal of the
Operating Businesses, which comprise all of the operating businesses of the
Virotec Group, to the two Executive Directors are set out in Section 5 above.
This transaction requires the approval of Virotec Shareholders pursuant to Rule
15 of the AIM Rules and constitutes a related party transaction for the purposes
of Rule 13 of the AIM Rules. The Virotec Independent Directors and Justin Seager
believe the following points to be relevant:
* although the Virotec Independent Directors and Justin Seager have
considerable faith in the technology behind the Operating Businesses, they do
not believe that it is practical to embark on a separate sales process within
the timescale of the Acquisition proposal and there is no certainty of finding
an alternative purchaser for such specialist businesses; and
* the Hydrodec management have made it clear that resources will not
be made available to the Virotec's Operating Businesses as they intend to focus
on the development of Hydrodec as a major international oil services company and
hence an immediate sale is an important element of their proposals. The Virotec
Independent Directors and Justin Seager recognise that the existing Virotec
management are best placed to develop the businesses and are able to conclude an
early completion of the transaction.
The Virotec Independent Directors and Justin Seager, who have been advised by
Arden, believe the terms of the Disposal to be fair and reasonable in the
context of the Acquisition so far as the Virotec Shareholders are concerned. In
providing their advice Arden have relied upon the commercial assessments of the
Virotec Independent Directors and Justin Seager.
9. Irrevocable Undertakings
Irrevocable undertakings to vote (or procure the vote) in favour of the Scheme
at the Court Meeting (or, if requested by Hydrodec to execute an agreement
consenting to and undertaking to the Court to be bound by the Scheme) and the
resolutions to be proposed at the General Meeting (other than as set out below)
have been received, in aggregate from the holders of 116,910,450 Virotec Shares
representing approximately 44.26 per cent. of the existing issued ordinary share
capital of Virotec, being:
* the holders (other than the Virotec Directors) of 96,516,117
Virotec Shares, representing approximately 36.54 per cent. of the existing
issued ordinary share capital of Virotec;
* the Virotec Independent Directors and Justin Seager in respect
of their own aggregate beneficial holdings of 1,901,300 Virotec Shares,
representing (as at the date of this announcement) approximately 0.72 per cent.
of the existing issued ordinary share capital of Virotec; and
* the Executive Directors in respect of their own aggregate
beneficial holdings of 18,493,033 Virotec Shares, representing (as at the date
of this announcement) approximately 7.00 per cent. of the existing issued
ordinary share capital of Virotec. The Executive Directors will not vote on the
resolution at the General Meeting relating to the Disposal.
The undertakings received from the Executive Directors will cease to be binding
only if the Scheme lapses or is withdrawn (other than in connection with a
switch to an Offer or if an Offer is announced within 21 Business Days of such
lapse or withdrawal) or the Offer lapses or is withdrawn (other than in
accordance with a switch to a Scheme). All other irrevocable undertakings will,
subject to certain conditions, cease to be binding in circumstances where a
third party offer is made on terms which represent an improvement of more than
10 per cent in the value of the consideration payable by Hydrodec.
Each of the Directors has irrevocably undertaken not to solicit, engage with, or
provide any information relating to any competing acquisition for Virotec and to
notify Hydrodec promptly of any approach he receives or becomes aware of in
relation to such a competing acquisition (including providing details of the
material terms) and to keep Hydrodec informed as to the progress of any such
competing acquisition.
In addition to the irrevocable undertakings, Hydrodec and persons acting or
deemed to be acting in concert with Hydrodec hold, in aggregate 8,803,998
Virotec Shares, representing 3.33 per cent. of the existing issued share capital
of Virotec, although these shares will not be available to be voted at the Court
Meeting. Further details of these shareholdings are set out in Section 14 below.
Further details of the irrevocable undertakings are set out in Appendix III to
this announcement.
10. Management and Employees
In the event of the Acquisition and Disposal proceeding, the existing
contractual and statutory employment rights, including pension rights, of all
the employees of the Virotec Group will be safeguarded.
11 Financing of the Consideration
The Cash Consideration payable pursuant to the Acquisition will be provided by
Hydrodec from its own cash resources, which will be increased by receipt of the
proceeds of the Placing.
Ludgate is satisfied that sufficient resources are available to Hydrodec to
satisfy in full the Cash Consideration payable pursuant to the Acquisition.
The maximum number of New Hydrodec Shares that would be issued as consideration
for the Acquisition (assuming all Virotec Shareholders make a valid election for
the Share Alternative) is 68,271,528, which represents 26.0 per cent. of the
enlarged issued share capital of Hydrodec or 19.8 per cent. following conversion
of all the Hydrodec Convertible Loan Notes and the completion of the Placing.
12. Structure of the Acquisition
It is intended that the Acquisition will be effected by means of a
court-sanctioned scheme of arrangement between Virotec and the Scheme
Shareholders under sections 895 to 901 of the 2006 Act.
The Scheme is subject to the Conditions and certain further terms referred to in
Appendix I to this announcement and to be set out in the Scheme Document. In
particular, to become Effective, the Scheme requires the approval of holders of
Scheme Shares by the passing of a resolution at the Court Meeting. That
resolution must be approved by a majority in number of the Scheme Shareholders
present, entitled to vote and voting at the Court Meeting (or at any adjournment
thereof), either in person or by proxy, representing not less than 75 per cent.
in value of all Scheme Shares which are voted at the Court Meeting (or at any
adjournment thereof). The holders of the Excluded Voting Shares will not be able
to vote at this meeting, but will separately consent to and undertake to be
bound by the Scheme in respect of their interests in Virotec Shares.
Implementation of the Scheme will also require the passing of certain
resolutions to facilitate the Acquisition at the General Meeting, which will be
held immediately after the Court Meeting.
Following the Meetings, the Scheme must be sanctioned and the Reduction
confirmed by the Court, and will only become effective on delivery to the
Registrar of Companies of a copy of the Order and the Order and the Minute being
registered by the Registrar of Companies.
Upon the Scheme becoming Effective, it will be binding on all Virotec
Shareholders, irrespective of whether or not they attended or voted at the Court
Meeting or the General Meeting.
The Acquisition is also conditional upon approval of the Disposal by Virotec
Shareholders at the General Meeting and the passing of the Hydrodec Resolutions
at the Hydrodec General Meeting.
