Last checked at 8 Dec 2010 14:17
Vislink plc (the "Company")
PUBLICATION OF SHAREHOLDER CIRCULAR
The Company is pleased to announce that it has today published a circular in relation to the sale of its Marine and Energy business (the "Circular"). As previously announced in the Company's Interim Management Statement released on 19 November 2010, the Company and one of its subsidiary companies have entered into a conditional sale and purchase agreement (the "SPA") for the sale of Hernis Scan Systems A/S ("Hernis") to a subsidiary of Cooper Industries plc (the "Disposal").
The Company has provided the following update in the Circular to the intended use of proceeds from the Disposal. The net proceeds from the Disposal available to the Company and its subsidiary companies (the "Group") on completion of the Disposal are expected to amount to £25.6 million (subject to adjustment to the extent that the working capital of Hernis at completion of the Disposal exceeds or falls short of the forecast amount) (the "Net Proceeds"). This represents gross proceeds of £32.5 million less direct costs relating to the Disposal of approximately £0.5 million, contracted payments to the Hernis management of £1.5 million and an amount of approximately £4.9 million which will be held in escrow for eighteen months pending any claims under the warranties and indemnities in the SPA.
The board of directors of the Company (the "Board") intends to consult with Company's shareholders, as far as practicable, on the use of the Net Proceeds, however, the Board currently expects the Company to use the Net Proceeds to:
·; repay all the Group's current borrowings which amount to approximately £7.3 million; and
·; acquire Gigawave for an initial consideration of £1.75 million and up to a maximum of £4.0 million in deferred consideration as previously announced.
The Board currently expects to use some of the remaining Net Proceeds to pay a special dividend, the amount and timing of which will be determined in due course. The balance of the Net Proceeds will be used to strengthen the Group's balance sheet to allow it the flexibility to invest further sums in internet protocol development as new product needs arise and to consider further acquisitions to achieve scale in its core markets.
In view of the size of the Disposal, which constitutes a Class I transaction pursuant to the UK Listing Rules, it remains conditional on approval of the shareholders of the Company at a General Meeting. The Circular published today sets out further details of the Disposal and contains the notice convening the General Meeting. The General Meeting is to be held at the offices of the Company, Marlborough House, Charnham Lane, Hungerford, Berkshire RG17 0EY at 3 p.m. on 29 December 2010. Subject to obtaining Shareholder approval at the General Meeting and the grant or deemed grant of the approval of the Disposal required under Norwegian competition law, completion of the Disposal is expected to take place on 30 December 2010.
The Company has provided the following update on current trading in the Circular:-
In line with the rest of the industry, the Group continues to experience delays in the award of certain US and overseas security contracts that would have provided the Law Enforcement and Public Safety Business unit with organic growth in 2010. Whilst several awards are still expected to be made this year, they may be too late to contribute significantly to revenue in 2010. This would result in Group revenues for the year being at or below the lower end of market expectations.
In connection with the required vote at the General Meeting, the Company has provided the following commentary:-
The terms governing the Group's borrowing facilities contain various financial covenants. Whilst the Group is currently operating within these financial covenants, if the Disposal did not complete shareholders should be aware that it is likely that the Group will be in breach of one or more of its covenants as at 31 December 2010. In these circumstances, the Directors would seek to agree waivers of the relevant covenants in accordance with established practice. The Directors are confident that such waivers would be agreed. Further details of the consequences of the Company not obtaining shareholder approval for the Disposal at the General Meeting are set out in the Circular.
The Circular will be posted to shareholders today and a copy of the Circular (including the Notice) has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.Hemscott.com/nsm.do.
The Circular will shortly be available to view on the Company's website (www.vislink.com), and will be available for inspection at the offices of Pinsent Masons LLP, Citypoint, One Ropemaker Street, London EC2Y 9AH during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted).
Further to the announcement in the Interim Management Statement, the Company is pleased to announce that John Hawkins has now joined the Board as a non-executive director and it is intended that he will succeed Tim Trotter as Chairman at the Company's AGM in 2011.
For further information, please contact:
Duncan Lewis, Chief Executive +44 (0) 14 88 68 55 00
James Trumper, Group Finance Director +44 (0) 14 88 68 55 00
Charlie Jack, Hudson Sandler +44 (0) 20 77 96 41 33
About Vislink plc
Vislink plc is a global technology business specialising in secure communications and services for the news & entertainment, law enforcement & public safety and marine & energy markets. The Company has four international business units serving these markets with manufacturing operations in the UK, Norway and the USA.
The Company's strategic focus is the design, manufacture, sale, installation and maintenance of wireless, video and IP technologies together with the supporting management systems. Vislink products include microwave radio, satellite transmission, wireless camera and marine CCTV systems.
Headquartered in the UK with operations in the USA, Norway, Dubai, South Africa and Singapore the Company employs over 400 people worldwide. The Company is fully listed on the London Stock Exchange (LSE:VLK).
For further information, please visit www.vislink.com.
Forward looking statements
Certain statements in this report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.