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David,
Thanks that's clear.
BOL
And Part 2...
leave it free of any debt and for it to become a cash shell. At the same time, the company would effect a fundraise to provide it with the funds required to retain its AIM listing and enable it to seek to acquire an asset or business that has potential for growth and profitability."
The sale constitutes a fundamental change of business and thus requires shareholder approval at a general meeting, which will be held March 2.
Approval for the placing will also be sought at this meeting. The placing will be of 1.57 billion shares at GBP0.001975 per share, raising GBP3.1 million before expenses. Mountfield shares closed at 0.60 pence on Friday and were suspended from trading before the London open on Monday.
Shareholders representing an approximately 55% stake in Mountfield have submitted irrevocable undertakings to vote in favour of the resolutions, the company said.
The sales will mean Mountfield no longer has any trading businesses or activities and will become an AIM Rule 15 cash shell. It will be required to make an acquisition constituting a reverse takeover, or be re-admitted to AIM as an investing company, within six months.
Failing this, its shares would then be suspended from trading. Admission to AIM would then be cancelled six months after suspension if the reason for suspension has not been rectified. Mountfield intends to pursue a reverse takeover transaction, though has not yet identified any potential targets, as this will be the new board's primary responsibility once Collins and Read are gone and new directors replace them.
Following its transition to a cash shell, Mountfield intends to change its name to UK Spac PLC, a special resolution to approve this change will also be proposed as soon as possible after the deal completes. Spac refers to a special-purpose acquisition company, an increasing popular vehicle for new listings, particularly in the US markets.
Mountfield has requested temporary suspension in AIM trading of its shares until the general meeting to approve the decision completes on March 2.
The company also noted it has appointed Peterhouse Capital Ltd as broker with immediate effect.
Bazzaman
That's what they used to do... The following might help explain what happened;
Mountfield Sells Operating Arms, Plans Fund Raise To Become Cash Shell
Mon, 15th Feb 2021 13:24
(Alliance News) - Mountfield Group PLC on Monday said it has conditionally agreed to sell its operating businesses in a management buyout and become a cash shell instead, planning to raise GBP3.1 million in a share placing and look for new investments.
The Wickford, Essex-based commercial flooring and specialist construction company has agreed to sell both Mountfield Building Group Ltd and Connaught Access Flooring Holdings Ltd.
Mountfield Building Group will be sold for GBP1.7 million to Mountfield Holdings, composed of GBP113,334 cash plus assumption of MBG intra-group debt. Connaught will be sold to Connaught Group for GBP2.3 million, of which GBP842,188 will be in cash and the remainder the assumption of a Connaught intra-group loan.
The buyers are owned by Chief Executive Andy Collins and Executive Director Graham Read, who will resign from the AIM-listed company on completion of the proposed sales. Cash received from the management buyouts will be used by Montfield to help pay off bank debt and trade creditors.
Mountfield's operating profit multiplied to GBP1.13 million in 2018 from GBP203,895 in 2015. While there was a GBP278,322 drop in 2019 operating profit to GBP850,851, the company had at the time viewed this as resulting from "problems with a particular contract which were unlikely to be repeated".
However, the first lockdown in March 2020 brought Mountfield's growth "to an abrupt halt" and it reported a steep drop in half-year pretax profit in 2020 to GBP80,605 from GBP719,056 a year before.
Mountfield Non-Executive Chair Peter Jay explained: "The company's trading position has not improved since 30 June 2020, with turnover, operating profits and the levels of secured turnover continuing to run at levels not seen since the recession of 2008 and 2009. The directors anticipate that the group's operating profits in 2020 are unlikely to be significantly above break-even."
This drop in profitability has hurt cash flow and it has becoming "increasingly difficult to support the costs of maintaining the company's AIM quotation". Additionally, company directors are no longer willing to keep providing personal guarantees for Mountfield's bank overdraft facility.
Should the current trading pattern persist longer than expected, or further deteriorate, Mountfield said it may not be able to continue as a viable business in its current form.
Jay said: "The directors, therefore, concluded that the solution to the company's present problems that offered an opportunity for shareholders to see value accruing to their ordinary shares would be for it to dispose of its two trading subsidiaries, Connaught and MBG, with the purchasers agreeing between them to assume all of the company's liabilities, leave it free of any debt and for it to b
Earache .. no problem. You are right, I missed the mention in the circular of the explicit intention to use the proceeds of the raise to seek to aquire other companies / investments. My mistake. DJ
So if Cathal stuck his hand in the fire.....
FWIW this is what Stockopedia says about them.
Mountfield Group Plc is engaged in the supply of fit-out services (and in particular the supply and installation of flooring systems) to data centers, office, retail and other commercial premises and of specialist construction services, including those related to property fabric repair and refurbishment. The Company's segments are Construction and Fit-out. The Construction segment includes direct contracting and trade contracting services to both main contractors and corporate end users. The Fit-out segment provides raised flooring systems to main contractors and corporate end users. It provides construction support and property services to private and public sectors. It provides construction and internal fit out of data centers for the information technology (IT) industry. Its activities include design and installation of environmentally controlled data centers; fitting out and refurbishment of commercial office buildings, hospitals and education facilities, and principal contracting.
Are they wrong?
