ARL.L Regulatory News (ARL)

30 Mar 2005 10:22

Arlington Group Ltd30 March 2005 Arlington Group Limited ("Arlington" of the "Company") Warrant Agreement The Company has entered into an agreement with Mr Nicholas Barham, ExecutiveChairman of the Company, in order to purchase the warrant instrument granted toMr Barham on 24 September 1999 (the "Warrant"). The Warrant, which expires on 30September 2009, entitles Mr Barham to subscribe for up to 15 per cent of thefully diluted share capital of the Company as at the date of the exercise, at aprice of 50p per ordinary share of 0.5 pence in the Company ("Ordinary Share").The consideration for the Warrant will be satisfied by the issue to Mr Barham of6,371,210 new Ordinary Shares ("New Ordinary Shares") credited as fully paid A non-dilutable 15% Warrant is an unusual financial instrument for an AIM-listedcompany. The open-ended nature of the instrument creates a level of uncertaintyin the capital structure of Arlington and, in particular, the future level ofdilution to which both assets and earnings will be subject. This issue hasbecome particularly acute as the NAV per share of Arlington has grown to exceedthe exercise price of the Warrant. The effect of this uncertainty has a negativeimpact on investor sentiment and also has become an issue in negotiations withvendors of businesses where Arlington is seeking to satisfy part or all of theconsideration by the issue of securities. The agreement to cancel the warrantresolves all of these issues. Pursuant to the above, the Company has made application for the New OrdinaryShares to be admitted to trading on the Alternative Investment Market of theLondon Stock Exchange. Dealings in these shares are expected to commence on 4April 2005 ("Admission"). The New Ordinary Shares will rank pari passu with theexisting issued Ordinary Shares of the Company. Following Admission of the NewOrdinary Shares, the enlarged issued share capital of the Company will be64,923,714 Ordinary Shares Following the agreement, and Admission of the Ordinary Shares, Mr Barham willhave increased his beneficial holding from 38,810,219 Ordinary Shares to45,181,429 Ordinary Shares, representing an increase from 66.28 per cent of thecurrent issued share capital to 69.59 per cent of the enlarged issued sharecapital of the Company. Mr Barham holds no further warrants or options in theCompany. The Directors (excluding Mr Barham, who is interested in the transaction),having consulted Evolution Securities Limited, consider the terms of the WarrantAgreement to be fair and reasonable insofar as shareholders are concerned. 30 March 2005 This information is provided by RNS The company news service from the London Stock Exchange