17 Oct 2008 15:54
Not for release, publication or distribution, in whole or in part, in, into or from the United States, Canada, Australia or Japan
BILLAM PLC
Posting of Circular regarding proposals for conversion of loans and issue of Shares in lieu of remuneration,
waiver of obligation under Rule 9 of the City Code on Takeovers and Mergers,
share capital reorganisation, amendments to the articles of association and change of name to Energiser Investments PLC
Convening of EGM as required by s142 of Companies Act 1985
Further to the publication on 30 September 2008 of the interim results of Billam for the six months ended 30 June 2008, the Company announces that it has today posted its annual report for the year ended 31 December 2007 and a circular containing a notice convening the AGM where a number of proposals will be made, including a proposal whereby Mr Stephen Wicks would convert part of his loan to the Company into Ordinary Shares in the Company (the "Circular"). Shareholders will also receive a copy of the interim results for the year ended 30 June 2008.
The AGM of the Company will be held at the offices of Libertas Capital, 16 Berkeley Street, London W1J 8DZ on 11 November 2008.
Additionally, it has come to the Board's attention that the Company's net assets are less than half its paid up share capital and, as required by section 142 of the Companies Act 1985, an EGM has been convened to consider whether any, and if so what, steps should be taken to deal with this situation. The Circular contains the notice of the EGM. The EGM is to be held at 10.30 am on 11 November 2008 and the AGM will take place at 10.45 am or, if later, immediately after the conclusion of the EGM.
Conversion of Loan and issue of Shares
As a consequence of the poor performance of the investment portfolio, the Board has initiated discussions with Mr Stephen Wicks, who has advanced loans totalling approximately £1.5 million to Billam as at 30 June 2008. Since that date, the Company has been able to repay approximately £350,000 of the loans to Mr Wicks. The Board and Mr Wicks have agreed to convert £360,000 of the remaining debt into 13,090,909 new Shares at an effective price of 2.75p per new Share, which represents a premium of 340% to the middle market price of a Billam share as at close of business on 15 October 2008, being the latest practicable date prior to the publication of the Circular. This debt for equity conversion will not only improve the balance sheet but will help to preserve Billam's cash by saving the interest, which would amount to over £20,000 per annum, that would have otherwise been payable on this element of Mr Wick's loan. Mr Wicks has agreed that the remainder of his loan to Billam, amounting in aggregate to approximately £800,000, will not be repayable for a minimum of twelve months unless the Company is able to do so.
In order to further preserve Billam's limited cash resources, it is also proposed that arrears of net remuneration amounting to £52,125.25 be paid to Mr Nishith Malde by the issue of 1,895,464 new Shares at 2.75p each.
As a further measure to reduce Billam's outstanding liabilities, Mr Howard Cramer (who is a director of Billam's subsidiary DFL) and Mr Simon Bennett (the Chairman) have also agreed to accept the arrears of net remuneration due to them, amounting in aggregate to £74,785.91, to be paid in the form of new Shares to be issued at a price of 2.75p each in order to preserve the cash resources of the Company. Although this is not strictly required to be approved by Shareholders, the Board considers that it is appropriate for a resolution to this effect to be proposed at the forthcoming AGM.
Both the conversion of the Loan and the issue of Shares in lieu of directors' net cash remuneration to Messrs Malde, Bennett and Cramer described above are all "related party" transactions as defined in the AIM Rules. The Directors consider, having consulted with Libertas Capital, that the terms of the loan conversion are fair and reasonable insofar as the Company's shareholders are concerned. The Directors, excluding Mr Malde in respect of the issue of Shares to him and Mr Bennett in respect of the Shares being issued to him, also consider, having consulted with Libertas Capital, that the issue of Shares in lieu of directors' net cash remuneration are fair and reasonable insofar as the Company's shareholders are concerned.
Mr Wicks is a substantial shareholder and is deemed, for the purposes of the Takeover Code, to be acting in concert with Mr Malde, whose appointment to the Board of Billam was proposed at an extraordinary general meeting convened by Mr Wicks in March 2006 and who, together with Mr Wicks, co-founded Inland PLC having previously served together as directors of Country & Metropolitan PLC.
The proposed issues of new Shares on conversion of Mr Wicks' loan and in lieu of Mr Malde's net cash remuneration would result in Mr Wicks holding 16,080,594 Ordinary Shares representing 62.8% of the issued ordinary share capital and the WM Shareholders (that is Mr Malde and Mr Wicks) holding 18,016,058 Ordinary Shares representing 70.4% of Billam's issued ordinary share capital. Such an increase would trigger a requirement under Rule 9 of the Takeover Code for Mr Wicks to make a mandatory offer for the whole of Billam's issued share capital, unless a waiver of this obligation is approved by the Panel and the Independent Shareholders voting on a poll.
The proposed issue of 1,895,464 new Shares to Mr Malde in lieu of net cash remuneration in isolation would result in result in Mr Malde holding 1,935,464 Ordinary Shares representing 15.5% of the issued ordinary share capital and the WM Shareholders (that is Mr Malde and Mr Wicks) holding 4,925,149 Ordinary Shares representing 39.4% of the enlarged issued share capital. Such an increase would trigger a requirement under Rule 9 of the Takeover Code for the WM Shareholders to make a mandatory offer for the whole of Billam's issued share capital, unless a waiver of this obligation is approved by the Panel and the Independent Shareholders voting on a poll.
