Hummingbird Regulatory News (HUM)

25 Apr 2008 07:01

Humberts Group PLC25 April 2008 Neither this announcement nor any copy of it may be taken, transmitted ordistributed, directly or indirectly, in or into the United States of America,Canada, Australia, the Republic of South Africa or Japan. Any failure to complywith this restriction may constitute a violation of United States, Canadian,Australian, South African or Japanese securities laws. HUMBERTS GROUP PLC ("Humberts" or "the Company") Proposed Placing of up to £2,250,000 of Secured Convertible Loan Notes Proposed Share Capital Reorganisation Grant of options to John McLean and Michael Nower Proposed issue of up to £3,000,000 of Secured Convertible Loan Notes and up to 47,083,245 new Ordinary Shares in relation to the Supplemental Acquisition Agreements Key Points • Humberts is proposing to raise up to £2.25 million (before commissions and other expenses) by way of a placing of up to £2.25 million of Secured Convertible Loan Notes (but with a minimum placing of £1.5 million of Secured Convertible Loan Notes); • The Notes are convertible into ordinary shares in the Company at a 25 per cent discount (or, in certain cases, 37.5 per cent discount) to the Closing Price of ordinary shares at the date any such Notes are converted; • The Placing is being implemented in conjunction with the Deferred Consideration Adjustment. The Deferred Consideration Adjustment is being implemented by the Company arranging for Sellers to execute Supplemental Acquisition Agreements. The arrangements in the Supplemental Acquisition Agreements will reduce the cash requirements on the business in relation to the acquisitions already made by the Group; and • The proposed Placing in conjunction with the Deferred Consideration Adjustment will provide additional working capital for the Group, and reduce the cash out flow from the Group in relation to the acquisitions already made, therefore strengthening the financial position of the Company. John McLean, Executive Chairman of Humberts, commented: "Today's announcement of the proposed placing in conjunction with the DeferredConsideration Adjustment will strengthen our balance sheet and provideadditional capital to drive the business forward and maximise value for ourshareholders" Enquiries: Humberts Group plc 020 7491 8888John McLean, Executive ChairmanMichael Nower, Interim Chief Executive OfficerNigel Cartwright, Chief Financial Officer Panmure Gordon (UK) Limited 020 7459 3600Grant Harrison Rakesh SharmaMark Lander (Corporate Broking) 1. INTRODUCTION The Company is proposing to raise up to £2.25 million (before commissions andother expenses) by way of a placing of up to £2.25 million of SecuredConvertible Loan Notes (but with a minimum placing of £1.5 million of SecuredConvertible Loan Notes). The Placing is conditional upon, inter alia, thepassing of the Resolutions at a General Meeting of the Company which has beenconvened for 11.00 a.m. on 14 May 2008 at the offices of Fasken MartineauStringer Saul LLP, Fourth Floor, 17 Hanover Square, London, W1S 1HU. The Notes are convertible into ordinary shares in the Company at a 25 per centdiscount (or, in certain cases, 37.5 per cent discount) to the Closing Price ofordinary shares at the date any such Notes are converted. It is thereforepossible that the price at which shares are to be issued on such conversionwould be below 5p (which is the current par value of the ordinary shares in theCompany). By English law a company cannot issue shares for less than their parvalue and so the Company is proposing the Share Capital Reorganisation, wherebyeach of the 62,194,618 Existing Ordinary Shares are divided into one OrdinaryShare (with a par value of 2 pence) and one Deferred Share (with a par value of3 pence) and every two unissued Existing Ordinary Shares are divided into fiveOrdinary Shares (with a par value of 2 pence). The Company has reached agreement in principle with the majority of the Sellerswhereby those Sellers will agree to an adjustment of the terms under which theDeferred Consideration is paid to such Sellers. The agreements in principlereached with those Sellers include the issue to them of Secured Convertible LoanNotes, the issue to them of Adjusted Consideration Shares, and a cash payment tothem on or before 31 October 2008. The purpose of this document is to convene a GM at which Shareholders' approvalwill be sought for the Resolutions (which include the resolution to implementthe Share Capital Reorganisation) and to set out the background to, and reasonsfor, the Proposals and to explain why your Board considers the Proposals to bein the best interests of the