IRF.L Regulatory News (IRF)

1 Jun 2006 07:01

IRF European Fin Investments Ltd 01 June 2006 IRF European Finance Investments Ltd. ("IRF"") Reverse Takeover Announcement IRF (AIM: IRF) is pleased to announce that it has entered into a definitiveagreement with Antonios Athanasoglou and Ilias Lianos (the "Sellers") to acquirebetween 28 per cent. and 30 per cent. of the issued share capital of ProtonInvestment Bank SA ("Proton") for between €120.1 million and €128.5 million (the"Acquisition"). The lower percentage of Proton shares will be acquired if it isnecessary to avoid the triggering of a mandatory offer to the other shareholdersof Proton in the absence of the Greek Capital Market Commission granting awaiver. Angeliki Frangou, Chairman, stated, "We are excited about the acquisition of acontrolling position in Proton and the platform for growth it represents. Welook forward to playing a significant role in the ongoing consolidation of thebanking sector in Southeastern Europe." Approvals Completion of the Acquisition constitutes a reverse takeover under AIM Rules andis conditioned on approval of the Company's shareholders. Shareholders owningapproximately 65.05% of the issued share capital of IRF have entered into votingcommitments to vote or procure votes in favour of the Acquisition. Theseshareholders include Angeliki Frangou, Chairman of IRF, Andreas Vgenopoulos,deputy chairman of IRF and Georgios Kintis, chief executive officer of IRF.These voting commitments include the 20% of the issued share capital held by theCompany's founding shareholders, which are required to be voted in accordancewith the majority. The agreement with the Sellers is not conditioned on the approval of the Bank ofGreece, although such approval will be sought. Based on previous informaldiscussions with the Bank of Greece, IRF believes the Bank of Greece's approvalis likely to be forthcoming. If such approval is not granted, IRF may berequired to divest of its investment in Proton. About Proton Proton focuses on investment banking and the provision of specialised corporateadvisory and investment services and was listed on the Athens Stock Exchange on22 December 2005. Proton reported operating income of €31.992 million in 2005and an associated profit before tax of €24.669 million. Proton's book value at31 December 2005 was €199.27 million. Proton has announced that is has commenced a merger process with Omega Bank S.A.("Omega"), which has a strong focus on retail lending activities. This mergeris subject to approval by both Proton's and Omega's shareholders as well asregulatory approval and is not expected to complete until September 2006. Omegaoperates 17 retail branches across Greece. Board Structure of Proton and IRF Following the Acquisition, the Sellers have agreed to effect, to the extentpossible, the resignation of 4 of the 7 existing directors of Proton. Thesedirectors will be replaced by 4 directors nominated by IRF, one of whom must beindependent of IRF. Angeliki Frangou, Chairman of IRF, and Georgios Kintis,Chief Executive of IRF, have agreed to become the new directors of Proton andIRF will appoint a further 2 directors in due course. The Sellers are executivedirectors of Proton and own in aggregate approximately 25 per cent. of Proton'sshare capital. It is intended that they will remain executive directors ofProton following completion of the Acquisition. As part of the Acquisition, IRF will enter into separate arrangements withProton ensuring that IRF is provided with all necessary information to enableIRF to comply with its reporting obligations (subject to Proton's obligations under Greek law). No new proposed directors are being considered by IRF at this time. Impact of Omega Merger If the Omega merger happens, IRF's shareholding in Proton will be diluted tobetween approximately 20.2 per cent. and 21.6 per cent. The Sellers and IRF haveagreed that if Proton merges with Omega, IRF and the Sellers will seek (to theextent possible) to change the composition of the Proton board so that there area total of 11 directors, of which 6 will be nominated by IRF ( one of whom mustbe independent of IRF), one will be nominated by the Omega's current managementand 4 will be nominated by the Sellers. Funding The Acquisition will be funded with cash proceeds raised from the placingconducted in November 2005 upon IRF's admission and trading on AIM. The netplacing proceeds, approximating $252 million, are held in trust in a trust fundin Bermuda and release of such trust funds is conditional upon majorityshareholder approval of the Acquisition. Qualified Business Combination The Acquisition will constitute a "Qualified Business Combination" under theCompany's bye-laws. A reverse takeover document will be sent to IRFshareholders in due course. Until such time as that document is sent out, theCompany's ordinary shares (AIM: IRF) and warrants (AIM: IRFW) will be suspendedfrom trading on AIM. Advisers IRF was advised on the acquisition by The Investment Bank of Greece, S GoldmanAdvisors Limited, and Collins Stewart Limited which also acts as the NominatedAdviser and UK Broker. Enquiries: Angeliki FrangouIRFTelephone : +30 010 453 8610 Seema PatersonCollins StewartTelephone: 020 7523 8350 THIS PRESS RELEASE IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES.SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATIONOR AN EXEMPTION FROM REGISTRATION. ANY PUBLIC OFFERING OF SECURITIES IN THEUNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROMTHE COMPANY, WHICH WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY ANDMANAGEMENT AS WELL AS FINANCIAL STATEMENTS. This information is provided by RNS The company news service from the London Stock Exchange