LID.L Regulatory News (LID)

28 Apr 2006 12:58

For Immediate Release 28 April 2006NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY ORINDIRECTLY, IN OR INTO THE UNITED STATES, JAPAN, CANADA, AUSTRALIA OR THEREPUBLIC OF IRELAND LiDCO Group plc ("LiDCO" or the "Company") Placing of 17,500,000 new Ordinary Shares at 20p to raise ‚£3.5 million LiDCO, the cardiovascular monitoring company, today announces that it hasconditionally completed a placing of 17,500,000 new Ordinary Shares of 0.5peach at a price of 20 pence per share (the 'Placing'). The Company announcesthat, following the close of the Placing the Company will have raised ‚£3.5million before expenses.Terry O'Brien, LiDCO's CEO today commented "I am delighted to announce theproposed placing of shares the proceeds of which will be used for productdevelopment, to support our market expansion and working capital requirementsand reduce our borrowings. The placing will put LiDCO in a stronger financialposition to exploit the growth opportunities referred to in our preliminaryresults announcement also released today."The Placing is conditional on the approval of a resolution at an extraordinarygeneral meeting to be held on 23 May 2006 (the "EGM"). A Circular together withnotice of EGM will today be dispatched to Shareholders. Subject to the passingof the resolution at the EGM the Company, through Panmure Gordon & Co, willapply for the Placing Shares, which will rank pari passu with existing OrdinaryShares, to be admitted to trading on AIM, and expects that admission will occuron 24 May 2006.Copies of the Circular (in connection with the Placing) being posted toShareholders will be available to the public, free of charge, from the date ofthis announcement for the period of one month at the offices of Panmure Gordon& Co at:Panmure Gordon & CoMoorgate Hall155 MoorgateLondonEC2M 6XBFor further information please contact:LiDCO Group Plc Tel: +44 (0)20 7749 1500Terry O'Brien - Chief ExecutiveHugh McGarel-Groves - Finance DirectorFinancial PR: Buchanan Communications Tel: +44 (0)20 7466 5000Tim Anderson, Mary-Jane Johnson, James StrongNominated Adviser and Broker: Panmure Gordon & Co Tel: +44 (0)20 7459 3600Aubrey Powell, Katherine Roe, Andrew CollinsBackground to and reasons for the PlacingSales and Marketing ActivityLiDCO's current direct sales force has achieved good growth in the territoriesin which the Company operates but is thinly spread, particularly in the US.Furthermore, it has become apparent that the market for minimally invasivecardiovascular monitoring products is growing strongly. In order to takeadvantage of this market opportunity for LiDCO's products, the Company proposesto increase its direct sales staff, as well as increase understanding of theoperation of its products by medical practitioners. The increased sales staffwill be able to undertake more of the training required for hospitals tocalibrate the LiDCOplus monitor with the sensor. The Directors believe thatthis will increase sales of LiDCO's disposable products, as well as furtherdemonstrate the benefits of the new features on the forthcoming release of theversion 4.0 LiDCOplus software.Research and DevelopmentLiDCO continues to invest significant sums in software and other development ofthe LiDCO products, having created new software versions in each of the lastthree years, as well as process improvements to the sensor manufacturing.Increasingly, hospitals are interested in improving connectivity of theirmedical and administrative equipment in order to maximise potential efficiencybenefits. For LiDCO, this means that it needs to expand its softwareprogramming resources to enable its products to work with a greater variety ofcommunication protocols. Part of the proceeds of the Placing will therefore beused in connection with these research and development activities and to makefurther improvements to the user interface with the potential for additionalderived hemodynamic parameters.Loan FacilityIn August 2005, LiDCO entered into a three year secured revolving convertibleloan agreement with Laurus Master Fund Ltd ("Laurus"), a US based provider offinance to small cap growth companies. This agreement provided for a loanfacility of $2million, secured on the assets of the Company. Under the terms ofthe agreement, repayment of any outstanding sum may be made in cash or,alternatively, in an equivalent number of shares, by reference to a specificformula. The current sum outstanding is $2million (approximately ‚£1.1million)and the interest rate is currently 9.25 per cent per annum. The Company intendsto use part of the proceeds of the Placing to repay substantially all of theoutstanding loan so as to reduce the interest payable, whilst retaining thefacility for the remaining life of the loan agreement.Under the terms of the loan agreement with Laurus, and following notice of theproposed repayment, Laurus will have the right to convert part or all of