PCF.L Regulatory News (PCF)

Private & Commercial Finance Group plc

("PCFG" or the "Company")

Exercise of option and fundraising

PCFG (AIM: PCF), the AIM quoted finance house; today announces that it has conditionally raised a total of £4.07 million through the proposed issue of £4.07 million of 6 per cent. convertible unsecured 2016 loan notes ("2016 CULS") at nominal value (the "Loan Notes") (the "Fundraising"). 

The issue of the Loan Notes will complete the Company's fundraising of £10 million announced in October 2012. The Fundraising comprises of the exercise by PCFG of a £3 million put option with Bermuda Commercial Bank Limited ("BCB") (a wholly owned subsidiary of Bermuda National Limited ("BNL")) which expires on 16 October 2013 and the issue of a further £1.07 million 2016 CULS to BCB and other subscribers. BCB has subscribed for £920,000 of the £1.07 million 2016 CULS, with the balance issued to other existing institutional holders of 2016 CULS. The issue of the Loan Notes is conditional upon their admission by the UK Listing Authority to the standard listing segment of the Official List and by the London Stock Exchange to its main market ("Admission"). 

The terms of the 2016 CULS (of which £5.93 million were issued by the Company in November 2012) are as follows:

· issue price of 100p per £1 nominal value of 2016 CULS;

· interest rate of 6 per cent. per annum payable by equal half-yearly instalments;

· rank in priority to the ordinary shares on a winding-up of the Company;

· amounts in excess of £1 million may be converted into ordinary shares of 5p each in the Company ("Ordinary Shares") at any time, otherwise conversion is twice annually (in March and September), at a rate of one ordinary share per 8.5p nominal of 2016 CULS; and

· all outstanding 2016 CULS will be redeemed at nominal value on 30 September 2016. 

Use of Proceeds

£2.99 million of the proceeds of the Fundraising will be used to repay the Company's 8% convertible unsecured loan notes 2013 (the "8% 2013 Notes") and the 10% convertible unsecured loan notes 2013, both of which mature on 30 September 2013. The balance of the proceeds of £1.08m will fund the future growth of the Company.

BCB's participation in the Fundraising

Following the issue of the Loan Notes, BCB will be interested in an aggregate of £8,500,446 in value of 2016 CULS. In addition, BNL currently has an interest in 15,553,800 Ordinary Shares representing 29.37% of the Company's current issued share capital. 

Takeover Code

In October 2012, the UK Panel on Takeovers and Mergers ("Panel") deemed BNL, Custodial Capital Management Limited, David Morgan and Westhouse Securities Limited to be acting concert with BCB (together the "Concert Party"). The Concert Party is deemed to be in existence until the Panel rules otherwise. In November 2012, the Company's independent shareholders (being shareholders independent of the Concert Party) approved a waiver of obligations arising under Rule 9.1 of the City Code on Takeovers and Mergers ("Takeover Code" and "Whitewash" respectively). The effect of the Whitewash was to waive the obligation which would normally oblige BCB (and the Concert Party) to make a general offer to all other shareholders to acquire their shares following any acquisition by BCB (and the Concert Party) of 30 per cent or more of voting rights in the Company. The Whitewash enables BCB (and or any member of the Concert Party) to acquire an aggregate holding of up to 110,411,709 Ordinary Shares as a result of the exercise of conversion rights attaching to the 2016 CULS.

The participation of BCB in the Fundraising includes £467,524 nominal 2016 CULS being issued to be BCB which if converted would result in the issue of 5,500,279 Ordinary Shares in excess of the shares the subject of the Whitewash. As a result the Company has consulted with the Panel who have agreed that 2016 CULS may be issued to BCB under the Fundraising without a whitewash in accordance with Note 10 to Rule 9.1 of the Takeover Code (the "BCB Non-Whitewash Loan Notes") provided that on conversion of the BCB Non-Whitewashed Loan Notes, BCB (and the Concert Party) will be obliged to comply with Rule 9.1 of the Takeover Code without the benefit of the Whitewash.

Shareholders should be aware that if BCB (and the Concert Party) has, immediately prior to any conversion of 2016 CULS (whether BCB Non Whitewashed Loan Notes or otherwise), an interest in over 50 per cent. of the voting rights in PCFG (which may arise as a result of the Whitewash), then under the provisions of Rule 9.1 of the Takeover Code, BCB (and the Concert Party) will be able to increase its aggregate interest in the Company without incurring any obligation under Rule 9.1 to make a general offer to all other shareholders. However, should any member of the Concert Party acquire an interest in shares of the Company such that they are interested in 30 per cent. or more of the voting rights in the Company, the Panel may regard this as giving rise to an obligation upon that member of the Concert Party to make an offer for the entire issued share capital of the Company at a price no less than the highest price paid by the individual member of the Concert Party or any other member of the Concert Party in the previous 12 months.

Related Party Transaction

BCB is a related party to the Company under the AIM Rules as a consequence of BNL being a substantial shareholder (as defined in the AIM Rules) in the Company and therefore BCB's subscription for £920,000 in value of 2016 CULS constitutes a related party transaction (as defined in the AIM Rules). Accordingly, as required by the AIM Rules, the independent directors (being each of the directors with the exception of David Morgan, who is the representative of BNL on the Company's board), having consulted with the Company's nominated adviser, Westhouse Securities Limited, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Admission timetable

The issue of the Loan Notes is subject to Admission and application has been made for the Loan Notes to be admitted to the standard listing segment of the Main Market of the London Stock Exchange. It is expected that Admission will occur, and that dealings in the Loan Notes will commence, at 8.00 a.m. on 30 September 2013.

Cancellation of redeemed 8% 2013 Notes

£2.4 million of 8% 2013 Notes are currently traded on AIM under the TIDM PCFB. The register for these notes has now closed and following the redemption of all outstanding 8% 2013 Notes, the AIM quotation for the 8% 2013 Notes will be cancelled. Accordingly, application has been made for the admission to AIM of the 8% 2013 Notes to be cancelled as soon as practicable following redemption, expected to occur on or around 1 October 2013.

Chief Executive of PCFG, Scott Maybury commented:

'This concludes the fundraising under our Prospectus dated 16 October, 2012. As outlined in that Prospectus the fundraising has enabled the Group to redeem the loan notes that reach maturity this month, secure term bank funding for the Group and provide the capital resources for the ambitious growth plans we have for our portfolio.

'I would like to thank the existing shareholders and loan note holders who have participated. In particular, I would like to thank Bermuda National Limited for their support on this significant transaction.'

- End -

For further information, please visit www.pcfg.co.ukor contact:

About Private & Commercial Finance Group plc 

Consumer Finance - Helping you get the vehicle you need

Business Finance - Finance solutions that work for you

Private & Commercial Finance Group plc is an AIM-quoted finance house. PCFG has two main operating divisions: Consumer Finance provides a range of specially tailored finance products for consumers and Business Finance, which finances vehicles, plant and equipment for SMEs. The Group has a highly efficient and scalable business model, utilising its specially developed internet-based proposal system to service national networks of brokers and suppliers.