Further details of the Scheme, including the timetable for its implementation,
will be set out in the Scheme Document which is expected to be posted to Virotec
Shareholders on or around 12 May 2008.
13. Delisting and re-registration
Hydrodec intends to apply for cancellation of the admission of the Virotec
Shares to trading on AIM and to re-register Virotec as a private company, either
as part of the Scheme, or under the relevant provisions of the 2006 Act.
If the Acquisition is effected by way of an Offer and such Offer becomes or is
declared unconditional in all respects and sufficient acceptances are received,
Hydrodec intends to exercise its rights to acquire compulsorily the remaining
Virotec Shares in respect of which the Offer has not been accepted.
14. Disclosure of interests in Virotec
Except as disclosed below, as at the close of business on 6 May 2008, being the
latest practicable Business Day prior to the date of this announcement, neither
Hydrodec nor any of the directors of Hydrodec, nor, so far as Hydrodec is aware,
any person acting in concert with Hydrodec has: (i) any interest in or right to
subscribe for any Virotec Shares, nor (ii) any short positions in respect of
Virotec Shares (whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person to purchase
or take delivery, nor (iii) borrowed or lent any Virotec Shares (save for any
borrowed shares which have been on-lent or sold):-
Name Interest in Per cent. of issued
Virotec share capital
Shares
Hydrodec Group plc 8,150,000 3.09%
Ludgate Investments Limited 253,998 0.10%
Non-executive directors of
Ludgate Investments Limited:
David Burton 200,000 0.08%
Trevor Cooke 200,000 0.08%
Brian Sheeran (a)(b) 10,947,540 4.14%
Bruno Bamonte (a)(b) 7,545,493 2.86%
Notes to table:
(a) Virotec's Executive Directors, Brian Sheeran and Bruno Bamonte, are included
in the above table as a result of their being directors of Hydrodec, and have
been excluded from discussions of both the Hydrodec and Virotec boards in
respect of the Acquisition.
(b) Under the terms of the Virotec STIP and LTIP, the Executive Directors, Brian
Sheeran and Bruno Bamonte are due to be allotted shares are not included in the
above table. The Executive Directors have chosen to waive their rights under the
STIP and LTIP in return for a cash payment - refer to Section 2.
15. Overseas Shareholders
Restricted Overseas Persons shall not be entitled to receive New Hydrodec Shares
and shall not be eligible to elect for the Share Alternative. Restricted
Overseas Persons will receive a cash payment of 13 pence per Virotec Share.
The ability of the Virotec Shareholders who are not resident in the United
Kingdom to receive the consideration resulting from the implementation of the
Scheme may be affected by the laws of their relevant jurisdiction. Such persons
should inform themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction. Virotec Shareholders who are in any doubt
regarding such matters should consult an appropriate independent professional
adviser in the relevant jurisdiction without delay.
16. Implementation Agreement
Virotec and Hydrodec have entered into the Implementation Agreement which sets
out, inter alia, various matters in relation to the implementation of the Scheme
(or, if applicable, the Offer) the conduct of Virotec's business prior to the
Effective Date or the lapse or withdrawal of the Acquisition, and a non-solicit
undertaking.
Hydrodec also has the right, upon Virotec receiving details of a competing
proposal, to match or better the value implied by that competing proposal by
5.00 p.m. on the third Business Day after being advised of such proposal. If
Hydrodec announces a revised offer (whether by way of scheme of arrangement or
otherwise) within such period, the Virotec Independent Directors have agreed
that the Scheme or, if applicable, the Offer will continue to be the subject of
a unanimous and unqualified recommendation by them.
Further information in relation to the Implementation Agreement will be set out
in the Scheme Document.
17. General
The Acquisition will be subject to the Conditions and certain further terms set
out in Appendix I and the further terms and conditions to be set out in the
Scheme Document, the related Forms of Proxy, the Form of Election and any other
document by which the proposals of the Acquisition are made.
The bases and sources of certain information contained in this announcement are
set out in Appendix II. Details of the irrevocable undertakings received by
Hydrodec are set out in Appendix III. Certain terms used in this announcement
are defined in Appendix IV.
The Scheme will be governed by English law and will be subject to the applicable
requirements of the AIM Rules.
The Scheme Document is expected to be posted to Virotec Shareholders on or
around 12 May 2008 and the Scheme is expected to become Effective on or shortly
after 25 June 2008.
Enquiries
Hydrodec Group plc Virotec International plc
John Gunn Angus Craig
Tel: +44 (0) 20 7621 5770 Tel: +61 755 733 353
John Dickson
Tel: +61 418 454 818
Ludgate Investments Limited Arden Partners plc
Charles Sebag-Montefiore Christopher Hardie
Robert Petch Matthew Armitt
Tel: +44 (0) 20 7621 5770 Tel: +44 (0) 20 7398 1600
Numis Securities Limited
Anthony Richardson
Nick Westlake
Tel: +44 (0) 20 7260 1000
This announcement is not intended to, and does not, constitute, or form part of,
any offer to sell or any invitation to purchase or subscribe for any securities
or the solicitation of any vote or approval in any jurisdiction. This
announcement does not constitute a prospectus or a prospectus equivalent
document. Any decision in relation to the Acquisition should be made only on the
basis of the information contained in the Scheme Document, Forms of Proxy, Form
of Election and Hydrodec Circular or any other document by which the proposals
of the Acquisition are made, which will include the full terms and conditions of
the Acquisition.
Virotec and Hydrodec encourage Virotec Shareholders to read the Scheme Document
when it becomes available because it will contain important information relating
to the Acquisition. The proposals of the Acquisition will be made solely through
the Scheme Document.
Ludgate, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Hydrodec and no-one else in connection with the
Acquisition and will not be responsible to anyone other than Hydrodec for
providing the protections afforded to customers of Ludgate or for providing
advice in relation to the Acquisition or any other matter referred to in this
announcement.
Arden, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Virotec and no-one else in connection with the
Acquisition and will not be responsible to anyone other than Virotec for
providing the protections afforded to customers of Arden Partners plc or for
providing advice in relation to the Acquisition or any other matter referred to
in this announcement.