theamount to be repaid under the facility at the Placing Price, up to a maximumresultant holding of 2.99% of the Company's outstanding issued share capital.Assuming completion of the Placing and conversion in full by Laurus of themaximum amount of shares permitted by the loan agreement, Laurus' aggregateholding in the Enlarged Share Capital would amount to 3,007,098 shares or 2.5%of the Enlarged Share Capital, of which 1,116,920 shares are already held byLaurus, following a conversion event announced on 18 November 2005. In theevent that Laurus does not choose to convert any of the loan amount to berepaid, Laurus would continue to hold 1.0% of the Enlarged Share Capital.Regardless of further conversion and subject to agreement, it is expected thatLaurus will enter into an orderly market arrangement on customary terms.Working CapitalIn addition, the Directors wish to increase the level of working capitalfunding available to the Company. This will allow funding for the higher tradedebtor position associated with the anticipated growth in sales. The Directorsare of the opinion that, taking into account the proceeds of the Placing, theCompany will have sufficient working capital for its present requirements, thatis to say, for at least the next 12 months.APPENDIXTERMS AND CONDITIONS OF AND IMPORTANT INFORMATION ON THE PLACINGThe Placing and the terms and conditions herein, are directed exclusively atpersons falling within Article 19 and/or Articles 47 to 50 of the FinancialService and Markets Act 2000 (Financial Promotion) Order 2005 (as amended)(such category of investors being referred to as "Relevant Persons") and noother person should respond to this announcement. Accordingly, thisannouncement is exempt from the general restriction set out in Section 21 ofthe FSMA on the communication of invitations or inducements to engage ininvestment activity and has not been approved by a person who is authorisedunder the FSMA.Members of the public are not entitled to take part in the Placing and thisannouncement is communicated to them for the purposes of information only. Thisannouncement and the terms and conditions herein must not be relied on, actedon or responded to by persons who are not Relevant Persons. If you are in anydoubt as to whether you are a Relevant Person you should consult a professionaladviser for advice.This announcement and appendix do not constitute an offer to sell or issue orsolicitation of an offer to buy or subscribe for new Ordinary Shares in anyjurisdiction, and any acquisition or application for Ordinary Shares shouldonly be made on the basis of information contained in this document.The following definitions have been used in this announcement:"Admission" Admission of the Placing Shares to trading on AIM in accordance with the AIM Rules "AIM" the AIM market of the London Stock Exchange "AIM Rules" the rules applicable to AIM as published by the London Stock Exchange from time to time "Board" or "Directors" the directors of LiDCO "Circular" this Circular dated 28 April 2006 describing the Placing and giving notice of the Extraordinary General Meeting "CREST" the relevant system (as defined in the Uncertificated Securities Regulations 2001) in respect of which CRESTCo is the operator "CRESTCo" CRESTCo Limited "Enlarged Share the issued share capital of the Company immediately Capital" following the Placing "Existing Ordinary the 100,571,850 Ordinary Shares in issue as at the Shares" date of this announcement "FSMA" Financial Services and Markets Act 2000 (as amended) "Group" LiDCO, its subsidiaries and its subsidiary undertakings "London Stock London Stock Exchange plc Exchange" "Ordinary Shares" ordinary shares of 0.5p each in the capital of the Company "Panmure Gordon & Co" Panmure Gordon (Broking) Limited (trading as Panmure Gordon & Co) whose registered office is at Moorgate Hall, 155 Moorgate, London, EC2M 6XB, the Nominated Adviser and Broker to the Company "Placing" the conditional placing by Panmure Gordon & Co, on behalf of the Company, of the Placing Shares at the Placing Price, pursuant to the terms and conditions of the Placing Agreement "Placing Agreement" the conditional agreement dated 28 April 2006 between the Company, the Directors and Panmure Gordon & Co relating to the Placing "Placing Price" 20p per Ordinary Share "Placing Shares" 17,500,000 Ordinary Shares which are the subject of the Placing "Prospectus Rules" the Prospectus Rules made by the Financial Services Authority with effect from 1 July 2005 pursuant to Commission Regulation (EC) No. 809/2004 "Securities Act" the US Securities Act 1933 "Shareholders" holder(s) of Existing Ordinary Shares The PlacingUnder the Placing, Panmure Gordon & Co on behalf of the Company, hasconditionally placed 17,500,000 new Ordinary Shares at the Placing Price toraise ‚£3.5 million (or approximately ‚£3.2 million net of expenses).Application will be made (conditional on the approval of shareholders