29 Oct 2015 07:00
MIRADA PLC - Placing, Subscription and Notice of General MeetingMIRADA PLC - Placing, Subscription and Notice of General Meeting
PR Newswire
London, October 29
mirada plc
(“mirada” or “the Company”)
(AIM: MIRA)
Placing, Subscription and Notice of General Meeting
mirada plc, the AIM-audio-visual interaction specialist, announces a proposed placing and subscription to raise approximately £1.5 million (before expenses) by way of the issue of 24,531,939 placing shares (“Placing Shares”) and 468,061 subscription shares (“Subscription Shares”) (together the “New Shares”) at a price of 6 pence each (the “Placing”).
Highlights
The Placing and Subscription has conditionally raised £1.5 million of new funds for the Company
24,531,939 Placing Shares conditionally placed with existing shareholders, board members and managers and 468,061 Subscription Shares subscribed for at 6p, a discount of 4.0 per cent to the closing mid-price on 28 October 2015
Focus of the Company remains on the large scale roll-out of the Televisa contract
Negotiations continue with other potential Tier One and Tier Two customers
The new funds will be used to strengthen mirada’s balance sheet and working capital ahead of the expected Televisa roll out during the next financial year
New funds will also be used to enable mirada to fund the additional professional services requested by Televisa in accordance with the original contract dated 19 May 2014 as supplemented by various annexes
Televisa Group S.A. (“Televisa”) is a Mexican based multimedia company and the largest Hispanic content producer in Latin America.
José Luis Vázquez, CEO of mirada plc, commented: “I am delighted with the support of existing shareholders, board members and managers in this Placing.”
“The focus of the Company remains on the large scale roll-out of the Televisa Contract and the Directors believe this will be the key priority of the Company throughout FY16 and into FY17 for further professional services and new networks to deploy.”
“The Company remains in negotiation with other potential Tier One and Tier Two customers and any further updates will be released to the market in due course.”
"I look forward to seeing shareholders later today at the AGM".
General Meeting
A notice convening a General Meeting of the Company is to be held at the offices of Howard Kennedy LLP at No. 1 London Bridge, London, SE1 9BG at 11 a.m. on 23 November 2015 to grant Directors the authority to allot the Placing Shares and the Subscription Shares for cash on a non pre-emptive basis. A circular will be sent to shareholders today and will be available to download from the Company’s website: www.mirada.tv.
Director / PDMR dealing
The Company also announces that certain directors and managers subscribed for Placing Shares at the Placing Price as set out below:
| Director | Beneficial holding of Ordinary Shares before Placing | Number of Placing Shares to be purchased | Beneficial holding of Ordinary Shares after Placing | % of expected Enlarged Share Capital |
| José Luis Vázquez | 2,163,008 | 333,334 | 2,496,342 | 1.80 |
| Francis Coles | 572,486 | 166,667 | 739,153 | 0.53 |
| José Gozalbo Sidro | 253,005 | 166,667 | 419,672 | 0.30 |
| Antonio Rodríguez | 180,000 | 166,667 | 346,667 | 0.25 |
| Javier Peñín | 120,000 | 166,667 | 286,667 | 0.21 |
| Matthew Earl | 99,000 | 166,667 | 265,667 | 0.19 |
Related party Transaction
As Chase Nominees and Hargreave Hale are participating in the Placing and are both significant Shareholders in mirada, the Placing is deemed to be a related party transaction as described in the AIM Rules. The Directors, who have consulted with Arden in its capacity as Nominated Adviser to the Company, consider the Placing and the Resolutions to be fair and reasonable insofar as Shareholders are concerned and to be in the best interests of the Company and its Shareholders as a whole.
Each director's participation in the Placing is considered to be a related party transaction for the purposes of Rule 13 of the AIM Rules. Accordingly, the independent director of mirada (being Javier Casanueva) considers, having consulted with the Company's nominated adviser, Arden, that the terms of each director's participation in the Placing are fair and reasonable insofar as Shareholders are concerned.
Total Voting Rights
Application will be made to the London Stock Exchange for the Placing Shares and the Subscription Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings for normal settlement in the Placing Shares and the Subscription Shares on AIM will commence at 8.00 a.m. on 24 November 2015.
For the purpose of the Disclosure and Transparency Rules, mirada’s enlarged issued share capital following the issue of 25,000,000 New Ordinary Shares, will consist of 139,057,695 ordinary shares of 1 penny each.