Company and its shareholders as a whole. Thisdocument also contains the Directors' recommendation that you vote in favour ofthe Resolutions to be proposed at the GM, notice of which is set out at the endof this document. The Placing is being conducted by the Company on a non pre-emptive basis tocertain existing Shareholders and other institutional investors in order toavoid the relatively significant cost and delay to the Company which wouldarise, were the Company to make an open offer to all Shareholders to subscribefor Secured Convertible Loan Notes. The Placing is not underwritten. The Ordinary Shares that are issued on theconversion of Secured Convertible Loan Notes will, when issued and fully paid,rank pari passu in all respects with the Ordinary Shares then in issue,including the right to receive all dividends and other distributions thereafterdeclared, made or paid on the Ordinary Shares. The Placing is conditional on, inter alia: • the passing of the Resolutions; and • the Adjustment Condition being satisfied. Shareholders should be aware that if the Placing and the Deferred ConsiderationAdjustment do not both proceed the Group would need to take immediate action tocurtail expenditure until further funds are available. In these circumstances,the Company would continue to seek alternative sources of funding to ensure thecontinuation of its business. There can be no certainty that any alternativesources of funding would be available to the Company if the Placing and theDeferred Consideration Adjustment do not both proceed. On 30 January 2008, Humberts announced that it had received a preliminaryapproach regarding a possible offer for the Company. On 18 March 2008, the Boardconfirmed that it had subsequently received a number of indicative offers forthe whole as well as offers for certain parts of the Group. Following furtherdiscussions with interested parties, it was not possible to reach agreement onterms of a formal offer. As a consequence, the Company announced on 24 April2008 that all discussions have now ceased and that the Company is no longer inan offer period for the purposes of the City Code on Takeovers and Mergers. 2. BACKGROUND During the year to 30 September 2007 the Group continued its strategy ofconsolidation of the UK real estate agency market and established itself as amarket leading brand with 80 offices and 714 staff, predominantly based acrossthe Southern half of England. This strategy allowed the business to furtherdiversify away from its reliance on the sales of residential homes, which forthe year ended 30 September 2007 accounted for only 55 per cent. of totalturnover, against 58 per cent. in 2006, with rural, commercial, land, new homes,fine arts and professional services divisions and an architectural practicemaking up the balance. Since the year end, this balance is now reduced furtherto 46 per cent. Trading performance during the first half of the year to 31 March 2007, wasahead of expectations and contributed well to underlying earnings of the Group.The second half of the year started more slowly with the subsequent statisticsfor the year pointing to the end of June as being a decisive tipping point inthe market cycle, with activity levels turning downwards. This trend wasfurther compounded by uncertainty surrounding interest rates, concerns over theeffect of the collapse in the US sub-prime mortgage market, the introduction ofHome Information Packs (HIPs) and finally, in September, the advent of theNorthern Rock crisis. With the deteriorating market conditions and the general uncertainty in thesector, the Group subsequently took the decision to put its acquisition strategyon hold so that it could start to focus on the integration of the acquisitionsalready made. This became more of an imperative in a falling market, the impactof which became truly apparent at the end of December and the beginning of theNew Year. In the year to 30 September 2007, Group turnover grew 135 per cent. as a resultof acquisitions and some organic growth. However, against the background of thecurrent performance of the business in today's market, the Group has reviewedeach of the acquired companies' business plans. The Group has reduced theamortisation period of goodwill to seven years. As a result of current marketconditions and the requirements of the accounting standards, a goodwillimpairment write-down of £18.4 million has been made. Following thesewrite-downs Humberts made a loss after tax of £17 million. 