at theEGM) to the London Stock Exchange for the admission of the Placing Shares totrading on AIM. It is expected that Admission will occur and that dealings willcommence on 24 May 2006 at which time it is also expected that the PlacingShares will be enabled for settlement in CREST.Terms of the Placing AgreementPursuant to the Placing Agreement, Panmure Gordon & Co has agreed to use itsreasonable endeavours to place the Placing Shares with placees selected by it.Panmure Gordon & Co has further agreed itself to subscribe such number of thePlacing Shares for which it fails to procure placees.The Placing is conditional upon, inter alia, the passing of a resolution at theEGM, Admission and on the Placing Agreement having become unconditional and nothaving been terminated in accordance with its terms prior to Admission. If theconditions of the Placing Agreement are not fulfilled or waived on or before8.00 am on 24 May 2006 (or such later time and date as the Company and PanmureGordon & Co may agree, being no later than 8.00 am on 8 June 2006) the Placingwill not become unconditional and the placing monies will be returned to theplacees, without interest, as soon as practicable thereafter.In consideration of their services in connection with the Placing, the Companywill pay to Panmure Gordon & Co a commission of a certain percentage of theaggregate value, at the Placing Price, of the Placing Shares as well as acorporate finance fee. The Placing Agreement contains warranties given by theCompany and the Directors with respect to the Group, its business and certainmatters connected with the Placing. Panmure Gordon & Co is entitled toterminate the Placing Agreement in certain circumstances prior to Admission,principally in the event that any of the warranties contained therein are, orbecome, materially untrue, inaccurate or misleading or if an event of forcemajeure arises.Overseas shareholders The Placing Shares have not been and will not be registered under theSecurities Act or under the securities law of any state of the United Statesnor have they been qualified for sale under the securities legislation of anyprovince or territory of Canada and the relevant exemptions are not beingobtained from the securities commission of any province of Canada andaccordingly, the Placing Shares may not be offered, sold, taken up, deliveredor transferred (directly or indirectly) and will not qualify for sale withinthe United States or Canada or to, or for the account or benefit of, any personor corporation in (or with a registered address in) the United States orCanada. The Placing Shares will not be lodged or registered with the AustralianSecurities and Investments Commission under Australia's Corporations Law andare not being offered for subscription or sale and may not be directly orindirectly offered, sold or delivered in or into Australia or for the accountor benefit of any person or corporation in (or with a registered address in)Australia. No document in relation to the Placing Shares has been or will be lodged forregistration with the Registrar of Companies in the Republic of Ireland and thePlacing Shares will not be offered, sold or delivered, directly or indirectlyin the Republic of Ireland. All subscribers for Placing Shares must provideaddresses outside the Republic of Ireland for the receipt of certificates forPlacing Shares. The relevant clearances have not been, and will not be, obtained from theMinistry of Finance of Japan and no document in relation to the Placing hasbeen or will be lodged with or registered by the Ministry of Finance of Japan.The Placing Shares may not therefore be offered or sold, directly orindirectly, in or into Japan, its territories and possessions and any areassubject to its jurisdiction.GeneralThis announcement is the sole responsibility of the Company. Panmure Gordon &Co is acting as nominated adviser, broker and financial adviser to the Companyand to no other person in relation to the Placing. Panmure Gordon & Co will notbe responsible to any person other than the Company for providing theprotections afforded to the customers of Panmure Gordon & Co nor for advisingany person other than the Company on the transactions and arrangements referredto in this document.These terms and conditions apply to persons making an offer to subscribe forPlacing Shares under the Placing. Each person to whom these conditions apply,as described above, who confirms his agreement to Panmure Gordon & Co (onbehalf of itself and the Company) to subscribe for Placing Shares (which mayinclude Panmure Gordon & Co and/or its nominee(s)) hereby agrees with each ofPanmure Gordon & Co and the Company to be bound by these terms and conditionsas being the terms and conditions on which the Placing Shares will be issuedunder the Placing. A Placee shall, without limitation, become so bound ifPanmure Gordon & Co confirms to it by telephone (i) the Placing Price and (ii)its allocation (the "Confirmation") and Panmure Gordon & Co so notifies theCompany's registrar on behalf of the Company.Conditional on (i) the passing of the resolution at the EGM, (ii) Admissionoccurring on 24 May 2006 or such later date as the Company and Panmure Gordon &Co may agree (not being later than 8 June 2006), (iii) the Confirmation, eachPlacee agrees to subscribe for the number of Placing Shares allocated to it, atthe Placing Price. To the fullest extent permitted by law, each Placeeacknowledges and agrees that it will not be entitled to exercise any remedy ofrescission at any time. This does not affect any other rights a Placee mayhave. A conditional contract note will be dispatched as soon as possiblefollowing the Confirmation.Each Placee undertakes to pay the Placing Price for the Placing Shares issuedto such Placee in such manner as shall be directed by Panmure Gordon & Co.Liability for stamp duty and stamp duty reserve tax is described below. In theevent of failure by any Placee to pay as so directed, the relevant Placee shallbe deemed hereby to have appointed Panmure Gordon & Co or any nominee ofPanmure Gordon & Co to sell (in one or more transactions) any or all of thePlacing Shares in respect of which payment shall not have been made as directedby Panmure Gordon & Co.By participating in the placing, each Placee irrevocably represents, warrantsand undertakes to Panmure Gordon & Co (for itself and as agent of the Company)that:(a) it and/or each person on whose behalf it is participating (in whole or inpart) in the Placing or to whom it allocates its Placing Shares in whole or inpart:(i) has the capacity and authority and is entitled to enter into and performits obligations as a subscriber of Placing Shares and will honour suchobligations; and(ii) has fully observed all laws of relevant jurisdictions and obtained allnecessary governmental or other consents in either case which may be requiredin relation to the subscription by it of Placing Shares;(b) it is not a person who is resident in, or a citizen of, the United States,Canada, Australia, the Republic of Ireland or Japan (or an agent or nominee ofsuch a person) or a corporation, partnership or other entity organised underthe laws of any such jurisdiction (or an agent or nominee of such a person);(c) it is a Relevant Person;(d) in agreeing to subscribe for Placing Shares it has received and read thisdocument including this appendix and is not relying on any information,representation or warranty relating to the Placing, Placing Shares or theCompany other than as contained in this document and it has not relied on andis not relying on any representation or warranty or agreement by Panmure Gordon& Co or the Company or any of their respective directors, employees or agentsor any other person except as set out in the express terms herein;(e) save where Panmure Gordon & Co has been given prior written notice to thecontrary, in participating in the Placing it is acting as principal and for noother person and that its acceptance of that participation will not give anyother person a contractual right to require the issue by the Company of any ofthe Placing Shares;(f) it irrevocably confirms Panmure Gordon & Co's discretion with regard to thePlacing Agreement and agrees that Panmure Gordon & Co does not owe it anyfiduciary duties in respect of any claim it may have relating to the Placing;(g) it acknowledges that the Placing Shares have not been and will not beregistered under the Securities Act or under the securities laws of any Stateof the United States, that the relevant clearances have not been and will notbe obtained from the Securities Commission of any province of Canada and thatthe Ordinary Shares have not been and will not be registered under thesecurities laws of Australia, the Republic of Ireland or Japan and, therefore,the Placing Shares may not, subject to certain exceptions, be directly orindirectly offered or sold in the United States, Canada, Australia, theRepublic of Ireland or Japan;(h) it acknowledges and agrees that neither it nor any affiliate, nor anyperson acting on its or any affiliate's behalf, has or will offer, sell, takeup, renounce, transfer or deliver directly or indirectly any Placing Shareswithin the United States, Canada, Australia, the Republic of Ireland or Japanor offer, sell, take up, renounce, transfer or deliver in favour of a residentof Canada, Australia, the Republic of Ireland or Japan;(i) it has not offered or sold and will not offer or sell any Placing Shares inthe United Kingdom prior to Admission except in circumstances which have notresulted and will not result in an obligation to publish an approved prospectusarising under section 85(1) of the FSMA or a breach of such section;(j) it has complied with all relevant laws of all territories, or obtained allrequisite governmental or other consents which may be required in connectionwith its participation in the Placing; that