MIRA.L Regulatory News (MIRA)

07 July 2014 mirada plc ("mirada" or "the Company") £3.5 Million Placing and Notice of General Meeting mirada plc, the AIM-quoted audio-visual interaction specialist (AIM: MIRA),announces a proposed placing to raise approximately £3.5 million (beforeexpenses) by way of a placing of 28,000,000 Placing Shares at 12.5 pence pershare ("the Placing") with institutional and other investors, subject toshareholder approval. At the same time of the Placing, and at the same price of 12.5 pence per share,certain Shareholders comprising in aggregate 11.4 per cent. of the issued sharecapital of the Company, propose to dispose of all their Existing OrdinaryShares ("Disposal"). The new monies will be used to help mirada further strengthen its positionwithin the rapidly growing over the top ("OTT") market as it builds on themomentum achieved by its first Tier 1 and largest contract win to date. HIGHLIGHTS * 28,000,000 Ordinary Shares conditionally placed with institutional and other investors. * The Placing has conditionally raised £3.5 million of new monies for the Company. * Placing and Disposal price of 12.5 pence per share represents a discount of 2 per cent. to the closing mid-market price on 04 July 2014 (being the latest practicable date prior to the date of this Announcement). * New monies will be used to enable the Company to service recently awarded contracts, further strengthen its position within the OTT market and Latin America, to further develop its product base and to strengthen its balance sheet. Commenting, Jose Luis Vazquez, Chief Executive Officer, said: "Having secured our largest contract to date, we see strong potential to buildon a growing pipeline of work within the OTT market, which continues to growrapidly. The contract provides a significant reference point for us and thereis huge scope for mirada to build on the recent momentum. The new monies willhelp us to further strengthen our position within the market place and focus onproduct development and marketing initiatives as we look to service anincreasing amount of larger contracts." General Meeting A circular convening a general meeting of the Company to be held at the officesof HowardKennedyFsi LLP at 180 Great Portland Street, London W1W 5QZ on 30 July2014 at 11.00 am to grant Directors the authority to allot the Placing sharesfor cash on a non pre-emptive basis will be sent to shareholders today and willbe available to download from the Company's website at www.mirada.tv. Total Voting Rights Application will be made to the London Stock Exchange for the Placing Shares tobe admitted to trading on AIM. It is expected that Admission will becomeeffective and that dealings for normal settlement in the Placing Shares on AIMwill commence at 8.00 a.m. on 05 August 2014. For the purposes of the Disclosure and Transparency Rules, mirada's totalissued share capital following the issue of the 28,000,000 New Ordinary Sharesconsists of 114,057,695 ordinary shares of 1 penny each. The above figure may be used by shareholders as the denominator for thecalculations by which they will determine if they are required to notify theirinterest in, or a change to their interest in, mirada, under the Disclosure andTransparency Rules. Enquiries: mirada plc +44 (0) 207 549 5678Jose Luis Vazquez, Chief Executive Officer Walbrook PR +44 (0) 207 933 8780Nick Rome/Sam Allenmirada@walbrookpr.com Arden Partners plc +44 (0) 207 614 5900Steve Douglas (Corporate Finance)James Felix (Corporate Finance)Kam Bansil (Corporate Broking) Background to and reasons for the Placing During late 2012 and 2013, mirada announced a number of new contract wins withcustomers including Brazilian telecommunications company GVT, Axtel, a leadingMexican telecommunications operator, and Latin American digital lifestyleproducts company, Millicom. These contracts have all been based on mirada's product-led license revenuemodel which derives subscriber-based fees, allowing the Company to earnincreasing revenues at a high gross margin. In addition, revenues from theselicence fees allow the Company to benefit from multi-year agreements withcustomers with revenues continuing long after the deployment of the customers'digital television services. This is a key differential to mirada's existingrevenue model. These wins were followed on 19 May 2014, when the Company reached a majormilestone by winning its first ever Tier 1 contract with a large establishedLatin American digital TV operator for its multi-screen product iris. This isexpected to generate significant revenues - the Directors believe that salesfrom this contract should far exceed mirada's yearly turnover over the nextthree to five years. Tier 1 contracts would be expected to have in excess of 5 million set top boxes("STB"). Typically, the aim would be for mirada's software to be deployedalongside new platforms over a three-to-five year period with an average fee of$3 to $5 per STB. The Company's inaugural Tier 1 contract win followed asuccessful USD $1.4m trial. The trial was originally scheduled to complete inQ1 2014, with payment expected to be received by the Company at or around theend of the trial, with a view to entering into the fuller contract if thesubsequent tests were successful. However, despite the customer being satisfied with the Company's performanceduring the trial within the agreed timetable and having committed for acommercial rollout in the contract executed at the end of May, the STBsrequired for the commercial deployment will only be available in Q4 2014. As a consequence of this delay and the need to continue investing the newopportunities identified by the Board, the Company forecasted potential workingcapital pressures. Despite not having an impact on the Company being able toservice the Tier 1 contract, the Board of Directors decided to accelerate thefundraise for risk of detrimental operational costs cutting measures beingimplemented, which could have caused the Company to lose out on futureopportunities following the award of this Tier 1 contract. The OTT opportunity These opportunities have, in the Directors' opinion, resulted from the Tier 1contract providing a strong reference point for mirada and as such have`forced' the Company to accelerate other potential short-term opportunitieswithin the OTT market - which focuses on the broadband delivery of audio-visualcontent. In order to service the growing pipeline of opportunities and tofurther