3. MANAGEMENT On 21 January 2008 Tim James, the Group's Executive Chairman and Max Ziff, theGroup's Chief Executive Officer left the Board, and the non-executive deputychairman John McLean, who was appointed to the Board on 21 December 2007,assumed the role of Executive Chairman. Michael Nower was appointed as a non-executive director and the interim chiefexecutive of the Group on 13 February 2008. At the 2008 AGM the existing directors Patricia Farley and Simon Wharmby steppeddown from the Board. It is the intention of the Board in due course to appoint afull time chief executive officer and to strengthen the Board with theappointment of additional, independent non-executive Directors. 4. CURRENT TRADING On 21 January 2008 the Group announced that trading in the core residentialagency business had been disappointing, with volumes materially below theBoard's expectations and that the Group expected to make a loss in the firstquarter of its financial year. Whilst December and January are traditionally theslowest months for our sector, the current uncertainty in our market continuesto have a negative effect on the volumes of house sales actually beingexchanged, current indications are that there was no improvement in the secondquarter of its financial year. Accordingly, the Group expects to make a loss inthe first half of the 2008 financial year. The current economic uncertainty has lead to a well documented slow down in theresidential housing market which has meant that, we along with our peers in thesector, are having to adjust to a tougher environment. Current difficulties in the mortgage market lead the Board to believe that therewill be little improvement in the volumes of residential sales for the remainderof the Company's financial year. This is likely to severely impact the Group'sfinancial results for the remainder of the financial year. 5. REASONS FOR THE PLACING, THE DEFERRED CONSIDERATION ADJUSTMENT ANDUSE OF PROCEEDS The Board has assessed the Group's strategy and prepared fresh internal plansthrough which we aim to secure the future of the business in the best interestsof our shareholders, employees and other stakeholders. Following the acquisitions made to date, there were outstanding deferred cashconsiderations at 30 September 2007 of £6 million (which was in addition to the£4 million in respect of new shares), payable over a period of four years. Ofthis, £3 million related to the deferred cash consideration in respect of the2008 financial year. As at the date of this document, the balance outstanding isapproximately £1.7 million. The Group needs to rationalise its cost base and fully integrate itsacquisitions during a period where adverse trading conditions will have aproportionately larger effect on the Group's cash flow. The Board has thereforeconcluded that the Placing needs to be implemented in order to provideadditional working capital for the Group. The Placing is being implemented inconjunction with the Deferred Consideration Adjustment. The DeferredConsideration Adjustment is being implemented by the Company arranging forSellers to execute Supplemental Acquisition Agreements. The arrangements in theSupplemental Acquisition Agreements will reduce the cash requirements on thebusiness in relation to the acquisitions already made by the Group. The Placingis conditional on, amongst other things, the Adjustment Condition beingsatisfied. In addition, the Group will be raising funds internally through the sale ofnon-core assets and, potentially, some of its current businesses which do notwholly meet the brand strategy of the Group. To this end, the Group hasannounced two disposals. On 2 April 2008 the Group announced the disposal ofFarley Management Company Limited (which had a portfolio of eight properties,all located in South-West London, of which six were owned on a freehold basis,and two were held on long lease-holds) for a cash consideration of £315,000. On3 April 2008 the Group announced the disposal of the block management businessof Farleys estate agents in South Kensington, London for a cash consideration of£424,500. 6. SECURED CONVERTIBLE LOAN NOTES The Company will create up to £5,250,000 of Secured Convertible Loan Notes byexecuting the Instrument. A summary of the principal terms of the Notes is setout in the Circular, but the key terms include: • The Notes will be secured by a floating charge over the Company's assets contained in the Debenture executed in favour of The Law Debenture Trust Corporation plc, which will hold the security as trustee on behalf of all the Noteholders. • The charge created by the debenture will rank behind a fixed and floating charge executed by the Company in favour of National Westminster Bank plc to secure its overdraft facility of up to £1 million. • The Company shall have the ability to redeem or