The intention of MOGP to pursue a reverse was detailed in the recent circular, as was some discussion of the consequences and risks.
"The Company intends to pursue a reverse takeover transaction, subject to shareholder approval, with the aim of delivering shareholder value. Pursuant to Rule 14 of the AIM Rules, a reverse takeover transaction would require the publication of an admission document in respect of the proposed enlarged entity and would be conditional upon the consent of the Shareholders being given at a general meeting. As per the guidance notes to Rule 14 of the AIM Rules, trading in the Ordinary Shares would be suspended following the announcement that a reverse takeover had been agreed or was in contemplation until the publication of an AIM Admission Document or an announcement that the transaction was not proceeding.
The Board has not yet identified any potential reverse takeover targets which will be the primary responsibility of the new board. In seeking and considering potential acquisitions, it is intended that the new board will seek to identify opportunities offering the potential to deliver value creation and returns to shareholders over the medium to long-term. The Company will consider investment opportunities in any sectors as they arise.
Any failure in completing an acquisition or acquisitions which constitute(s) a reverse takeover under AIM Rule 14 (including seeking re-admission as an investment company (as defined under the AIM Rules)) will after 12 months result in cancellation of the Company's Ordinary Shares from trading on AIM."
hTtp://www.mountfieldgroupplc.com/component/docman/doc_details/96-circular-and-notice-of-general-meeting.html
thanks Indy just checking in. There is nothing stopping MOGP making a bid for any company (or listing a current private company) using existing assets (cash on the balance sheet) it already had from it disposals of assets of course, but it cannot, from my understanding raise further capital from the market to do so without redefining / issuing some form of revised prospectus. So the real question is how much cash does it currently have..? I've no idea, but it will be interesting to see how it pans out.
Deep great to have you back on here. Thanks for the digging. Much appreciated.
Demon, yes maybe I am being a little picky but it is the detail of the prospectus to re-define the business that should really matter to investors otherwise it is nothing more than a blind punt. cheers all
Let's just say its WIP Deepjoy, it is changing its name to UK SPAC plc. We're splitting hairs here.
my last word here but to set the record straight MOGP is defined as a shell company not a SPAC. It cannot operate as a SPAC fro investment purposes unless it is listed as such or / and has outlined such an intention in a prospectus. A company trading as a building supplier cannot simply operate as an investment vehicle without redefining it's purpose in the listing. It also cannot raise capital for such purposes without issuing a prospectus to the market... that is my understanding but dyor. There are some horrific ramps and falsehood being bounded about today so please everyone do some research on the listing rules etc before you make any decisions. ATB DJ
I guess people are assuming that there must be a reason why raglan have invested. and the other 2 sizeable investors too. all together, at this point in time? or just coincidence? raglan in particular will have had the wherewithal (and requirement) to carry out due diligence - won't have just done it as a punt? or would they?
I’m the exact same, very small amount in MOGP to keep an interest. However, it stands to reason that if you’re selling ORPH to get into MOGP you need your head looked. Any non core asset we have has zero value on our balance sheet, so why pay money for a share in the SPAC when you’ll potentially get multiple here for no cost. Now, there may be more this spac than meets the eye but the smart money invests here.
Trader_3 - I completely agree.
I have put a small amount (fun money only) in MOGP purely because Raglan has taken a stake. I have not touched my ORPH holding to do this - and have no intention of selling ORPH any time soon. This is purely to keep me interested / entertained as I don't have any short-term ventures at the moment.
I can't see (m)any ORPH investors reducing their stake here to put into MOGP - as you say it would be a jump from the known into the unknown.
This is just to keep me entertained while we wait for the next ORPH news... which I think might involve the remaining Covid slots at the Royal Free. Just my guess.
a cash shell is exactly what it says.. It a company with no assets or revenue given a nominal worth by it's notional directors share holding. It is like bidding someone for one nominal pound by offering them £1.03 when the reality is there is no asset only a nominal pound. orph may or may not take over the asset but if you want value it makes no sense to buy the vehicle.. Good luck thou everyone hope it pays off for all of you here :)
You're right - lots of OO holders (myself included btw) are taking slices of MOGP for FOMO, but really its MOGP holders who ought to be paying attention to these rumours and thinking, I should take a slice of ORPH. Even if the suggestion of a link between MOGP & ORPH proves to be false, it remains the case that ORPH are looking for such a vehicle to spin something out into, so whether it be MOGP or not - if you want that kind of opportunity - get in ORPH (I know I'm preaching to the converted here, but you get the point I'm sure)
Trader3 .. bang on. The purpose of a cash shell reverse take over target it that the spin off aquires a cheap shell company. The majority of share holders in the shell will determine the take over offer not the minority. Therefore it stand to reason that any Orph holder bidding on MOGP shares is actually doing themselves out of cash in the long run. Makes no sense to bid up or trade a shell company when you know where the target asset originates from ...
ORPH = Low (known) Risk & High Reward
MOGP = High (unknown) Risk & Unknown Reward
If MOGP subsequently incorporates Imutex or other non core assets, CF has stated you will receive free shares via your ORPH holding in any case.
Maybe I’m over simplifying things, but by buying ORPH shares you will invest in a known & profitable low risk\high growth company and also receive any potential upside in MOGP.
Why take the higher risk in buying MOGP?
IMHO