SMRT.L Regulatory News (SMRT)

13 Dec 2007 07:01

Nettworx PLC13 December 2007 Nettworx plc Irrevocable Undertaking and Share Subscription Discussions with Sim4Travel Holdings plc Coms plc ("Coms") is a company whose shares are traded on AIM, has todayannounced that it is in discussions with Sim4Travel Holdings plc ("Sim4Travel"),a company whose shares are traded on the Plus quoted market, which may or maynot lead to an offer being made for the whole of the issued share capital ofSim4Travel. Nettworx invested in Sim4Travel on the 13 April 2007 and currentlyholds 117,333,333 ordinary shares in the capital of Sim4Travel (representing11.8% on a fully diluted basis) and £756,000 convertible loan notes which areconvertible into 126,000,000 ordinary shares and a further warrant to subscribefor 30,000,000 shares in Sim4Travel. Coms Coms was founded by Jason Drummond in 2000 with a vision of using the Internetto carry and deliver voice telephone calls. Unlike Skype, Coms is based uponthe industry standard SIP protocol which enables the widest possible connectionof customers, devices and integrated Web 2.0 applications. For the year ended31 January 2007, Coms had income of £106,380 and a gross profit of £27,046. Itmade a loss after tax of (£664,331), had year end cash balances of £178,522 andconsolidated net assets of £1,942,336. Sim4Travel Sim4Travel is a telecoms network independent company that offers travellers analternative to their domestic network solutions by providing travellers with newinternational (Pay As You Go) SIM cards for use whilst abroad. Sim4Travel'sservice, which covers over 120 countries, significantly reduces, and in somecases completely avoids international roaming charges. In addition, Sim4Travelprovides support that includes a top-up facility and UK based customer care,both of which can be accessed at any time from anywhere around the world. Sim4Travel was incorporated in September 2004 and admitted to trading on thePlus quoted market (then Ofex) on 5 May 2006. Information relating to a proposed offer The basis of a proposed offer for Sim4Travel, should the discussions progress,will be a share for share exchange (with no cash alternative) and, in the lightof Sim4Travel's early stage of development, current trading and financialposition the aggregate value of the proposed offer is likely to be in the regionof £3m, compared with Sim4Travel's current market capitalisation ofapproximately £7.4m. Loan from Coms to Sim4Travel Sim4Travel's financial position is such that interim funding is presentlyrequired to meet Sim4Travel's working capital requirements in the short term. Coms entered into a loan agreement with Sim4Travel on 5 December 2007. Underthe terms of this agreement, Sim4Travel can borrow up to £500,000 from Coms at arate of interest equal to 5% per annum over the Barclays Bank Plc base rate.The loan and accrued interest are repaid on 30 March 2008 or on any later dateagreed between Coms and Sim4Travel. The loan has been secured by way of a fixedand floating charge over the Sim4Travel's assets granted to the company grantedto Coms under a debenture dated 5 December 2007. Discussions with Nettworx and Irrevocable Undertaking As part of its discussions with Sim4Travel, Coms has also been in talks withNettworx. These talks have led to Nettworx giving to Coms a conditionalirrevocable and binding undertaking under which Nettworx has agreed to thefollowing obligations: 1. Nettworx will accept the terms of a proposed offer if andonly if such proposed offer for Sim4Travel is made by Coms following a TakeoverCode Rule 2.5 announcement ('Announcement of a firm intention to make anoffer'). 2. Nettworx will, in the event that an offer document isposted, accept the proposed offer in relation to both Nettworx's 117,333,33ordinary shares in the capital of Sim4Travel and the 120,000,000 ordinary shareswhich will arise from conversion of £756,000 convertible loan notes whichNettworx holds (referred to in paragraph 4 below), even if a higher alternativeoffer has been made to Sim4Travel's shareholders. 3. At the same time, and conditional only upon the posting ofan offer document to Sim4Travel's shareholders, Nettworx will subscribe for£500,000 for 83,333,333 new ordinary shares in the capital of Coms at 0.6p pershare by way of a private placing. In addition, subject to compliance with theTakeover Code or any other regulatory issues, Nettworx will be issued a warrantto subscribe for a further 50,000,000 ordinary shares in the capital of Coms atan exercise price of 0.6p and exercisable at any time during the 12 month periodfollowing the warrant issue. This will be in consideration of Nettworx waivingits right under its existing warrants over 30,000,000 shares in Sim4Travel. 4. Nettworx will convert into equity all its outstandingSim4Travel convertible loan notes dated 13 April 2007 immediately upon theCompany declaring the proposed offer has become unconditional as to acceptances. Nettworx will hold the shares that it receives in Coms pursuant to thesubscription and acceptance of the offer for Sim4Travel as part of itsinvestment portfolio. Nettworx has agreed with Coms that any disposals of suchshares during the 12 months from the date upon which the offer is declaredunconditional in all respects will only be made through the broker from time totime of Coms. Reasons for the Announcement and AIM Rules 12 and 13 The Irrevocable Undertaking commitments referred to above are being disclosed atthis time in accordance with AIM Rules as notwithstanding their beingconditional upon a potential Takeover Code Rule 2.5 announcement in relation tothe proposed offer for Sim4Travel, the satisfaction of the condition is outsidethe control of Nettworx. The irrevocable commitment to dispose of Nettworx's shareholding of existingSim4Travel shares and further shares to be issued on the conversion of itsconvertible loan notes will be a substantial transaction for the purpose of AIMRule 12 and the irrevocable commitment to subscribe for £500,000 for newordinary shares in the capital of Coms at 0.6p per share by way of a privateplacing will be a related party transaction in accordance with AIM Rule 13,given that Jason Drummond is a director and the Chairman of Coms and is also adirector of Nettworx. Jason Drummond is also a substantial shareholder in Coms.The Directors of Nettworx, other than Jason Drummond, consider having consultedwith the Nettworx nominated adviser, that the terms of the transaction are fairand reasonable insofar as the shareholders of Nettworx are concerned. Coms Announcement Coms is today making an announcement with regard to the discussions withSim4Travel and the share subscription by Nettworx. Sim4Travel Announcement Sim4Travel is today making an announcement in accordance with the Takeover Codethat it is in talks with Coms which may or may not lead to an offer being madefor the whole of the issued share capital of Sim4Travel. Date: 13 December 2007 Contact: Jonathan Rowland Nettworx plc Tel: +44 (0) 207 087 7970 Contact: Mark Ashurst Canaccord Adams Tel: +44 (0) 207 050 6500 This information is provided by RNS The company news service from the London Stock Exchange