Last checked at 4 Sep 2009 16:39
PLUS Markets Group plc ("PLUS")
Middle East Initiative, Board Changes, Update and Subscription
4 September 2009
As the owner of a stock exchange based in London, one of the world's most international centres of equity finance, PLUS has announced a number of initiatives to internationalise its markets and has started to promote itself abroad, especially in the Far East. Around a quarter of the issuers quoted on PLUS are either overseas companies or operate mainly overseas, including some recent joiners with a Middle East and North Africa (MENA) focus. PLUS is seeking to continue its expansion overseas and to develop itself in the Gulf Cooperative Council (GCC) in particular.
To enable PLUS to develop in the Middle East and surrounding areas, Amara Dhari Investments Limited ("Amara Dhari"), a special purpose vehicle set up by a syndicate of investors from the Middle East to take a strategic stake in PLUS Markets Group plc (the "Group" or "PLUS"), has agreed to subscribe for up to 73,333,333 new Ordinary Shares (the "Subscription Shares") at 7.5 pence per share, raising up to 5.5 million before expenses for the Group (the "Subscription"). The Subscription is conditional on PLUS receiving a minimum subscription of 5 million. The Subscription is also conditional, inter alia, on the passing of the shareholder resolutions at a meeting of shareholders to be held on 25 September 2009 (the "General Meeting") notice of which will be dispatched to shareholders in the coming days together with a circular to shareholders (the "Circular"). At the General Meeting, shareholders will be asked to grant the Directors the necessary authorities to issue the Subscription Shares, inter alia.
The Subscription is the first stage of a wider mutual commercial venture with Amara Dhari with the aim of promoting PLUS in the Middle East and introducing business to PLUS, including but not limited to issuers on PLUS' primary markets and trading members, further details of which are set out in the Circular.
The shareholders of Amara Dhari are Middle East based and have a diverse background. They are well connected and have significant interests in a variety of sectors in the Middle East including real estate, construction, insurance, banking and brokerage. It is these associations that PLUS will seek to exploit to increase revenue and create a presence in the Middle East.
By way of incentivising Amara Dhari to introduce business to PLUS, the Group has agreed, conditional inter alia on the passing of the shareholder resolutions, to issue Amara Dhari with a warrant to subscribe for up to a further 58,000,000 new Ordinary Shares at 5 pence per Ordinary Share (as defined in the Circular) upon Amara Dhari introducing business in line with certain revenue targets, further details of which are set out in the Circular along with further details of the venture. Assuming that the warrant is fully exercised, Amara Dhari will be investing a total of up to 8.4 million before expenses in the Group.
Update on PLUS
PLUS announced that it intended to commence trading in all AIM securities by 1 September 2009 at the latest. The Group is pleased to confirm that all regulatory and technological issues have now been resolved and that PLUS commenced such trading in all AIM securities on 21 August 2009. Early indications are that it has already achieved significant market share especially in non-order book stocks.
Overall PLUS is now the major venue for trading many smaller companies, its chosen field of competition, with many companies having their shares traded mainly on PLUS.
Having now achieved a fully competitive exchange and having completed its stock coverage, the board of directors believes that PLUS will be able to exploit its position as a venue for quoting, listing and disseminating information about trading in smaller, newer and/or less liquid companies.
In this respect, PLUS will introduce new initiatives to incentivise market makers to use its platform and further details of such schemes will be published by PLUS to its market participants through the usual channels in due course.
Financial Update
PLUS Markets Group expects to publish its interim results for the period until 30 June 2009 within the next few weeks. These will include exceptional costs in respect of recent litigation. Having completed its initial development phase, and secured all its regulatory permissions, the Group has reviewed its cost base carefully and has taken active steps to reduce its underlying operational costs in respect of its existing operations in 2010.
However, the primary markets are currently extremely challenging with a dearth of companies coming to the market. Moreover, the delay in obtaining the right to trade all AIM securities and the cost of the associated litigation requires the Group to strengthen its balance sheet, increase its regulatory capital and to diversify its geographical reach to exploit its new position as a fully competitive stock exchange. Hence the Company's agreement with Amara Dhari.
Board changes
Upon and subject to completion of the Subscription and the admission of the Subscription Shares to trading on AIM ("Admission"), the Group shall appoint two non-executive directors, Hisham S. Al Otaibi and Ahmed Al Asfour.