The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, mirada, under the Disclosure and Transparency Rules.
AGM
The Company will be holding its annual general meeting this morning at the offices of Howard Kennedy LLP at No. 1 London Bridge, London SE1 9BG at 11.00 a.m.
-END-
Enquiries:
| mirada plc Jose Luis Vazquez, Chief Executive Officer | +44 (0) 203 751 0320 |
| Walbrook PR Nick Rome/Sam Allen mirada@walbrookpr.com | +44 (0) 207 933 8783 |
| Arden partners (Nomad and Broker) James Felix, Ciaran Walsh (Corporate Finance) Kam Bansil (Corporate Broking) | +44 (0) 207 614 5900 |
Background to and reasons for the Placing and Subscription
On 19 May 2014 the Company reached a major milestone by winning the Televisa Contract for its multi-screen product Iris to be deployed alongside a new commercial launch of set-top boxes ("STB(s)") across Televisa's Mexican based cable networks. The Televisa Contract win followed a competitive tender process, as well as a successful USD $1.4m trial, which took less than 9 months to complete. At that time, the Directors were of the belief that the Televisa Contract would cover several million STBs, and the Company would charge Televisa an average one-off license fee of $3 to $5 per new STB over a three-to-five year period. In addition, as well as expecting the sales from the Televisa Contract to exceed the Company's yearly turnover over the next three to five years, the Board expected revenues to commence at the end of the 2014 calendar year once the first Televisa cable network, Cablevisión Monterrey in Mexico, commenced its launch.
Four months later and in conjunction with the Televisa Contract, the Company also won its inaugural OTT contract with Televisa which was announced on 18 September 2014, and for which the majority of the net placing proceeds raised during the previous placing, as announced on 7 July 2014, were deployed.
Despite delivering Iris on time to Cablevisión Monterrey, the commercial roll-out was delayed because of extended testing of Cablevisión Monterrey's provisioning systems to avoid any potential issues on the important launch. Due to this delay, the Company was not able to announce the commercial launch of Iris in Monterrey until 17 February 2015. At the same time, the Company continued to invest in OTT functionalities in accordance with the OTT contract.
The next two networks to deploy under the Televisa Contract are larger scale in number of subscribers and STBs than Cablevisión Monterrey's, and the Board had initially anticipated that the roll-out would commence during the 2015 calendar year. However, as announced on 29 September 2015, due to Televisa's internal reasons, deployment for the next two networks was delayed to the end of the last quarter of the current financial year, ending 31 March 2016.
Concurrent with these delays, and as also stated in the announcement on 29 September 2015, the Company has been engaged with providing additional development work for the Televisa Contract for which professional services fees are being earned. Broadly, these are expected to replace postponed license fee revenues, albeit at a lower margin. Furthermore, the Board expects the total value of the Televisa Contract to be greater than when first estimated in 2014 as Televisa has recently acquired another two networks in Mexico, Telecable and Cablecom, and the Board believes Iris will be deployed across these two networks' subscriber base's STBs at some point during the financial year ending 2017.
Notwithstanding the delays and the Company's resources being stretched to provide the additional professional services to Televisa as mentioned above, the Company has still been winning new business: the successful launch of the Movistar Go product, the audiovisual service operated by Telefonica Peru, which features the Iris SDP backend tool, as announced on 28 November 2014; and the commercial launch of a new user interface at Movistar+, the audiovisual service operated by Telefónica in Spain, based on mirada's inspire UI, as announced on 11 September 2015.
As a consequence of the change in revenue mix and associated margin reduction brought about by the Televisa delays, the Board has forecasted potential working capital pressures in the near to medium term. Despite not expecting this to result in the Company being unable to service the Televisa Contract in accordance with its terms, such potential working capital pressures may give rise to the need to raise capital to strengthen the balance sheet whilst the Company is exposed to the Televisa roll-out delay. These potential working capital pressures, if not remedied by the Placing and Subscription proceeds, may force the Company to start making operational costs cutting measures and to use inefficient and costly debt facilities, which could result in the loss of future opportunities. In addition, the Placing and Subscription proceeds will also be used to continue to provide the additional professional services requested by Televisa in the interim period.
