ROL.L Regulatory News (ROL)

23 Jan 2008 11:39

Rotala PLC23 January 2008 Rotala plc ("Rotala" or "the Company") Notice of General Meeting The Board of Rotala announced on 16 January 2008 that the Company is seekingauthority from Shareholders to allot up to 20.28 million Relevant Securities forcash, without statutory pre-emption rights applying, in order to provide capitalto fund potential future acquisitions by the Company and to meet working capitalrequirements. The Board currently envisages carrying out a placing of LoanNotes (together with the issue of share warrants), but may use the authority toissue other Relevant Securities either as an alternative, or in addition to sucha placing. The Company does not currently have the requisite shareholder authorities tomake an issue of Relevant Securities of the size necessary to meet the fundingrequirements of the Company. The consent of Shareholders is therefore requiredboth to increase the Directors' authority to allot Relevant Securities and toallot such securities without statutory pre-emption rights applying in favour ofexisting Shareholders. A Circular has been sent to Shareholders to convene the General Meeting, whichis to be held at Sixth Floor, 80 Cannon Street, London EC4N 6HL at 10.00 a.m. onThursday, 14th February 2008. Background The Board of Rotala announced on 16 January 2008 that it had raised £1.0 millionunder the terms of a loan agreement (the "Loan Agreement") with LudgateInvestments Limited and John Gunn, Chairman of the Company (the "Loan"). TheLoan will provide the finance required to enable the Company to complete theacquisition of Ludlows of Halesowen Limited ("Ludlows"). Under the terms of the Loan Agreement, conditional upon, inter alia, theResolutions being passed, the Loan Agreement provides for the principal amountadvanced under the Loan to be settled in consideration of the issue of suchnumber of Convertible Unsecured Redeemable Loan Notes of £1.00 each due 2011(the "Loan Notes") as have an equal nominal value to such amount, together withany warrants attaching to the Loan Notes. The Company is seeking authority from Shareholders to allot up to 20.28 millionRelevant Securities for cash, without statutory pre-emption rights applying, inorder to meet working capital requirements, to facilitate the continuedexpansion of the Group beyond the contract wins that have been announced inrecent months and to finance further acquisitions. The issue of RelevantSecurities and the exercise or conversion of Relevant Securities issued pursuantto this authority would represent a 100 per cent. increase in the existingissued share capital of the Company. The Company is currently in the process of undertaking a placing of Loan Noteswith certain investors. By passing the Resolutions, the Company will be able toraise such financing in order to exploit quickly opportunities that presentthemselves to the Company, in a cost-effective manner. Reasons for THE resolutions The Company's strategy is to transform the economics of small bus and coachoperators through consolidation of their cost bases, reductions in unit costsand the application of superior financial and management resources. The Board continues to be engaged in discussions regarding a number of furtheracquisition opportunities in line with its principal strategy of expanding thegroup rapidly around a small number of commercial hubs, currently based aroundBirmingham and Bristol. The Company will also require additional working capitalif it is to take full advantage of the opportunities for expansion that existthrough new contract wins, a number of which have been announced in recentmonths. Any funds raised through the issue of Relevant Securities will be used firstlyto provide additional working capital to service the recently announced contractwins, and any additional contract wins, which the Company is confident it willobtain in the first half of 2008. Secondly, the proceeds will be used to pursuea number of potential acquisitions that the Company is in the process ofevaluating. This is in line with the Board's principal strategy of expandingthe Group through acquisitions. The Directors recommend that the specialresolution disapplying the statutory pre-emption rights set out in section 89(1)of the Act in order to ensure that the Company has the necessary funds to meetthe objectives set out above. The Board will issue Relevant Securities on openmarket terms to maximize the working capital of the Company. RECOMMENDATION The Independent Directors unanimously recommend Shareholders to vote in favourof the Resolutions as they intend to do in respect of their own beneficialshareholdings (direct and indirect) which amount, in aggregate to 1,197,219Ordinary Shares, representing approximately 5.88 per cent. of the issuedOrdinary Shares. Contacts: John Gunn, Chairman Rotala plc 020 7621 5770Kim Taylor, CEO Rotala plc 020 7621 5770Romil Patel / Matthew Marchant, Blue Oar Securities Plc 020 7448 4400 DEFINITIONS "Circular" the circular dated 22 January 2008, addressed to the Shareholders "Company" or "Rotala" Rotala plc (registered in England and Wales under company number 5338907) "Directors" or "Board" the directors of the Company "General Meeting" the general meeting of the Company convened for 10 a.m. on Thursday, 14th February 2008 "Group" the Company and its subsidiaries and subsidiary undertakings at the date of this document "Independent Directors" the Directors other than John Gunn "Loan Notes" convertible unsecured loan notes due for redemption on 31 December 2011 "Ludgate" Ludgate Investments Limited (registered in England and Wales under company number 4043908), a company in which John Gunn has an interest "Ordinary Shares" ordinary shares of 25 pence each in the capital of the Company "Relevant Securities" shall have the meaning prescribed by section 80(2) of the Act "Resolutions" the resolutions set out in the notice of General Meeting at the end of this document "Shareholders" holders of Ordinary Shares This information is provided by RNS The company news service from the London Stock Exchange