it has complied with all requisiteformalities and that it has not taken any action or omitted to take any actionwhich will or may result in Panmure Gordon & Co, or the Company or any of itsdirectors, officers, agents, employees or advisors acting in breach of thelegal and regulatory requirements of any territory in connection with thePlacing or its application; that it is not in a territory in which it isunlawful to make an offer to subscribe for Placing Shares; and that it will payany issue or other taxes due under any relevant non-UK laws;(k) it acknowledges and agrees in connection with its participation in thePlacing that Panmure Gordon & Co is not acting for it in relation to thePlacing or otherwise and that Panmure Gordon & Co will not have any duties orresponsibilities to it for providing the protections afforded to its customersor for advising it with regard to the Placing or the Placing Shares, nor do thecontents of this announcement constitute the giving of investment advice byPanmure Gordon & Co to it;(l) it has obtained all necessary consents and authorities to enable it to giveits commitment to subscribe for Placing Shares and to perform its obligationsas set out herein;(m) save where Panmure Gordon & Co has been given prior written notice to thecontrary, it is not a person falling within subsections (6), (7) or (8) ofsections 67 or 70 or subsections (2) and (3) of section 93 or subsection (1) ofsection 96 of the Finance Act 1986 (or an agent or nominee of such person);(n) save where Panmure Gordon & Co has been given prior written notice to thecontrary, the issue of Placing Shares to it (whether as principal, agent ornominee) will not be subject to stamp duty or stamp duty reserve tax at theincreased rates referred to in sections 67 or 93 (Depositary Receipts) orsections 70 or 96 (Clearance Services) of the Finance Act 1986;(o) in the case of a person who confirms to Panmure Gordon & Co on behalf of aPlacee an agreement to subscribe for Placing Shares and/or who authorisesPanmure Gordon & Co to notify the Placee's name to the Company's registrar,that person represents and warrants that he has authority to do all such actson behalf of the Placee;(p) to the extent that a Placee is subscribing for Placing Shares on behalf ofa third party and prior written notice of such matter has been given to PanmureGordon & Co as contemplated by paragraph (e) of this appendix; i. such Placee has carried out applicable procedures to verify the identity of such third party for the purposes of the Money Laundering Regulations 2003 (the "Regulations"); (ii) such Placee has complied fully with its obligations pursuant to theRegulations; and(iii) such Placee will provide Panmure Gordon & Co on demand with anyinformation it might require for the purposes of verification under theRegulations;(q) it is aware of, has complied with and will comply with its obligations inconnection with money laundering under the Proceeds of Crime Act 2002; and(r) it acknowledges that the issue of the Placing Shares to it will be issuedsubject to the terms and conditions set out herein.In the event that a Placee is not able to give the warranties in (m) and (n)above, stamp duty or stamp duty reserve tax may be chargeable or may bechargeable at a higher rate: neither Panmure Gordon & Co nor the Company willbe responsible for any resulting liability to stamp duty or stamp duty reservetax, which shall be for the account of the Placee and in respect of which thePlacee agrees to indemnify, and keep indemnified, Panmure Gordon & Co and theCompany.Each Placee irrevocably appoints any director of Panmure Gordon & Co as itsagent for the purpose of executing and delivering to the Company and/or itsregistrars any documents on its behalf necessary to enable it to be registeredas the holder of any of the Placing Shares offered to it;Settlement of the transactions in the Placing Shares following Admission willtake place within the CREST system against Panmure Gordon & Co's CREST account83801. The usual rules of secondary settlement and trading will apply.Panmure Gordon & Co will endeavour to meet the demands of those Placeesindicating that they wish to hold their Placing Shares in certificated form.In the case of a joint agreement to subscribe for Placing Shares, references toa Placee in these terms and conditions are to each Placee who is a party tosuch agreement and each such Placee's liability is joint and several.These terms and conditions and all documents and agreements into which theseterms and conditions are incorporated by reference or otherwise validly form apart will be governed by and construed in accordance with English law. For theexclusive benefit of Panmure Gordon & Co and the Company each Placeeirrevocably submits to the exclusive jurisdiction of the English courts inrespect of these matters. This does not prevent an action being taken againstthe Placee in another jurisdiction.ENDLIDCO GROUP PLC