purchase Notes before the Redemption Date provided it does so pro rata in respect of all the Notes. • The Notes will be redeemed on the Redemption Date if not previously redeemed or converted into Ordinary Shares. • Interest is payable on the Notes at 4 per cent per annum above the base rate of National Westminster Bank plc from time to time, but the Company may elect to satisfy its obligation to pay interest by issuing Ordinary Shares at a 25 per cent discount to the weighted average Closing Price over the previous 20 Business Days (but no Ordinary Shares will be issued at less than par value). However, a Noteholder may elect that 40 per cent. of the interest due to him shall be paid in cash. • A Noteholder may at any time convert his/her Notes into Ordinary Shares at a 25 per cent discount to the Closing Price when notice to convert is given. If the Notes remain unpaid on the Redemption Date a Noteholder may then for a period of three months from the Redemption Date at any time convert the Notes into Ordinary Shares at a 37.5 per cent discount to the Closing Price when notice to convert is given. However, no Ordinary Shares will be issued at less than par value. • The Company may, acting reasonably, require the conversion of the Notes into Ordinary Shares if the Closing Price is greater than 15p for any 20 trading days during any consecutive 30 trading days on AIM ending not more than five Business Days prior to the service of notice by the Company to require conversion. However, the Company will not be entitled to require conversion if such conversion would result in all or some of the holders of the Notes being required to make a mandatory cash bid for Ordinary Shares pursuant to Rule 9 of the City Code. • The Notes become repayable on the occurrence of certain events of default. The Company will be issuing up to £2.25 million of Secured Convertible LoanNotes pursuant to the Placing and up to £3.0 million of Secured Convertible LoanNotes pursuant to the Deferred Consideration Adjustment. 7. DEFERRED CONSIDERATION ADJUSTMENT The Company has agreed in principle with Sellers who are owed, in aggregateapproximately £3.2 million in cash (which was in addition to approximately £2.4million in respect of new shares) (representing 66 per cent of the totalDeferred Consideration) that the Seller will enter into a SupplementalAcquisition Agreement to vary the terms of the relevant Acquisition Agreement sothat their entitlement to Deferred Consideration is replaced with the followingarrangements. The arrangements in the Supplemental Acquisition Agreements will reduce the cashrequirements on the business in relation to the acquisitions already made by theGroup. The Supplemental Acquisition Agreements to be entered into with Sellers willprovide that: • typically 75 per cent of the Deferred Cash Consideration due to a Seller will be satisfied by the issue of Secured Convertible Loan Notes where the principal sum of the Notes issued will be the same as 75 per cent of the Deferred Cash Consideration due to the relevant Seller. • typically the remaining 25 per cent of the Deferred Cash Consideration due to a Seller will be paid in cash on or before 31 October 2008. If, before 31 October 2008, the Company sells an asset for a cash consideration payable on completion of that sale of more than £2 million then the remaining 25 per cent of the Deferred Cash Consideration due to a Seller will be paid in cash within ten Business Days of the date of completion of that sale. However, the Company shall not be required to utilise more than 50 per cent of the proceeds of sale of such an asset in paying the remaining 25 per cent of the Deferred Cash Consideration due to the Sellers who execute Supplemental Acquisition Agreements. Therefore, it is possible that, even if the Company sells an asset for a cash consideration payable on completion of that sale of more than £2 million, those Sellers who have executed Supplemental Acquisition Agreements will not receive all the remaining 25 per cent of the Deferred Cash Consideration due to those Sellers. If that happens then the balance of the Deferred Cash Consideration due to those Sellers will be paid on 31 October 2008. • All of the Deferred Share Consideration due to a Seller will be satisfied by the issue of Ordinary Shares. The number of Ordinary Shares to be issued to a Seller will be calculated by reference to the Relevant Closing Price. If any part of the Deferred Share Consideration is due to paid in 2008 then a Seller will receive all of the 2008 Deferred Share Consideration which shall be satisfied by the issue of Ordinary Shares at the Relevant Closing Price. If