Sirius Pet Regulatory News (SRSP)

23 Jul 2008 11:54



Global Gaming Technologies PLC

("GGT" or the "Company")

Proposed Board Appointments

Agreements for Services

Proposed Change of Name to Sirius Petroleum plc

Notice of General Meeting

As previously announced on 11 June 2008, the Company is currently considering a number of opportunities in the oil and gas sector. Whilst discussions have been encouraging, the Company is at a very early stage in its consideration of potential targets. No deal has yet been identified and there can be no certainty that a transaction will be concluded.

The Company today announces the following proposals, the purpose of which is to enable the Company to be better placed to identify and execute an oil and gas transaction in Nigeria (the "Proposals"):

the proposed appointment of three new non-executive directors;

the entry into conditional services agreements between the Company and each of Sirius Oil & Gas Limited ("Sirius") and Taglient Oil Nigeria Limited ("Taglient"): 

Sirius, a newly formed British Virgin Islands private company, has agreed to seek out opportunities for the Company to acquire interests in oil and gas fields in Nigeria, to conduct initial due diligence on potential acquisition targets and to assist in the raising of funds; and

Taglient is a Nigerian private company owned and managed by Nigerian nationals who have considerable knowledge and contacts within the Nigerian Oil industry. Under this agreement, Taglient has agreed to seek out opportunities for the Company to acquire interests in oil and gas fields in Nigeria; 

the proposed change of name of GGT to Sirius Petroleum plc; 

two proposed placings; and 

the convening of a general meeting to consider and, if thought fit, approve the above and to waive pre-emption rights in respect of the issue of certain ordinary shares of 0.25p each in the capital of the Company ("Ordinary Shares").

Full details of the Proposals are set out in the Appendix below. A circular will be posted to shareholders today with a notice of general meeting to be held on 19 August 2008 at 10:00 a.m. at the offices of Fladgate LLP, 25 North Row, London, W1K 6DJ ("General Meeting"). The circular is available for download from the Company's website at www.globalgamingtechnologies.com .

Enquiries:

Hansard Group, John Bick tel: +44 (0)791 764 9362

Canaccord Adams Limited, Andrew Chubb tel: +44 (0) 207 050 6500

  Appendix

Strategy update and background

As previously announced, the Company is currently considering a number of opportunities in the oil and gas sector. Whilst discussions have been encouraging, the Company is at a very early stage in its consideration of potential targets. No deal has yet been identified and there can be no certainty that a transaction will be concluded.

The Company currently has had no substantive trading business since April 2007 when it was decided to cease the business of developing and using aggregation software in the gaming industry. Since that date, the Company has been classified as an investing company under the AIM Rules for companies ("AIM Rules") and has been dependent on the financial support of Corvus Capital Inc ("Corvus") which holds 28.02 per cent. of the Ordinary Shares in issue. Corvus, of which all of your current directors are also directors, has been assisting the Company in developing its strategy, in particular its focus on the oil and gas industry.

The purpose of the Proposals is to enable the Company to be better placed to identify and execute an oil and gas transaction, such as to give the Company a viable future as a stand alone, independent business. Whilst certain of the Proposals are dilutive of existing shareholders and in some cases are with related parties, your directors consider them to be fair and reasonable in the context of the Company's past performance and current position.

Appointment of new directors 

At the General Meeting, resolutions will be proposed to appoint the following persons as non-executive directors:

Babatunde Olusegun Agboola, aged 57, obtained a BS degree in Chemistry from Illinois State University Normal, and a Master of Science degree in chemical engineering from Arizona State University, Tempe, Arizona. He started his professional career with Mobil Producing Nigeria, a Nigerian subsidiary of Exxon Mobil which undertook all upstream activities, where he held key staff, supervisory and management positions prior to his retirement to take up appointments on the boards of several energy services and E&P companies including Fieldspargroup Limited and Dantose Energy Services Limited. His experience spans over 30 years in the oil and gas industry. Mr Agboola will become the Company's non-executive chairman.

Toby Jonathan Langford Hayward, aged 49 is a Chartered Accountant and has been an investment banker since 1984. He was a Director of Corporate Finance at Singer & Friedlander Limited and Henry Ansbacher & Co. Limited before working in the Oil & Gas team at Canaccord Capital Limited. He joined Jefferies International Limited as a Managing Director in 2005 with responsibility for the UK Equity Capital Markets and listed clients in the E&P sector. He left Jefferies in June 2008 to concentrate on a number of private interests and, in addition, he was appointed Non-Executive Chairman of Severfield Rowen Plc in May 2008.

