MED.L Regulatory News (MED)

18 Sep 2007 07:03

MicroEmissive Displays Group PLC18 September 2007 Strictly embargoed: 07:01, 18 September 2007 MicroEmissive Displays Group plc 18 September 2007 MicroEmissive Displays Group plc ("MED" or the "Company") Conditional placing of 15,720,000 new Ordinary Shares to raise approximately £7.5 million (net of expenses) MED, the AIM listed designer and manufacturer of low-power microdisplays usinglight emitting polymers for portable consumer electronics products, todayannounces its intention to raise approximately £7.5 million (net of expenses) byway of a Placing. Summary of the Placing: • Placing of 15,720,000 Placing Shares at a price of 50p per share to raise approximately £7.5 million (net of expenses). • Net proceeds of the Placing will be used to strengthen the Company's balance sheet and fund the working capital requirements anticipated as a result of the ramping of production at the Company's manufacturing facility, providing comfort to existing and prospective commercial partners. George Elliott, Chairman of MED, said: "These additional funds will ensure that on completion of the conditionalplacing, MED has the financial resources required to ramp production and executemanagement's strategy for growth." A circular containing a notice of extraordinary general meeting convened for 10a.m. on 12 October 2007 is today being sent to shareholders of the Companyoutlining the terms of the Placing and seeking Shareholder approval to, interalia, enable the Directors to allot the Placing Shares in connection with thePlacing. This summary should be read in conjunction with, and is subject to, the fulltext of the attached announcement. For further information, please contact: MicroEmissive Displays 0131 650 7764Bill Miller, Chief ExecutiveGraeme Walker Finance Director Arbuthnot Securities Limited 020 7012 2000Neil KirtonJohn Prior Tavistock Communications 020 7920 3150John WestMatt Ridsdale MicroEmissive Displays Group Plc ("MED" or the "Company") Conditional placing of 15,720,000 new Ordinary Shares to raise approximately £7.5 million (net of expenses) 1. Introduction MED announces that it has conditionally placed in aggregate 15,720,000 PlacingShares at a price of 50p per share. Once completed, the Placing will raiseapproximately £7.5 million (net of expenses). The net proceeds of the Placingwill strengthen the Company's balance sheet and fund the working capitalrequirements anticipated as a result of the ramping of production. The Placing is conditional, inter alia, upon the Company obtaining approval fromits Shareholders to increase its authorised share capital, grant the Boardauthority to allot the Placing Shares and to disapply statutory pre-emptionrights which would otherwise apply to, inter alia, the allotment of the PlacingShares. The Placing is also conditional upon Admission. The Placing is being made on a non pre-emptive basis as the time and costsassociated with a pre-emptive offer resulting from the introduction of the EUProspectus Rules (which came into force in July 2005) are considered by theDirectors to be excessive. The making of a pre-emptive offer would require theproduction of a prospectus which would have to comply with the Prospectus Rulesand be pre-vetted and approved by the FSA. 2. Background to and reasons for the Placing Over the last 12 months MED has taken very important steps towards volumeproduction with our tool set installed and qualified, negotiation of salesdistribution agreements and additional loan finance secured. Importantly, ourstate-of-the-art manufacturing facility in Dresden, Germany, was officiallyopened in May and the first working samples of our next-generation eyescreenTMwere produced and shipped to potential customers in July. Good progress has beenmade in all aspects of the business and the operational milestones set out inthe Company's 2006 preliminary results statement have been achieved. The Directors believe that eyescreenTM remains a compelling and cost-effectiveproduct, the key elements of which, relative to competing products, are thesmall, lightweight nature of our product coupled with high image quality and lowpower requirements. 3. Funding and use of proceeds During the year, MED has further strengthened its position with substantialprogress at the operational level. As mentioned above, our manufacturingfacility was opened in May and includes a 396 square metre clean room and issituated alongside the Fraunhofer Institute, recognised internationally as acentre of excellence for polymer and organic semiconductor innovation. Our staffin Dresden now number 23 and we will continue to hire for the production rampthrough the remainder of 2007 and 2008. With our objective of installing the manufacturing line and preparing it forvolume production having now been achieved, the Directors believe that MED isnow in a position to extract value from its sales pipeline. The Company isbuilding traction with potential customers, the order book is growing, and theprospects for the second half of 2007 and in particular for 2008 are promising. The proceeds pursuant to this Placing will be used to strengthen the Company'sbalance sheet and fund the working capital requirements anticipated as a resultof the ramping of production, providing comfort to existing and prospectivecommercial partners. 