SVR.L Regulatory News (SVR)

9 Jun 2008 07:00

SERVICEPower PLC

("SERVICEPower" or the "Company")

NEW FINANCING ARRANGEMENTS AND PROPOSED MOVE TO AIM

CHANGE OF ADVISOR

6 June 2008 - SERVICEPower (LSE: SVR), a market leader for outsourced service and field management, announces today that it has entered into a new £1m loan facility agreement with Herald Ventures II Limited Partnership, Herald Investment Trust plc, BFL&P LLP and The Alphagen Volantis Fund Limited (the "Lenders") to be used for the working capital needs of the Company. The Company also announces that it intends to move to AIM and at the same time plans to raise further funds through a placing of new ordinary shares. 

Mark Duffin, CEO, SERVICEPower, commented, "In our recent Interim Management Statement of 16 May 2008, we stated that we would be looking to strengthen the Company's balance sheet. I am therefore pleased to announce we have put in place a new loan facility, will be undertaking a subsequent fund raising and that we will be moving to AIM in due course. We believe AIM is a more appropriate market for SERVICEPower at this time. With new funding in place we will be better positioned to execute our business development strategy, which has already led to an improvement in lead generation and closure this year.

"Furthermore, I am delighted to welcome on board KBC Peel Hunt as broker to the Company and look forward to working with them as the Company goes through its next phase of development."

The Company intends to cancel the listing of its ordinary shares on the Main Market of the London Stock Exchange and apply for its ordinary shares to be admitted to trading on AIM. Subject to market conditions SERVICEPower expects admission to AIM will occur in the 2nd half of 2008. The Board believes that AIM, with its lower cost of complying with continuing obligations is more appropriate for a company of SERVICEPower's size. The AIM Rules require that the Company appoints a nominated advisor and broker before its ordinary shares can be admitted to trading on AIM. KBC Peel Hunt has agreed to act as nominated adviser and broker to the Company in relation to the move to AIM.

The £1m loan facility (the "Facility") has been drawn down in full immediately and accrues interest, compounded every 6 months, at a rate of 8% per annum. The Facility is secured over the Company's assets in priority to any other charge that SERVICEPower currently has or grants in the future. The Facility is repayable upon the earlier of 31 December 2008 or in certain other default circumstances.

The Company also intends to raise further funds through a placing of new ordinary shares (the "Placing"), to be completed at the time of admission to AIM.

If shareholders approve the resolutions required to enable completion of the move to AIM and the Placing, and the Placing is completed, the Facility will become repayable at the Company's election to the Lenders either through:

a) the issuance of a convertible loan note (the "Convertible") to the Lenders. The Convertible will give the Lenders the right to convert the Loan Note into ordinary shares in SERVICEPower at the lower of 5p per ordinary share or the Placing Price. The rate of interest on the Convertible is 8% per annum, compounded every 6 months; or

b) the issuance of new ordinary shares in the Company at the lower of 4p per ordinary share or a 20% discount to the price ordinary shares are issued at in the Placing (the "Placing Price").

If shareholders do not approve the resolutions required to enable completion of the move to AIM and the Placing, then the Facility will become immediately repayable in full, including accrued interest and a 200% premium on the total outstanding monies will become payable by SERVICEPower to the Lenders. SERVICEPower has received irrevocable undertakings from shareholders who are beneficially interested in shares representing 14.9 per cent of the total issued share capital of the Company. These irrevocable undertakings include irrevocable undertakings received from the Lenders in respect of the shares in which they are beneficially interested.

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About SERVICEPower

SERVICEPower, publicly traded on the London Stock Exchange (LSE:SVR), allows companies to locate their employed field resources in the right geography, ensure they have the right mix of skills, and outside this geography create a network of independent, authorized service contractors whose costs are efficiently managed by our sophisticated warranty management software. The schedules and routes for both the employed field resources and the independent servicers are optimised by SERVICEPower's technology to ensure the right balance between the cost of operations and ensuring customers receive a superior service experience. Further information on the company can be found at www.servicepower.com