16 Dec 2016 09:51
16 December 2016
Management Resource Solutions Plc
Update on AGM and Commercial Matters
Further to the announcement of 29 November, the board of Management Resource Solutions Plc ("MRS" or "Company") wish to clarify certain matters relating to the Annual General Meeting of the Company to be held on 19 December 2016 ("AGM").
Undertaking Regarding Dilution
The directors have consulted a range of institutional and private investors in the Company and wish to clarify certain resolutions to be proposed at the AGM.
The share authorities granted to the directors of MRS at the last annual general meeting of the Company held on 28 December 2015 have already been utilised in full and the additional authorities granted by shareholders on 20 October 2016 expire upon the commencement of the AGM. Resolutions 2 and 3 proposed at the AGM are to grant new authorities for the next year.
The directors are aware of shareholders' concerns that the authorities being sought are designed solely to dilute existing shareholders. The board of MRS would like to assure shareholders that this is not the case and that there is no current intention to utilise the authorities as the Company now has adequate financial resources and facilities for its continuing businesses.
However, in order to reassure shareholders the board is committing that, regardless of any share authority granted at the AGM, any issues of equity within 12 months of the date of the AGM will be put to shareholders for their explicit approval. The only exception to this will be in respect of deferred consideration payments to the vendors of Bachmann Plant Hire and any other issues of equity which are subject to prior contract and have already been notified to shareholders, for example the exercise of staff options or any further deferred consideration payments satisfied in shares to the Bachmann vendors.
Deferred Payment to Bachmann Vendors
The first deferred consideration payable to the Bachmann vendors, as referred to in the announcement of 3 November 2016, is A$1,333,333. The board resolved to pay this sum by the issue of new equity but prior to his dismissal, the former CEO without the knowledge of the rest of the board, made a payment of A$500,000 in cash to the Bachmann Vendors in partial settlement of the amount due. The outstanding balance of A$833,333 will be satisfied by way of the issue of 3,610,226 new ordinary shares of €0.01 each in the Company ("Ordinary Shares") at a price of 13.7375p per share, as determined by the contract between the Company and the Bachmann vendors.
As detailed in the Company's AIM admission document dated 11 January 2016, a condition of the purchase of Bachmann Plant Hire was that all related party loans be repaid and discharged in full. However, it has become apparent through the audit process, which is now nearly complete, that the former CEO, without the knowledge of the rest of the board, determined that this condition be waived in respect of amounts due to Greg Bachmann. As at 30 June 2016 the amount due to the Bachmann vendors in the form of a loan was approximately A$1.8m.
It has now been agreed that the A$500,000 cash consideration already paid to the Bachmann vendors will be treated as a payment against this loan and the sum of A$500,000 due as deferred consideration will be satisfied by the issue of further new Ordinary Shares, to be issued at the 10 day mid-market closing price per share following resumption of trading of the Ordinary Shares on AIM.
Application will be made for the Ordinary Shares being issued as deferred consideration to be admitted to trading on AIM as soon as possible after the 10 day trading period referred to above.
Current Trading
As referred to in previous announcements, the board is very pleased with progress within the continuing businesses of the group. Since its acquisition MRS Services Group (formerly SubZero) has secured additional contracts and purchase orders worth approximately A$10.4 over the next year and is in the final stages of negotiating an additional A$2.7m of work for the period.
Bachmann Plant Hire continues to meet the board's expectations with a strong pipeline of business in place.
Company Website
MRS is pleased to report that its website http://www.mrsplc.net is once again operational.
For further information:
Management Resource Solutions PLC c/o FTI +44 (0)20 3727 1000
Murray d'Almeida, Chairman
Timothy Jones, Finance Director
Northland Capital Partners Limited +44 (0)203 861 6625
(Nominated Adviser and Joint Broker)
William Vandyk
Gerry Beaney
Peterhouse Corporate Finance Limited +44 (0)20 7469 0932
(Joint Broker)
Charles Goodfellow
Lucy Williams
FTI Consulting +44 (0)20 3727 1000
Edward Westropp
Emilie O'Herne
Management Resource Solutions (MRS), through its subsidiaries Bachmann and MRS Services Group, offers plant hire, equipment repair, refurbishment and fabrication, mine rehabilitation, civil earthworks, labour hire and other support services to a wide base of private and public sector clients in Australia. MRS caters predominately to the mining, civil construction and infrastructure industries.