any part of the Deferred Share Consideration is due to a Seller after 2008 then, in recognition of the fact that a Seller will be receiving his Deferred Share Consideration early, he will receive a reduced amount of Deferred Share Consideration. If any part of the Deferred Share Consideration is due to paid in 2009 then, typically, a Seller will receive 95 per cent of the 2009 Deferred Share Consideration which shall be satisfied by the issue of Ordinary Shares at the Relevant Closing Price. If any part of the Deferred Share Consideration is due to paid in 2010 then, typically, a Seller will receive 90 per cent of the 2010 Deferred Share Consideration which shall be satisfied by the issue of Ordinary Shares at the Relevant Closing Price. • Any Adjusted Consideration Shares issued in satisfaction of a Seller's entitlement to Deferred Share Consideration will be subject to orderly market provisions whereby the relevant Seller they will, until the second anniversary of the date of issue of such Adjusted Consideration Shares, only sell or dispose of such Adjusted Consideration Shares through Panmure Gordon or the Company's broker from time to time provided that they can match the best price obtainable elsewhere. The entitlement of a Seller to Deferred Cash Consideration or Deferred ShareConsideration will, for the purposes of the Supplemental Acquisition Agreements,be deemed to be, if there are minimum and maximum entitlements to DeferredConsideration, the mid-point of such entitlements. However, if unless themaximum entitlement has been achieved or is, in the reasonable opinion of theCompany, achievable, the entitlement will be deemed to be the maximumentitlement. Negotiations are still continuing with the Sellers and the Directors anticipatethat Sellers who are owed 66 per cent of the Deferred Consideration will haveexecuted Supplemental Acquisition Agreements by the date of the GM. TheDirectors consider that if Sellers who are owed 66 per cent of the DeferredConsideration do execute Supplemental Acquisitions Agreements then the Group'soutstanding obligations under the Acquisition Agreements will have been reducedby approximately £1.6 million in the current financial year and further infuture financial years. Of those Sellers who were offered the opportunity to participate in the DeferredConsideration Adjustment, the holders of approximately 83 per cent (by value)have accepted in principle. The Supplemental Acquisition Agreements will all be conditional upon, theResolutions being passed. If all of those Sellers who the Directors anticipatewill execute Supplemental Acquisition Agreements do execute SupplementalAcquisition Agreements then the Company will be required to issue £2.7 millionof Secured Convertible Loan Notes and issue 41,987,142 Adjusted ConsiderationShares (which will be credited as fully paid up at the Relevant Closing Price). The Adjusted Consideration Shares will be issued credited as fully paid and willrank pari passu in all respects with the Ordinary Shares then in issue,including the right to receive and retain all dividends and distributionsdeclared, made or paid on such shares. 8. DETAILS OF THE PLACING The Company is proposing to raise up to £2.25 million, before expenses, througha placing arranged by Panmure Gordon of up to £2.25 million of SecuredConvertible Loan Notes. However, no Placing Notes will be issued unless theMinimum Placing (of at least £1.5 million of Secured Convertible Loan Notes) isachieved. Panmure Gordon has agreed, as agent for the Company, to use itsreasonable endeavours to procure subscribers for up to £2.25 million of SecuredConvertible Loan Notes. Certain of the Directors namely, Michael Nower, James Lugg and I, have eachagreed in aggregate to subscribe for £50,000 of Secured Convertible Loan Notes. Shareholders should be aware that if the Placing and the Deferred ConsiderationAdjustment do not both proceed the Group would need to take immediate action tocurtail expenditure until further funds are available. In these circumstances,the Company would continue to seek alternative sources of funding to ensure thecontinuation of its business. There can be no certainty that any alternativesources of funding would be available to the Company if the Placing and theDeferred Consideration Adjustment do not both proceed. 9. FINANCIAL EFFECT OF THE PROPOSALS A pro forma statement of net assets showing the affect of the Proposals(assuming the Minimum Placing) is set out in the Circular which will be postedto Shareholders shortly. 