CLP.L Regulatory News (CLP)

18 Dec 2009 07:00



18 December 2009

 Brainspark plc

("Brainspark" or the "Company")

Placing to raise £550,000 (before expenses)

and 

Loan Conversion

Brainspark (AIM: BSP), the AIM-listed investment company, is pleased to announce that it has raised £550,000 (before expenses) through the placing of 110,000,000 new ordinary shares of 0.01 pence each in the Company (the "Placing Shares") at a price of 0.5 pence per share (the "Placing"). The Placing Shares have been placed with new investors and existing shareholders. The Placing Shares will represent approximately 22.6 per cent. of the enlarged issued share capital of the Company. 

The net proceeds of the Placing will be put towards the implementation of the Company's investment strategy as set out in the circular sent to shareholders of the Company on 16 November 2009. In particular the funds raised pursuant to the Placing will be used by Brainspark to invest in Mediapolis Investments S.A. Further to the announcement released by the Company on 19 November 2009. Brainspark is investing €462,100 (£413,950) in Mediapolis Investments S.A. to acquire a 10.88 per cent. equity interest in the company. Mediapolis Investments controls Mediapolis SpA which is the owner of a site in northern Italy with plans for the development of a theme park. Brainspark currently holds 0.47 per cent. of the issued share capital of Mediapolis SpA.

As part of the Placing, Alfredo Villa, a Non-Executive Director of Brainspark, has subscribed for 25,000,000 Placing Shares at the Placing Price. Following completion of the Placing Alfredo Villa will hold a beneficial interest in 82,668,670 ordinary shares in the Company equivalent to 16.97 per cent. of the enlarged issued share capital of the Company. Furthermore, clients of RCF Customers, a portfolio management company of which Alfredo Villa is a discretionary fund manager, have subscribed for a total of 9,200,000 Placing Shares at the Placing Price. Following completion of the Placing, RCF Customers will have a beneficial interest in 40,150,000 ordinary shares in the Company representing 8.24 per cent. of the enlarged issued share capital of the Company.

The Company has also issued, conditional on Admission, 110,000,000 warrants to subscribers for the Placing Shares on the basis of 1 warrant for every 1 Placing Share subscribed for under the Placing. Each warrant entitles the holder to subscribe for one new ordinary share in the Company. The warrants are exercisable at any time prior to 31 December 2012 at a price of 0.65 pence per ordinary share. No application is being made for the Warrants to trading on AIM. The warrants will not be transferable. Alfredo Villa, Non-Executive Director of the Company, will hold 25,000,000 warrants on completion of the Placing.

In addition, Francesco Gardin, Chairman of Brainspark, has agreed to convert a £213,250 convertible loan previously made by him to the Company into 46,358,695 new ordinary shares in the Company (the "Conversion Shares") at the conversion price of 0.46 pence per share (the "Loan Conversion"). Following completion of the Placing and Loan Conversion, Francesco Gardin will hold a beneficial interest in 114,261,973 ordinary shares in the Company representing 23.46 per cent. of the enlarged issued share capital of the Company. Francesco Gardin has opted to undertake the Loan Conversion rather than seeking repayment of the convertible loan from the Company. It is the intention of Francesco Gardin to sell the Conversion Shares on or around Admission. The option agreement entered into between Francesco Gardin and Moggle Inc. in July 2009 concerning the possible sale of the convertible loan, as detailed in the Company's interim results released on 30 September 2009, has now been terminated. In addition the Company has received confirmation from Infusion (2009) Limited that the $1m personal guarantee previously made by Francesco Gardin to Infusion 2002 Limited has now been guaranteed by other assets which are not related to the Company. As a result the Company has now released the convertible loan note guarantee held on behalf of Infusion 2002 Limited.

The issue of the Placing Shares and warrants to Alfredo Villa constitute related party transactions for the purposes of rule 13 of the AIM Rules for Companies. The directors of the Company (with the exception of Alfredo Villa) consider, that having consulted with the Company's nominated adviser, Allenby Capital Limited, the terms of the transactions are fair and reasonable insofar as its shareholders are concerned.

The Loan Conversion constitutes a related party transaction for the purposes of rule 13 of the AIM Rules for Companies. The directors of the Company (with the exception of Francesco Gardin) consider, that having consulted with the Company's nominated adviser, Allenby Capital Limited, the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

The Placing Shares and Conversion Shares will rank in full for all dividends or other distributions hereafter declared, made or paid on the ordinary share capital of the Company and will rank pari passu in all other respects with all other ordinary shares in issue.

Application has been made to the London Stock Exchange for the Placing Shares and the Conversion Shares to be admitted to trading on AIM ("Admission") and it is expected that the Placing Shares and the Conversion Shares will be admitted to trading on 23 December 2009. On Admission there will be 487,058,695 ordinary shares of 0.01 pence each in the Company.

Professor Francesco Gardin, Chairman of Brainspark, commented, "We continue our aggressive investment strategy which we believe will add significant shareholder value to the Company. The ability to raise funds at over a 40% premium to the current mid-market share price is an excellent result and evidence that investors support our strategy. It is our intention to pursue further investments during the course of 2010, especially those which will offer synergistic opportunities to Mediapolis and the recently announced proposed investment in Filmmaster Television. The Board is excited by the progress made in recent months and looks forward with confidence to the future."

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