19th Sep 2006 17:30
Raven Capital Inc19 September 2006 Not for release, publication or distribution in whole or in part in or into theUnited States, Canada, Japan, Australia, the Republic of Ireland or the Republic of South Africa 19 September 2006 Raven Capital Inc. ("Raven" or "the Company") Proposed acquisition of Upstream Asia Limited Proposed placing of 2,500,000 ordinary shares of 0.25p each at 20p per share Proposed change of name Notice of extraordinary general meeting and Application for admission to trading on AIM The Board is pleased to announce that it has today conditionally agreed toacquire the entire issued share capital of Upstream Asia Limited ("Upstream"), aleading Asia Pacific focused corporate and marketing communications servicesnetwork. Certain definitions apply throughout this announcement and your attention isdrawn to the table at the end of this announcement where these definitions areset out in full. Highlights • Raven has conditionally agreed to acquire the entire issued share capital of Upstream through the issue of 79,675,002 new Ordinary Shares. At the placing price of 20p per share, the Acquisition Shares value Upstream at approximately £15.94 million. • Upstream was named Asia's New PR Consultancy of the Year in 2001 by Media magazine. Since then, Upstream has grown to include offices in Beijing, Hong Kong, Shanghai, Singapore and Taipei, together with franchises in Tokyo and Sydney. • Upstream is well positioned to meet Asia's growing demand for branding and communications services, especially in China where the next generation of global brands is emerging and where it is imperative that multinationals secure their market positioning. • Upstream Group has provided selected services either on a retainer or project fee basis to a blue chip client base including Alcatel, eBay, EDS, 02, Towngas and Hong Kong Science & Technology Parks. • Proposed change of name to "Upstream Marketing and Communications Inc.". • Placing of 2,500,000 new Ordinary Shares to raise £500,000 before expenses ( approximately £175,000 net of expenses) at the Placing Price, the net proceeds of which will be used to provide working capital for the Enlarged Group. • Dealings in the Existing Ordinary Shares were suspended from trading on AIM on 3 April 2006 at a mid market price of 20.25p. This suspension has now been lifted following the publication today of the Admission Document. In view of its size, the Acquisition constitutes a reverse takeover under theAIM Rules, and is conditional, inter alia, upon the approval of Shareholders atan Extraordinary General Meeting to be held on 13 October 2006. A copy of the Admission Document to be sent to Shareholders today is availableat www.corvus.com Commenting, Graham Butt, Chairman of Raven said:"Upstream has built a significant network with which to service the markets inGreater China we believe that it now has the critical mass to achieve goodorganic growth. In addition there are a number of opportunities to makeacquisitions to expand the reach of the network and continue to build value forshareholders." Commenting, David Ketchum, CEO of Upstream said:"Our listing will help expand the offering we can make to clients and give usaccess to capital for accelerated growth. Upstream is in the right places, withthe right services, at the right time," Ketchum said. "We are well positioned tocapture market share in China and to create a unique holding company focused onhigh growth markets and sectors, built through organic growth and by acquiring aseries of complementary public relations, communications, digital marketing andadvertising firms to integrate into the Upstream network." Enquiries:Raven Capital Inc.John BickTel:(0870) 389 6999Tel: 07917 649362 Strand PartnersJames Harris/Angela PeaceTel: 020 7409 3494 This summary should be read in conjunction with the full text of thisannouncement set out below. Strand Partners Limited, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is acting as nominated adviser to theCompany in connection with the proposed admission of the Enlarged Share Capitalto trading on AIM. Its responsibilities as the Company's nominated adviser underthe AIM Rules are owed solely to the London Stock Exchange and are not owed tothe Company or to any Director or to any other person in respect of his decisionto acquire shares in the Company in reliance on any part of this announcement.Walker Crips Stockbrokers Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority and is a member of the LondonStock Exchange, is acting as broker to the Company in connection with thePlacing and proposed admission of the Enlarged Share Capital to trading on AIM.Strand Partners Limited and Walker Crips Stockbrokers Limited are not acting foranyone else and will not be responsible to anyone other than the Company forproviding the protections afforded to their clients or for providing advice inrelation to the contents of this announcement or the Placing or the Admission ofthe Enlarged Share Capital to trading on AIM. No representation or warranty,express or implied, is made by either Strand Partners Limited or Walker CripsStockbrokers Limited as to the contents of this announcement, without limitingthe statutory rights of any person to whom this announcement is issued. NeitherStrand Partners Limited nor Walker Crips Stockbrokers Limited will be offeringadvice, nor will they otherwise be responsible for providing customerprotections to recipients of this announcement or for advising them on thecontents of this announcement or any other matter. The information contained inthis announcement is not intended to inform or be relied upon by any subsequentpurchasers of Ordinary Shares (whether on or off exchange) and accordingly noduty of care is accepted in relation to them. Strand