Trading Update, Outlook and prospects
On 29 September 2015, the Company announced a pre-close trading update for the period ended 30 September 2015, in which it said:
"The Board anticipates that there will be limited revenues from licence fees being recognized from these two networks during FY16, instead with revenues being deferred into financial year ending 31 March 2017.”
“In the meantime, the Company has been engaged with providing additional development work for the Tier One contract for which professional services fees are being earned. Broadly, these are expected to replace postponed license fee revenues, albeit at a lower margin. Notwithstanding these additional professional services fees, owing to the delays deferring licence fees revenues as described above, coupled with the Board’s anticipation of earnings for the first half of FY16 being broadly similar to last year, the Board expects earnings for FY16 to be materially behind market expectations, but still ahead of last year."
“As a consequence of the Company’s exposure to these types of delays, and following rising levels of demand from Tier Two and Tier Three customers, the Board is pleased to announce it will be launching an advanced cloud-based proposition for these smaller customers, named “mirada as a service” (“maaS”). MaaS is intended to address the needs of a wide range of potential customers with a bundle of products and services that the Board believes will speed up the deployment and continuous upgrade of these customers’ Digital TV services. The Board expects maaS to generate a new source of recurrent revenues for mirada, providing a hedge to Tier One customer exposure. Further announcements on the timing of maaS launch will follow in due course.”
As at 30 September 2015, £5.6 million has been billed by the Company to Televisa in relation to the Televisa Contract and the Directors believe an additional £2.5 million will be billed by the end of March 2016. The Company has also generated OTT revenues of £0.6 million as at 30 September 2015 which the Board expects to grow to approximately £1.7 million by the end of March 2016. As at 30 September 2015, the total debt position was £3.8 million with facilities available to the Company of up to a maximum of £5.0 million.
The focus of the Company remains on the large scale roll-out of the Televisa Contract and the Directors believe this will be the key priority of the Company throughout FY16 and into FY17 in addition to further professional services being billed and new networks within Televisa being deployed. The Board expects that, on the basis of the next two networks at Televisa commencing their commercial roll-out in April 2016, the Company will reach a positive free cash-flow position for the financial year ending 31 March 2017. In the meantime, the Company remains in negotiation with other potential tier one and tier two customers and any further updates will be released to the market in due course.
Details of the Placing, Subscription and the Placing Agreement
Arden has raised approximately £1.5 million (before expenses) for the Company by way of a conditional placing of 24,531,939 Placing Shares at 6 pence per Placing Share with institutional and other investors and 468,061 Subscription Shares have been subscribed for by Tulola directly with the Company. As an existing shareholder in the Company, Tulola and the Company agreed to enter into the Subscription.
The Issue Price represents a discount of 4.0% to the closing mid-market price of an Existing Ordinary Share on 28 October 2015, which the Directors believe, having undertaken a marketing exercise, to be the best price reasonably obtainable.
The Placing is conditional, inter alia, upon:
the passing of the Resolutions at the General Meeting;
the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and
admission of the Placing Shares and the Subscription Shares to trading on AIM becoming effective by not later than 8.00 a.m. on 24 November 2015 (or such later time and/or date as Arden and the Company may agree).
Accordingly, if such conditions are not satisfied, or, if applicable, waived, the respective part or parts of the Placing will not proceed.
The Placing and Subscription will result in the issue of in total 25,000,000 Placing Shares and Subscription Shares (representing, in aggregate, approximately 18.0 per cent. of the Enlarged Share Capital). The Placing Shares and Subscription Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore will rank equally for all dividends or other distributions declared, made or paid after the date of their issue. No temporary documents of title will be issued.
Dealings in the Placing Shares and the Subscription Shares on AIM are expected to commence on 24 November 2015. It is expected that CREST accounts will be credited on the day of Admission as regards the Placing Shares in uncertificated form and that certificates for Placing Shares and Subscription Shares to be issued in certificated form will be dispatched by normal business post by 17 December 2015.
About mirada
mirada creates and manages services for digital TV platforms and broadcasters which enable consumers to interact with and purchase digital content on television, mobile, online and bespoke devices. mirada’s products and solutions are used worldwide to deliver interactive TV, Video on Demand, digital marketing and payment services. Its products and services have been deployed by some of the biggest names in digital media and broadcasting including Sky, Virgin Media, BBC, ITV, France Telecom and Telefónica. Headquartered in London, mirada has commercial offices across Europe and Latin America and operates technical centres in the UK and Spain. For more information, visit www.mirada.tv.