Ahmed Ibrahim Al Asfour, proposed non executive Director (aged 54)
Mr. Al Asfour has spent his early career working for oil companies. From 1992 to 1996 he worked for the Ministry of Oil for the State of Kuwait and presently serves as Chairman and CEO of Ritaj Insurance Company as well as holding a number of other board appointments.
Mr. Al Asfour obtained a Bachelor of Science degree from the University of Minnesota and is a national of the state of Kuwait.
Hisham S. Al Otaibi,proposed non executive Director (aged 62)
Mr. Al Otaibi is the former Minister of Commerce and Industry for the State of Kuwait, and has been a member of the Kuwait Supreme Petroleum Council since 1999. He currently serves as a director of the Kuwait Stock Exchange, having formerly been its President and is Chairman of Contracting & Marine Services Co.
Mr. Al Otaibi holds a Bachelor of Science degree from the University of Oklahoma and is a national of the state of Kuwait.
Additional information on the Proposed non-executive Directors
The Proposed Directors hold or have held the following directorships or havebeen partners in the following partnerships within the five years prior to thedate of this circular:Ahmed Ibrahim Al Asfour Current Past Ritaj Insurance Company Loulou Real Estate Company Warba Insurance Company Aloa Fuelling Company Hisham S. Al Otaibi Current Past Contracting & Marine Al Ahelia Investment Co (SAK) Services Co(SAK) Kuwait Drilling Co Kuwait Stock Exchange Hisham Sulaiman Al Otaibi Gen Trading Est
Neither of the Proposed Directors has:
(i) any unspent convictions in relation to indictable offences;
(ii) had any bankruptcy order made against him or entered into any voluntary arrangements;
(iii) been a director of a company which has been placed in receivership, compulsory liquidation, creditors' voluntary liquidation, administration, been subject to a voluntary arrangement or any composition or arrangement with its creditors generally or any class of its creditors whilst he was a director of that company or within the 12 months after he ceased to be a director of that company;
(iv) been a partner in any partnership which has been placed in compulsory liquidation, administration or been the subject of a partnership voluntary arrangement whilst he was a partner in that partnership or within the 12 months after he ceased to be a partner in that partnership;
(v) been the owner of any assets or a partner in any partnership which has been placed in receivership whilst he was a partner in that partnership or within the 12 months after he ceased to be a partner in that partnership;
(vi) been publicly criticised by any statutory or regulatory authority (including recognised professional bodies); or
(vii) been disqualified by a court from acting as a director of any company or from acting in the management or conduct of the affairs of a Company.
Departing non-executive Directors
At the same time, Giles Vardey and Ian Salter will be stepping down from the board of directors on Admission. Stephen Hazell Smith, Chairman of PLUS Markets Group plc thanks Giles and Ian for their wise counsel and significant contribution to PLUS's development and welcomes the appointment of Mr Al Asfour and Mr Al Otaibi to the board of directors.
The Group has also agreed to pay, subject to completion of the Subscription, Qatar Consulting Company (the "Arranger") a fee of 275,000 for introducing Amara Dhari to the Group which the Arranger will use to subscribe for 3,666,667 new Ordinary Shares in PLUS. The Group will also apply for admission of the 3,666,667 new Ordinary Shares to trading on AIM.
Subject to the passing of the shareholder resolutions set out in the notice of General Meeting included in the Circular Amara Dhari will following the issue of the Subscription Shares own shares representing 19 per cent. of the Group's enlarged issued share capital (assuming full subscription).
The subscription monies will strengthen the Group's balance sheet and increase its regulatory capital enabling PLUS to achieve geographic, product and client diversification and continue its wider primary and secondary market development.
Simon Brickles, CEO PLUS Markets Group, said, "We are very pleased with this capital raising initiative - it substantially strengthens our balance sheet during these sensitive times in the market and will support our continuing efforts to build market share and take our place in the exchange environment. It will also further enhance our international activities by creating a bridge to the important and vibrant Middle Eastern market. The ability to offer exchange trading services across all UK stocks, from the smallest to the largest, is also a gratifying conclusion and one which we expect to lead to increased trading activity in the coming months."
For further information, please contact:
Simon Brickles 020 7553 2000PLUS Markets Group plcNick Westlake 020 7260 1345
Numis Securities Limited (NOMAD)
John Parry 020 7490 8062
Rostron Parry (PR Enquiries)
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