Partners Limited has approved the contents of this announcement solelyfor the purpose of section 21 of the Financial Services and Markets Act 2000.The principal place of business of Strand Partners Limited is 26 Mount Row,London W1K 3SQ. The Directors and Proposed Directors accept responsibility for the informationcontained in this announcement. Subject as aforesaid, to the best of theknowledge and belief of the Directors and Proposed Directors (who have taken allreasonable care to ensure that such is the case), such information is inaccordance with the facts and does not omit anything likely to affect the importof such information.This announcement does not constitute, or form part of, an offer or aninvitation to purchase any securities. Not for release, publication or distribution in whole or in part in or into theUnited States, Canada, Japan, Australia, the Republic of Ireland or the Republic of South Africa 19 September 2006 Raven Capital Inc. ("Raven" or "the Company") Proposed acquisition of Upstream Asia Limited Proposed placing of 2,500,000 ordinary shares of 0.25p each at 20p per share Proposed change of name Notice of extraordinary general meeting and Application for admission to trading on AIM IntroductionThe Company today announces that it has conditionally agreed to acquire theentire issued share capital of Upstream through the issue of 79,675,002 newOrdinary Shares. At the placing price of 20p per share, the Acquisition Sharesvalue Upstream at approximately £15.94 million. The Company also proposes toraise £500,000 before expenses (approximately £175,000 net of expenses) by wayof a placing of 2,500,000 new Ordinary Shares at the Placing Price, the netproceeds of which will be used to provide working capital for the EnlargedGroup. Following completion of the Proposals, the Vendors will own approximately59.66% of the Enlarged Share Capital. The Company's Existing Ordinary Shares were suspended from trading on AIM on 3April 2006 at a mid market price of 20.25p as a consequence of the Company nothaving completed a reverse takeover or substantially implemented its investingstrategy in accordance with the timetable specified under AIM Rule 8 relating toinvesting companies. This suspension has now been lifted following thepublication today of the Admission Document. The Acquisition constitutes a reverse takeover of the Company under the AIMRules by virtue of its size and because it also results in a fundamental changein the business of the Company from that of an investment company specialisingin the hedge fund sector to a company providing international corporate andmarketing communications services. As such, completion of the Acquisition isconditional on receiving the approval of Shareholders. Such approval is to besought at the EGM. If the Resolutions are duly passed at the EGM, the Company'sexisting trading facility on AIM will be cancelled and the Company will applyfor the Enlarged Share Capital to be admitted to trading on AIM. Shareholders should note that the Proposals are inter-conditional. It isexpected that Admission will take place and dealings in the Enlarged ShareCapital will commence on 16 October 2006. Irrevocable undertakings to vote in favour of the Resolutions have been receivedfrom the Directors and certain of the Shareholders in respect of 34,166,112Existing Ordinary Shares, representing approximately 77 per cent. of theCompany's existing issued share capital. Shareholders should, however, be in no doubt as to the importance of theProposals to the future of the Company since the Directors believe that thecombination of the Acquisition and the Placing is an essential step towardsrestoring the Company to a secure financial position. The Acquisition and thePlacing are each conditional upon the other proceeding. If the Acquisition andthe Placing do not proceed, for whatever reason, the Company would need toattempt to raise further funds or seek alternative methods of financing, onaccount of the fact that it will have incurred expenses in pursuit of theAcquisition and would not have sufficient working capital for its presentrequirements, that is for at least the next twelve months from the date of thisannouncement. If such funds could not be raised or alternative methods offinancing secured, the Board would urgently have to consider alternative coursesof action, such as the initiation of insolvency procedures, in which event theCompany would be delisted from trading on AIM. In addition, pursuant to Rule 41 of the AIM Rules, the London Stock Exchangewill cancel the admission to trading of a company's securities on AIM where theyhave been suspended from trading for six months. As the Existing Ordinary Shareshave been suspended since 3 April 2006, if the Acquisition and Placing do notproceed the Company will be delisted from trading on AIM in any event. The Company and its investment strategyThe Company was incorporated on 19 November 2004 in the Cayman Islands and wasadmitted to trading on the AIM market as a cash shell on 15 December 2004 whenit raised £400,000 before expenses through a placing of its Ordinary Shares. Atthe time of the original AIM admission the Company stated that it was itsintention to build, largely through acquisition and joint venture transactions,a group specialising in the hedge fund sector. Since then, the Directors haveexplored a number of potential opportunities of that type, although none weresufficiently attractive to merit being put before Shareholders. In December 2005, the Board was approached by EP, an investment company based inSingapore, with a proposal to invest additional funds into the Company and towork with the Directors to source a suitable acquisition. On 13 January 2006,discussions with EP were successfully concluded and the Company raised anadditional £150,000 gross through a placing of 13,300,000 Ordinary Shares withEP, representing approximately 29.99% of the enlarged share capital of theCompany at that time. Since the Ordinary Shares were suspended from trading on AIM, the Directors havecontinued to evaluate a number of potential transactions and believe that theProposals are in the best interests of Shareholders. Information on Upstream BackgroundUpstream was founded in 2000 by David Ketchum. Since its establishmentUpstream's network has grown to include full service offices and affiliatesthroughout the principal commercial markets in the Asia-Pacific region. Upstreamprovides a range of corporate and marketing communications services tomultinational corporations and Asia-based clients throughout the Asia-Pacificregion, with a focus on Greater China and in 2001 was named Asia's new PRconsultancy of the year by Media Magazine. Headquartered in Hong Kong, the Group has wholly owned offices in Beijing,Shanghai, Taipei and Singapore. Upstream-branded offices currently operate inTokyo and Sydney. The Group also has cooperation agreements in place withaffiliated agencies across the Asia Pacific region, as well as being a member ofinternational networks. The Group offers a full range of traditional and online communicationssolutions, including strategic public relations counselling, corporate andmarketing communications, event management, digital marketing and web-basedcommunications services and works with clients primarily in three sectors:technology/media/telecommunications; consumer/lifestyle/travel; and corporateand financial. To date, the Upstream Group has provided selected services either on a retaineror project fee basis to a blue chip client base including Alcatel, eBay, EDS,02, Towngas and Hong Kong Science & Technology Parks. Retainer fees aregenerally from clients that sign agreements contracting a certain amount of workto be completed over a certain period. Project fees arise from one-offassignments for a pre-agreed fee. The Directors and the Proposed Directors consider that the Upstream Group iswell positioned to capitalise on Asia's growing demand for branding andcommunications services, particularly in China where the next generation ofglobal brands may be emerging and where the Directors and Proposed Directorsconsider it important for multinationals to secure their market positioning. TheDirectors and the Proposed Directors believe that new market sectors opened tomultinational companies by the World Trade Organisation (WTO) and the upcoming2008 Olympics in Beijing are among the factors driving investment and demand formarketing communications in China, as is the Chinese consumer's increasingspending levels on luxury and branded goods and travel. Upstream's 49 employees include an experienced management team based around theAsia-Pacific region and a team of consulting staff with extensive experience inthe communications industry. ServicesThe scope of services offered by the Upstream Group includes: • Strategic branding and public relations consultancy The Upstream Group provides strategic advice to senior client executives at theCEO, managing director, marketing director and public affairs level on brandingand on marketing and corporate communications campaign planning. The scope ofservices offered includes research, advice on how to best position the clientcompanies or their products in the marketplace, messaging to build awareness anddifferentiation, creative development, media selection and budgeting. • Corporate and marketing communications services The Upstream Group offers a range of public relations services includingcampaign development, advertising services, media relations, crisis and issuescommunications, and media training. Particular activities undertaken by theUpstream Group in respect of each of these services include creative services,media buying, sponsorship arrangement, staging news conferences, preparing anddistributing news releases, arranging executive interviews, placing featurestories, writing by-lined and editorial articles and media monitoring. • Event management Upstream aims to create innovative solutions for clients that help develop brandawareness and sales. Specific services include arranging marketing partnerships,organising special events and exhibitions, arranging speaking opportunities,recommending sponsorships, creating brochures and other associated marketingmaterial and executing promotions and competitions. • Web presence/digital marketing and e-distribution Asia-Pacific now has the largest percentage of internet users worldwide (36% ofthe global total), greater than each of the US and Europe. China's internetpopulation is already over 111 million and is forecast to increasesignificantly, and approximately 65% of the world's broadband users are in theAsia-Pacific region. Upstream advises clients on their web presence, digitalmarketing campaigns, search and use of streaming video/webcasts in order to takeadvantage of this marketing opportunity. MarketThe market for public relations and marketing and corporate communicationsservices in the Asia-Pacific region is already large and currently isfragmented. The Directors and Proposed Directors believe that China offers the UpstreamGroup the greatest opportunity for growth driven primarily by the following twofactors: • the internationalisation of large sectors of China's economy, leading to vastly increased competitiveness, an environment in which marketing communications can provide opportunities for competitive advantage; and • the modernisation of business administration, leading to increased focus on public relations and associated concepts. The Directors and Proposed Directors believe that both of these factors willdrive increased demand for the