Armadale Capital Regulatory News (ACP)

1 Jun 2011 07:00

Placing of shares Watermark Global Watermark Global plc ("Watermark" or the "Company") 1 June 2011 Proposed Placing The Board of Watermark is pleased to announce a placing ("Placing") of up to 430,000,000new ordinary shares of 0.15p each in the capital of the Company ("Placing Shares")at 0.35 pence per share to raise up to GBP1,505,000 before expenses. The Placing will be effected in two tranches. The first tranche, which is expectedto raise up to GBP462,000, is subject, inter alia, to admission of 132,000,000 ofthe Placing Shares to trading on AIM which is expected to occur at 8.00 a.m. on 7June 2011. The second tranche, which is expected to raise up to GBP1,043,000, issubject, inter alia, to admission of 298,000,000 of the Placing Shares to tradingon AIM and also upon the approval of shareholders at the Company's AGM which isintended to be held at 9.00 am on 30 June 2011. It is expected that admission ofthe second tranche of the Placing Shares to trading on AIM will occur at 8.00 a.m.on 1 July 2011. The two placing tranches are not inter-conditional. The Placing is not underwritten but, as agent for the Company, Cenkos Securitiesplc has conditionally placed 283,000,000 of the Placing Shares with certain institutionaland other investors. In addition, the Company has also conditionally placed 147,000,000of the Placing Shares with Australian institutional and other professional investors.Commission for all of the Placing Shares placed by Cenkos Securities plc and thoseplaced in Australia is being taken in the form of new ordinary shares ("CommissionShares") and amounts to the issue of 27,214,286 new ordinary shares. These sharesare expected to be admitted to trading on 1 July 2011 and their issue is also subjectto the approval of shareholders at the Company's AGM. The net proceeds of the Placing£1.45 million after expenses will be used for working capital purposes and will beinvested in the Company's projects as described below. The Placing will ensure continuityof existing operations without any interruption or loss of competitive advantage,allowing the Company's wholly owned subsidiary, Western Utilities Corporation (Pty)Limited ("WUC") to continue to progress discussions with the Trans Caledon TunnelAssociation ("TCTA") on its potential involvement with both the short and long-termsolutions to clean up the Acid Mine Drainage problem in conjunction with the SouthAfrican Government. TCTA is a government institution with formal protocols and theconclusion of any agreement may take some time. The commercialisation of informationin the short to medium term would not prevent WUC from participating in an operationand maintenance capacity as part for the short, medium and long term AMD clean-upprojects, in respect of which WUC intends to participate in the formal tender processas soon as these are announced. All the information from the DFS relating to thelong-term solution remains valuable in the context of the longer-term solution. The net proceeds from the Placing will also provide sufficient working capital toallow the Company to expand its technical and support team as needed should Watermarkbe formally engaged on the projects. The Board believes that the Placing (assumingthat the allotment of the second tranche of Placing Shares is approved at the AGM)will provide the Company with the working capital it requires until a definitivedecision is made by the Government regarding the project and, in any event, for atleast the next twelve months. The Board therefore recommends that all shareholdersvote in favour of the allotment authorities to approve the Placing at the AGM. Aspreviously announced, there has been no definitive statement made by the Governmentor its agencies as to how the problem will be treated or funded. Accordingly, WUCmay be involved in a number of different ways and will continue to keep shareholdersinformed of any progress. The Board believes that WUC's technology and feasibility studies are significantlymore advanced than that of its competitors and although it remains confident of securinga role in both the interim and long term solution, there is no certainty that Watermarkwill be successful in any tender for business nor what the time frame for the longterm solution will be. Accordingly, during the past year, whilst waiting for definitiveaction from the South African Government on AMD, the Company has also been assessingwhether Watermark's technology could have wider applications within other naturalresources sectors both in South Africa and the rest of the world. As part of thiswork, two prospective opportunities have arisen in South Africa which the Board intendsto further explore as these could generate cash flows and profitability for Watermarkin the medium term. The first opportunity is an AMD remediation project associatedwith anthracite coal mining and briquetting of the resulting waste fines. The otherinvolves the separation of water and oil from an oil producing field to create industrialgrade usable water. At this stage, our investigations are at a preliminary stageand it is intended that approximately GBP500,000 of the Placing proceeds could beapplied to complete further due diligence and feasibility studies if necessary. TheBoard stresses that neither of these opportunities changes the Company's primaryfocus, which is the treatment of AMD in the gold fields of South Africa and willupdate investors of any progress when relevant. Application will be made to the London Stock Exchange for all of the Placing Sharesand the Commission Shares to be admitted to trading on AIM. All the new shares will,when issued, rank pari passu in all respects with the Company's existing ordinaryshares. Notice of the Company's AGM including resolutions to authorise the allotment of thesecond tranche of the Placing Shares will be posted together with the Company's Reportand Accounts for the year ended 31 December 2010 no later than 6 June 2011. Bell Potter Securities has conditionally agreed to take up 45,125,581 new ordinaryshares in the first tranche and 101,874,419 new ordinary shares in the second tranche.The placing of new Shares with Bell Potter Securities is a related party transactionunder the AIM Rules. The Directors consider, having consulted with Cenkos as theCompany's nominated adviser, that the terms of the placing of new ordinary shareswith Bell Potter Securities are fair and reasonable so far as shareholders are concerned. Peter Marks, Chairman, said, "The Board of Watermark is very pleased to have securedthis financing. It keeps us very much in the hunt to participate in the long overduetreatment of AMD in the Witwatersrand basins. It also gives us the ability to investigatesome other opportunities which may create further shareholder value. Although thishas been a long and at times frustrating journey, I feel confident that our managementteam will have a chance to implement their undoubted expertise in water treatmentin South Africa which the country so badly needs." Enquiries: Watermark Global Plc Jaco Schoeman, Chief Executive Officer Tel: + 44(0) 20 7233 1462 jschoeman@watermarkglobalplc.com Charles Zorab, Investor Relations Tel: + 44(0) 20 7233 1462 czorab@watermarkglobalplc.com Nominated Adviser: Cenkos Securities Ian Soanes/Elizabeth Bowman Tel: +44(0)20 7397 8928