Numis, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Hydrodec and no-one else in connection with the
Acquisition and will not be responsible to anyone other than Hydrodec for
providing the protections afforded to customers of Numis Securities Limited or
for providing advice in relation to the Acquisition or any other matter referred
to in this announcement.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
into whose possession this announcement comes should inform themselves about,
and observe, any applicable restrictions or requirements. Any failure to comply
with such restrictions or requirements may constitute a violation of the
securities laws of any such jurisdiction. This announcement has been prepared
for the purposes of complying with the AIM 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 City Code or the laws and regulations
of any jurisdiction other than England.
Persons in, or resident in, Australia should note that the Scheme is exempt from
the requirement to issue a prospectus under the provisions of Parts 6D.2 and
6D.3 and sections 1012A, 1012B and 1012C of the Corporations Act 2001 of
Australia (Cth), pursuant to the provisions of the Australian Securities and
Investments Commission (ASIC) Class Order 07/9 ("Prospectus relief for foreign
schemes of arrangement and PDS relief for Pt 5.1 schemes and foreign schemes of
arrangement"). ASIC Class Order 07/9 provides that where securities are offered
for issue under a scheme of arrangement which is between a foreign company and
its members and regulated under a law that is in force in an 'eligible foreign
country' (which includes the United Kingdom) the issuer is exempt from the
requirement to prepare a prospectus under the Corporations Act 2001 (Cth).
US Persons should note that the Scheme relates to the shares of a UK company and
will be governed by English law. Neither the proxy solicitation nor the tender
offer rules under the US Securities Exchange Act of 1934, as amended, will apply
to the Scheme. Moreover, the Scheme will be subject to the relevant disclosure
requirements and practices applicable in the UK to schemes of arrangement, which
differ from the disclosure requirements of the US proxy solicitation rules and
tender offer rules. Financial information included in this announcement and the
Scheme Document has been or will have been prepared in accordance with
accounting standards applicable in the UK that may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in the
United States.
The New Hydrodec Shares that may be issued pursuant to the Scheme have not been
and will not be registered under the US Securities Act or under the relevant
securities laws of any state, district, territory or other jurisdiction of the
United States. Accordingly, New Hydrodec Shares may not be offered or sold in
the United States, except in an offer not subject to, or in reliance on an
exemption from, the registration requirements of the US Securities Act and such
state securities laws.
Any New Hydrodec Shares which may be issued pursuant to the Scheme have not been
and will not be registered under the relevant securities laws of the US, Canada,
Australia, New Zealand, Republic of Ireland or Japan and no regulatory
clearances in respect of the New Hydrodec Shares have been, or will be, applied
for in any jurisdiction. In particular, any relevant clearances and
registrations have not been, and will not be, obtained from the securities
commission of any province of Canada and no prospectus in relation to the New
Hydrodec Shares has been, or will be, lodged with, or registered with, the
Australian Securities and Investments Commission, the Registrar of Companies in
New Zealand or the Japanese Ministry of Finance. Accordingly, unless otherwise
determined by Hydrodec and permitted by applicable law and regulation, the New
Hydrodec Shares may not be, offered, sold, resold, transferred, delivered or
distributed, directly or indirectly in or into the US, Canada, Australia, New
Zealand, Republic of Ireland or Japan or any other jurisdiction where to do so
would violate the laws of that jurisdiction or would require registration or
clearance thereof in such jurisdiction.
No listing authority or equivalent has reviewed, approved or disapproved of this
announcement or any of the proposals described in this announcement.
Virotec confirms that as at the close of business on 6 May 2008 it had
264,168,231 ordinary shares of 1 penny each in issue. The International
Securities Identification Number (ISIN) for Virotec's ordinary shares is
GB00B15PVR02.
Hydrodec confirms that as at the close of business on 6 May 2008 it had
193,845,402 ordinary shares of 0.5 pence each in issue. The International
Securities Identification Number (ISIN) for Hydrodec's ordinary shares is
GB00B02FJF09.
Forward Looking Statements
This announcement includes statements that are, or may be deemed to be, 'forward
looking statements' that are based on current expectations or beliefs, as well
as assumptions about future events. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
''believes'', ''estimates'', ''plans'', ''anticipates'', ''targets'', ''aims'',
''continues'', ''expects'', ''intends'', ''hopes'', ''may'', ''will'',
''would'', ''could'' or ''should'' or, in each case, their negative or other
variations or comparable terminology. These forward-looking statements include
matters that are not facts. They appear in a number of places throughout this
announcement and include statements regarding the directors of Hydrodec's
intentions, beliefs or current expectations concerning, amongst other things,
Hydrodec's and/or Virotec's results of operations, financial condition,
liquidity, prospects, growth, strategies and the industries in which Hydrodec
and Virotec operates. By their nature, forward-looking statements involve risk
and uncertainty because they relate to future events and circumstances.
Forward-looking statements contained in this announcement based on past trends
or activities should not be taken as a representation that such trends or
activities will continue in the future. Subject to any requirement under the AIM
Rules or other applicable legislation or regulation, , Virotec, Numis, Ludgate
or Arden undertakes any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
Undue reliance should not be placed on forward-looking statements, which speak
only as of the date of this announcement.
There are several factors which could cause actual results to differ materially
from those expressed or implied in forward-looking statements. Among the factors
that could cause actual results to differ materially from those described in the
forward-looking statements are changes in the global, political, economic,
business, competitive, market and regulatory forces, future exchange and
interest rates, changes in tax rates and future business combinations or
dispositions.
Profit Forecasts
Nothing in this announcement is intended, or is to be construed, as a profit
forecast or to be interpreted to mean that earnings per New Hydrodec Share for
the current or future financial years, or those of the combined group, will
necessarily match or exceed the historical published earnings per Hydrodec Share
or Virotec Share.
APPENDIX I
PART A
CONDITIONS TO IMPLEMENTATION OF THE ACQUISITION AND THE SCHEME
1 The Acquisition is conditional upon:
1.1 the Scheme becoming Effective by no later than 30
September 2008 or such later date (if any) as Virotec and Hydrodec may agree and
(if required) the Court may allow. The Scheme will comply with the AIM Rules and
applicable securities laws;
1.2 approval of the requisite majorities of the Hydrodec
Shareholders being received at a general meeting of Hydrodec in order to
increase the authorised share capital of Hydrodec and to authorise the directors
to allot the New Hydrodec Shares under the Scheme; and
1.3 the approval of the Disposal by the Virotec Shareholders
at the General Meeting.
