C.H. Bailey Plc Regulatory News (BLEY)

7 Jul 2005 07:00

Bailey(C.H.) PLC07 July 2005 OPEN OFFER OF 4,440,969 ORDINARY SHARES AND 389,444 "B" ORDINARY SHARES C.H. Bailey Plc, the AIM quoted engineering and leisure group, announces that itproposes to raise approximately £884,000 before expenses by means of an openoffer of 4,440,969 Ordinary Shares and 389,444 "B " Ordinary Shares. Summary of the Open Offer • 4,440,969 Ordinary Shares at 12.6 pence per share and 389,444 "B" Ordinary Shares at 83.25 pence per share • Raising approximately £884,000 before expenses • Fully supported by the Directors • Proceeds to be used towards repaying loans from two of the Directors Commenting on the Open Offer, Charles Bailey, managing director said:"The Group has changed very significantly over the last two years and the Boardbelieves that further changes need to be made to allow the Company toconsolidate its position and to achieve profitability. The Open Offer will strengthen the balance sheet, will give existingshareholders the opportunity to participate in the fundraising and willfacilitate any further structural changes which may be required. The Directorsbelieve that the Group is now making significant progress and hope thatshareholders will wish to show their continued support for the Company by takingup their entitlements under the Open Offer, as the Directors themselves intendto do." Further information:Bryan WarrenC.H. Bailey, Plc Tel: 01633 262961 Richard DayArden Partners Limited Tel: 020 7398 1632 C.H. BAILEY, PLC OPEN OFFER OF 4,440,969 ORDINARY SHARES AND 389,444 "B" ORDINARY SHARES IntroductionThe Board of C.H. Bailey, Plc (the "Company") announces an Open Offer of4,440,969 Ordinary Shares at 12.6 pence per share and 389,444 B Ordinary Sharesat 83.25 pence per share to raise approximately £884,000 before expenses. TheOffer Shares are all currently held by the Company as treasury shares.Qualifying Shareholders are being given the opportunity under the Initial Offerto apply for all of the Offer Shares on the basis, in the case of each class ofExisting Ordinary Shares, of 1 Offer Share of the relevant class for every 9Existing Ordinary Shares of that class held as at the Record Date, being closeof business on 4 July 2005. As described in more detail below (Details of the Open Offer), QualifyingShareholders will also be offered the opportunity, under the Excess Offer, toapply for more than their pro rata entitlements with such applications beingscaled back in the event of excess applications. A full circular (the "Circular") containing details relating to the Open Offer is being sent to shareholders today. Reasons for the Open Offer The Board considers it to be in the best interests of the Company to furtherstrengthen the Group's balance sheet and to repay as quickly as is practicablethe debt of £900,000, plus accrued but unpaid interest, which is currently owedto two of the directors, Charles Bailey and Mrs Sarah Bailey ("Loans"). Repayment of the Loans is now due. The Board considers that the best way toachieve this is to make use of the shares of both classes currently held intreasury. Accordingly, the net proceeds of the Open Offer, which are expected toamount to approximately £820,000 will be put towards repayment of the Loans andany accrued but unpaid interest. The sale of the Offer Shares will increase the net assets of the Company andstrengthen the Company's position for seeking future development funding in theevent that the Group decides, for example, to develop further the assets inMalta or Tanzania. The Board also believes that the sale of the treasury sharesnow will simplify any process of restructuring the share capital, should theBoard decide to recommend such a restructuring to shareholders. Directors' interests All of the Directors have indicated that they intend to subscribe for theirmaximum individual entitlements under the Initial Offer. Additionally, in order to ensure the sale of all of the Offer Shares, CharlesBailey has indicated that he will apply for all of the Offer Shares other thanthose for which the other Directors are applying under the Initial Offer. Thiswill ensure that, regardless of the level of acceptances from other QualifyingShareholders, all of the Offer Shares will be sold. In the event that noQualifying Shareholders, apart from the Directors, applied for Offer Sharesunder the Initial Offer and all of the Offer Shares available under the ExcessOffer were taken up by Charles Bailey, the Directors' resulting interests inshares would be: Name Ordinary Shares B Ordinary Shares Number % Number %C H Bailey 2,908,859 6.48 223,000 5.73Mrs S Bailey 20,228,260 45.04 3,099,444 79.59T C Bishop 9,123 0.02 0 0Sir W H McAlpine 11,111 0.02 0 0 Details of the Open Offer The Company intends to raise approximately £884,000, before expenses, by theissue of 4,440,969 'A' Offer Shares and 389,444 'B' Offer Shares pursuant to theOpen Offer. Applications for Offer Shares will be satisfied by the issue ofOrdinary Shares and 'B' Ordinary Shares that are currently held by the Companyas treasury shares. Initial Offer The Circular being despatched to Qualifying Shareholders today invitesQualifying Shareholders to apply for Offer Shares at the 'A' Offer Price of 12.6pence per 'A' Offer Share and the 'B' Offer Price of 83.25 pence per 'B' OfferShare, payable in full on application, on the basis of 1 Offer Share for every 9Existing Shares of the same class held by such Qualifying Shareholders andregistered in their names on the Record Date, and so in proportion for any othernumber of Existing Shares then held. The Offer Price of 12.6 pence per 'A' Offer Share and 83.25 pence per 'B' OfferShare represents a 10 per cent discount to the closing middle market prices of14 pence per Ordinary Share and 92.5 pence per 'B' Ordinary Share respectivelyon 4 July 2005, the Record Date of the Open Offer. At the close of business on 6July 2005, immediately prior to the announcement of the Open Offer, the middlemarket prices were 14 pence per Ordinary