multinational-standard communications consultancyservices in which the Upstream Group has proven capabilities which will provideUpstream with a considerable opportunity to increase its market share in thisregion. China market entry supportUpstream has, since 2003 from its Hong Kong office, been providing services tomultinational companies seeking to expand their business into China, such asmessaging and branding consultancy, national and local market communications,vertical trade market communications, promotions, media relations, preparationof associated marketing materials and event management. In early 2006, Upstream completed the establishment of its Wholly Foreign OwnedEnterprise (WFOE) in China, affording the Upstream Group legal status to provideconsulting services and issue invoices in China. This arrangement builds onUpstream's previous presence in China via two representative offices and theDirectors and the Proposed Directors believe is an important step incapitalising on the China opportunity. Current Trading and ProspectsA financial summary for the Upstream Group for the three years ended 31 December2005 is set out below: Year ended Year ended Year ended 31 December 31 December 31 December 2003 2004 2005 £'000 £'000 £'000Revenue 736 820 1,104(Loss)/profit from operationsand before taxation (38) 8 20Net assets 21 29 48 It is important that you do not rely solely on the key or summary financialinformation shown above. Since it was established in 2000 Upstream has achieved steady growth of thebusiness throughout the Asia-Pacific region, focusing on investing aconsiderable proportion of profits generated into building the business,employing additional professional staff, and creating new practices and lines ofbusiness such as corporate and financial and travel, that offer significantgrowth opportunities for the business. This investment in infrastructure hasresulted in the Upstream Group recording only minimal profits to date. The Directors and Proposed Directors believe that the investment made to datehas enabled Upstream to establish a robust presence in China, which is expectedto account for a significant amount of the Enlarged Group's revenue growth inboth percentage and monetary terms. In addition the Directors and ProposedDirectors believe that the underlying growth in demand for public relations,communications and marketing services, particularly in China, represents asignificant opportunity for the Enlarged Group. StrategyThe Directors and Proposed Directors are confident that the Enlarged Group willachieve significant revenue growth through the pursuit of four broad strategies: • Capitalise on investments made to date • Develop current relationships • Drive new business development • Expand through selective acquisitions Capitalise on investments made to dateSince its establishment the directors of Upstream have focused on developing theUpstream Group's network of offices and has now set up offices and teams inplace in each of its identified strategic markets. In addition, it has recruitedthe requisite senior consulting and business development staff, as well asestablishing the necessary "footprint" of network offices to take advantage ofthe market opportunity, particularly in China. The Directors and ProposedDirectors believe that the platform is now in place to drive profitable growthand that Upstream has the senior talent and resources to win and retain a rangeof assignments that were previously inaccessible to the business. Develop current relationshipsThe Upstream Group has an existing blue chip client list that the Directors andProposed Directors intend to develop in the following two ways: • Increase share of client budgets: Current client budgets in China and elsewhere indicate that Upstream is currently taking just a portion of its client's total marketing and communications expenditure. The Directors and Proposed Directors intend to focus on cross-selling supplementary campaigns and services that will generate additional revenue for the business from its existing client base. This effort will be complementary with the Enlarged Group's strategy of making selective acquisitions, which should yield further opportunities to cross-sell services. • Extend existing relationships with Upstream clients into new markets, such as China: Relationships with certain existing clients have already been successfully expanded to China, and the Directors and Proposed Directors believe that there remain numerous additional opportunities to do this throughout the remainder of the region. Business development in strategic sectorsThe Upstream Group offers marketing and communications services primarily in thefollowing three sectors: • Technology/Media/Telecoms; • Corporate and Financial; and • Consumer and travel. The Directors and Proposed Directors will seek to continue to develop its clientbase and service offering within these key sectors in order to drive additionalrevenue growth for the business. In addition, the Group offers services such aselectronic news release distribution, which the Enlarged Group expects to beable to drive accelerated growth. Expand through selective acquisitionsThe Proposed Directors are in the preliminary stages of seeking and evaluatingopportunities to consolidate and/or cooperate with small to medium sizedindependent communications firms that are expected to add long term value andservice offerings to the Enlarged Group. The acquisition initiative may provideeconomies of scale and improve operational efficiency. Reasons for the AcquisitionThe Directors and Proposed Directors believe that the Acquisition and associatedAdmission will provide the Enlarged Group with a number of benefits whichinclude: • exposure to the growing demand for public relations and event management services in