21 Feb 2020 15:37
21 February 2020
The Stanley Gibbons Group PLC
(the "Company" or the "Group")
Agreement with Phoenix S. G. Limited ("Phoenix SG") and release of guarantor from loan agreement
Agreement with Phoenix S. G. Limited
The Company announces that its subsidiary, Stanley Gibbons Limited ("SGL") has today entered into an agreement with Phoenix SG under which SGL has acquired trading inventory consisting of approximately 780 items. The initial consideration is £1.07 million (the aggregate "Base Cost"), which is payable in cash to Phoenix SG over the term of the agreement, as and when sales of the inventory are made to third parties and will be the net proceeds, after deduction of commission payment to be made to SGL, on completed sales. The commission payment is in line with that which SGL would earn on similar deals with unrelated parties. The agreement is for a total of ten years and any sale at a value that is less than the Base Cost of the inventory item can only be made with specific permission of Phoenix SG. To the extent that all of the inventory is sold and the appropriate payments have been made by SGL to Phoenix SG, no further consideration will be due. If, after seven years of the agreement, 20 per cent. or more of the consideration owed to Phoenix SG remains outstanding, Phoenix SG and SGL have agreed they will negotiate in good faith the repayment of the outstanding consideration to Phoenix SG. To the extent that any inventory remains to be sold at the end of the agreement, the relevant inventory will be returned to Phoenix SG and no further consideration will be due.
Phoenix SG is currently interested in 58.09 per cent. of the issued share capital of the Company and the transaction referred to above constitutes a related party transaction for the purposes of AIM Rule 13. The Independent Directors of the Company consider, having consulted with the Company's nominated adviser, Liberum Capital Limited, that the terms of the transaction are fair and reasonable so far as the Company's shareholders are concerned. Graham Shircore is the CEO of the Company and a Partner of Phoenix Asset Management Partners (PAMP). As a nominee of PAMP on the Company's Board, he is not considered independent for the purposes of this transaction.
As a result of this agreement, SGL will have both the opportunity to earn commission from subsequent sales and also to further improve the range of items it is able to offer, which will be available for sale from its website and specialist dealers.
Release of guarantor from loan agreement
The Company has a loan facility with Phoenix SG repayable in March 2023 (the "Loan Agreement"). As at 19 February 2020, £14.1m was drawn under the Loan Agreement.
The Company announces that the Company and its subsidiaries, that are guarantors to the Loan Agreement, have signed a deed of release and confirmation with its lender Phoenix S.G. Limited that releases and discharges Stanley Gibbons (Guernsey) Limited (in liquidation) of its obligations and future obligations and liabilities under the Loan Agreement with Phoenix S. G. Limited.
As a result of Stanley Gibbons (Guernsey) Limited (in liquidation) no longer being a guarantor of the Loan Agreement, the Group is currently no longer in default on its loan facilities. During periods of default the loan is repayable on demand.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014
Enquiries
The Stanley Gibbons Group plc +44(0)207 836 8444Harry Wilson (Chairman)Anthony Gee (Chief Finance Officer)
Liberum Capital Limited (Nomad and Broker) +44(0)20 3100 2000Andrew GodberEdward ThomasLaura Hamilton