Riverfort Regulatory News (RGO)

29 Jun 2005 12:45

Caldwell Investments PLC29 June 2005 To be released 29 June 2005 CALDWELL ANNOUNCES £629,000 RIGHTS ISSUE • Caldwell Investments P.L.C. ("Caldwell" or the "Company") announced today a 1 for 7 rights issue at 25p per share to raise £629,000 (before expenses) • The Issue Price represents a 33.3% discount to the Closing Price of 37.5p on 28 June 2005 • New money raised will be used principally to fund the Group's hardwood outdoor furniture marketing activity Rights Issue of up to 2,516,071 New Ordinary Shares at 25p per share Introduction In my Chairman's Statement accompanying the preliminary announcement of theGroup's final results for the 14 month period ended 28 February 2005, releasedon 27 May 2005, I stated that the Board had resolved to raise money by way of arights issue to fund future NinaSun(R) marketing investment. The Companyannounced today the terms of the Rights Issue under which QualifyingShareholders will be offered 2,516,071 New Ordinary Shares at a price of 25p pershare, by way of a one for seven rights issue, in order to raise up toapproximately £629,000 before expenses. The Rights Issue is not beingunderwritten but I intend to take-up in full my entitlement to 564,289 shares(representing approximately 22.4 per cent. of the New Ordinary Shares) and otherDirectors and certain Shareholders have confirmed in writing their intention tosubscribe for a further 587,434 New Ordinary Shares making, in aggregate,1,151,723 New Ordinary Shares (representing approximately 45.8 per cent. of theNew Ordinary Shares). The Directors were granted the necessary authorities by Shareholders at theAnnual General Meeting of the Company held on 4 June 2004 to allot and issueshares by way of rights and, therefore, the Rights Issue is not conditional onany further Shareholder approval. Background After four years development and a great deal of investment in intellectualproperty, plant and machinery, extensive commercial and consumer trials andmodifications, the NinaSun(R) canopy for resin loungers was launched in December2004. The augmented NinaSun(R) range of hardwood outdoor furniture with theintegrated canopy will be launched in spring 2006. Arrangements fordistribution of canopies for resin loungers in the US, Mexico and the Caribbeanare now in place with Contract Furniture Inc of San Francisco, an establishedmajor distributor of resin loungers in the US. In the rest of the world thecanopies for resin furniture are being marketed by Balliu, one of the world'sleading resin furniture manufacturers, through their international distributornetwork in over 50 countries. The Group recently exhibited a new hardwood diner/recliner at the BBC GardenersWorld Exhibition at the NEC. The product was very well received and orders weretaken for all available stock for summer 2005. The NinaSun(R) deckchair wasalso exhibited and a significant number of orders were taken. Reasons for the Rights Issue and intended use of proceeds It was always recognised by the Board that realisation of the NinaSun(R) projectwould take a number of years to materialise. To date the rate of progress hasbeen on track and it is expected that NinaSun(R) canopies will start to make anoticeable contribution to Group turnover in the financial year starting March2006. Following considerable investment in intellectual property, plant, machinery,product development and commercial and consumer trials we are now moving intothe marketing phase for the NinaSun(R) canopy. It is intended that the net proceeds of the Rights Issue which, assuming fulltake-up of the New Ordinary Shares, are expected to amount to approximately£569,000, will be used principally to fund the hardwood outdoor furnituremarketing activity described in the section entitled ''Strategy'' below andotherwise to provide additional general working capital for the Group. Details of the Rights Issue The Company proposes to raise up to approximately £629,000 before expenses byoffering 2,516,071 New Ordinary Shares by way of rights to QualifyingShareholders at 25p per share, payable in full on acceptance, on the basis of: 1 New Ordinary Share for every 7 Existing Ordinary Shares held and registered on the Record Date and so in proportion for any other numberof Existing Ordinary Shares then held. Where necessary, entitlements to NewOrdinary Shares will be rounded down to the nearest whole number of New OrdinaryShares and shares representing fractional entitlements will not be allotted butwill be sold in the market for the benefit of the Company. The New Ordinary Shares will, when issued, rank pari passu in all respects withthe Existing Ordinary Shares, including the right to receive all dividends andother distributions declared or paid after the date of this announcement.Holdings of Existing Ordinary Shares held in certificated and uncertificatedform will be