Hong Kong, China and the rest of Asia; • the opportunity to raise new equity capital for the Enlarged Group through AIM in the future; and • the creation of a currency, in the form of publicly listed shares, that can be used by the Enlarged Group in acquiring high value targets in the marketing and public relations sectors. Current trading and prospects for the Enlarged GroupSince its incorporation in November 2004, the Company's only significantactivities have been to obtain admission to trading on AIM, raising £400,000before expenses, to place 13,300,000 Ordinary Shares with EP, raising £150,000,and to enter into conditional agreements relating to the Acquisition. The Directors and the Proposed Directors believe that the strategy that theEnlarged Group intends to follow on completion of the Acquisition, focused onprofiting from the rising demand for branding and communications services inChina and throughout the Asia-Pacific region, gives the Board reason to beoptimistic as to the Enlarged Group's prospects. The major shareholders of UpstreamThe major shareholders of Upstream are David Ketchum, Jane McGuire Ketchum andTechpacific who between them own approximately 76 per cent. of Upstream. DavidKetchum is married to Jane McGuire Ketchum, who is a financial editor withextensive experience working with investment banks in Asia Pacific. David Ketchum is the founder of Upstream which he established in 2000. David hasworked in the corporate and marketing communications industry for 23 years, andhas vast experience in building brands and companies, including internationalexperience with major multinational agency networks and with Calvin Klein inAsia Pacific. Techpacific is a wholly owned subsidiary of Techpacific Capital Limited which isan independent merchant banking and asset management group listed on the HongKong Stock Exchange's Growth Enterprise Market. Directors and Proposed DirectorsAt the EGM, a Resolution will be proposed to appoint David Ketchum, Jane McGuireKetchum and Shahed Mahmood as directors of the Company. Graham Butt willcontinue in his capacity as a director but will resign as Chairman of the Board.It is intended that Shahed Mahmood will be appointed as a non-executive Chairmanand David Ketchum and Jane McGuire Ketchum will be appointed as executivedirector and non-executive director, respectively. Assuming the Resolutions toappoint the Proposed Directors are passed at the EGM, immediately followingCompletion the Enlarged Board will comprise: DirectorsGraham Butt (Non-Executive Director)Graham Butt, aged 45, is a director of Fulcrum Administration LLC and a memberof the Society of Estate and Trust Practitioners. Graham previously acted as anadministrator, trustee and director of The Castle Trust Co. Limited group ofcompanies for over 20 years, during which time he was actively investing instructured funds and hedge funds to maximise returns for high net worth clients.Graham is a director of Corvus Capital Inc., a company whose shares are tradedon AIM. Joanna Barrett (Non-Executive Director)Joanna Barrett, aged 40, has some 23 years' experience in the finance industry,both in the money markets and metal exchanges. For the last ten years Joanna hasworked in the offshore financial services industry specialising in theestablishment and running of trust and fiduciary structures. This role involvesacting on behalf on high net worth clients in both equity and structured financeinvestments. Joanna is also a director of Corvus Capital Inc. Proposed DirectorsDavid Ketchum (Chief Executive Officer)David Ketchum, aged 45, has 23 years' experience in branding, marketing andcommunications as vice president with global agency networks Hill and Knowlton,Burson-Marsteller and Calvin Klein, where he served as senior vice president,Marketing and Communications. He is chairman of the Asia Digital MarketingAssociation; chairman of the Council of Public Relations Firms in Hong Kong; andauthor of Big M, Little m Marketing New strategies for a New Asia. Shahed Mahmood (Non-Executive Chairman)Shahed Mahmood, aged 36, is a business consultant based on the Isle of Man, withover 14 years of wide ranging experience in the economic development field. Hehas previously given consultancy advice in both the business and human resourcesectors to numerous governmental organisations in the UK and the Isle of Man.Shahed's past employment includes director of AIM listed Crosby Capital PartnersInc. (formerly known as Skiddaw Capital Inc.), a leading independent, dealfocused, Asia-oriented merchant banking and asset management firm. Jane McGuire Ketchum (Non-Executive Director)Jane McGuire Ketchum, aged 43, is a financial editor with extensive experienceworking with investment banks in Asia Pacific. Currently based in Hong Kong witha Japanese securities firm, she has worked in Hong Kong and Japan with firmssuch as Schroders, Barings and Deutsche Bank. The Enlarged Board intends to make further appointments at executive level, asthe Enlarged Group's business progresses and suitable candidates are identified,and will appoint a finance director following Completion. Principal terms of the AcquisitionPursuant to the Acquisition Agreement, the Company has conditionally agreed topurchase the entire issued share capital of Upstream from the Vendors inconsideration for the allotment and issue to the Vendors of 79,675,002 newOrdinary Shares equating to a value of £15,935,000 at the Placing Price. The interests of each of the Vendors in Upstream prior to Completion and as theyare expected to be in the Company on Completion are set out in the table below: Holder Shares in Acquisition Enlarged Share Upstream Shares Capital %David Ketchum 477,217 20,425,935 15.30Jane McGuireKetchum 469,130 20,079,794 15.04techpacific.com(BVI)InvestmentsLimited 473,723 