Eland Oil & Gas Regulatory News (ELA)

14 Jan 2005 07:00

Medisys PLC14 January 2005 For immediate release 14 January 2005 Medisys PLC ("Medisys" or the "Company") Re-purchase and cancellation of A and C Preference Shares in Hypoguard Holding Co. Limited ("HOLDCO") Medisys announces that the 13 million redeemable A preference shares in HOLDCO(the "A Preference Shares"), and the 4 million redeemable C preferenceshares in HOLDCO (the "C Preference Shares"), both subscribed for in 1999as part of the Joint Venture with Elan Corporation plc ("Elan") are to bere-purchased by HOLDCO and cancelled. HOLDCO is a wholly owned subsidiary of theCompany incorporated in Bermuda. The re-purchase will be satisfied by the issue of an aggregate of 30,804,706 newordinary shares of 1 pence each in the Company (the "New Ordinary Shares")to Kings Road Investments Ltd, a company not connected to Elan, which hasacquired the rights to the New Ordinary Shares. Admission of the New Ordinary Shares to listing on the Official List of the UKListing Authority and to trading on the London Stock Exchange is expected totake place on 19 January 2005 whereupon the re-purchase of the A PreferenceShares and the C Preference Shares will be completed. Kings Road Investments Ltd has agreed to a six months orderly market stagedlock-up restriction in respect of market disposals of the New Ordinary Shares. Background In 1999, Medisys announced that it had entered into a joint venture with Elan,the Irish speciality pharmaceutical group and certain affiliated companies, forthe development of biosensor-based blood glucose diagnostic products. Inaddition, the Joint Venture acquired the rights to certain technologies relatingto the in-vivo monitoring of blood glucose in diabetics from Marathon MedicalTechnologies, Inc. ("Marathon"), a joint venture company owned by BioJectMedical Technologies, Inc. and Elan. Under the terms of the Joint Venture, Hypoguard Limited (a wholly ownedsubsidiary of Medisys) and Elan each provided a worldwide exclusive licence tocertain technologies to Hypoguard Development Co Limited ("JVCO"), a newlyincorporated wholly owned subsidiary of Medisys. In addition, Hypoguard licensedto JVCO its Arrow technology and Elan granted a licence to JVCO of an enablingpump technology. JVCO acquired from Marathon certain patent and intellectualproperty rights licensed from the Elan Group relating to technologies used inin-vivo monitoring of blood glucose in diabetics. In order to enable JVCO to fund the licence and assignment fees and thedevelopment of the technologies, certain funding was provided by Elan. Elan International Services Ltd. ("EIS") subscribed for 13 millionredeemable A preference shares in HOLDCO for a total subscription price of US$13million. The A Preference Shares were subsequently sold by EIS to ElanPharmaceutical Investments III, Ltd. ("EPIL III"), a wholly ownedsubsidiary of EIS. The shares are generally redeemable at par plus a premium of5% per annum at any time between the second and ninth anniversaries of theirissue, although Medisys has the right to apply the proceeds of redemptiontowards the issue to the holder of new Medisys Ordinary Shares at a price ofUS$0.7505 per share. The holder also had the right to require that the proceeds of redemption beapplied towards the purchase by the holder from HOLDCO of 50% of the issuedshare capital of JVCO (the "JVCO Share Exchange Right") save that Medisyscould, at its option, deny this right by (a) the issue to the holder of newMedisys Ordinary Shares at a price of US$0.4938 per share and (b) the payment tothe holder of a royalty based on market sales of products developed by JVCO. TheJVCO Share Exchange Right was effectively cancelled as part of the joint venturetermination arrangements announced by the Company on 2 December 2004. EIS subscribed for 5 million redeemable B preference shares in HOLDCO for atotal subscription price of US$5 million. The shares were generally redeemableby the holder at par plus a premium of 6% per annum at any time between thesecond and ninth anniversaries of their issue, although Medisys had the right toapply the proceeds of redemption towards the issue to the holder of new MedisysOrdinary Shares at a price of US$0.6518 per share provided the market price ofMedisys Ordinary Shares was greater than US$0.6518. In the event that the marketprice of Medisys Ordinary Shares was less than US$0.6518, then the market priceof Medisys Ordinary Shares would become the conversion price and the applicableredemption premium increased on a scale from 6% to a maximum of 15% per annum.The maximum applicable redemption premium was reached when the market price forMedisys Ordinary Shares was US$.4120 per share. The Company announced, as partof the joint venture termination arrangements, the purchase and cancellation ofthe redeemable B preference shares on 2 December 2004, the consideration forwhich was satisfied by the issue of 17 million new ordinary shares of 1 pence inthe Company to EIS and the payment of £560,000 in cash. The cash element of theconsideration is to be paid in eight equal quarterly instalments of £70,000, thefirst of which was paid on 31 December 2004 and the last of which is due andpayable on 30 September 2006. EIS also subscribed for 4 million redeemable C preference shares in HOLDCO for atotal subscription price of US$4 million. The C preference shares weresubsequently sold by EIS to EPIL III. The shares are generally redeemable by theholder at par plus a premium of 15% per annum at any time between the second andninth anniversaries of their issue, although Medisys has the right to apply theproceeds of redemption towards the issue to the holder of 8,101,266 new MedisysOrdinary Shares. - Ends -Enquiries: Medisys PLC 020 7563 5200Michael Barry, Chief Financial Officer Weber Shandwick Square Mile 020 7067 0700Kevin Smith/Sarah MacLeod This information is provided by RNS The company news service from the London Stock Exchange