Last checked at 4 Sep 2008 07:00
For immediate release: 4 September 2008
ZOO DIGITAL GROUP PLC
("ZOO", "the Company")
PROPOSED PLACING OF 3,413,333 PLACING SHARES AT 15 PENCE PER SHARE
ZOO Digital Group plc, (AIM: ZOO) the digital media production technology group, announces today that it proposes a capital raising by conditionally placing 3,413,333 new ordinary shares of 15p each in the Company ("Placing Shares") at a placing price of 15p per share (the "Placing Price") to raise approximately £512,000 before expenses (the "Placing"). The Placing Shares will, when issued, represent 16 per cent. of the enlarged issued share capital of the Company following completion of the Placing.
The Placing Price of 15 pence per Placing Share represents a premium of 25 per cent. to the closing middle market price of 12 pence per ordinary share on 3 September 2008, being the last business day before announcement of the Placing.
Reasons for the fundraising and use of proceeds
The proposed fundraising is to provide the Company with additional working capital resources. The board of directors of the Company ("Board") believes that the additional working capital will enable the Company to continue to develop the business without undue constraint.
The Company has also today announced its preliminary results for the year to 31 March 2008. Full details on the final results are contained in a separate announcement.
Settlement and dealings
Due to the size of the issue of the Placing Shares relative to the Company's existing authority to allot securities for cash on a non pre-emptive basis the issue of the Placing Shares is conditional upon the passing of certain resolutions which are to be proposed at the Company's eighth annual general meeting which is to be held on 6 October 2008 at 11.00 am at The Tower, 2 Furnival Square, Sheffield S1 4QL ("AGM"). Accordingly, the Board is seeking shareholders' approval to dis-apply pre-emption rights at the AGM to the extent required to, amongst other things, facilitate the Placing. If the necessary resolutions are passed at the AGM, it is expected that application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that the Placing Shares will be admitted to trading on AIM on 7 October 2008. The Placing Shares will, when issued, rank pari passu in all respects with the existing ordinary shares of the Company. Following admission of the Placing Shares to trading on AIM the enlarged issued share capital of the Company will be 21,326,421 ordinary shares.
Director's and Substantial Shareholder's Placing participation
The Placing is being taken up by the Company's Chief Executive Officer, Stuart Green, who is subscribing for 1,333,333 of the Placing Shares thereby increasing his holding to 4,179,835 ordinary shares (representing 19.6 per cent. of the enlarged issued share capital following completion of the Placing), Herald Investment Management Ltd, ("Herald") who will be subscribing for 1,800,000 of the Placing Shares thereby increasing their holding to 3,590,100 ordinary shares (representing 16.8 per cent. of the enlarged issued share capital following completion of the Placing) and South Yorkshire Investment Fund, who will be subscribing for 280,000 of the Placing Shares thereby increasing their holding to 1,782,564 ordinary shares (representing 8.4 per cent. of the enlarged issued share capital following completion of the Placing).
Related Party Transactions
The participation of both Stuart Green as a director of the Company and Herald as a substantial shareholder in the Placing are deemed to be related party transactions under the AIM Rules for companies. Accordingly ZOO's directors (other than Stuart Green), consider, having consulted with KBC Peel Hunt Ltd, the Company's nominated adviser, that the terms of the Placing are fair and reasonable insofar as the Company's shareholders are concerned.
Recommendation
The directors of ZOO believe that the Placing is in the best interests of ZOO and its shareholders as a whole. Accordingly, your directors recommend that shareholders vote in favour of the resolutions which are to be proposed at the AGM, as they intend to do in respect of their own beneficial and connected shareholdings, which amount to 17,913,088 ordinary shares representing 46.4 per cent. of the issued share capital of ZOO, and all of the directors of ZOO (or their connected persons) have signed irrevocable undertakings to do so.
Notices
The accounts of ZOO for the year ended 31 March 2008 set out the details and terms of the Placing in the Chairman's statement ("Accounts"). A copy of the Accounts is being sent to shareholders on or around 9 September 2008 together with a notice of the AGM to approve the relevant resolutions.
Copies of the Accounts will be available on the Company's website at www.zoodigitalgroup.com.
Christopher Honeyborne, Non Executive Chairman commented:
The Board are actively focused on driving the business forward through the continued integration of Scope Seven and by enhancing our technological offering. The directors of the Company believe that shareholder value will be maximized by combining this approach with operational improvements that have already been made across the business. I would like to take this opportunity to thank our existing shareholders for their continued support."
For further information please contact:
ZOO Digital Group plc tel: 0114 241 3700
Stuart Green - Chief Executive Officer
Helen Gilder - Group Finance Director
KBC Peel Hunt tel: 020 7418 8900
Nominated Adviser and Broker
Richard Kauffer / Daniel Harris
Weber Shandwick Financial tel: 020 7067 0700
Nick Dibden/John Moriarty