2 The Scheme is conditional upon:-
2.1 its approval by a majority in number representing not less
than three-fourths in value of the Scheme Shareholders who are on the register
of members of Virotec at the Voting Record Time, present and voting, whether in
person or by proxy, at the Court Meeting (or any adjournment thereof);
2.2 the resolutions set out in the notice of General Meeting
required to approve and implement the Scheme and to approve certain related
matters being duly passed by the requisite majority at the General Meeting (or
any adjournment thereof); and
2.3 (i) the sanction (with or without modification (but
subject to such modification being acceptable to Hydrodec and Virotec)) of the
Scheme and the confirmation of the Reduction of Capital by the Court, (ii) an
office copy of the Order and of the Minute being delivered for registration to
the Registrar of Companies and (iii) the registration of the Order and of the
Minute by the Registrar of Companies.
3 In addition, Hydrodec and Virotec have agreed that 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 or
waiver of the following Conditions:-
3.1 no government or governmental, quasi-governmental, supranational,
statutory, regulatory, environmental or investigative body (including without
limitation, any national or supranational anti-trust or competition authority),
court, trade agency, association, institution or any other person or body
whatsoever in any relevant jurisdiction (each a "Third Party") having decided to
take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or having made, proposed or enacted, any
statute, regulation, decision or order, or taken any other steps which would or
might reasonably be expected to:-
3.1.1 require, prevent, limit or delay the divestiture, or
alter the terms for any proposed divestiture, by any member of the Wider Virotec
Group or by any member of the Hydrodec Group of all or any portion of their
respective businesses, assets, undertakings or properties or impose any
limitation on the ability of any of them to conduct all or any portion of their
respective businesses or own or control all or any portion of their respective
assets or properties, which in each case would be material in the context of the
Acquisition or the Hydrodec Group, as applicable;
3.1.2 require, prevent, limit or delay the divestiture by
any member of the Hydrodec Group of any shares or other securities in any member
of the Wider Virotec Group;
3.1.3 impose any limitation on, or result in a delay in, the
ability of any member of the Hydrodec Group to acquire or to hold or to exercise
effectively, directly or indirectly, all or any rights of ownership of shares or
loans or securities convertible into shares in Virotec or any other member of
the Wider Virotec Group or on the ability of any member of the Wider Virotec
Group to hold or exercise effectively, directly or indirectly, all or any rights
of ownership in respect of shares or other securities in any member of the Wider
Virotec Group or to exercise management control over any such member of the
Wider Virotec Group;
3.1.4 require any member of the Hydrodec Group or the Wider
Virotec Group to acquire, offer to acquire, redeem or repay any shares or other
securities (or interest therein) and/or any indebtedness of any member of the
Wider Virotec Group or the Hydrodec Group owned by or owed to any third party;
3.1.5 make the Scheme or its implementation or the
acquisition or proposed acquisition by Hydrodec of any shares or other
securities in, or control of, Virotec or any other member of the Wider Virotec
Group void, illegal, and/or unenforceable under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit, or delay the same, or impose any additional conditions or financial or
other obligations with respect thereto, or otherwise challenge, hinder or
interfere, therewith or require amendment to the Acquisition; or
3.1.6 otherwise adversely affect the business, assets,
profits or prospects of any member of the Wider Virotec Group or the Hydrodec
Group in a manner which is material to the obligations of the Hydrodec Group
taken as a whole in connection with the Acquisition,
and all applicable waiting and other time periods during which any Third Party
could institute, implement or thereafter take any such action, proceedings,
suit, investigation, enquiry or reference or otherwise intervene under the laws
of any relevant jurisdiction having expired, lapsed or been terminated;
3.2 all reasonably necessary filings having been made in
connection with the Acquisition and all statutory or regulatory obligations in
any relevant jurisdiction having been complied with in connection with the
Acquisition or the acquisition by any member of the Hydrodec Group of any shares
or other securities in or under the control of Virotec, and all necessary
approvals, including antitrust approvals, having been obtained (and all waiting
periods, including extensions thereto under any applicable legislation and/or
regulations of any relevant jurisdiction having expired, lapsed or been
terminated), in each case which are material in the context of the Acquisition;
3.3 all Authorisations reasonably necessary or appropriate for
or in respect of the Acquisition and the proposed acquisition of any shares or
other securities in or under the control of Virotec by Hydrodec having been
obtained in terms and in a form satisfactory to Hydrodec, from all appropriate
Third Parties or persons with whom any member of the Wider Virotec Group has
entered into contractual arrangements and all such Authorisations, together with
all Authorisations necessary or appropriate to carry on the business of any
member of the Wider Virotec Group, remaining in full force and effect and there
being no notice or intimation of any intention to revoke, suspend, not renew or
amend or not to renew the same at the time at which the Scheme becomes Effective
in all respects and all necessary statutory or regulatory obligations in any
relevant jurisdiction having been complied with in all material respects;
3.4 Save as Disclosed, there being no provision of any
arrangement, agreement, licence, permit or other instrument to which any member
of the Wider Virotec Group is a party or by or to which any such member or any
of its assets is or are bound, entitled or subject and which, in consequence of
the Scheme, or the proposed change in the control of Virotec, could or might
reasonably be expected to result, to an extent which would be material in the
context of the Acquisition, in each case in:-
3.4.1 any monies borrowed by, or any other indebtedness
(actual or contingent) of, any such member of the Wider Virotec Group being or
becoming repayable or capable of being declared repayable immediately or prior
to their stated maturity date or repayment date or the ability of such member to
borrow monies or incur any indebtedness being withdrawn or inhibited or being
capable of becoming or being withdrawn or inhibited;
3.4.2 the creation of any mortgage, charge or other
security interest over the whole or any part of the business, property or assets
of any such member of the Wider Virotec Group or any such security (whenever
created, arising or having arisen) being enforced or becoming enforceable;
3.4.3 any such arrangement, agreement, licence, permit or
instrument of any member of the Wider Virotec Group being (or becoming capable
of being) terminated or adversely modified or any adverse action being taken or