treated as separate holdings for the purpose of calculatingentitlements under the Rights Issue. The Issue Price of 25p per New Ordinary Share represents a 33.3 per cent.discount to the Closing Price of 37.5p on 28 June 2005 (being the latestpracticable date prior to the publication of the circular to Shareholders). The Rights Issue has not been underwritten. Pursuant to the Rights IssueAgreement, KBR will, as agent of the Company, use its reasonable endeavours toprocure subscribers for those New Ordinary Shares not taken-up, provided that anamount can be obtained per New Ordinary Share which is not less than theaggregate of the Issue Price and the expenses of procuring such subscribers. Ifand to the extent that such subscribers cannot be procured by not later than3.00 p.m. on 21 July 2005 for any New Ordinary Shares not taken-up, the relevantNew Ordinary Shares will not be issued. Applications have been made to the UK Listing Authority and to the London StockExchange for the New Ordinary Shares, nil paid, to be admitted to the OfficialList and to trading on the London Stock Exchange's market for listed securities.It is expected that Admission will become effective and that dealings willcommence in the Nil Paid Rights on 30 June 2005. The Rights Issue is conditional on: (a) the Rights Issue Agreement becoming unconditional, save for Admission, by no later than 29 June 2005 and not having been terminated in accordance with its terms on or prior to Admission; and (b) Admission occurring at or before 8.00 a.m. on 30 June 2005 The ISIN of the Nil Paid Rights is GB00B0C05K23 and the ISIN of the Fully PaidRights is GB00B0C05L30. Current trading and prospects Trading in our underwear business is currently going well and we are hopeful ofa materially improved performance in the current year. During the 14 monthperiod ended 28 February 2005, currency movements led to a general erosion ofmargins. However, during the current financial year, more stable financialconditions have returned. Sales of the baby buggy parasols have to date been slow due to lack of sunshine.It is too early to predict the outcome of this part of our business. The Board views the potential for the NinaSun(R) canopies very positively.Although we do not expect to generate significant revenues from this activityuntil the financial year commencing March 2006, the Board is confident that theNinaSun(R) canopy represents an outstanding opportunity for the Group. In the 14 month financial period ended 28 February 2005 Caldwell made a smallloss. The Board has budgeted for an increase in marketing spend needed toestablish the wooden furniture with integrated canopy in the world market place.Your Board anticipates that the results for year ending February 2007 willbegin to reflect the value of that investment. Strategy Resin loungers As indicated above, the marketing strategy for the canopies for resin loungersis to supply the products through distributors and arrangements have beenentered into with Contract Furniture Inc of San Francisco and Balliu. Hardwood outdoor furniture The Board considers that the market for these products is more fragmented thanfor resin loungers and that it is appropriate to market the NinaSun(R) canopiesinitially through direct marketing and promotions. A NinaSun(R) website wastherefore established and became operational in April 2005. In order to attractpotential purchasers to the NinaSun(R) website, it is essential to enhanceproduct awareness, knowledge and credibility, and maximise the number of peoplewho have seen and felt the product. Following the positive feedback received for the consumer trials and at the BBCGardeners World Exhibition, we are commissioning marketing strategists to carryout an international market and brand evaluation and to prepare an integratedmarketing plan. It is intended that implementation of this plan will commence inautumn 2005. New products It is also our intention to develop a range of tubular aluminium furniture withintegrated canopies. This would be aimed at the camping and leisure markets,which represent about a third of the market for outdoor furniture. Action to be taken Qualifying Shareholders (other than, subject to certain exceptions, those withregistered addresses in or who are residents or citizens of the United States orthe Excluded Territories) have been sent Provisional Allotment Letters, showingthe number of New Ordinary Shares provisionally allotted to them and containinginstructions on acceptance and payment, renunciation, splitting and registrationin respect of the New Ordinary Shares. The latest time and date for acceptance and payment in full in respect of theRights issue is 11.00 a.m. on 21 July 2005. The New Ordinary Shares will be issued in certificated form and will berepresented by definitive share certificates, which are expected to bedespatched by 29 July 2005. Circular to