20,276,384 15.18Jonathan Hakim 166,700 7,135,126 5.34PeterKingsbury 95,300 4,079,049 3.05Paul Adams 95,300 4,079,049 3.05Paul Mottram 48,200 2,063,066 1.54Sato Emi 12,100 517,907 0.39Huang LuHsiuo-Feng 6,100 261,093 0.20North Rock HoldingsLimited 6,100 261,093 0.20ChristopherGiacomelli 4,900 209,731 0.16Thomas Frick 2,500 107,005 0.08Jay Chang 2,500 107,005 0.08Andrew Work 1,700 72,764 0.05 Total 1,861,470 79,675,002 59.66 On Completion, assuming that the Strand Warrant remains outstanding, the Vendorswill own 79,675,002 Ordinary Shares, representing approximately 59.66% of theEnlarged Share Capital. Under the Acquisition Agreement all the Vendors have given warranties as totitle and authority. David Ketchum, Jane McGuire Ketchum and Techpacific havegiven warranties and indemnities, subject to certain limitations, relating tothe business and assets of Upstream, including its tax affairs. The Company hasgiven warranties and indemnities, subject to certain limitations, relating tothe Company's history. The Company has agreed to pay the Vendors' legal costs inconnection with the Acquisition up to a maximum of £59,000. In addition to restrictive covenants contained in his service agreement whichwill be renewed on Completion, David Ketchum has, under the AcquisitionAgreement, given non-compete and non-solicitation undertakings in respect of theactivities currently carried on by Upstream for periods of one and two yearsrespectively from Completion. The Acquisition Agreement is conditional, inter alia, on: 1. the passing of those of the Resolutions at the EGM necessary to approve the purchase of the shares in Upstream and to authorise the Company to issue the Acquisition Shares, Placing Shares and Fee Shares; 2. the Company having cash resources of not less than £240,000 after payment of transaction expenses; and 3. Admission. Details of the PlacingThe Company has conditionally placed 2,500,000 new Ordinary Shares at 20p pershare to raise £500,000 before expenses (approximately £175,000 net ofexpenses). At the Placing Price, the Company would have a market capitalisationof approximately £26.7 million based on the Enlarged Share Capital. The Placingis conditional, amongst other things, upon the Re-Introduction Agreementbecoming effective on or before 16 October 2006, or such later time and date asthe Company, Strand Partners and Walker Crips may agree, but in any event notlater than 31 October 2006. The net proceeds of the Placing will be used to provide the Enlarged Group withadditional funding for its ongoing working capital requirements. On completionof the Placing the Company will pay to Penkenna a commission of five per cent.of the gross proceeds of the Placing in consideration of introducing subscribersfor the Placing Shares. The Placing Shares will represent approximately 1.87% of the Enlarged ShareCapital of the Company following Admission, will be fully paid upon issue andwill rank equally in all respects with the Existing Ordinary Shares, theAcquisition Shares and the Fee Shares. On Completion, the Directors and ProposedDirectors will hold 30.74%, in aggregate, of the Enlarged Share Capital. Fee SharesOn Completion, Silk Route Investments will receive 6,750,000 Ordinary Shares inconsideration of Silk Route Investments having introduced the Company toUpstream and Strand Partners will receive 250,000 Ordinary Shares as part of itsfee arrangements with the Company. The CommitmentAt the time of the Company's admission to trading on AIM on 1 December 2004,Shareholders who subscribed at 5p per Ordinary Share under the Original Placingalso committed to subscribe for an aggregate of 2,666,666 further OrdinaryShares at a price of 15p per share, upon completion of the Company's firstacquisition within the hedge fund sector. The Acquisition is not in line withthe stated investment strategy and accordingly Original Placees will not becalled upon to meet the obligations under the Commitment. Change of company nameTo reflect the proposed changes to the Company, its management and operations asa result of the Acquisition, it is proposed that conditional on Completion andthe passing of an appropriate Resolution at the EGM, the Company will change itsname to "Upstream Marketing and Communications Inc.". Dividend policyThe Ordinary Shares rank equally for all dividends and other distributionsdeclared, paid or made in respect of the ordinary share capital of the Company.The Company has not paid any dividends since incorporation. The Directors and Proposed Directors expect that, in the short term, theanticipated revenues generated by the business will be utilised by the EnlargedGroup for the development and growth of the Enlarged Group. The Directors andProposed Directors will review the dividend policy in light of the profitsgenerated by the Upstream business. The declaration and payment by the Company of dividends will be dependent uponthe Company's financial condition, future prospects and other factors deemed tobe relevant at the time. This will take into account both the requirements ofthe business and the expectations of the Shareholders. Settlement, dealings and CRESTCREST is a paperless settlement procedure enabling securities to be evidencedotherwise than by a certificate and transferred otherwise than by writteninstrument. CRESTCo Limited is unable to take responsibility for the electronicsettlement of shares issued by companies in certain non-UK jurisdictions. Depositary Interests allow paper stock in such non-UK jurisdictions to bedematerialised and settled electronically. The paper-based stock is transferredto a nominee company that then issues the Depositary Interests to the individualshareholder's CREST account on a one-for-one basis and provides the necessarycustodial service. The Depositary Interest can then