any obligation or liability arising thereunder;
3.4.4 any assets or interests of, or any asset the use of
which is enjoyed by, any such member of the Wider Virotec Group being or falling
to be disposed of or charged or ceasing to be available to any member of the
Virotec Group or any right arising under which any such asset or interest could
be required to be disposed of or charged or could be expected not to be
available to any member of the Virotec Group, otherwise than in the ordinary
course of business;
3.4.5 the rights, liabilities, obligations, interests or
business of any member of the Wider Virotec Group thereunder being terminated or
adversely modified or affected;
3.4.6 any member of the Wider Virotec Group ceasing to be
able to carry on business under any name under which it presently does so; or
3.4.7 the creation of any liability, actual or contingent,
by any member of the Wider Virotec Group,
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit, or other instrument to which any member of the
Wider Virotec Group is a party or by or to which, any such member or any of its
assets is bound, entitled or subject, is likely to result in any of the events
or circumstances as are referred to in sub-paragraphs 3.4.1 to 3.4.7 (to an
extent which would be material in the context of the Acquisition);
3.5 Save as Disclosed, no member of the Wider Virotec Group
having, since 31 December 2007:-
3.5.1 save as between wholly owned subsidiaries of Virotec
or between Virotec and any of its wholly owned subsidiaries, issued or agreed to
issue or authorised or proposed the issue or grant of additional shares of any
class, or securities convertible into or exchangeable for shares, or rights,
warrants or options to subscribe for or acquire any such shares or convertible
or exchangeable securities;
3.5.2 recommended, declared, paid, made or proposed to
recommend, declare, pay or make any dividend or other distribution (whether
payable in cash or otherwise) other than to another wholly owned member of the
Wider Virotec Group;
3.5.3 save as between wholly owned subsidiaries of Virotec
or between Virotec and any of its wholly owned subsidiaries, effected,
authorised or proposed or announced its intention to effect, authorise or
propose any merger, demerger or scheme or any acquisition, disposal or transfer
of or the creation of any security interests over any assets or shares or any
change in its share or loan capital;
3.5.4 issued, authorised or proposed the issue of or made
any change in or to any debentures or, save in the ordinary course of business,
incurred or increased any indebtedness or become subject to any contingent
liability;
3.5.5 disposed of or transferred, mortgaged or encumbered
any asset or any right, title or interest in any asset save in the ordinary
course of business;
3.5.6 proposed or entered into any contract, any
reconstruction or amalgamation, any transaction or arrangement otherwise than in
the ordinary course of business;
3.5.7 proposed or entered into an agreement, contract,
arrangement or commitment or passed any resolution or made any offer (which
remains open for acceptance) with respect to any of the transactions or events
referred to in this paragraph 3.5;
3.5.8 proposed or entered into or varied the terms of any
service agreement with any of the directors or senior executives of Virotec or
any director or senior executive of any member of the Virotec Group;
3.5.9 proposed or entered into any agreement which
consents to the restriction of the scope of the business of any member of the
Wider Virotec Group (which in any case would be material in the context of the
Acquisition);
3.5.10 waived or compromised any claim (which in any case
would be material in the context of the Acquisition);
3.5.11 other than in the ordinary course of business, entered
into, varied, authorised or proposed any contract, transaction or commitment
(whether in respect of capital expenditure or otherwise) which is of a
loss-making, long term, onerous or unusual nature or magnitude or which is or is
likely to be restrictive to the businesses of any member of the Wider Virotec
Group or which involves or could involve an obligation of such a nature or
magnitude;
3.5.12 purchased, redeemed or repaid or announced any proposal
to purchase, redeem or repay any of its own shares or other securities or
reduced or made any other change to any part of its share capital or any other
securities;
3.5.13 taken or proposed any corporate action or had any legal
proceedings started or threatened against it for its winding-up (voluntary or
otherwise), dissolution, striking-off or reorganisation or for the appointment
of a receiver, administrative receiver, administrator, trustee or similar
officer of all or any of its assets or revenues or any analogous proceedings in
any jurisdiction or had any such person appointed (which in any case would be
material in the context of the Acquisition);
3.5.14 been unable or admitted that it is unable to pay its
debts or having stopped or suspended (or threatened to stop or suspend) payment
of its debts generally or ceased or threatened to cease carrying on all or a
substantial part of its business or proposed or entered into any composition or
voluntary arrangement with its creditors (or any class of them) or the filing at
court of documentation in order to obtain a moratorium prior to a voluntary
arrangement or, by reason of actual or anticipated financial difficulties,
commenced negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness or any form of insolvency proceeding or
event similar or analogous to any of the aforementioned events in any
jurisdiction;
3.5.15 made any alteration to its memorandum or articles of
association or other constitutional documents;
3.5.16 made or announced any proposal to make any change or
addition to any retirement, death or disability benefit or any other
employment-related benefit of or in respect of any of its directors, employees,
former directors or former employees;
3.5.17 made or formally consented to any change to the terms
of the trust deeds or rules constituting the pension schemes established for its
directors and/or employees and/or their dependants or to the benefits which
accrue, or to the pensions which are payable thereunder, or to the basis on
which qualification for or accrual or entitlement to such benefits or pensions
are calculated or determined, or to the basis upon which the liabilities
(including pensions) of such pension schemes are funded or made, or agreed or
consented to any change to the trustees; or
3.5.18 merged with any body corporate or acquired or disposed
(in either case otherwise than in the ordinary course of trading) of any assets
(including shares in subsidiaries, associates and trade investments) or made any
change in its share or loan capital, or authorised or proposed or announced any
intention to propose any merger, de-merger, acquisition, disposal or change as
aforesaid;
3.6 Save as Disclosed, since 31 December 2007:-
3.6.1 there having been no material adverse change in the
business, financial or trading position or profits or prospects of Virotec or
any other member of the Wider Virotec Group ;
3.6.2 there having been no litigation, arbitration
proceedings, prosecution or other legal proceedings to which any member of the
Wider Virotec Group is or may become a party (whether as plaintiff or defendant
or otherwise), no such proceedings having been threatened against any member of