Share and 75 pence per 'B' OrdinaryShare. Fractions of Offer Shares will not be allotted to Qualifying Shareholders but,together with Offer Shares attributable to those Overseas Shareholders who arenot eligible to participate in the Open Offer, will be aggregated and madeavailable to other Qualifying Shareholders under the Excess Offer describedbelow and the proceeds will be retained for the benefit of the Company. Excess Offer In addition, Qualifying Shareholders may apply for any number of additionalOffer Shares in excess of their entitlements under the Initial Offer. QualifyingShareholders may only apply for additional Offer Shares if they have properlyapplied for their maximum entitlement under the Initial Offer and may only applyfor additional Offer Shares of the same class as they are entitled to apply forunder the Initial Offer. In the event that applications for additional Offer Shares of a particular classare received for an aggregate number in excess of the number of Offer Shares ofthat class not taken up in the Initial Offer, the remaining Offer Shares of thatclass shall be apportioned between those Qualifying Shareholders applying foradditional Offer Shares in proportion to the number of additional Offer Sharesof the same class they have each applied for, with any fractional entitlementsso arising being dealt with as determined by the Company, in its absolutediscretion. Holdings of Existing Ordinary Shares and/or Existing 'B' Ordinary Shares incertificated and uncertificated form will be treated as separate holdings forthe purpose of calculating entitlements under the Open Offer.The full terms of the Open Offer, the conditions to which it is subject and theprocedure for application are set out in Part 2 of the Circular. Current trading and prospects As announced at the time of publication of the Group's interim results for thesix months ended 30 September 2004, which showed a significant growth inturnover and a reduction in operating losses, the Group's managing director,Charles Bailey, said in his statement that the Group's results were beginning toshow the benefits of the restructuring and diversification of the Group whichhad taken place over the previous twelve months. Since the date of the interimannouncement, the Group has completed the sale of the Bute dry dock for £1.8million and the acquisition of Modular Automation International Limited. The Directors estimate that the Group's turnover for the year ended 31 March2005 was not less than £6.9m (2004: £4.6m) and that its operating loss beforeexceptional items, investment income and interest was not more than £1.4m (2004:£1.8m loss). The Board expects to publish the Group's audited accounts for thisperiod in late September 2005. The Board believes that the restructuring of the Group's engineering divisionwhich has taken place has created a stable platform from which these businessescan now move forward. The Group's leisure businesses are showing an encouragingimprovement in performance and the Board is now evaluating the development andother opportunities that exist in Malta and Tanzania. Discussions with possibledevelopers and financiers are moving forward and studies are being undertaken inboth Malta and Tanzania. Trading in the first three months of the new financial year has beensatisfactory, with turnover above that achieved in the corresponding period in2004 and the Board is positive on the prospects for the Group during theremainder of the year. Possible share reorganisation As shareholders are aware, the Board has, in the last two years, takensignificant steps to restructure the trading and other activities of the Group.As part of its continuing review of the Group, the Board is currentlyconsidering the existing share structure of the Company. The Board is of the view that a simplified share structure may provide increasedmarket transparency and help create a stronger platform for future development.Accordingly, the Board is actively considering the benefits of moving to oneclass of share and the methods by which this may be achieved. The Board aims toconclude its deliberations so as to be able to report to shareholders at thenext Annual General Meeting. Expected timetable of principal events Record Date for the Open Offer Close of business on 4 July 2005 Latest time and date for splitting of applications 3.00 pm on 26 July 2005Latest time and date for receipt of completed 3.00 pm on 28 July 2005 Application Forms under the Open OfferCommencement of dealings in the Offer Shares 29 July 2005Delivery in CREST of Offer Shares subscribed 29 July 2005for to be held in uncertificated formDespatch of share certificates 4 August 2005 The dates set out above may be adjusted by the Company, in which case details ofthe new dates will be notified to AIM and, where appropriate, to Shareholders. Overseas Shareholders The Existing Shares and the Offer Shares have not been and will not beregistered under the United States Securities Act 1933, as amended, or under thesecurities legislation of any state of the United States of America, Canada,Australia, Japan, New Zealand or the Republic of Ireland. Accordingly, subjectto certain exceptions, the Offer Shares may not, directly or indirectly, beoffered or sold within the United States of America, Canada, Australia, Japan,New Zealand or the Republic of Ireland or to or for the account or benefit ofany national, resident, or citizen of Canada, Australia, Japan, New Zealand orthe Republic of Ireland or any person located in the United States of America.This announcement does not constitute an offer, or the solicitation of an offer,to subscribe or buy any Offer Shares to any person in any jurisdiction to whomit is unlawful to make such an offer or such solicitation in such ajurisdiction. Definitions Words and expressions as defined in the Circular shall, unless the contextrequires otherwise, have the same meaning in this announcement. End July 7th, 2005 This information is provided by RNS The company news service from the London Stock Exchange