10. SHARE CAPITAL REORGANISATION In order to permit the conversion rights contained in the Secured ConvertibleLoan Notes to be exercised at a price lower than the current par value of theCompany's ordinary shares (i.e. 5p), the Company is proposing to divide eachissued Existing Ordinary Share into one ordinary share of 2 pence and onedeferred share of 3 pence and to divide each unissued Existing Ordinary Shareinto five ordinary shares of 2 pence each. New share certificates will not be issued and the existing share certificateswill continue to be valid following the Share Capital Reorganisation.Shareholders who hold their shares in the Company through CREST should note thatthe Company's ISIN number GB0034037811 will continue to be valid. The Deferred Shares will have no income or voting rights. The only rightattaching to the Deferred Shares will be to receive the amount paid up above ona winding-up of the Company once the holders of Ordinary Shares have received£1,000,000 per Ordinary Share held. The Deferred Shares will not be transferableand will be held by the secretary of the Company as trustee for the holders. 11. ADMISSION TO AIM Application will be made to the London Stock Exchange for all the AdjustedConsideration Shares to be admitted to trading on AIM. Conditional upon thepassing of the Resolutions, Admission is expected to become effective andtrading in the Adjusted Consideration Shares to commence on 20 May 2008. 12. NEW OPTION SCHEME It is the Board's intention to introduce new option schemes as soon aspracticable to satisfy existing contractual commitments to Sellers and certainemployees and to spread employee share ownership as widely as possiblethroughout the Group. 13. THE MCLEAN OPTIONS AND THE NOWER OPTIONS I was appointed a director of the Company on 21 December 2007 and I becameexecutive chairman of the Company on 21 January 2008. The Company has agreed,subject to the Resolutions being passed, to grant me an option to subscribe forup to 1,568,627 Ordinary Shares at the Relevant Closing Price (i.e. theaggregate subscription price under the McLean Options will be £100,000). TheMcLean Options will be granted on the date of the GM and will expire on thefifth anniversary of the GM. I may exercise the McLean Options at any timeduring the option period, unless I cease to be a director of the Company incircumstances where I could be dismissed summarily, in which case the McLeanOptions will lapse immediately (unless the Board exercises its discretion toallow me to exercise all or part of the Mclean Options within a period specifiedby the Board). Michael Nower was appointed as a non-executive director and the interim chiefexecutive of the Company on 13 February 2008. As was announced on 14 February2008, the Company has agreed, subject to the Resolutions being passed, to grantMr Nower an option to subscribe for up to 784,314 Ordinary Shares at theRelevant Closing Price (i.e. the aggregate subscription price under the NowerOptions is £50,000). The Nower Options will be granted on the date of the GM andwill expire on the fifth anniversary of the GM. Mr Nower may exercise the NowerOptions at any time during the option period, unless he ceases to be a directorof the Company in circumstances where he could be dismissed summarily, in whichcase the Nower Options will lapse immediately (unless the Board exercises itsdiscretion to allow Mr Nower to exercise all or part of the Nower Options withina period specified by the Board). 14. CIRCULAR A Circular containing further details of the Proposals convening the GeneralMeeting is expected to be posted to Shareholders shortly. Expected Timetable of Principal EventsLatest time and date for receipt of forms of proxy and CREST proxy 11.00 a.m. on 12 May 2008instructions for the General MeetingGeneral Meeting 11.00 a.m. on 14 May 2008Issue of the Secured Convertible Loan Notes 14 May 2008Date of despatch of definitive certificates for the Secured Convertible by 21 May 2008Loan NotesAdjusted Consideration Shares admitted to trading on AIM 20 May 2008 15. DEFINITIONS "Acquisition Agreements" the agreements entered into between the Company and the Sellers whereby the Group acquired shares or assets from the Sellers "Adjusted Consideration Shares" the Ordinary Shares to be issued as part of the Deferred Consideration Adjustment pursuant to the Supplemental Acquisition Agreements "Adjustment Condition" the execution of Supplemental Acquisition Agreements by Sellers to whom at least 60 per cent of the Deferred Consideration is due "Admission" admission of the Adjusted Consideration Shares to trading on AIM and such admission becoming effective "AIM" AIM, the London Stock Exchange's market for smaller growing companies "Circular" the document dated 25 April 2008, addressed to the