Last checked at 3 Dec 2020 07:00
3 December 2020
LIVE COMPANY GROUP PLC
("LVCG", the "Company" or the "Group")
Introduction of New Sports and Entertainment Division, Acquisitions and fundraise, issue of shares to advisor
Total Voting Rights
Live Company Group plc (AIM: LVCG) (the "Company") announces the establishment of a new sports and entertainment division: Live Company Sports and Entertainment Pty Limited ("LCSE") to be formed by series of acquisitions and associated fund raise ("New Division") ("Transaction").
Highlights
· New Division will focus on live sports, entertainment and music events
· Several existing contracts for events will be novated to LCSE's South African subsidiary from Worldsport South Africa Pty Limited ("WSSA")
· Major new projects and concepts introduced such as K Pop Festival (Korean Pop) in Europe
· The right to sell sponsorship and the management for the upcoming Formula E race in Cape Town planned for December 2021 (right to sell sponsorship comes through the acquisition of E Movements Holdings Ltd ("E-Movement")
· Aggregate consideration under the acquisition agreement for LCSE (including novated contracts from WSSA and introduction of the new projects and concepts) of £1,150,000 to be satisfied by the issue of new ordinary shares of 1p each in the Company ("new Ordinary Shares") (the issue of some of which will be deferred) and subject to lock-ins until December 2022
· Aggregate cash consideration for the acquisition of E-Movement which owns the right to sell sponsorship and operational management of Formula E Cape Town and e- FEST globally of £300,000 (payment by instalments commencing end 2020)
· Placing of new Ordinary Shares to raise gross proceeds of £0.6 million for the development of the New Division, purchase of E-Movement and working capital for New Division and existing business
David Ciclitira, Chairman of LVCG said: "I am very excited at the chance of adding significant revenues to the Group from our New Division, which will be achieved with minimal addition to our central overheads. Discussions with our global partners with regards to the expansion of this New Division have been very positive and we look forward to providing further information in due course. The forthcoming introduction of a global COVID19 vaccine programme will hopefully add opportunities for the second half of 2021 and beyond. Our experience in this new field, together with the ability to use our Cape Town based team working with our global partners offers significant economies of scale. I look forward to updating Shareholders on our developments in due course.
Strategy for the New Division
The New Division namely, Live Company Sports and Entertainment will focus on the fee-based promotion and organisation of global sports and entertainment events including motorsport, sailing, cycling, golf, music and lifestyle events. The first of these, the largest participant based cycle race in the world, the Pick n Pay cycle tour, is planned to take place in Cape Town in March 2021. The strategy of the division will be to develop new global concepts for international events in addition to expanding the existing South African based events. WSSA itself will cease trading at the end of Q1 2021 following the novation. Its key management will transfer to LSCE Pty which is a wholly owned subsidiary of LCSE ltd.
Existing contracts to be novated and major new projects and concepts introduced by the Acquisitions
LCSE
LCSE together with Explorado Group GmbH, the parent company of the Group's existing partner in Germany for BRICKLIVE have formed a joint venture, K-POP Europa Ltd ("KPE"). KPE is in the final stages of agreement to stage a K-Pop concert in Germany in partnership with a Korean broadcaster and a local German Stadium who are underwriting the costs. KPE will be paid fees and commission on monies raised. K-Pop is a very successful Korean-focussed form of popular music. The most successful band is called BTS whose management team recently floated on the Seoul stock exchange raising USD 0.8 billion.
In addition LCSE will be launching 'Best of' a lifestyle event concept showcasing the best of wine, food and art with planned global roll out in 2021 and 2022 potentially to include cities such as Milan, Seoul and Singapore. The first event 'Best of Art Food and Wine Cape Town' will take place in May 2021 London and November 2021 in Cape Town, South Africa.
WSSA
The following contracts ("Novated Contracts") for events due to take place in 2021 and 2022 have been novated to Live Company Sports and Entertainment Pty Ltd, a 100% owned subsidiary of LCSE, from WSSA: Pick n Pay Cycle Tour South Africa, the rights to manage the Ocean Race stop-over in Cape Town and a contract with Pick n Pay (a major South African supermarket chain) to manage various events in South Africa. These are fee based events whereby the Company receives a fee to manage the event and is not dependant on selling sponsorship or tickets. Further details of the Novated Contracts are set out in the attached Schedule.