the Wider Virotec Group and no investigation by a third party against or in
respect of any member of the Wider Virotec Group having been instituted,
threatened or announced by or against or remaining outstanding in respect of any
member of the Wider Virotec Group which in any such case might materially affect
any member of the Wider Virotec Group in any way; and
3.6.3 no contingent or other liability having arisen or
become apparent or increased (which in any case would be material in the context
of the Acquisition);
3.7 Save as Disclosed, Hydrodec not having discovered:-
3.7.1 that the financial, business or other information
concerning the Wider Virotec Group, as contained in the information publicly
disclosed by any member of the Wider Virotec Group prior to the date of this
announcement or as otherwise fairly disclosed to any member of the Hydrodec
Group or its advisers by or on behalf of Virotec prior to the date of this
announcement, contains a misstatement of a fact or omits to state a fact
necessary to make the information contained therein true or not misleading in
any case which has not been subsequently corrected by appropriate disclosure
prior to the date of announcement;
3.7.2 that any member of the Wider Virotec Group is subject
to any liability, contingent or otherwise, which is not disclosed in the Annual
Report and Accounts of Virotec for the financial year ended 31 December 2007
(which in any case would be material in the context of the Wider Virotec Group);
3.7.3 that any partnership or company in which any member of
the Wider Virotec Group has a significant economic interest (being, in the case
of a company, an interest carrying 10 per cent, or more of the voting capital of
that company) and which is not a subsidiary of Virotec is subject to any
liability, contingent or otherwise, which is not disclosed in the Annual Report
and Accounts of Virotec for the financial year ended 31 December 2007 (which in
any case would be material in the context of the Acquisition);
3.7.4 that any past or present members of the Wider Virotec
Group has not complied with all applicable legislation or regulations of any
jurisdiction with regard to the disposal, spillage or leak of waste or disposal
or emission of hazardous substances or any other environmental matters which
non-compliance would be likely to give rise to any liability (whether actual or
contingent) on the part of any member of the Wider Virotec Group (which in any
case would be material in the context of the Acquisition);
3.7.5 that there has been a disposal, spillage, leak of
waste or hazardous substances on, or an emission of waste or hazardous
substances from, any property now or previously owned, occupied or made use of
by any past or present member of the Wider Virotec Group which would be likely
to give rise to any liability (whether actual or contingent) on the part of any
member of the Wider Virotec Group (which in any case would be material in the
context of the Acquisition);
3.7.6 that there is any liability (whether actual or
contingent) to make good, repair, reinstate or clean up any property now or
previously owned, occupied or made use of by any past or present member of the
Wider Virotec Group under any environmental legislation, regulation or order of
any government, or governmental, quasi-governmental, supranational, statutory or
regulatory body, court, trade agency or professional association or any other
person or body in any jurisdiction (which in any case would be material in the
context of the Acquisition);
3.7.7 that circumstances exist (whether as a result of the
Acquisition or otherwise):-
(i) which would be likely to lead to any government or
governmental, quasi-governmental, supranational, statutory or regulatory body,
court, trade agency, professional association or any other person or body in any
jurisdiction instituting, or
(ii) whereby any member of the Wider Virotec Group or any
present or past member of the Wider Virotec Group would be likely to be required
to institute,
an environmental audit or take any other steps which would in any case be likely
to result in any actual or contingent liability to make good, repair, reinstate
or clean up any property now or previously owned, occupied or made use of by any
member of the Wider Virotec Group (which in any case would be material in the
context of the Acquisition); or
3.7.8 the Virotec Group has failed to comply with applicable
statutory or regulatory obligations in any relevant jurisdiction (which in any
case would be material in the context of the Acquisition).
4 Hydrodec reserves the right to waive, in whole or in
part, all or any of the above Conditions, except Condition 2.
5 Hydrodec shall be under no obligation to waive or
treat as fulfilled any of such Conditions earlier than the date of the sanction
of the Scheme referred to in Condition 2 notwithstanding that the other
Conditions may at such earlier date have been waived or fulfilled and that there
are at such earlier date no circumstances indicating that any of such Conditions
may not be capable of fulfillment or waiver.
PART B
Certain further terms of the Acquisition
1. Hydrodec reserves the right to elect to implement the Acquisition by way of
an Offer. In such event, such Offer(s) will be implemented on the same terms
(subject to appropriate amendments, including (without limitation) that
Condition 2 would not apply and that the Offer would be subject to an acceptance
condition set at ninety per cent. (or such lesser percentage (being more than 50
per cent.), as Hydrodec may decide), so far as applicable, as those which would
apply to the Scheme.
2. Any Virotec Shares acquired under the Acquisition will be acquired free from
all liens, equities, charges, encumbrances, rights of pre-emption and other
interests and rights and together with all rights now and hereafter attaching
thereto, including voting rights and the right to receive and retain in full all
dividends and other distributions and other distributions (if any) declared,
made or paid on or after the date of this announcement.
3. The Acquisition and Scheme will be governed by English law and be subject to
the jurisdiction of the English courts, and to the conditions set out in this
announcement and any further terms to be set out in the Scheme Document, the
related Forms of Proxy, the Form of Election or any other document by which the
proposals of the Acquisition are made.
APPENDIX II
BASES AND SOURCES OF INFORMATION
1. As at the close of business on 6 May 2008, Virotec had in issue 264,168,231
ordinary shares of 1 penny each.
2. Unless otherwise stated, the financial information on Virotec is extracted
from or derived (without any adjustment) from the Virotec annual report and
accounts for the six months ended 31 December 2006, and the reports and accounts
for the year ended 31 December 2007.
3. Unless otherwise stated, the financial information on Hydrodec is extracted
from or derived (without any adjustment) from the audited annual report and
accounts for the year ended 31 December 2006 and the preliminary unaudited
results for the year ended 31 December 2007.
4. Unless otherwise stated, all prices for Virotec Shares and Hydrodec Shares
have been derived from the AIM appendix to the Daily Official List of the London
Stock Exchange and represent closing middle market prices on the relevant dates.
5. The currency exchange rate used throughout the announcement is #1 to AUD$2.12
which was the rate ruling as at 28 April 2008.
APPENDIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS
Irrevocable undertakings as described in Section 9 of this announcement have
been given in respect of the number of Virotec Shares set out opposite the names
of the following Virotec Shareholders below (and any further Virotec Shares
acquired by them prior to the completion of the Acquisition):
Name Number of Virotec Per cent. of existing
Shares Ordinary Share Capital
of Virotec
BNY Norwich Union Nominees 1,340,751 0.51
Ltd
Chase Nominees Ltd 12,488,568 4.73
CUIM Nominee Ltd 3,408,055 1.29
Guardian Trust Company Ltd 141,600 0.05
JP Morgan Chase 1,560,129 0.59
Lewetta Investments Ltd 335,571 0.13
Ludgate Environmental Fund 7,500,000 2.84
Ltd
Ludgate 181 (Jersey) 5,900,000 2.23
Limited
Majedie Investments Plc 7,000,000 2.65
Pershing Keen Nominees Ltd 7,642,300 2.89
PIHL Equity LLP 10,583,333 4.01
Damor Investments Ltd 4,166,667 1.58
Roger & Rita Griffiths 1,600,000 0.61
Securities Services 2,499,910 0.95
Nominees Ltd
State Street Nominees Ltd 26,498,965 10.03
The Sawyer Trust 156,000 0.06
Vidacos Nominees Ltd 2,371,868 0.90
WB Nominees Limited 1,322,400 0.50
96,516,117 36.54
The following Virotec Independent Directors and Justin Seager have given
irrevocable undertakings as described in Section 9 of this announcement in
respect of the number of Virotec Shares set out opposite their names below (and
any further Virotec Shares acquired by them prior to the completion of the
Acquisition):
Name Number of Virotec Per cent. of existing
Shares Ordinary Share Capital
of Virotec
David McConchie 500,000 0.19
John Glynn 56,300 0.02
Justin Seager 1,345,000 0.51
1,901,300 0.72
The Executive Directors have given irrevocable undertakings as described in
Section 9 of this announcement in respect of the number of Virotec Shares set
out opposite their names below (and any further Virotec Shares acquired by them
prior to the completion of the Acquisition):
Name Number of Virotec Per cent. of existing
Shares Ordinary Share Capital
of Virotec
Brian Sheeran 10,947,540 4.14
Bruno Bamonte 7,545,493 2.86
18,493,033 7.00
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement unless the context
otherwise requires:
"2006 Act" the Companies Act 2006
"Acquisition" the proposed acquisition of Virotec
(other than the Excluded Shares) to
be effected by means of the Scheme
(or should Hydrodec so elect, by
means of an Offer)
"Act" or the "Companies Act" the Companies Act 1985, as amended
"AIM" the AIM market of the London Stock
Exchange
"AIM Rules" the London Stock Exchange's AIM
Rules for Companies as amended from
time to time
"Arden" Arden Partners plc
"Australia" the Commonwealth of Australia and
its dependant territories
"Authorisations" authorisations, orders, grants,
recognitions, confirmations,
consents, licences, clearances,
certificates, permissions or
approvals
"AUD$" Australian Dollars, the lawful
currency of Australia
"Board" the board of Directors
"Business Day" a day (other than a Saturday or
Sunday or public holiday) on which
banks are open for business in
London
"Canada" Canada, its provinces and
territories and all areas subject
to its jurisdiction or any
political sub-division thereof
"Cash Consideration" the cash consideration due to
Scheme Shareholders under the
Scheme, being 13 pence per Scheme
Share up to a maximum amount of
#2,600
"City Code" or "Code" the City Code on Takeovers and
Mergers
"Closing Price" the closing middle-market quotation
of a Hydrodec Share and a Virotec
Share as derived from the AIM
appendix to the Daily Official List
of the London Stock Exchange
"Company" or "Virotec" Virotec International plc,
incorporated in England and Wales
with registered number 05796515
"Conditions" the conditions to the
implementation of the Offer, which
are set out in Appendix I of this
announcement
"Court" the High Court of Justice in
England and Wales
"Court Meeting" the meeting of the Scheme
Shareholders (other than the
holders of the Excluded Shares)
convened by order of the Court
pursuant to section 896 of the 2006
Act, to consider and, if thought
fit, to approve the Scheme with or
without modification (including any
adjournment or postponement
thereof)
"Directors" the directors of Virotec
"Disclosed" disclosed in the 2007 annual report
and accounts of Virotec or
otherwise publicly announced via a
Regulatory Information Service by
or on behalf of Virotec prior to
the date of this announcement or as
otherwise fairly disclosed in
writing prior to the date of this
announcement to Hydrodec or the
Hydrodec Group by or on behalf of
Virotec
"Disposal" the proposed disposal of the
Operating Businesses of Virotec to
the Executive Directors, which is
conditional upon the Scheme
becoming Effective and the approval
of Virotec Shareholders at the
General Meeting
"Effective" if the Acquisition is implemented
by way of the Scheme, the Scheme
having become effective in
accordance with its terms
"Effective Date" the date on which the Scheme
becomes effective in accordance
with its terms
"Excluded Shares" any Virotec Shares beneficially
owned by any member of the Hydrodec
Group at the Scheme Record Time
"Excluded Voting Shares" means the Excluded Shares and any
Scheme Shares beneficially owned by
persons acting in concert (as
defined in the Code), or considered
to be acting in concert, with
Hydrodec (including, for the
avoidance of doubt Bruno Bamonte
and Brian Sheeran)
"Executive Directors" each of Bruno Bamonte and Brian
Sheeran, being directors of Virotec
"Form of Election" the form of election to be sent to
Virotec Shareholders pursuant to
which a Virotec Shareholder may
make an election under the Share
Alternative in respect of his Cash
Consideration
"Forms of Proxy" the forms of proxy for use by
Virotec Shareholders at the Court
Meeting and the General Meeting
"General Meeting" the general meeting of Virotec to be
convened in connection with the
Acquisition and the Disposal, or any
adjournment thereof
"The Greenhouse Fund" The Greenhouse Fund Limited, an AIM
listed company, incorporated in
Jersey
"Hydrodec" Hydrodec Group plc, incorporated in
England and Wales with registered
number 05188355
"Hydrodec Circular" the document to be addressed to
Hydrodec Shareholders containing,
notice of the general meeting of
Hydrodec
"Hydrodec Convertible Loan Notes" #1 fixed rate unsecured convertible
loan notes 2012 in the capital of
Hydrodec issued under an instrument
dated 5 November 2007
"Hydrodec Independent Directors" each of John Gunn, Mark McNamara,
John Dickson, John Cowan and Rodger
Sargent, being directors of Hydrodec
"Hydrodec General Meeting" the general meeting of Hydrodec to
be called to approve the Hydrodec
Resolutions