Shareholders "City Code" or "Code" the City Code on Takeovers and Mergers "Closing Price" the closing middle quotation of an Existing Ordinary Share as published in the Daily Official List "Completion" completion of the Proposals "Debenture" the debenture proposed to be entered into between the Company (1) and the Trustee (2) in order to secure the Company's obligations under the Notes and the Instrument "Deferred Cash Consideration" in relation to any Seller, that part of the Deferred Consideration which the Company is required to pay to that Seller in cash, such amount being calculated as described in section 7 of this announcement "Deferred Consideration" the amount payable by the Company in respect of unfulfilled obligations to pay deferred consideration pursuant to the Acquisition Agreements, being the sum of the Deferred Cash Consideration and the Deferred Share Consideration "Deferred Consideration Adjustment" the adjustment of the Deferred Consideration pursuant to the Supplemental Acquisition Agreements "Deferred Shares" deferred shares of 3 pence each in the capital of the Company arising from the Share Capital Reorganisation and having the rights and obligations set out in the Resolutions "Deferred Share Consideration" in relation to any Seller, that part of the Deferred Consideration which the Company is required to pay to that Seller by issuing ordinary shares in the Company to satisfy that obligation "2008 Deferred Share Consideration" in relation to any Seller, that part of the Deferred Consideration which the Company is due to pay to him in 2008 "2009 Deferred Share Consideration" in relation to any Seller, that part of the Deferred Consideration which the Company is due to pay to him in 2009 "2010 Deferred Share Consideration" in relation to any Seller, that part of the Deferred Consideration which the Company is due to pay to him in 2010 "Directors" or "Board" the directors of the Company "Existing Ordinary Shares" the ordinary shares of 5p each in the capital of the Company "General Meeting" or "GM" the general meeting of the Company, convened for 11.00 a.m. on 14 May 2008 "Group" the Company and its subsidiaries "Humberts" or "the Company" Humberts Group plc "Instrument" the instrument proposed to be executed by the Company following the General Meeting to create the Secured Convertible Loan Notes "Minimum Placing" the placing of Notes with a minimum value of £1,500,000 pursuant to the Placing "McLean Options" the option proposed to be granted to John McLean to subscribe for up to 1,568,627 Ordinary Shares at the Relevant Closing Price per share (with an aggregate subscription price of £100,000), further details of which are set out in section 13 of this announcement "Noteholder" a registered holder of Secured Convertible Loan Notes "Nower Options" the option proposed to be granted to Michael Nower to subscribe for up to 784,314 Ordinary Shares at the Relevant Closing Price per share (with an aggregate subscription price of £50,000), further details of which are set out in section 13 of this announcement "Ordinary Shares" the ordinary shares of 2 pence each in the capital of the Company arising as part of the Share Capital Reorganisation "Panmure Gordon" Panmure Gordon (UK) Limited, nominated adviser and broker to the Company "Placing" the conditional placing of up to £2,250,000 of Secured Convertible Loan Notes "Placing Notes" the Secured Convertible Loan Notes to be issued pursuant to the Placing "Proposals" the Placing, the passing of the Resolutions, the Share Capital Reorganisation, the Deferred Consideration Adjustment and Admission "Redemption Date" the date that is the second anniversary of the issue of Notes or, if that is not a Business Day, on the next following Business Day "Relevant Closing Price" 6.375 pence per share (being the Closing Price on 24 April 2008, which was the latest practicable date prior to the posting of the Circular) "Resolutions" the resolutions to be proposed at the GM, notice of which is set out in the Circular "Secured Convertible Loan Notes" or "Notes" the Humberts Group plc Secured Convertible Loan Notes 2010 "Sellers" all of the sellers of shares and assets to the Group to whom the Company still has unfulfilled obligations to pay deferred consideration for such shares or assets "Shareholders" holders of Existing Ordinary Shares "Supplemental Acquisition Agreements" the agreements proposed to be entered into by the Company with each of the Sellers varying the terms of the Acquisition Agreements "Trustee" The Law Debenture Trust Corporation plc ENDS This information is provided by RNS The company news service from the London Stock Exchange