Last checked at 30 Jul 2009 15:23
For Immediate Release
30 July 2009
Dawmed Systems PLC
Result of First General Meeting
Sale of Dawmed International Limited
Adoption of New Investing Policy
Proposed Change of name of the Company
The Board of Dawmed is pleased to announce that both resolutions were passed at the First General Meeting ("First GM") held today concerning the sale of all the issued share capital of Dawmed International Limited to Wassenberg & Co.B.V ("the Sale") and the adoption of the new Investing Policy under the AIM Rules following completion of the Sale.
Pursuant to the Sale, the Company is required to change its name. At the Second General Meeting ("Second GM") convened for 6 August 2009, a special resolution will be put to Shareholders to change the Company's name to Adalta Real PLC.
Accordingly the Company has adopted the new Investing Policy as set out below:
NEW INVESTING POLICY
Following completion of the Sale the Continuing Directors propose that, instead of winding up the Company, the Company's share capital should remain admitted to trading on AIM and that the Company's New Investing Policy should be based predominantly upon property agency, the acquisition and development of and/or investment in commercial property, the acquisition of land and development of high end residential property, together with potential corporate acquisitions, the latter mainly in the property sector.
There have been recent and significant falls in the value of commercial and residential property as well as associated land in the UK and many companies in the property sector are suffering in the downturn. The Continuing Directors believe therefore that there are opportunities to acquire development land, built property and/or property companies, with the potential for significant uplifts from the current low levels of property values and for ongoing generation of profit over the medium and long term.
The proposed New Investing Policy is intended to be split between commercial agency, development property and investment property and this overall split will be subject to available opportunities from time to time as well as the Company's ability to make such investments in as tax efficient manner as possible, for example through compliance with current HMRC Tax Exemption Rules following the Sale.
The Company will be an active investor. Such investments may result in the Company acquiring the whole or part of a company or project. The Company's investments may take the form of equity, joint venture debt, convertible instruments, licence rights, or other financial instruments as the Continuing Directors deem appropriate.
The Continuing Directors propose that the New Investing Policy should enable it to pursue and exploit the following opportunities in the UK:-
commercial and industrial agency services;
commercial development (including acquisition and refurbishment opportunities) subject to pre-lets to prime covenant tenants;
sales of such completed and let developments as profit generators;
acquisition of existing individual residential property with expansion and/or refurbishment potential for early profit;
acquisition of high end value individual residential land and development for the generation of later and greater profit;
future retention of its own completed and let commercial developments as held investments for medium and/or long term quality revenue generation;
subject to tenant covenant status, future acquisition of existing completed and let property as an active investor for long term quality revenue generation;
future acquisition of a compatible property company for potential expansion; and
future corporate investment for passive or active gain.
There is no limit on the number of projects in which the Company may invest. The Continuing Directors are currently reviewing potential investment and acquisition opportunities in line with the Company's New Investing Policy. The Company intends to be both a short-term and a long-term investor and the Continuing Directors will place no minimum or maximum limit on the length of time that any investment may be held.
At the same time the Company will maintain low office and personnel overheads to achieve significantly reduced fixed annual costs compared with previous levels. Admission to AIM will be retained to facilitate future fund raising options whilst maintaining an exit route for shareholders.
The Continuing Directors intend that commercial property endeavours will be related to high grade tenant covenant. Residential endeavours will be active developments for short-term gain from sales of completed properties prior to certified habitation. Commercial investments will be a mixture of short term sales of pre-let property with high grade tenant covenant and long term pre-let investment potential according to magnitude and funding. It is envisaged that initially there will be a relatively small number of development investments due, inter alia, to financial limitations, but over time the intention will be to broaden the scope and to increase the volume. Whilst the Company is expected to enjoy early revenue from the property agency business it will be exposed to some extent in the short-term to the success or otherwise of one or two initial development projects.
Subject to the availability of advantageous bank or other sources of funding, the Continuing Directors propose that the Company be geared up to 75% ie. borrowings will not normally exceed three times its equity investment depending on the type of property and the covenant status of the tenant in the case of commercial property.
Shareholders should note that the consideration for any acquisition or investment, including any debt element of the consideration, will be subject to compliance with the AIM Rules. Should any of the provisions of AIM Rule 14 be met, then this may result in the Company having to treat the transaction as a reverse take-over necessitating shareholder approval and a re-application to trading on AIM.
As an investing company, the Company will be required to implement its Investment Policy within 12 months of the First GM, or otherwise make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules, failing which the Company's Shares would then be suspended from trading on AIM. If the Company's Investing Policy has not been implemented on or before 30 January 2011, the admission to trading on AIM of the Company's Shares would be cancelled and the Continuing Directors would convene a General Meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders. In making the assessment of whether or not an investing company has substantially implemented its investing policy, this is normally considered to mean that the investing company has invested a substantial portion (usually at least 50 per cent) of all funds available to it, including funds available through agreed debt facilities, in accordance with its investing policy.
The Continuing Directors have already received a satisfactory initial "Letter of Intent" from a major UK Bank for a secured debt funding facility of up to the initial planned level of £2 million. This is subject to reasonable financial and other normal terms such as, inter alia, the agreed viability of each property project.
It is the intention of the Continuing Directors to target the restoration of share value in the medium and long term to a level which properly represents the potential value of the Company. Once the financial market conditions are more favourable, the Company will contemplate raising further equity funding from the capital .markets whether through a rights issue, placing of shares, or otherwise.
Enquiries:
| DawMed Systems Plc Kevin M Gilmore, Executive Chairman | Tel: 01608 682244 Mob: 07785 396666 |
| Beaumont Cornish Limited Roland Cornish | Tel: 020 7628 3396 |
| Bishopsgate Communications Limited Maxine Barnes | Tel: 020 7562 3350 |
| For further information about the Company's business please visit www.dawmed.com | |