TSTR.L Regulatory News (TSTR)

15 Jun 2006 17:57

Canisp PLC15 June 2006 15 June 2006 Canisp plc Proposed Placing Notice of Extraordinary General Meeting and Board Changes Canisp plc announces that it has conditionally placed 60,000,000 ordinary sharesof one penny each at par ("Placing Shares") to raise £600,000 before expenses ("Placing"). The Placing is conditional upon the Company in extraordinary generalmeeting ("EGM") granting the directors authority to allot and issue the PlacingShares otherwise than pro-rata to existing shareholders. Background In the chairman's statement accompanying the Company's interim results whichwere announced on 20 December 2005, we said that we would continue to work hardto grow our customer base but that we were also investigating alternativeapproaches to recover shareholder value. We are continuing this twin strategy.To date we have spoken to a number of parties interested in acquiring all orpart of our business. It has been the board's view that such persons havesignificantly underestimated the value of the Company's assets such that none ofthese approaches have been worthy of detailed consideration. In the meantime wecontinue to work to grow the Company's existing customer base and to assist inthis the directors have decided to proceed with the Placing. The Placing The Company has received firm commitments from placees, including from directorMike Hirschfield, to subscribe for all of the Placing Shares. Such commitmentsare conditional only upon shareholders approving the special resolution to beproposed at the EGM by no later than 30 July 2006. The net proceeds of the Placing are estimated to be £585,000, a proportion ofwhich will be used to repay, in part, existing borrowing from Bank of Scotland. Capitalisation of debt Contemporaneously with completion of the Placing and subject to the passing ofthe special resolution at the EGM, the Company will capitalise £257,500 of thedebt owed to Corvus Capital Inc (Corvus) by the allotment and issue of25,750,000 ordinary shares at par (Capitalisation). Following the Placing andCapitalisation Corvus will hold 27.87 per cent of the entire issued sharecapital of the Company. In addition to the Capitalisation, the Company has agreed with Corvus thatCorvus may capitalise the balance of its debt amounting to £527,500, in whole orpart, at any time in the 24 months following the date of the EGM at a price pershare of whichever is the lower of 1 1/2p and the average closing bidprice for an ordinary share of the Company on the AIM market for the threetrading days preceding Corvus' demand to capitalise debt, subject always to thecapitalisation price per share being no lower than par value (CorvusCapitalisation Agreement). The Corvus Capitalisation Agreement is conditionalupon approval of the special resolution to be proposed at the EGM. Rule 9 of the City Code on Takeovers and Mergers normally requires any person orgroup of persons acting in concert that acquire shares which, taken togetherwith shares already held, carry 30 per cent. or more of the voting rights of aCompany to offer to acquire the balance of the equity share capital in cash atthe highest price paid by that person or any person acting in concert with himin the previous 12 months. Corvus has told your board that currently itsintention is not to increase its shareholding in the Company beyond its currentlevel (in which case Corvus would only exercise its rights under the CorvusCapitalisation Agreement if it had sold all or some of its shares in the Companyor if its holding had been diluted by the issue of further shares in theCompany). Your directors believe that the Corvus Capitalisation Agreement is in the bestinterests of the Company and its shareholders as a whole because it incentivisesCorvus to capitalise its debt rather than calling for the repayment of its debt. Related party Corvus is a related party of the Company under the AIM rules because it is asubstantial shareholder in the Company and because Ian Tickler sits on theboards of both companies. In addition, I used to be a director of Corvus. The directors have consulted with the Company's nominated adviser, CanaccordAdams Limited, and consider that the terms of the Placing, and CorvusCapitalisation Agreement are fair and reasonable insofar as the Company'sshareholders are concerned. Board changes Subject to completion of the Placing and the passing of resolutions 1, 2 and 3at the EGM, Mark Shrosbree will join the board as the Company's managingdirector, Tim Moss will join as part time finance director and Sam Glover willjoin the board as a non-executive director. At the same time I will resign fromthe board, Mike Hirschfield will take over as executive chairman and JohnMaundrell's role will change from executive to non-executive. Mark Shrosbree, age 47, has over 20 years' experience