Shareholders A copy of the circular to shareholders, comprising a prospectus, has beensubmitted to the UK Listing Authority and will shortly be available forinspection at the UK Listing Authority's Document Viewing Facility which issituated at: Financial Services Authority25 The North ColonnadeCanary WharfLondon E14 5HSTel: 020 7066 1000 Expected timetable of principal events Record Date for the Rights Issue close of business on 24 June 2005 Despatch of Provisional Allotment Letters 29 June 2005 Dealings in New Ordinary Shares, nil paid, commence on the London Stock 8.00 a.m. on 30 June 2005Exchange Existing Ordinary Shares trade ex-rights 30 June 2005 Latest time and date for splitting Provisional Allotment Letters, nil or 3.00 p.m. on 19 July 2005fully paid Latest time and date for acceptance and payment in full and registration 11.00 a.m. on 21 July 2005of renunciation Dealings to commence in New Ordinary Shares, fully paid 22 July 2005 Despatch of share certificates for New Ordinary Shares in certificated by 29 July 2005form Definitions The following definitions apply throughout this announcement unless the contextrequires otherwise: "Admission" admission of the New Ordinary Shares, nil paid, to the Official List and to trading on the London Stock Exchange's market for listed securities becoming effective in accordance with, respectively, the Listing Rules and the Admission and Disclosure Standards "Admission and the requirements contained in the publication "Admission and Disclosure Standards"Disclosure Standards" dated November 2004 containing, amongst other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's market for listed securities "Board" or "Directors" the directors of Caldwell "certificated" or "in a share which is not in uncertificated form (that is, not in CREST)certificated form" "Caldwell" or "Company" Caldwell Investments P.L.C. "Caldwell Group" or " Caldwell and its subsidiariesGroup" "Closing Price" the closing middle market quotation of an Existing Ordinary Share as published in the Daily Official List "CREST" the relevant system (as defined in the CREST Regulations) in respect of which CRESTCo Limited is the Operator (as defined in the CREST Regulations) "CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/No 3755) (as amended) "Daily Official List" the Daily Official List of the London Stock Exchange "Excluded Territories" Australia, Canada, Japan and the Republic of Ireland "Existing Ordinary the 17,612,500 Ordinary Shares in issue at the date of this documentShares" "FSMA" the Financial Services and Markets Act 2000 "Fully Paid Rights" rights to acquire the New Ordinary Shares, fully paid "Issue Price" 25p per New Ordinary Share "KBR" Keith, Bayley, Rogers & Co. Limited "Listing Rules" the Listing Rules of the UK Listing Authority, made under Part VI of the FSMA "London Stock Exchange" London Stock Exchange plc "New Ordinary Shares" up to 2,516,071 new Ordinary Shares to be issued by the Company pursuant to the Rights Issue "Nil Paid Rights" rights to acquire the New Ordinary Shares, nil paid "Official List" the Official List of the UKLA "Ordinary Shares" ordinary shares of 10p each in the capital of the Company "Overseas Shareholders" Qualifying Shareholders who have no registered address in the UK (or who have not given to the Company an address within the UK for the service of notices) "Provisional Allotment the renounceable provisional allotment letter relating to the Rights Issue, enclosedLetter" with this document and sent to Qualifying Shareholders other than certain Overseas Shareholders "Qualifying Shareholders Shareholders on the register of members of the Company on the Record Date" "Record Date" the record date for the Rights Issue, being the close of business on 24 June 2005 "Rights Issue" the issue to Qualifying Shareholders by way of rights of 1 New Ordinary Share for every 7 Existing Ordinary Shares held on the Record Date, as described in this document "Rights Issue Agreement" the conditional agreement dated 28 June 2005 between the Company, KBR and Nabarro Wells & Co. Limited relating to the Rights Issue "Shareholders" holders of Ordinary Shares "UK Listing Authority" the Financial Services Authority acting in its capacity as the competent authorityor "UKLA" for the purpose of Part VI of the FSMA "uncertificated" or "in a share which is for the time being recorded on the register of members of theuncertificated form" Company as being held in uncertificated form in CREST and title to which may be transferred by means of CREST "UK" the United Kingdom of Great Britain and Northern Ireland "United States" the United States of America, its territories and possessions, any state of the United States of America and District of Columbia and all other areas subject to its jurisdiction END This information is provided by RNS The company news service from the London Stock Exchange