E-Movement
Other concepts such as e-FEST (a sustainability festival around the Formula E race that includes an electric motorshow and a climate change conference) are also in the final stages of development and will be introduced as part of the transaction too.
Summary of the Acquisitions
The Company is entering into three acquistions as set in the Schedule below and details of the consideration for which is summarised as follows:
LCSE
Consideration for the acquisition is £650,000 to be satisfied by the issue of 6,500,000 new Ordinary Shares in the Company at an issue price of 10p per share to David Ciclitira for the introduction, negotiation, development and launch of the new projects and concepts as per the following payment schedule:
1. 4,500,000 shares upon completion ("LCSE Acquisition Shares")
2. 2,000,000 shares with an issue date deferred until such time as no Rule 9 obligation triggered (as described below)
The shares will be subject to a lock-in agreement until December 2022 restricting the ability of the shareholder to dispose of their interest prior to this date .
Consideration for the acquisition of the Novated Contracts is £350,000 to be satisfied by the issuance of 3,500,000 new Ordinary Shares at an issue price of 10p per share to Bruce Parker- Forsyth (a director of WSSA) "the vendor". Additionally, consideration of £150,000 is to be satisfied issuance of 1,500,000 new Ordinary Shares to Anders Gronburg a creditor of WSSA at a price of 10 pence per share as per the following payment schedule:
1. 1,500,000 shares to Bruce Parker-Forsyth upon completion ("Acquisition Shares")
2. 2,000,000 shares to Bruce Parker-Forsyth subject to performance conditions, deferred until such time as no Rule 9 obligation is triggered (target no later than 31st December 2022)
3. 1,500,000 shares with an issue date deferred until such time as no Rule 9 obligation is triggered (target no later than 31st December 2022)
The shares will be subject to a lock-in agreement until December 2022 restricting the ability of the shareholder to dispose of their interest prior to this date .
E-Movement
Consideration of £300,000 is to be satisfied in cash ( £50,000 of which falls due in December 2020, the rest throughout 2021) for the share capital of E-Movement.
The Placing
To provide funding for the development of the New Division, purchase of E-Movement and working capital for New Division and existing business, the Company has raised £0.6 million (before expenses) by way of a placing of 12,000,000 new Ordinary Shares ("Placing Shares") through Monecor (London) Limited trading as ETX Capital ("Monecor") and SP Angel LLP ("SP Angel") at a placing price of 5p per share (the "Placing Price") (the "Placing").
The Company has entered into two separate placing agreements dated 2 December 2020 (the "Placing Agreements") with Monecor and SP Angel, pursuant to which they, as agents for the Company, have procured placees for the Placing Shares at the Placing Price.
The obligations of Monecor and SP Angel under the Placing Agreement are conditional, inter alia, upon admission of the Placing Shares having occurred by 8.00 a.m. on 9 December 2020 (or such later time and/or date as may be agreed, being no later than 8.00 a.m. on 22 January 2021), and there being no material breach of the warranties given to prior to admission of the Placing Shares.
Monecor or SP Angel may terminate the Placing Agreement in specified circumstances (including for breach of warranty at any time prior to admission of the Placing Shares, if such breach is reasonably considered by Monecor or SP Angel to be material in the context of the Placing) and in the event of a force majeure event occurring at any time prior to admission of the Placing Shares. If the conditions of the Placing Agreement are not fulfilled on or before the relevant date in the Placing Agreement, placing monies will be returned to placees without interest as soon as possible thereafter. If the Placing Agreement is terminated, the Conversion will not take place.
Warrants
The Company will issue participants in the Placing, one warrant for every Placing Share (the "Warrants"). As a result, 12,000,000 Warrants will be issued to placees pursuant to the Placing and subject to approval of the necessary authorities at the Company General Meeting ("GM") which will be scheduled for January 2021 (details of which are to be announced).
Each Warrant will provide the holder the right to one new Ordinary Share on its exercise. The Warrants will be exercisable at a price of 10 p for a two year period from the date of the GM, subject to any extension in accordance with the Warrant instrument. If exercised in full, the Warrants would result in the issue of a further 12,000,000 new Ordinary Shares.
The Company is also considering making proposals to warrantholders from the June 2020 placing as announced on 26th June 2020 to place these on similar terms (including a revised exercise price of 10p) and will provide further details in due course, noting that upon exercise these warrants would generate further capital for the Company.