be traded and settlementwill be within the CREST system in the same way as any other CREST security. The Company has adopted the Depositary Interest facility operated by itsregistrar so that Shareholders have the choice of whether they want to holdtheir Ordinary Shares in certificated or uncertificated form. Shareholders ofthe Company who elect to hold their Ordinary Shares in uncertificated formthrough the Depositary Interest facility will be bound by the terms of the DeedPoll. The Company's share register will show the nominee company, Capita IRG TrusteesLimited, as the holder of the Ordinary Shares but the beneficial interest willremain with the Shareholders who will continue to receive all the rightsattaching to the Ordinary Shares as they would have if they had themselves beenentered on the register. The Depositary Interests will be traded and settled viathe CREST system. Shareholders can withdraw their Ordinary Shares back intocertificated form at any time using standard CREST messages. Conversion into and transfers of Depositary Interests are subject to stamp dutyor stamp duty reserve tax, as appropriate, in the normal way. CREST is a voluntary system and holders of Ordinary Shares who wish to receiveand retain share certificates will be able to do so. Placees that have asked tohold their Ordinary Shares in uncertificated form will have their CREST accountscredited with Depositary Interests on the day of Admission. Where Placees haverequested to receive their Ordinary Shares in certificated form, sharecertificates will be despatched by first-class post within 14 days of the dateof Admission. No temporary documents of title will be issued. Pending thereceipt of definitive share certificates in respect of the Placing Shares (otherthan in respect of those shares settled via Depositary Interests through CREST),transfers will be certified against the register. Application will be made for the Enlarged Share Capital to be admitted to AIM.It is expected that Admission will take place and dealings in the Enlarged ShareCapital will commence on 16 October 2006. Share Option SchemeThe Company has adopted the Share Option Scheme. On Completion, the Companyintends to grant options over 6,750,000 Ordinary Shares, at 20p per share, toDavid Ketchum representing 5.05 per cent of the Enlarged Share Capital. Underthe rules of the Share Option Scheme, the number of shares under option islimited to 15 per cent of the Company's issued share capital. The options to begranted to Mr Ketchum vest three years after grant and are not subject toperformance conditions. Lock-in agreements and orderly market arrangementsSubject to Admission, each of the Directors, David Ketchum and Jane McGuireKetchum have undertaken to the Company, Strand Partners and Walker Crips that,except in certain limited circumstances, they will not dispose of any interestin the Ordinary Shares held by them for a period of 12 months from the date ofAdmission and, for the following 12 months, that they will only dispose of theirholdings with the consent of the Company's broker and nominated adviser fromtime to time. Techpacific and Corvus Capital Inc. have each similarly undertaken for a periodof 12 months from Admission that they will only dispose of their holdings withthe consent of the Company's broker and nominated adviser from time to time. Jonathan Hakim, Peter Kingsbury and Paul Adams have each undertaken for a periodof six months from Admission that they will only dispose of their holdings withthe consent of the Company's broker and nominated adviser from time to time. Non-applicability of the Takeover CodeAs the Company is not resident in the UK, the Channel Islands or the Isle of Manit is not subject to the Takeover Code. The Company has, however, endeavoured,where appropriate, to prepare the Admission Document substantially in compliancewith the spirit of the Takeover Code. While the Company will seek to comply withthe provisions of the Takeover Code, third parties will not be obliged, and theCompany will not be able to compel them, to comply with the Takeover Code. Assuch, investors should note, in particular, the paragraph below on Rule 9 of theTakeover Code. Rule 9 of the Takeover Code normally requires any person (or group of personsacting in concert) that acquires shares which, taken together with sharesalready held, carry 30% or more of the voting rights of a company to offer toacquire the balance of the equity share capital. Rule 9 of the Takeover Codealso normally requires any person who, together with persons acting in concertwith him, holds between 30% and 50% of a company's voting rights and whoacquires additional shares which increases his holding of voting rights to makesuch a mandatory offer. As the Company is not a company to which the TakeoverCode applies, investors should be aware that Shareholders are and will beentitled to increase their holding of voting rights in the Company above 30%without incurring any obligation to make a mandatory offer under the TakeoverCode as would normally arise were the Company subject to the provisions of theTakeover Code. If the Takeover Code did apply to the Company, then, by virtue of the percentageof the Enlarged Share Capital represented by the Acquisition Shares, it wouldhave been required to seek competent independent advice that the Acquisition wasin the best interests of the Company and of its shareholders as a whole, as theDirectors believe it to be. The terms of the Acquisition mean that the Vendors will, in aggregate, hold inexcess of 30% of the issued share capital of the Company. Under the terms of theTakeover Code, such a holding would have obliged the Vendors to make a generaloffer to the shareholders of the Company for the entire issued share capital ofthe Company. The Takeover Code