The Panel has agreed, in either case subject to the approval on a poll of Independent Shareholders at the AGM, to waive any general offer obligation resulting from both the issue of new Shares on conversion of the Loan and the issue of new Shares to Mr Malde in lieu of net cash remuneration. The resolutions to approve the Panel Waivers (the "Waiver Resolutions") are subject to the approval of the Independent Shareholders on a poll at the AGM and each Independent Shareholder will be entitled to one vote for each Share held. The Independent Shareholders are the Shareholders other than the WM Shareholders.
Reorganisation of share capital
The closing mid-market price of an existing Share was 0.625p on 15 October 2008, being the last dealing day prior to publication of the Circular. The Company's share price is therefore below the current nominal value of 20p per Share. This prohibits the Company from raising any further equity capital since, in order to comply with the Companies Act 1985, any further Shares would have to be issued at a price at or above the nominal value. In order to assist the Company with its ongoing and future activities, the Board wishes to have the ability to raise further equity finance. Accordingly it is felt necessary to reduce the nominal value of the existing Ordinary Shares from the present level of 20p per share and reorganise the share capital accordingly.
At the AGM, a resolution will be proposed to approve the subdivision and redesignation of each Ordinary Share into 1 new Ordinary Share of 0.1 pence each and 199 new deferred shares of 0.1 pence each and each authorised but unissued Ordinary Share into 1 new ordinary share of 0.1 pence each and 199 new deferred shares of 0.1 pence each.
The rights attaching to the new Shares will, save for the change in nominal value and the entitlement of shareholders in respect of a return of capital or other distributions therefrom, be identical in all respects to those attaching to the existing Shares.
Amendments to the Articles of Association and change of name
Other proposals described in the Circular provide for amendments to the articles of association of the Company, primarily to bring them into line with best practice following changes to company law introduced under the Companies Act 2006, and a change of the Company's name to Energiser Investments PLC.
Extraordinary General Meeting
It has come to the Board's attention that the Company's net assets are less than half its paid up share capital and, as required by section 142 of the Companies Act 1985, the EGM has been convened to consider whether any, and if so what, steps should be taken to deal with this situation. Set out at the end of the Circular is the notice convening the EGM to be held at the offices of Libertas Capital at 10.30 am on 11 November 2008.
Recommendation
Simon Bennett, the only director who is independent of Mr Wicks, having been so advised by Libertas Capital, considers that the Proposals are fair and reasonable and in the best interests of the Company and the Independent Shareholders as a whole. In providing advice to Mr Bennett as the independent Director, Libertas Capital has taken into account his commercial assessments. Accordingly, Mr Bennett recommends that Shareholders vote in favour of the Waiver Resolutions as he intends to do in respect of his own shareholding of 50,000 Shares, representing approximately 0.5 % of the Ordinary Shares in issue at today's date.
In view of Mr Bennett's personal interest in the resolution to issue new Shares to him in lieu of net cash remuneration, he makes no recommendation in relation thereto and will not vote on it in respect of his own shareholding.
The Directors believe that the other resolutions to be proposed at the AGM are in the best interests of the Company and its Shareholders as a whole and, save as set out above, unanimously recommend that you vote in favour of each of the resolutions, as they intend to do in respect of their aggregate beneficial holdings which currently represent approximately 0.8% of the Company's issued ordinary share capital.
For further information contact:
Billam PLC
Nish Malde +44 (0) 1923 713600
Libertas Capital
Jakob Kinde +44 (0) 207 569 9650
Sandy Jamieson
Definitions
The expressions below have the following meanings when used in this announcement:
"AIM Rules" the "AIM Rules for Companies" (including the guidance notes thereto) published by London Stock Exchange;
''Annual General Meeting'' or the annual general meeting convened for the same day and place as
''AGM'' the EGM;
"Billam" or the "Company" Billam Plc;
"Board" or "Directors" the directors of Billam;
''Extraordinary General Meeting" the extraordinary general meeting of the Company convened for 11 November
or ''EGM'' 2008;
"Group" the Company and its subsidiaries;
''Independent Shareholders'' Shareholders other than the WM Shareholders;
"Libertas Capital" Libertas Capital Corporate Finance Limited, nominated adviser to Billam;
"Loan" £360,000 being part of a larger sum advanced by Mr Wicks as a secured loan to Billam;
''London Stock Exchange'' London Stock Exchange plc;
"Mr Malde" Nishith Malde FCA and, unless the context requires otherwise, the trustees of the Nish Malde Pension Plan;
''Ordinary Shares'' or "Shares" ordinary shares of 20p each in the capital of the Company or, unless the context requires otherwise, ordinary shares of 0.1p each following the proposed sub-division and re-designation of ordinary shares at the forthcoming Annual General Meeting;
''Panel'' the Panel on Takeovers and Mergers;
''Panel Waivers'' the waivers to be granted by the Panel of any obligation which would otherwise be imposed on the concert party, either individually or collectively, under Rule 9 of the Takeover Code, as a result of the conversion of the Loan and issue of Shares to Mr Malde in lieu of net cash remuneration;
''Proposals'' the proposals for the approval by Shareholders described in the letter from the Chairman set out in the Circular, including those in respect of the Panel Waivers;
''Shareholders'' holders of Ordinary Shares;
"Takeover Code" the City Code on Takeovers and Mergers;
"WM Shareholders" Mr Wicks, Mr Malde, the trustees of the Stephen Wicks Pension Fund and the trustees of the Nish Malde Pension Plan; and
"Mr Wicks" Stephen Desmond Wicks and, unless the context requires otherwise, the trustees of the Stephen Wicks Pension Fund.