in the UK telecoms market.From 1986 to 1992 he was sales director for a telecom dealership in bothhardware and network services. From 1993 to 1998 he worked for Alcatel and waspromoted to national sales manager. In 1999 he helped establish, as salesdirector, a national switch-less reseller business which was sold in 2005. He iscurrently sales director of The Airtime Group Limited, a wholly owned subsidiaryof the Company. Timothy Moss, age 43,qualified as a chartered accountant with Pannell KerrForster in 1990.He has held senior financial positions with a number ofcompanies in the utilities, communications and telecoms sectors, and iscurrently a director of The Airtime Group Limited and CVS Management Limited. Heis based in Geneva, Switzerland. Tim holds options over 125,000 ordinary sharesin the capital of the Company exercisable at a price of 31p per ordinary share. Sam Glover, aged 32, has over ten years of IT development experience. Thisranges from the development of equity and derivative market analysis andcharting tools to the project management of the IT relocation for Lloyds ofLondon underwriters on behalf of Facilities Solutions Limited. Sam has alsoacted as a consultant on the technical infrastructure and computerisation forXchanging and Ins-Sure pre and post merger. Sam is currently a director of XLServices Limited. There are no other disclosures to be made regarding Mark, Tim or Sam under rule17 or paragraph (g) of schedule 2 of the AIM Rules. Action to be taken A circular being posted to shareholders today includes a notice of the EGM to beheld at 10:30 a.m. on Monday 10 July 2006 at 25 North Row, London W1K 6DJ. Themeeting is being convened to consider and, if thought fit, approve theappointments of Mark Shrosbree, Tim Moss and Sam Glover as directors and aspecial resolution authorising the directors to issue and allot the PlacingShares and shares arising from the Capitalisation and the Corvus CapitalisationAgreement. Recommendation Your directors believe that the Placing and Corvus' continued financial supportare critical to the Company's ability to continue trading. Accordingly, thedirectors recommend shareholders to vote in favour of the resolutions to beproposed at the EGM as they will be doing so in respect of their ownshareholdings amounting in aggregate to 5.94 per cent of the Company's entireissued share capital. John LeatChairman15 June 2006 Notice of EGM Notice is given that an extraordinary general meeting of the members of CanispPLC (Company) will be held at 25 North Row, London W1K 6DJ on Monday 10 July2006 at 10:30a.m. to consider and, if thought fit, pass the following: Ordinary resolutions 1. Conditional upon the passing of resolution 4 below, to appoint Mark Shrosbreeas a director of the Company. 2. Conditional upon the passing of resolution 4 below, to appoint Tim Moss as adirector of the Company. 3. Conditional upon the passing of resolution 4 below, to appoint Sam Glover asa director of the Company. Special resolution 4. That pursuant to section 95(1) CA 1985, the directors are authorised to allotequity securities, as defined in section 94(2) CA 1985, under the authorityconferred by resolution 4 passed at the Company's annual general meeting held on2 November 2005, as if section 89(1) CA 1985 did not apply to the allotment, forthe period commencing on the date of this resolution and expiring at theconclusion of the next annual general meeting of the Company except that thedirectors may allot relevant securities following an offer or agreement madebefore the expiry of the authority and provided that the authority is limitedto: 4.1 the allotment of equity securities at par in connection with a placing ofordinary shares in the Company up to an aggregate nominal amount of £600,000(six hundred thousand pounds); 4.2 the allotment of equity securities at par in connection with thecapitalisation of £257,500 (two hundred and fifty seven thousand five hundredpounds) owed to Corvus Capital Inc; 4.3 the allotment of equity securities, in the 24 months following the date ofthe meeting, to capitalise up to £527,500 owed to Corvus Capital Inc at a priceper share of whichever is the lower of 1 1/2p and the closing bid pricefor an ordinary share of the company on the AIM market for the three tradingdays preceding Corvus Capital Inc's demand to capitalise its debt, subjectalways to the capitalisation price per share being no lower than par value; and 4.4 the allotment of equity securities, otherwise than in accordance withparagraphs 4.1, 4.2 and 4.3 up to an aggregate nominal amount of £100,000 (onehundred thousand pounds). By order of the boardKitwell Consultants LimitedSecretary Registered office: Kitwell House, The Warren, Radlett, HertfordshireWD7 7DU ends This information is provided by RNS The company news service from the London Stock Exchange