Related Party Transaction
As Mr Ciclitira is a Director of the Company and a substantial shareholder (with his wife holding 33.12% of the current issued share capital), as defined under the AIM Rules for Companies (the "AIM Rules"), he is a Related Party of the Company as defined under the AIM Rules.
Under the LSCE acquisition agreement, David Ciclitira will be receiving consideration of £650,000 in new Ordinary Shares together with £100,000 in cash on a stage payment basis and participation in an earn-out for the acquisition of E-Movement. Accordingly, this is classified as a Related Party Transaction pursuant to Rule 13 of the AIM Rules and the Directors of the Company, other than Mr Ciclitira and his wife, Mrs Serenella Ciclitira ("Independent Directors"), consider, having consulted with the Company's Nominated Adviser, Beaumont Cornish Limited, that the terms of the Transaction are fair and reasonable insofar as the Company's Shareholders are concerned.
In forming their view, the Independent Directors have taken into account an independent valuation of the contracts and projects and concepts being acquired by the Company which has indicated a value range in excess of ther consideration being paid. They have also taken into account the desirability of adding a further revenue stream to the Company's existing business and the synergies between this and the existing global contacts and cross-sell opportunities which the Group has through David Ciclitira.
The Directors also considered that :
· the planned LCSE strategy either to own its projects outright or to have a long licence fits in with the global strategy of LVCG
· all of the existing or planned projects are fee or commission based. Apart from the hiring of two middle management, the new division will use the existing LVCG central staff.
In considering these facts and after careful deliberation the Independent Directors concluded that the introduction of the New Division is beneficial to the Company and that the consideration being lower than the independent valuation range offers value to Shareholders.
Rule 9 and Concert Party
David Ciclitira (together with his wife), Bruce Parker-Forsyth and Anders Gronburg are considered as being in concert pursuant to Rule 9 of the Takeover Code as a result of the Transaction. The following table details the shareholding of the concert party before and post Admission.
| Number of Ordinary Shares currently held | % of issued share capital pre-Admission | Number of new Ordinary Shares to be issued on admission | Number of Ordinary Shares on admission | % of then issued share capital |
David Ciclitira | 29,586,436 | 33.12 | 4,500,000 | 34,086,436 | 31.52 |
Bruce Parker -Forsyth | 0 | 0 | 1,500,000 | 1,500,000 | 1.39 |
Anders Gronburg* | 0 | 0 | 0 | 0 | 0 |
*deferred consideration as detailed above
Issue of Fee Shares
The Company will also issue 810,000 new Ordinary Shares for payment of professional services during 2020 amounting to £40,500 at the Placing Price ("Fee Shares") and with the associated 1 for 1 warrants on the same terms as the Warrants.
AIM Application and Total Voting Rights
The Placing Shares, LSCE Acquisition Shares, Acquisition Shares and Fee Shares (collectively "New Shares") will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of issue of the Placing Shares and Conversion Shares.
The New Shares are being issued under the Company's existing share authorities.
Application will be made for the admission to trading on AIM of the 18,810,000 New Shares. Dealings are expected to commence on 9 December in respect of the New Shares ("Admission").
Following Admission, the enlarged issued share capital of the Company will comprise 108,138,544 Ordinary Shares. Each Ordinary Share has one voting right. No Ordinary Shares are held in treasury. The above figure may be used by LVCG shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.
A full presentation will be available on www.livecompanygroup.com
Enquiries:
Live Company Group Plc Tel: 020 7225 2000
Sarah Ullman, Chief Operating Officer
Beaumont Cornish Limited (Nominated Adviser) Tel: 020 7628 3396
Roland Cornish/Rosalind Hill Abrahams
Shard Capital Partners LLP (Broker) Tel: 020 7186 9952
Damon Heath
SP Angel Corporate Finance LLP (Placing Agent) Tel: 020 3470 0470
Stuart Gledhill / Adam Cowl
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
LIVE COMPANY GROUP
Live Company Group plc ("LVCG", the "Company" or the "Group") is a live events and entertainment Company, founded by David Ciclitira in December 2017. The Company was admitted to trading on AIM in December 2017, following the reverse acquisition of Brick Live Group and Parallel Live Group by LVCG.