"Hydrodec Group" Hydrodec, its subsidiaries and
subsidiary undertakings
"Hydrodec Resolutions" resolutions to be proposed to
Hydrodec Shareholders to increase
the authorised share capital of
Hydrodec and to authorise the
directors of Hydrodec to issue the
New Hydrodec Shares
"Hydrodec Shareholder" a holder of Hydrodec Shares
"Hydrodec Shares" ordinary shares of 0.5 pence each in
the capital of Hydrodec
"holder" a registered holder and includes any
person(s) entitled by transmission
"Japan" Japan, its cities, prefectures,
territories and possessions
"London Stock Exchange" London Stock Exchange plc
"Ludgate" Ludgate Investments Limited,
financial adviser to Hydrodec, of
80 Cannon Street, London EC4N 6HL
"Meetings" the Court Meeting and the General
Meeting
"Minute" the minute (approved by the Court)
confirming the Reduction in
accordance with section 138 of the
Act
"New Hydrodec Shares" new ordinary shares of 0.5 pence
each in the capital of Hydrodec to
be issued under the Scheme
"Numis" Numis Securities Limited
"Offer" a takeover offer as that term is
defined in section 974 of the 2006
Act
"Operating Businesses" Mt Carrington Mines Pty Ltd, Virotec
Technologies Pty Ltd, Virotec Global
Solutions Pty Ltd, Virotec Italia
srl, Virotec USA Inc, Virotec
Aquasolve LLC, Virotec Europe Ltd
and Sterling Environmental Solutions
Ltd, and any other subsidiary of the
Company, other than Virotec
Investments Pty Limited
"Order" the order of the Court sanctioning
the Scheme under section 899 of the
2006 Act and confirming the
Reduction under section 137 of the
Act
"Panel" the Panel on Takeovers and Mergers
"pence", "#" and "Sterling" the lawful currency of the United
Kingdom
"Placing" the placing of 10,000,000 Hydrodec
Shares at a placing price of 50
pence per share to raise #5 million
before expenses, announced by
Hydrodec on 21 April 2008 and
expected to complete on 7 May 2008
"Reduction" the proposed reduction of capital
pursuant to section 137 of the Act,
to be provided for under the Scheme
"Reduction Hearing" the hearing by the Court of the
claim form to confirm the Reduction
in accordance with section 137 of
the Act
"Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001/3755)
"Regulatory Information Service" has the meaning attributed to it by
the AIM Rules
"Reserve Shares" the 54.5 million Hydrodec Shares
registered in the name of Virotec
"Restricted Overseas Person" (i) a US Person, a person in the US
or a person whom Hydrodec reasonably
believes to be in or resident in the
US;
(ii) a person (including an
individual,
partnership, unincorporated
syndicate, limited liability
company, unincorporated
organisation, trust, trustee,
executor, administrator or other
legal representative) in, or
resident in, or any person whom
Hydrodec reasonably believes to be
in or resident in Canada or Japan
(or any custodian, nominee or
trustee for such person); and
(iii) any person in any other
jurisdiction (other than persons in
the UK or Australia) whom Hydrodec
is advised to treat as a restricted
overseas person in order to observe
the laws of such jurisdiction or to
avoid the requirement to comply with
any governmental or other consent or
registration, filing or other
formality which Hydrodec regards as
unduly onerous
"Scheme" or "Scheme of the scheme of arrangement under
Arrangement" sections 895 to 901 of the 2006 Act
to be proposed by Virotec to the
Virotec Shareholders in connection
with the Acquisition, with or
subject to any modification,
addition or condition approved or
imposed by the Court and agreed to
by Virotec and Hydrodec
"Scheme Document" the document to be addressed to
Virotec Shareholders containing,
inter alia, the Scheme and an
explanatory statement in compliance
with section 897 of the 2006 Act
"Scheme Hearing" the Court hearing of the claim form
to sanction the Scheme and of the
claim form to confirm the Reduction
in accordance with section 137 of
the Act
"Scheme Record Time" 6.00 p.m. on the Business Day
immediately prior to the date of the
Scheme Hearing
"Scheme Shareholders" the holders of Scheme Shares in the
register of members of the Company
at the Scheme Record Time
"Scheme Shares" the Virotec Shares:
(i) in issue at the date of the
Scheme Document;
(ii) (if any) issued after that date
and before the Voting Record Time;
and
(iii) (if any) issued at or after
the Voting Record Time but on or
before the Scheme Record Time either
on terms that the original or any
subsequent holder therof shall be
bound by the Scheme or in respect of
which the holder therof shall have
agreed in writing to be bound by the
Scheme,
in each case excluding the Excluded
Shares
"Share Alternative" the facility to be provided for in
the Scheme whereby a Virotec
Shareholder may elect, subject to
certain limitations and conditions,
to receive New Hydrodec Shares in
lieu of the Cash Consideration to
which they would otherwise be
entitled to pursuant to the Scheme
"subsidiary" has the meaning given in section 736
of the Act
"subsidiary undertaking" has the meaning given in section 258
of the Act
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
"US" or "United States" the United States of America, its
territories and possessions, any
state of the United States of
America and the District of Columbia
"US Person" as defined in Regulation S under the
US Securities Act
"US Securities Act" the US Securities Act of 1933, as
amended, and the rules and
regulations promulgated thereunder
"Virotec" Virotec International plc,
incorporated in England and Wales
with registered number 05796515
"Virotec Group" or "Group" Virotec and its subsidiaries and
subsidiary undertakings
"Virotec Independent Directors" each of John Glynn and David
McConchie, being directors of
Virotec
"Virotec Shareholders" the holders of Virotec Shares
"Virotec Shares" ordinary shares of 1 pence each in
the capital of Virotec
"Voting Record Time" 6.00 p.m. on the day prior to the
day immediately before the Court
Meeting and the General Meeting or
any adjournment thereof (as the case
may be)
"Wider Virotec Group" the Virotec Group and associated
undertakings of Virotec and any
other body corporate, partnership,
joint venture or person in which
Virotec and such undertakings
(aggregating their interests) have
an interest of more than 20 per
cent. of the voting or equity
capital or the equivalent
"$" or "US Dollars" the lawful currency of the United
States
All references in this announcement to time are to the time in London, UK unless
otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFBILFFREFIDIIT
Virotec (LSE:VTI)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Virotec (LSE:VTI)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024