4. Details of the Placing The Company proposes to raise approximately £7.5 million (net of expenses)through the issue of the Placing Shares at the Placing Price. The Placing Pricerepresents a discount of 8.3 per cent. to the closing middle market price of54.5p on 17 September 2007, being the last practicable dealing day prior to thedate of this announcement. The Placing Shares will represent approximately 26.5per cent. of the Company's issued share capital immediately following Admission. The Placing Agreement Pursuant to the terms of the Placing Agreement, Arbuthnot has conditionallyagreed to use its reasonable endeavours, as agent for the Company, to place thePlacing Shares at the Placing Price with certain institutional investors. ThePlacing Agreement is conditional upon, inter alia, the Resolutions being dulypassed at the EGM and Admission becoming effective on or before 8 a.m. on 15October 2007 (or such later time and/or date as the Company and Arbuthnot mayagree, but in any event by no later than 3 p.m. on 31 October 2007). The Placing Agreement contains warranties from the Company and the Directors infavour of Arbuthnot in relation to, inter alia, the accuracy of the informationcontained in this document and certain other matters relating to the Group andits business. In addition, the Company has agreed to indemnify Arbuthnot inrelation to certain liabilities it may incur in respect of the Placing.Arbuthnot has the right to terminate the Placing Agreement in certaincircumstances prior to Admission, in particular for an event of force majeure orin the event of a material breach of the warranties set out in the PlacingAgreement. Admission and dealings Application will be made to the London Stock Exchange for the Placing Shares tobe admitted to trading on AIM. The Placing Shares will, when issued, rank paripassu in all respects with the existing Ordinary Shares, including the right toreceive dividends and other distributions declared following Admission. It isexpected that such Admission will become effective and that dealings willcommence on 15 October 2007. 5. Unaudited interim results for the six months to 30 June 2006 The Company today announced its unaudited interim results for the six months to30 June 2007. Pre-tax losses for the six month period to 30 June 2007 were £3.1million (six months to 30 June 2006: £3.4 million). Net funds at 30 June 2007were £2.3 million (30 June 2006: £4.1 million). 6. Related party transaction Arbuthnot has conditionally placed the Placing Shares at the Placing Price withvarious institutional investors, including Scottish Equity Partners Limited("SEP") (6,000,000 Placing Shares) and AXA Framlington Investment ManagementLimited ("Framlington") (1,200,000 Placing Shares). The issue of Placing Sharesto each of the aforementioned substantial shareholders is classified as atransaction with a related party for the purposes of the AIM Rules. Inaccordance, therefore, with the AIM Rules, the Directors having consulted withthe Company's nominated adviser, Arbuthnot, consider that the terms of thetransaction (namely the subscriptions by SEP and Framlington, pursuant to thePlacing at the Placing Price) are fair and reasonable insofar as itsShareholders are concerned. 7. Extraordinary General Meeting The circular to be sent out to Shareholders today contains a notice conveningthe EGM to be held at Scottish Microelectronics Centre, West Mains Road,Edinburgh EH9 3JF at 10 a.m. on 12 October 2007 at which the Resolutions will beproposed for the purposes of implementing the Placing. Copies of the circular incorporating the notice convening the EGM will beavailable for collection from the offices of Arbuthnot Securities Limited,Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR for a period of one monthfrom the date of this announcement and will also be available at the Company'swebsite, www.microemissive.com. Placing statistics Placing Price 50p Number of existing issued shares 43,632,206 Number of Placing Shares being placed on behalf of the 15,720,000Company Estimated proceeds receivable by the Company, net of £7.5 millionexpenses Number of Ordinary Shares in issue following Admission 59,352,206 Number of Placing Shares as a percentage of the enlarged 26.5 per cent.issued share capital Expected timetable of events 2007 Latest time and date for receipt of Forms of Proxy 10 a.m. on 10 October Extraordinary General Meeting 10 a.m. on 12 October Admission and dealings in the Placing Shares 8 a.m. on 15 Octoberexpected to commence on AIM Definitions The following definitions apply throughout this announcement, unless the contextrequires otherwise: "Act" the Companies Act 1985, as amended "Admission" the admission of the new Ordinary Shares to trading on AIM "AIM" the AIM market of the London Stock Exchange plc "AIM Rules" the AIM Rules for Companies and the AIM Rules for Nominated Advisers published by the London Stock Exchange plc "Arbuthnot" Arbuthnot Securities Limited, the Company's broker and placing agent "Board" or the board of directors of MED "Directors" "Extraordinary the extraordinary general meeting of the CompanyGeneral Meeting" convened for 10 a.m. on 12 October 2007 (or anyor "EGM" adjournment thereof) "Form of Proxy" the accompanying Form of Proxy for use by Shareholders in relation to the EGM"Group" MED and its subsidiaries, MicroEmissive Displays Limited and MicroEmissive Displays GmbH "MED" or "the MicroEmissive Displays Group plcCompany" "Notice of EGM" the notice of EGM, set out at the end of the circular sent to shareholders "Ordinary Shares" ordinary shares of 1 pence each in the capital of MED "Placing" the conditional placing to be undertaken by Arbuthnot as agent for the Company of the Placing Shares at the Placing Price "Placing Agreement" the conditional agreement dated 18 September 2007 made between the Arbuthnot (1) the Company (2) and the Directors pursuant to which the Placing Shares will be conditionally placed at the Placing Price "Placing Price" 50p per Placing Share "Placing Shares" 15,720,000 new Ordinary Shares which are to be conditionally placed in accordance with the terms of the Placing Agreement "Resolutions" the resolutions numbered 1 to 5 set out in the Notice of EGM "Shareholders" the persons who are registered as the holders of Ordinary Shares This information is provided by RNS The company news service from the London Stock Exchange