The Group is a network of partner-driven fan-based shows using BRICKLIVE created content worldwide. The Company owns the rights to BRICKLIVE - an interactive experience built around the creative ethos of the world's most popular construction toy bricks. BRICKLIVE, which is a leading children's education and entertainment brand, actively encourages all to learn, build and play, and provides inspirational events and shows where like-minded fans can push the boundaries of their creativity. Bright Bricks is the Group's production centre for building brick based models. The Group is an independent producer of BRICKLIVE and is not associated with the LEGO Group.
Website: www.livecompanygroup.com.
Schedule
Acquisition | Assets | Shares/ Cash | Consideration | Price per share | Partner/ Vendor |
LCSE | 50% share in K -Pop Europa Ltd Intellectual Property and Moral rights to: a) Best of Cape Town b) Best of …concept globally c) Global cycling event d) Additional global projects
| Shares | £650,000/ 6,500,000 new Ordinary Shares 1. 4,500,000 shares upon completion 3. 2,000,000 shares deferred until such time as no rule 9 obligation triggered 4. Lock in until December 2022 | 10p | David Ciclitira 100% |
E-Movement | Share Capital of E- Movement Holdings Ltd
1) The Intellectual Property and Moral rights to e-FEST, that it is envisaged will take place in Cape Town and in other cities around the World to complement the Formula E ePrix races in those cities, and which will incorporate a curated mix of content and events showcasing e-mobility; 2) The sole and exclusive rights, pursuant to a Representation Agreement with E-Movement (Pty) Ltd., to solicit and secure sponsors for the proposed Cape Town ePrix.
| Cash | £300,000 and earn out of 50% of net profit for five years capped at £450,000 in any one year 1. £50,000 to Bruce Parker-Forsyth on or before 31st December 2020; 2. £25,000 to Iain Banner on or before 31st March 2021; 3. £25,000 to Iain Banner on or before 30th April 2021; 4. £50,000 to David Ciclitira on or before 30th June 2021; 5. £50,000 to Bruce Parker-Forsyth on or before 20th December 2021; 6. £50,000 to Iain Banner on or before 20th December 2021; 7. £50,000 to David Ciclitira on or before 20th December 2021;
Profit-related consideration paid by either: 1. Issue of new Ordinary Shares (issue deferred as required for Rule 9 purposes);or 2. Cash in two equal instalments in January and July of the following year
|
| David Ciclitira 33.33% Ian Banner 33.33% Bruce Parker Forsyth 33.33% |
WSSA | Novated contracts to the following events: 1. The Ocean Race 1973 S.L - Host venue Agreement (as amended), pursuant to which TOR appoints WSSA as its delivery partner to host the 14th Edition of The Ocean Race (in 2022/2023) in Cape Town. 2. Pick n Pay Retailers (Proprietary) Ltd - Event management Agreement appointing WSSA as PnP's sponsorship agency and event management agency for the Cape Town Cycle Tour, the PnP Wine and Food Festivals, and the Kirstenbosch Carols by Candlelight. 3. Pick n Pay Retailers (Proprietary) Ltd - Cape Town Cycle Tour Agency Agreement, appointing WSSA in relation to the acquisition and management of PnP's sponsorship rights for the Cape Town Cycle Tour 4. E-Movement (Pty) Ltd - Delivery Agreement, appointing WSSA be project management and delivery agency for the proposed Cape Town ePrix. Contract is being novated to E-Movement Holdings Ltd, a 100% subsidiary of LCSE.
| Shares | £500,000/ 5,000,000 Satisfied by the issue of: 1. 3,500,000 new Ordinary Shares to Bruce Parker-Forsyth (a director and principal shareholder of WSSA) 2. 1,500,000 new Ordinary Shares Anders Gronburg in satisfaction of an outstanding liability due from WSSA.
Schedule of payment 1. 1,500,000 shares shall be issued and allotted to Bruce Parker-Forsyth upon completion, the 'WSSA Novation Shares', and; 2. 2,000,000 shares shall be issued and allotted to Bruce Parker-Forsyth on or before 31st December 2022, dependant on meeting certain performance criteria, the 'WSSA Performance Shares'; and; 3. 1,500,000 shares shall be issued and allotted to Anders Gronburg no later than 31st December 2022,.
| 10p | Bruce Parker-Forsyth Anders Gronburg
|
Note: None of the companies set out above have yet produced any financial statements or reported any results and the assets values are therefore considered by the Company to the be equal to the consideration payable.