strengthen its OTT offering the Company is focused on investing in andaccelerating product development and sales and marketing initiatives, whichwill require additional funds being raised. By 2016, payers for OTT internet TV programming are expected to have increasedto 352 million, nearly 50% of worldwide total Pay-TV subscriptions (cable,satellite and IPTV combined). The OTT market continues to grow rapidly and in 2013 was worth an estimatedUS$11 billion. The Directors' believe that the key drivers for development areSmart Phones and tablets, which are perceived as driving demand for TV from anydevice. As such, pay-tv operators, broadcasters and telecoms companies will bea key target audience for mirada - with Brazil and Mexico likely to drive LatinAmerican demand. Trading Update, Outlook and prospects On 19 May 2014, the Company announced a trading update for the year ended 31March 2014, in which it said: "Revenues for the second half were in line with those for the first half,slightly less than expectations due to the continued investment on the LatinAmerican trial, but margins were stronger than anticipated and the Companyexpects to improve the EBITDA and net results for the year as a whole. In thecurrent financial year to 31 March 2015, trading will benefit from the newcontract announced today. The beginning of the current calendar year has been positive as the Tier 1contract win, announced earlier today, highlights the strength of our productsand our ability to service increasingly large contracts. This will be veryuseful when negotiating with other potential customers, especially in LatinAmerica, where our iris-inspire proposition is already gaining strongmomentum." Details of the Placing and the Placing Agreement The Placing Arden has raised approximately £3.5 million (before expenses) for the Companyby way of a conditional placing of 28,000,000 Placing Shares at 12.5 pence perPlacing Share with institutional and other investors. This Issue Pricerepresents a discount of 2% to the closing mid-market price of an ExistingOrdinary Share on 4 July 2014 which the Directors believe, having undertaken amarketing exercise, to be the best price reasonably obtainable. The Placing is conditional, inter alia, upon: a) the passing of the Resolutions at the General Meeting; b) the Placing Agreement becoming unconditional in all respects and not havingbeen terminated in accordance with its terms; c) admission of the Placing Shares to trading on AIM becoming effective by notlater than 8.00 a.m. on 05 August 2014 (or such later time and/or date as Ardenand the Company may agree); and d) Arden having entered into contractual commitments with, and having beenappointed as agent for, the relevant Shareholders in order to effect theDisposal. Accordingly, if such conditions are not satisfied, or, if applicable, waived,the respective part or parts of the Placing will not proceed. The Placing will result in the issue of in total 28,000,000 Placing Shares(representing, in aggregate, approximately 24.5 per cent. of the Enlarged ShareCapital). The Placing Shares, when issued and fully paid, will rank pari passuin all respects with the Existing Ordinary Shares and therefore will rankequally for all dividends or other distributions declared, made or paid afterthe date of issue of the Placing Shares. No temporary documents of title willbe issued. Dealings in the Placing Shares on AIM are expected to commence on 5 August2014. It is expected that CREST accounts will be credited on the day ofAdmission as regards the Placing Shares in uncertificated form and thatcertificates for Placing Shares to be issued in certificated form will bedispatched by first class post by 15 August 2014. The Placing Agreement Pursuant to the terms of the Placing Agreement, Arden as agent for the Companyhas agreed conditionally to use its reasonable endeavours to procure placeesfor the Placing Shares at the Issue Price. The Placing is not underwritten. The obligations of Arden under the Placing Agreement are conditional, interalia, upon the matters set out in the preceding paragraph at (a) to (d) above. The Placing Agreement contains certain warranties and indemnities given by theCompany and certain warranties given by the Directors (other than Raphael Sanz)in favour of Arden as to certain matters relating to the Company and itsbusiness. The obligations of Arden under the Placing Agreement may beterminated in certain circumstances if there occurs either a material breach ofany of the warranties or if a force majeure event occurs at any time prior toAdmission. Such rights exist in the event that such circumstances arise priorto Admission. If the conditions in the Placing Agreement are not fulfilled onor before the relevant date in the Placing Agreement then the subscriptionmonies will be returned to placees without interest. The Placing Agreement also provides for the Company to pay Arden a corporatefinance fee, commissions and certain other costs and expenses incidental to thePlacing and Admission. The Disposal Certain Shareholders holding in aggregate 11.4 per cent. of the ExistingOrdinary Shares have agreed, to sell their entire holdings of Existing OrdinaryShares to some of the institutional and other investors who are participatingin the Placing, at the Placing Price. Arden has been appointed as agent forthese selling Shareholders and the necessary announcements will be made as andwhen these trades are executed. Use of proceeds The net proceeds of the Placing (after commission and expenses of the Placing)which total £3.3 will be used as follows: * to reinforce the Company's working capital to ensure it is in an optimal position to implement the recently awarded contracts; * to invest in marketing to secure new OTT deals of high demand in Latin America; * to enable the Company to add advanced OTT functionalities to its lead product iris; and * to reduce the Group's debt and to strengthen the Group's balance sheet. Related Party Transactions As Chase Nominees and Hargreave Hale are participating in the Placing and areboth `substantial' Shareholders in Mirada, the Placing is deemed to be a related party transactionas described in the AIM Rules. The Directors, who have consulted with Arden inits capacity as Nominated Adviser to the Company, consider the Placing, and theResolutions to be fair and reasonable insofar as Shareholders are concerned andto be in the best interests of the Company and its Shareholders as a whole.