Olukayode Olufemi Kuti, aged 23, obtained a Bachelor of Arts from Duke University, USA. He studied Economics & Psychology and also received a Markets and Management Certificate. Since University he has worked as investment advisor for a South African investment fund, Huxton Capital.

Each of the proposed directors has entered into a conditional letter of appointment with the Company for an initial term of six months, thereafter terminable on three months notice on either side. Under each agreement, the director is entitled to fees of £1,000 per month, such fees to be reviewed at the time the Company completes a transaction which constitutes a reverse takeover under the AIM Rules. Both Mr Agboola and Mr Hayward are entitled to signing-on payments of £50,000 and £40,000 respectively, which the parties have agreed to capitalise at par into 20,000,000 and 16,000,000 Ordinary Shares respectively. The letters of appointment and the signing on payments are conditional upon the passing of resolutions at the General Meeting.

The directors believe that these appointments will provide the board with industry experience, relevant local knowledge and valuable relationships to enable the Company to pursue opportunities in Nigeria. 

In addition to their proposed directorships of the Company, Mr Agboola, Mr Kuti and Mr Hayward hold or have held the following directorships, and are or were members of the following partnerships within the last five years:

Toby Hayward was appointed a director of Paradisii Limited on 6 October 1999. A liquidator was appointed on 22 February 2006 and the company was dissolved on 2 February 2008. There was a deficit to creditors of £133,629.

Toby Hayward was appointed a director of International Seafood Products Plc on 29 March 1999 and of Ocean Supplies Limited on 13 October 1999 (a wholly owned subsidiary of International Seafood Products Plc). An administrative receiver was appointed on 12 July 2000 to both companies. International Seafood Products Plc was dissolved on 23 November 2004. There was a deficit to creditors of £587. Ocean Supplies Limited was dissolved on 1 May 2007. There was a deficit to creditors of £1,168,785.

Save as disclosed above, there is no further information required to be disclosed pursuant to schedule 2(g) of the AIM Rules.

Agreements for services

The Company has today entered into two agreements which are conditional upon the passing of resolutions at the General Meeting.

The first agreement is with Taglient, a Nigerian private company owned and managed by Nigerian nationals who have considerable knowledge and contacts within the Nigerian Oil industry. Under this agreement, Taglient has agreed, among other things, to use all its reasonable efforts to seek out opportunities for the Company to acquire interests in oil and gas fields in Nigeria. Taglient has agreed to provide its services exclusively to the Company. Taglient will be paid a fee of £114,250 upon the agreement ceasing to be conditional and a further £153,500 upon and subject to the Company completing an oil and gas transaction which constitutes a reverse takeover under the AIM Rules.

The second agreement is with Sirius, a newly formed British Virgin Islands private company in which Corvus Capital Inc has a 18.2% shareholding and Adrian Collins (a director of Corvus) a 8.6% shareholding. In addition, proposed director, Mr Kuti, holds 11.4% of Sirius. Under this agreement, Sirius has agreed, among other things, to use all its reasonable efforts to seek out opportunities for the Company to acquire interests in oil and gas fields in Nigeria, to conduct initial due diligence on potential acquisition targets and to assist in the raising of funds. The agreement also releases Taglient from its current exclusivity agreement with Sirius, so that Taglient is able to contract (as set out above) with the Company to assist it in identifying oil and gas opportunities. Sirius will be paid a fee of £275,000 upon the agreement ceasing to be conditional.

Both Sirius and Taglient have agreed to assist the Company in establishing a Nigerian company, to be named Sirius Taglient Petro Limited, which is necessary for the grant of permits and licences to carry out business locally. Pursuant to the agreements, Sirius (who holds 50% of the shares), Taglient (who hold 49%) and Mr Agboola (who holds the remaining 1%) have agreed to transfer all of their shares in Sirius Taglient Petro Limited to the Company for a nominal sum (not to be greater than £10 in aggregate), on demand. This arrangement will result in the Company owning 100% of Sirius Taglient Petro Limited. Sirius will transfer their 50% immediately on the Services Agreement becoming unconditional but Taglient and Mr Agboola will retain their shareholdings in trust for the Company.

