Srt Marine Sys. Regulatory News (SRT)

25 May 2006 07:00

SOFTWARE RADIO TECHNOLOGY PLC ("SRT" or the "Company") PLACING TO RAISE ‚£4,250,000 The Directors of SRT, the AIM-quoted provider of TETRA and AIS solutions to thecommunications and homeland security markets, are pleased to announce that theCompany has carried out a conditional placing of 9,042,552 new ordinary sharesat 47p per share to raise ‚£4,250,000 (the "Placing") through WesthouseSecurities LLP ("Westhouse").The Placing is conditional, inter alia, on the passing of resolutions at anextraordinary general meeting on 19 June 2006 (the "EGM"). A circular will besent to Shareholders today including notice of the EGM (the "Circular").Background to and Reasons for the PlacingSince SRT's admission to AIM on 2 November 2005, the Company has made strongprogress in both its TETRA and AIS businesses.On 27 April 2006, the Company announced that the preliminary resultsannouncement for the year ended 31 March 2006 would be made in the weekcommencing 12 June 2006. The Directors confirmed that they anticipated that thetrading results, before an exceptional item relating to the accountingtreatment of share options, would be slightly ahead of market expectationspublished prior to the Company's admission to AIM.The Directors have been particularly encouraged by the developments in the AISClass B market. The launch of SRT's low cost AIS Class B product in January2006 has stimulated much greater market interest than anticipated and a rangeof customer negotiations are underway, the largest of which involve nationalAIS systems.AIS transponders continuously transmit the vessel's position, course and speed,together with other identification details, whilst being able to receivesimilar information from other AIS transponders within range. AIS is designedto feed information to coastal authorities through base stations at strategicpoints. AIS was initially implemented in full in the form of the AIS Class Astandard. This was mandated by the International Maritime Organisation in 2002for all vessels over 300 metric tonnes, with certain exceptions includingfishing vessels.AIS Class B is a derivative of the AIS Class A standard which was developed foruse on smaller vessels, where the key market driver is coastal security inrelation to maritime traffic. The Directors estimate that the potential globalmarket for AIS Class B is 26,950,000 vessels, of which the vast majority areleisure vessels.National AIS projects are currently being implemented in a number of countries,including the USA, Mexico, Saudi Arabia, South Korea, China and the UK andother European Union countries.SRT formally launched its low cost AIS Class B transponder design at the LondonBoat Show in January 2006. The launch has generated substantial interest fromcompanies and governmental authorities around the world.SRT has adopted a dual strategy in addressing the AIS Class B market. As withSRT's TETRA business, the Company offers customers a reference design model,under which SRT's design is licensed to manufacturers in return for licence andproduct development fees and ongoing royalties. In the case of AIS Class B,however, SRT is also marketing the Class B design as a complete product, whichis manufactured on the Company's behalf by a major electronics company inChina.The Directors believe that AIS Class B represents a fast developing,potentially mass, market in which SRT holds some major competitive advantages.SRT has a six year AIS heritage, first mover advantage and existing low costtechnology available for sale or licensing. The Directors consider that thesefactors place SRT in a strong position to capture a leading role in the market.As a result, the Company is proposing to raise ‚£4.25 million in order toaccelerate the development of the AIS Class B business. The Directors intendthat the funds raised through the Placing will enable SRT to: * increase sales and marketing activity on a global scale, including attendance at exhibitions and the setting up of a permanent demonstration and testing centre; * commence the development of the next generation of AIS Class B product, which will be smaller and cheaper to manufacture, increasing SRT's net margin per unit; * develop an AtoN (aid to navigation) product, which is suitable for use on buoys and other off-board navigational tools; and * have the ability to consider strategic acquisition opportunities. Details of the PlacingThe Company is proposing to raise ‚£4,250,000 (before expenses) through aconditional placing by Westhouse of 9,042,552 new Ordinary Shares (the "PlacingShares") at 47p per share. The Placing Shares will represent 11.6 per cent. ofthe issued share capital of the Company as enlarged by the Placing. The Placingis conditional on the placing agreement, which has been entered into by theCompany and Westhouse (the "Placing Agreement"), becoming, or being declared,unconditional in accordance with its terms. The Placing Agreement isconditional, inter alia, on: a. the passing of the resolutions at the EGM; b. admission of the Placing Shares to trading on AIM occurring by not later than 8.00 a.m. on 20 June 2006 (or such later time and/or date as Westhouse and the Company may agree but in any event not later than 5.30 p.m. on 30 June 2006); and (c) the receipt by the Company (in a form reasonably satisfactory to Westhouse)of written confirmation from the HM Revenue & Customs that the Placing Shareswill be a qualifying holding for the taxation advantages offered under HMRevenue & Customs' Venture Capital Trust scheme.Application will be made for the Placing Shares to be admitted to trading onAIM. It is expected that admission will occur at 8.00 a.m. on 20 June 2006.The Placing Shares are not being offered generally to shareholders, whether ona pre-emptive basis or otherwise. The Directors believe that the additionalcost and delay which a rights issue or an open offer would entail would not bein the best interests of the Company.Copies of the Circular will be available for a period of one month from theoffices of Westhouse at Clements House, 14-18 Gresham Street, London EC2V 7NN.For further information please contact:Software Radio Technology plc 01761 409500 Simon Tucker simon.tucker@softwarerad.com Shamus Kelly shamus.kelly@softwarerad.com Westhouse Securities LLP 0161 838 9140 Tim Feather tim.feather@westhousesecurities.com Tavistock Communications 020 7920 3166 Christian Taylor-Wilkinson ctaylor-wilkinson@tavistock.co.ukWesthouse, which is regulated by the Financial Services Authority, is acting onbehalf of SRT. Westhouse is not acting for any other persons and will not beresponsible to anyone other than SRT for providing the protections afforded tocustomers of Westhouse or for providing advice in relation to the Placing orany other matter referred to in this announcement.This announcement is for information only and does not constitute an offer tosell or issue or the solicitation of an offer to buy, subscribe or acquire anysecurities in any jurisdiction. This announcement does not constitute an offerto sell or issue or the solicitation of an offer to buy, subscribe or acquireany securities in the capital of the Company in the United States, Canada,Australia, Japan or South Africa or in any jurisdiction in which such offerwould be unlawful and should not be relied upon in connection with any decisionto acquire Placing Shares or any other securities in the capital of theCompany. The information contained in this announcement is not for release,publication or distribution, directly or indirectly, to or into the UnitedStates, Canada, Australia, Japan or South Africa or in any jurisdiction inwhich such publication or distribution would be unlawful.This announcement has been issued by, and is the sole responsibility of, theCompany. No representation or warranty, express or implied, is or will be madeas to, or in relation to, and no responsibility or liability is or will beaccepted by Westhouse or by any of its affiliates or agents as to or inrelation to, the accuracy or completeness of this announcement, or any otherwritten or oral information made available to or publicly available to anyinterested party or its advisers, and any liability therefore is herebyexpressly disclaimed.ENDSOFTWARE RADIO TECHNOLOGY PLC