Carclo Regulatory News (CAR)

28 Jul 2005 11:28

Carclo plc28 July 2005 28 July 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN Acquisition and Placing Acquisition of additional 20% interest in Conductive Inkjet Technology Limited and £3.1 million Placing The Board of Carclo plc ("Carclo") is pleased to announce today that it hasentered into an agreement to increase its equity investment in Conductive InkjetTechnology Limited ("CIT") from 50% to 70%. In our recently published Report and Accounts for the year ended 31 March 2005,we reported excellent progress with the conductive inkjet technology process,which uses digital inkjet technology to print pure copper directly onto plasticand non-porous surfaces for use in a wide range of printed electronicsapplications. The pace of development of this technology and interest frompotential customers has continued to grow throughout 2005 and the products underdevelopment are approaching commercial application. CIT has been developed as a joint venture company owned equally by Carclo andits partner, Xennia Technology Limited ("Xennia"). Both partners now recognisethat CIT has entered a critical period in its development and it is desirablefor one partner to increase its level of investment and exercise control inorder to exploit more effectively the significant commercial potential of theconductive inkjet technology process. The key initial application of the conductive inkjet technology process is tomanufacture antennae designed for Radio Frequency Identification ("RFID")applications. The RFID market is expected to grow rapidly over the next fewyears as major retailers apply the technology to streamline their logisticsoperations. A key barrier to the growth of RFID has been the cost of RFID tags.CIT's proprietary technology offers a potential breakthrough in the cost ofmanufacturing tags. A demonstration line is nearing completion and has attractedsignificant interest from major international players in this market. RFID isonly one of a rich array of applications for the conductive inkjet technologyprocess. Carclo has reached agreement with Xennia to acquire an additional 20% of CIT'sequity for £1.6 million. This will increase Carclo's shareholding in CIT to 70%.A new shareholders' agreement will be executed confirming Carclo's managementcontrol of CIT. As a consequence of this new agreement, the terms of licenceswhich will be granted to Carclo in the field of technical plastics and to Xenniain the field of decorative applications of the technology will be formalised.Xennia has been granted a warrant to subscribe for an additional 10% of CITequity which will be exercisable at a subscription price equivalent to £1.0million if CIT is listed or sold before 31 March 2007. The £1.6 million consideration is being satisfied by a vendor placing byDresdner Kleinwort Wasserstein Securities Limited ("DrKW") of 1,975,309 newordinary shares of Carclo with institutional investors at a price of 81 penceper share ("the Placing Price"). In addition a further £1.5 million is beingraised by Carclo, using the authority available to it under Section 89 of theCompanies Act 1985, by the issue to institutions of 1,851,851 new ordinaryshares at the Placing Price to finance the further development of the CITprogramme. The 3,827,160 new ordinary shares (the "New Ordinary Shares") issuedrepresent approximately 7.4% of Carclo's existing issued share capital. The New Ordinary Shares will be issued fully paid and will rank pari passu inall respects with the existing ordinary shares and will therefore be entitled toreceive the final dividend of 0.8p payable on 8 September 2005 to shareholderson the register as at 5 August 2005. Application will be made to the UK Listing Authority (the "UKLA") for the NewOrdinary Shares to be admitted to the Official List maintained by the UKLA andto be admitted to trading by the London Stock Exchange plc on its main marketfor listed securities ("Admission"). Admission of the New Ordinary Shares isexpected to take place on 2 August 2005. The acquisition and the placing of New Ordinary Shares are conditional, interalia, upon the placing agreement entered into today between DrKW and the Company(a) having become unconditional in all respects and not having been terminatedin accordance with its terms prior to Admission, and (b) Admission of the NewOrdinary Shares becoming effective by 2 August 2005, or such later date (notbeing later than 31 August 2005) as the Company and DrKW may agree. At 30 April 2005, CIT had gross assets of £1.3 million and loans due to Carcloof £1.4million. CIT made a loss of £63,000 in the year ended 30 April 2005 aftercapitalising research and development expenditure of £1.1 million. Trading at Carclo has continued to be satisfactory since the publication of theCarclo Group's preliminary results statement on 13 June 2005 and the Boardremains confident in the prospects for the current financial year. - Ends - Enquiries: Carclo plc 01924 268040Ian Williamson, Chief ExecutiveRobert Brooksbank, Finance Director Dresdner Kleinwort Wasserstein 020 7623 8000Michael Covington Weber Shandwick Square Mile 020 7067 0700Richard HewsSusanne Walker This announcement has been prepared solely to provide information about thePlacing and it does not constitute, or form part of, any offer or invitation topurchase, underwrite or otherwise acquire New Ordinary Shares being offered, orthe solicitation of any such offer. Without limiting the foregoing statement,this announcement does not constitute an offer of securities for sale in theUnited States nor the solicitation of an offer to buy any such securities, normay securities be offered or sold in the United States absent registration or anexemption from registration as provided in the United States Securities Act of1933, as amended (the "Securities Act"), and the rules and regulationsthereunder. The Company does not intend to register the New Ordinary Sharesunder the Securities Act. This announcement does not constitute an offer to sell or issue or asolicitation of an offer to buy or subscribe for New Ordinary Shares in anyjurisdiction including, without limitation, Canada, Australia, Japan or anyother jurisdiction in which such offer or solicitation is or may be unlawful.This announcement and the information contained herein are not for publicationor distribution, directly or indirectly, to persons in Canada, Australia, Japanunless permitted pursuant to an exemption under the relevant local law or in anyjurisdiction in which such publication or distribution is unlawful. Dresdner Kleinwort Wasserstein Securities Limited, which is authorised andregulated by the Financial Services Authority, is acting for Carclo and for noone else in connection with the Placing and will not be responsible to anyoneother than Carclo for providing the protections afforded to the customers ofDresdner Kleinwort Wasserstein Securities Limited or for affording advice inrelation to the Placing, or any other matters referred to herein. No representation or warranty, express or implied, is made by Dresdner KleinwortWasserstein Securities Limited as to any of the contents of this announcementfor which the directors of Carclo are solely responsible. This announcementcontains certain forward-looking statements. Such forward-looking statements arebased on current plans, information and intentions and certain external factorswhich may be beyond the control of Carclo, and therefore, undue reliance shouldnot be placed on them. Such forward-looking statements involve unknown risks,uncertainties and other factors which may cause the actual results, financialcondition, performance or achievements of Carclo, or industry results, to bematerially different from any future results, performance or achievementsexpressed or implied by such forward-looking statements. Forward lookingstatements speak only as to the date on which they are made and Carcloundertakes no obligation to update publicly any such forward-looking statementsin this announcement to reflect future events or developments. This information is provided by RNS The company news service from the London Stock Exchange