9 Mar 2009 07:00
Juridica Investments Limited
("JIL" or "the Company")
Conditional Placing of up to 30,701,754 shares to raise approximately £35 million (before expenses) and proposed interim dividend of 4.6 pence per share
The board of Juridica Investments Limited is pleased to announce a conditional placing by Cenkos Securities plc and a proposed dividend to be paid to existing shareholders.
Highlights:
Lord Daniel Brennan QC, Chairman of JIL commented, "We are particularly pleased to have had such a positive response to the Placing in this economic environment. This is a sound endorsement of the Company's innovative approach to investing in litigation assets that has enabled it to establish a leading position in a large and developing market."
Richard W. Fields, Chief Executive Officer of Juridica Capital Management Limited said, "We have had a very encouraging first year and since the fund was launched committed US$112.25 million to 10 diverse investments involving 17 claims . In addition, the fund realized early, healthy returns on two investments that have made it possible for the Board to propose a maiden dividend."
Juridica Investments Limited
("JIL" or "the Company")
Conditional Placing of up to 30,701,754 shares to raise approximately £35 million(before expenses) and proposed interim dividend of 4.6 pence per share
The Board of JIL (the "Board") today announces a conditional placing by Cenkos Securities plc of up to 30,701,754 new ordinary shares (the "Placing Shares") with various institutional investors at a price of 114 pence per share (the "Placing Price") to raise approximately £35 million before expenses (the "Placing"). The Board is also pleased to announce a proposed interim dividend of 4.6 pence per ordinary share payable to those members whose names are on the register of members on 3 April 2009 (the "Record Date"). Both the Placing and payment of the dividend are conditional, inter alia, upon resolutions being passed at the extraordinary general meeting of the Company to be held on 26 March 2009 (the "EGM"). The Placing Shares are expected to be admitted to trading on 6 April 2009.
Background to and Reasons for the Placing
At the time of admission in December 2007, it was anticipated that the Company's capital would be fully committed between 18 and 24 months from admission. As at 6 March 2009, the Company had invested or provided commitments to fund up to $112.25 million including ongoing commitments of up to $95.25 million across 10 investments giving exposure to 15 current cases. Four cases allege breach of antitrust/competition law; five involve enforcement or determination of patent rights; two claim property damage and insurance subrogation; two are claims against sovereign powers; one involves a shareholder dispute; and one is a statutory claim. Five of these cases have trial/hearing dates set, two of which are scheduled during 2009 and three during 2010.
These commitments represent approximately 78 per cent of the amount available to the Company to invest leaving approximately $24 million in deployable capital remaining. In addition, two cases in which the Company invested have already reached final determination resulting in a gross profit on investment of approximately $5.19 million. In assembling this portfolio Juridica Capital Management Limited ("JCML"), the Company's manager, has analysed over 120 cases and continues to see significant opportunities for investment.
JCML believes the current economic environment will present a strong pipeline of investment opportunities. The net proceeds of the Placing will be used to fund the Company's ongoing investment program, as described in the Company's admission document dated 17 December 2007, and to capitalise on opportunities as they arise.
The Company intends to use up to approximately 50 per cent of the net proceeds of the Placing to make loans to Fields Scrantom Sullivan PLLC and other law firms. It is anticipated that the remainder of the net proceeds of the Placing will be used by the Company to make direct investments in claims and pay the ongoing expenses of the Company.
Interim Dividend
As referred to above, two of the cases in which the Company invested have already reached final determination, resulting in a gross profit on investment of approximately $5.19 million. In recognition of this, and in accordance with the Company's current dividend policy, the Board is proposing, subject to resolutions being passed at the EGM, to declare an interim dividend of 4.6 pence per ordinary share prior to completion of the Placing, which will only be paid to shareholders whose names are on the register of members on the Record Date.
The interim dividend will be paid by default in pounds sterling, although shareholders will be able to elect to receive the dividend in US dollars. Dividends paid in US dollars will be converted at the closing exchange rate prevailing on the Record Date.
Details of the Placing
The Company has entered into a placing agreement with Cenkos Securities plc ("Cenkos") pursuant to which Cenkos has, on behalf of the Company, conditionally placed the Placing Shares with various investors at the Placing Price. The consideration payable by the Company to Cenkos under the placing agreement will be satisfied by the issue of 1,535,087 new ordinary shares by the Company to Cenkos (the "Consideration Shares"). The Placing Shares and the Consideration Shares will be issued at the Placing Price. The Placing Shares would represent approximately 27.35 per cent of the enlarged share capital of the Company, assuming no further ordinary shares are issued by the Company (other than the Placing Shares and the Consideration Shares), no options are exercised, no warrants are exercised and the maximum number of Placing Shares is issued in connection with the Placing.
The Company's articles of association restrict the Directors from issuing shares non pre-emptively at a price which is less than the Company's net asset value per share. The Placing Price is less than the Company's last published net asset value per share. Accordingly, if the resolutions are passed at the EGM, the provisions of the Company's articles of association will be disapplied only in respect of the Placing Shares and the Consideration Shares. It is the Board's intention that any further issues of ordinary shares for cash will be at a price no less than the last published net asset value per share.
The Placing Shares and the Consideration Shares will, on admission, rank in full for all dividends and other distributions declared, made or paid in respect of existing ordinary shares after admission, other than the proposed interim dividend announced today by the Board, and will otherwise rank pari passu in all respect with such shares.
As part of the Placing, JCML has agreed to subscribe for a total of 153,507 Placing Shares in cash at the Placing Price.
Related Party Transaction
The Placing is intended to include a subscription (subject to the terms and conditions of the Placing) by existing shareholders who fall within the definition of related parties in the AIM Rules because they each hold more than 10 per cent. of the Company's existing ordinary shares. The Directors, having consulted with Cenkos as the Company's Nominated Adviser, consider that the terms of this transaction are fair and reasonable insofar as the Company's shareholders are concerned. In being consulted, Cenkos has relied on the Directors' commercial assessment of the transaction.
A circular containing details of the Placing, the interim dividend and proposed amendments to the Company's articles of incorporation and the notice of EGM is being posted to shareholders today and will be available on the Company's website: www.juridicainvestments.com.
The Company has received undertakings to vote in favour of the resolutions to be passed at the EGM in respect of 40,100,000 ordinary shares. This number includes voting commitments from JCML in respect of their 1,500,000 ordinary shares representing 1.875 percent of the Company's issued share capital.
| Juridica Capital Management Limited Richard W. Fields | Tel: +1 9866 443 1080 |
| Cenkos Securities plc Nicholas Wells/Camilla Hume |
Tel: +44 (0) 20 7397 8900 |
Bell Pottinger Corporate & Financial
Olly Scott Tel: +44 (0) 20 7861 3232
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
| Latest time and date for receipt of Forms of Proxy for the Extraordinary General Meeting | 10 a.m. on 24 March 2009 |
| Extraordinary General Meeting | 10 a.m. on 26 March 2009 |
| Interim dividend ex-div date | 1 April 2009 |
| Interim dividend record date | 3 April 2009 |
| Interim dividend payment date | 24 April 2009 |
| Expected date of admission and commencement of dealings in Placing Shares and Consideration Shares on AIM | 6 April 2009 |
| Where applicable, date for CREST accounts to be credited in respect of the Placing Shares | 6 April 2009 |
| Where applicable, date of dispatch of definitive share certificates for Placing Shares | 17 April 2009 |