Petards Regulatory News (PEG)

25 Jun 2008 16:00

Petards Group plc ("Petards" or "the Company")

Update

25 June 2008

Further to the announcement made on 29 May 2008, the Company confirms that discussions continue regarding a potential offer for the business (in whole or in part). However, the Board believes that its aim of preserving and maximising shareholder value will be best achieved by means of a refinancing of the business through the injection of fresh equity. The Board is therefore in discussions with its advisers concerning such an equity issue and is seeking to raise £5 million (net of expenses). Shareholder approval will be required for such an issue to become effective and a further announcement will be made as soon as is practicable.

The Group's bankers have agreed to extend the Company's working capital facility to enable the refinancing to be completed. It is proposed that approximately £1.25 million of the net proceeds of the proposed fundraising would be utilised to repay this facility, leaving the Company with a £2.0 million term loan and cash on its balance sheet to finance projected growth.

In the year to date the Company has traded well, with net debt below projected levels and a strong order book, having recently won two orders worth in excess of £2 million over and above those previously announced. The Company currently has order coverage for over 85% of management's expected revenue for this financial year. 

Under the AIM Rules, a company that does not publish its Report and Accounts within 6 months of the year end will have its shares automatically suspended. The Directors expect that the Company will not be able to sign off on the Company's Report and Accounts for the year ended 31 December 2007 until the completion of a placing of new equity and that the Company will not be in a position to announce a proposed equity refinancing, if successful, until the latter half of July. Therefore, the Company is not in a position to publish its 2007 Report and Accounts by 30 June and the Company's shares will be suspended immediately following publication of this announcement, pending publication of those Report and Accounts.

For further information:

Collins Stewart Europe Limited ("Collins Stewart") which is regulated in the United Kingdom by The Financial Services Authority is acting for the Company in relation to the matters described in this announcement and is not advising any other person, and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to customers of Collins Stewart or for providing advice in relation to the matters described in this announcement.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of the Company, all "dealings" in any "relevant securities" of the Company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of the Company, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of the Company by the Company or by any of its respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk . 

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in price or securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.