ZOL.L Regulatory News (ZOL)

7 Aug 2007 13:04

Crosby Capital Partners Inc07 August 2007 Crosby Capital Partners Inc. ("Crosby") Following the announcement made on 25 June 2007 in relation to the proposed IPOof Darcy Energy Holdings UK, Ltd. ("Darcy UK"), a subsidiary of IB DaiwaCorporation ("IB Daiwa" - JASDAQ 3587). Crosby is pleased to announce theexpected admission of Darcy UK to the AIM market of the London Stock Exchange("AIM") on 15 August 2007. Below is a summary of the three announcements made today by IB Daiwa. The fulltexts of the announcements are available on IB Daiwa's website:www.ibdaiwa.co.jp. All the announcements relate to the IPO of Leed Petroleum PLC("Leed Petroleum") formerly known as Darcy UK, on the AIM. Crosby owns, through two wholly owned subsidiaries, 102,425,000 shares in IBDaiwa, representing 24.02% of its issued share capital. The holdings haveremained unchanged from the 2006 Annual Report of Crosby and are classified as'financial assets at fair value through profit and loss' and are, therefore,marked to market with gains and losses being recognised in the income statement. Announcement on the details of the IPO of Leed Petroleum: 1. Summary of IPO • Date of admission: 15 August 2007 • Price per share: 0.47 GBP • Number of primary shares to be placed: 104,090,588 shares • Number of secondary shares to be placed: 10,638,297 shares • At the IPO, IB Daiwa will not dispose any of the Leed UK shares it owns. • Gross placing proceeds £48.9 million • Expected market capitalization: £118 million 2. Background of IPO and possible impacts of IPO to IB Daiwa's financialsand other matters. IB Daiwa acquired the Leed Group in December 2005 for the acquisition price ofUS$57.5 million. IB Daiwa has provided total equity of US$10.2 million to theLeed Group, which equals the cost of IB Daiwa's shares in the Leed Group on theits unconsolidated balance sheet. Since the acquisition, the Leed Group hasacquired new assets and has enhanced the reserve profile of the existing assets,and, hence, has expanded both the size of its operation and its reserves.Consequently, the Leed Group's corporate value has significantly increased, andthe market capitalisation of the Leed Group at the IPO will be about US$ 239million (converted from GBP118 million), of which about US$ 100 million will bethe market value of the shares currently held by IB Daiwa, representing anincrease of approximately 10 times over its equity cost of investment. In Q2, IBDaiwa expects to recognise approximately JPY 3.5 billion of extraordinary gainson the deemed sale of Leed UK. Upon the IPO, the IB Daiwa's ownership in the Leed Group is expected to become41.7%, which will cause the Leed Group to cease to be a consolidated subsidiaryof IB Daiwa and become an affiliate of IB Daiwa. After the IPO, IB Daiwa willcease to consolidate its operating income. Instead, the Company will equityaccount for its share of income in the Leed Group. The IPO will provide the Leed Group a platform to access the capital marketsefficiently on an on-going basis. The Leed Group will have about GBP 46 million,which will be used for repayment of certain debts, development and exploration,and others. After the IPO, IB Daiwa will continue to hold Leed Petroleum shares(and be the largest shareholder), and it believes that the IPO of Leed Petroleumnot only delivers a one-off gain, but also facilitates the continued growth bothin value of IB Daiwa's remaining stake in the Leed Group and in the its share ofprofits of the Leed Group. IB Daiwa has revised its consolidated financial forecasts for the fiscal yearending March 2008 because of the deconsolidation and the extraordinary gainswhich it will recognise on the deemed sale of shares of Leed Petroleum. Announcement on Change in Subsidiary Status: As a result of the IPO, IB Daiwa's ownership of Leed Petroleum will be reducedfrom 86.6%, to 41.7%, and Leed Petroleum will cease to be a consolidatedsubsidiary of IB Daiwa and will become an affiliate. At the IPO, IB Daiwa will not dispose any of the Leed Petroleum shares it owns. Announcement of Revision to Forecasts for Consolidated Financials for theCurrent Fiscal Year: The IPO will result in an extraordinary gain of approximately JPY 3.5 billionattributable to IB Daiwa and a decrease in IB Daiwa's stake in the Leed Groupfrom 86.6% to 41.7%. As such, IB Daiwa will deconsolidate the Leed Group andinstead will apply equity method to its interest in the Leed Group. As such, IBDaiwa has revised its forecast for the consolidated financials for the fiscalyear ending March 2008, and there has been no revision made other than therevisions related to the deconsolidation of the Leed Group and the extraordinarygain. Revisions to Forecasts for Consolidated Financials Revisions to Forecasts for Consolidated FinancialsInterim: 1 April 2007 - 30 September 2007 (Unit: JPY in millions) Sales Revenue Operating Ordinary Net Profit Profit ProfitPreviousForecast (A) 1,203 (762) (1,156) Base case: (1,062) Low case: (3,705)RevisedForecast (B) 837 (845) (1,042) Base case: 2,509 Low case: (134) Variance (B-A) (366) (83) 114 3,571 Variance (%) (30.4) % Reference:Actual Resultsfor PreviousPeriod 1,838 (623) (805) (861)(1 Apr 06 -30 Sep 06) Full-Year: 1 April 2007 - 31 March 2008 (Unit: JPY in millions) Sales Revenue Operating Ordinary Net Profit Profit ProfitPreviousForecast (A) 3,925 (570) (1,337) Base case: (1,278) Low case: (3,922)RevisedForecast (B) 1,439 (1,244) (1,447) Base case: 2,102 Low case: (542) Variance (B-A) (2,486) (674) (110) 3,380 Variance (%) (63.3) % Reference:Actual Resultsfor PreviousPeriod 2,947 (2,046) (2,557) (23,455)(1 Apr 06-31 Mar 07) Projected FY2007 EBITDA - Previous Forecast:JPY1,120 mil; Revised Forecast:: JPY(336) mil There is no revision to its unconsolidated financial forecast for the currentfiscal year. About Crosby Capital Partners Crosby Capital Partners Inc. is a leading independent deal-focused Asia-orientedmerchant banking and asset management group. Crosby is quoted on the AIM marketof the London Stock Exchange. Further details can be found on Crosby's websitewww.crosby.com. For further information on Crosby please contact: Crosby CapitalSteve Fletcher, Chief Operating Officer +44 20 7590 2800 Dawnay, Day Corporate FinanceDavid Rae/Ed Gay +44 20 7509 4570 This information is provided by RNS The company news service from the London Stock Exchange