STP.L Regulatory News (STP)

4 Apr 2007 14:40

Spiritel PLC04 April 2007 For release: 4 April 2007 SPIRITEL PLC ("Spiritel" or "the Company") Convertible Equity Facility Spiritel plc (AIM: STP), the telecommunications services business, is pleased toannounce that it has agreed, subject to the approval of the Company'sindependent shareholders, with Penta Capital Partners Limited, as the investmentmanager of Penta Fund 1 Limited Partnership and Penta Fund 1 SP LimitedPartnership (together "Penta"), the holders of the Company's redeemablepreference shares and the Company's outstanding loan notes, to modify the termsattaching to the redeemable preference shares, loan notes and loans. Preference shares A total of £4.1 million of redeemable preference shares are currentlyoutstanding. Spiritel will seek shareholder approval at an extraordinary generalmeeting (the "EGM") to amend the Company's Articles in order that the redeemablepreference shares become convertible into ordinary shares of 1p each, with up to£1,000,000 nominal value of the redeemable preference shares capable of beingconverted at a price of 2p per ordinary share and any further conversion beingeffected at the lower of 10 per cent. below the then current middle market priceand the then most recent subscription price, subject to a minimum of 3p perordinary share. The Articles will be further modified to remove Penta's right to any fixeddividend in respect of the redeemable preference shares, which currently carryan 8% coupon. Upon redemption or conversion of the redeemable preference shares,the Company will pay to Penta a redemption premium of 25% of the amount redeemedor converted. This premium may be converted into ordinary shares at the sameprice used to convert the redeemable preference shares to which the premiumapplies. Convertible loan notes It is proposed that convertible loan notes with an aggregate value of £350,000that are convertible into ordinary shares of 1p each in the Company at aconversion price of 2.75p per share at any time before 30 June 2007 will havetheir conversion price modified to 2.25p per share. This change is conditionalupon shareholder approval of the proposed changes to the Company's Articles. Loan notes It is also proposed that the Company will pay to Penta a redemption premium of35% of the nominal amount of any loan notes redeemed. Loan notes of £500,000 arecurrently outstanding. Conditional upon shareholder approval of the proposedchanges to the Company's Articles, Penta has also waived its right to intereston the loan notes with effect from 1 May 2005. Loans Spiritel will seek shareholder approval at the EGM to amend the Company'sArticles in order that loans of £1,650,000 are capable of being converted into1p ordinary shares at a price of 2.25p per ordinary share. Upon redemption orconversion of the loans, the Company will pay to Penta a redemption premium of40% on £1,200,000 of loans and a redemption premium of 25% of £450,000 of loans.The redemption premium will be paid on the amount redeemed or converted. Thispremium may be converted into ordinary shares at the same price used to convertthe loan to which the premium applies. Conditional upon shareholder approval of the proposed changes to the Company'sArticles, Penta has also waived its right to redemption premiums and interest onthe loans with effect from the dates of the loan agreements. Takeover Code Penta is currently the holder of 12.5 percent of the issued ordinary sharecapital of the Company and has the right to convert existing debt into ordinaryshares which would give Penta a holding of 29.7 per cent of the then enlargedissued ordinary share capital of the Company. If Penta were to convert thepreference shares, loan notes or loans on the terms of the proposal describedabove (the "Proposal"), it would trigger a mandatory offer for the Company underthe Takeover Code. Implementation of the Proposal will therefore be conditionalon the grant of a waiver by the Panel on Takeovers and Mergers ("the Panel")from the obligation that might otherwise arise for Penta to make a mandatoryoffer for all of the Company's ordinary shares not already owned by Penta (a"Code Whitewash"). The grant of a Code Whitewash by the Panel will require,inter alia, the approval of the Proposal by independent shareholders at the EGM. This announcement supercedes the conversion terms announced on 19 July 2006 and5 July 2006 in respect of the redeemable preference shares and loan notes. Alastair Mills, Spiritel's Chief Executive, commented: "I am delighted by thisdebt restructuring which both strengthens our balance sheet and, given theconvertible element to the restructuring, highlights Penta's confidence in theprospects for the Company's shares as we implement our strategy of buildingroutes to market through acquisition." For further information please visit www.spiritelplc.com or contact: Spiritel plc Tavistock CommunicationsAlastair Mills Simon HudsonChief Executive Clemmie CarrTel : +44 20 7160 0100 Tel: +44 20 7920 3150 -ends- This information is provided by RNS The company news service from the London Stock Exchange