Both the agreements with Taglient and Sirius allow any party to require outstanding fees to be capitalised in whole or part at par provided that the issue and allotment of Ordinary Shares does not result in Sirius or Taglient or any of their concert parties (if any) being interested in more than 29.9 per cent. of the total voting rights of the Company. It is the intention of the parties to capitalise £229,250 of the aggregate fees immediately (£115,000 to Sirius and £114,250 to Taglient) following the General Meeting by the allotment and issue of 91,700,000 Ordinary Shares (46,000,000 to Sirius and 45,700,000 to Taglient).

The capitalisation of these fees together with the share placings referred to below are being undertaken at par value of 0.25p per Ordinary Share. The directors believe that this is a fair and reasonable value to place on the Ordinary Shares on the basis that, in the absence of any value attributed to the Company in respect of the Proposals, 0.25p represents a premium of 298% to the net assets of the Company. The market price of the Company's shares has fluctuated dramatically in recent weeks and rose to current levels following market rumours which do not, in your directors opinion, reflect the true value of the Company as an investing company with limited cash resources. Hence they do not consider the current share price to be an appropriate level to use as a price guide for the Proposals. 

Placings

The Company is proposing to raise £45,000 from its directors and proposed directors by the allotment and issue of 18,000,000 Ordinary Shares at par ("Initial Placing"). Graham Porter and Mike Hirschfield, have agreed to subscribe for £18,750 and £10,000 worth of Ordinary Shares, respectively, and Mr Hayward, a proposed director, has agreed to subscribe for £16,250 worth of Ordinary Shares. The proceeds of the Initial Placing will be used for the Company's general working capital requirements.

In addition, the Company proposes to raise between £500,000 and £2,000,000 on or before 31 December 2010, dependent on the timing of due diligence requirements, in order to pay for technical, legal and financial due diligence on potential acquisition targets ("Second Placing"). The Second Placing will be priced in the context of the market. The amount of the Second Placing will be determined by the board, depending on the Company's due diligence requirements; such requirements will be driven, to a significant degree, by the size and nature of the transaction contemplated.

In connection with the Second Placing, the Company has entered into a fee agreement with Bedarra Limited ("Bedarra") pursuant to which Bedarra will use all reasonable endeavours to find placees to participate in the Second Placing ("Fee Agreement"). Bedarra has advised Corvus in the past and has successfully raised significant sums on a number of share placings. The Company has agreed to pay Bedarra a flat, up front fee of £30,000; no further sums will be due to Bedarra, irrespective of the amount it raises up to £2,000,000, and will negotiate a separate fee if the sum required exceeds this amount. The Company has agreed to capitalise the Second Placing fee at par by the allotment and issue of 12,000,000 Ordinary Shares to Bedarra following the General Meeting. 

The Initial Placing, Second Placing and Fee Agreement are conditional upon the passing of resolutions at the General Meeting.

Change of name

Given the change in the Company's strategy to that of a resources company and the name of its proposed local operating company, your board recommends that the Company change its name to Sirius Petroleum plc. 

Related party transactions

Sirius is owned as to 18.2 per cent. by Corvus, 11.4 per cent. by Mr Kuti and 8.6 per cent. by Adrian Collins, whom is a director of Corvus. The entry by the Company into the agreement with Sirius is, therefore, one with a related party for the purposes of the AIM Rules.

Similarly, the Initial Placing is with the directors and one of the proposed directors and is therefore treated as being a related party transaction for the purposes of the AIM Rules; as is the capitalisation of debt by two of the proposed directors.

Neither the Company, its directors, the proposed directors nor Corvus have any interest in the share capital of Taglient or Bedarra. 

Shareholdings following completion of the Proposals (excluding the Second Placing)

Recommendation

Since, for the purposes of certain parts of the Proposals, Sirius, the directors and proposed directors are related parties under the AIM Rules, the directors (excluding Mike Hirschfield and Graham Porter in respect of the Initial Placing only) have consulted with the Company's nominated adviser, Canaccord Adams Limited, and consider the related party aspects of the Proposals set out above to be fair and reasonable insofar as the Company's shareholders are concerned. 

Accordingly the directors believe that the Proposals are in the best interests of the Company and shareholders as a whole and accordingly recommend shareholders to vote in favour or the resolutions to be proposed at the General Meeting as they will be doing so in respect of their own beneficial shareholdings of 5,408,332 Ordinary Shares representing 1.82 per cent. of the entire issued share capital of the Company.

-ENDS-