does, however, provide for the waiver of thatobligation by the Panel on Takeovers and Mergers, subject to the approval of theAcquisition by a vote of independent shareholders on a poll at an extraordinarygeneral meeting. As the Takeover Code does not apply, there is no obligation on the Vendors tomake a general offer. Under the AIM Rules, the Acquisition is, however, subject to shareholderapproval at the EGM. Irrevocable undertakingsThe Company has received irrevocable undertakings from the Directors and certainsignificant Shareholders to vote in favour of the Acquisition and the otherResolutions in respect of, in aggregate, 34,166,112 Ordinary Shares representingapproximately 77 % of the Company's existing issued ordinary share capital. Extraordinary General MeetingIn order to give effect to the Acquisition and to approve other elements of theProposals, an extraordinary general meeting of the Company will be convened. Asthe Acquisition constitutes a reverse takeover, Shareholder approval will berequired under the AIM Rules. Admission documentThe Admission Document setting out details of the Proposals and including a notice of the EGM, accompanied by a form of proxy (or form of direction as applicable), will be posted to Shareholders today. Copies of the Admission Document will be available to the public free of charge from today at the offices of Fladgate Fielder at 25 North Row, London W1K 6DJ during normal business hours on any weekday (other than Saturdays and public holidays), until one month following the date of Admission. EXPECTED TIMETABLE OF PRINCIPAL EVENTS Publication of the Admission Document 19 September 2006 Latest time and date for receipt of Forms of Direction 11 a.m. GMT on 10 October 2006 Latest time and date for receipt of Forms of Proxy 11 a.m. GMT on 11 October 2006 Payment to be received from the investors Noon GMT on 11 October 2006 xtraordinary General Meeting 16 October 2006 Admission effective and dealings expected to commence in the 16 October 2006Enlarged Share Capital on AIM Completion of the Acquisition 16 October 2006 CREST accounts expected to be credited in respect of Depositary 16 October 2006Interests Definitive share certificates for the New Ordinary Shares 30 October 2006expected to be despatched (where applicable) by ACQUISITION AND PLACING STATISTICS Number of Existing Ordinary Shares 44,366,668 Number of Acquisition Shares 79,675,002 Placing Price 20p Number of Placing Shares 2,500,000 Number of Fee Shares 7,000,000 Number of Ordinary Shares in issue on Admission 133,541,670 Percentage of the Enlarged Share Capital represented by theAcquisition Shares* 29.33 % Percentage of the Enlarged Share Capital represented by thePlacing Shares 1.87 % Percentage of the Enlarged Share Capital held by the Directorsand Proposed Directors at Admission 30.74 % Gross proceeds of the Placing £500,000 Proceeds of the Placing net of expenses £175,000 * excluding the interests of the Proposed Directors whose holdings are includedin the percentage represented by the Directors The Placing is not being made, directly or indirectly, in or into the UnitedStates, Canada, Japan, Australia, Republic of Ireland, Republic of South Africaor any other jurisdiction in which such Placing or solicitation is unlawful.Accordingly, this announcement is not being and should not be released orotherwise distributed or sent in, into or from the United States, Canada, Japan,Australia, Republic of Ireland, Republic of South Africa, or any otherjurisdiction where to do so would be in breach of any applicable law and/orregulation. The new Ordinary Shares to be allotted pursuant to the Acquisitionand the Placing have not been and will not be registered under the SecuritiesAct or under the relevant securities laws of any state or other jurisdiction ofthe United States, Canada, Japan, Australia, Republic of Ireland or Republic ofSouth Africa. Accordingly, the new Ordinary Shares to be allotted pursuant tothe Acquisition and the Placing may not (unless an exemption under theSecurities Act or other relevant securities laws is available) be offered, sold,re-sold or delivered, directly or indirectly, in, into or from the UnitedStates, Canada, Japan, Australia, Republic of Ireland, Republic of South Africaor any other jurisdiction where this would constitute a violation of therelevant laws of, or require registration thereof in, such a jurisdiction or to,or for the account or benefit of, any US persons or a person in, or resident ofCanada, Japan, Australia, Republic of Ireland or Republic of South Africa. Strand Partners Limited, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is acting as nominated adviser to theCompany in connection with the proposed admission of the Enlarged Share Capitalto trading on AIM. Its responsibilities as the Company's nominated adviser underthe AIM Rules are owed solely to the London Stock Exchange and are not owed tothe Company or to any Director or to any other person in respect of his decisionto acquire shares in the Company in reliance on any part of this announcement.Walker Crips Stockbrokers Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority and is a member of the LondonStock Exchange, is acting as broker to the Company in connection with thePlacing and proposed admission of the Enlarged Share Capital to trading on AIM.Strand Partners Limited and Walker Crips Stockbrokers Limited are not acting foranyone else and will not be responsible to anyone other than the Company forproviding the protections afforded to their clients or for providing advice inrelation to the contents of this announcement or the Placing or the Admission ofthe Enlarged Share Capital to trading on AIM. No representation or warranty,express or implied, is made by either Strand Partners Limited or Walker CripsStockbrokers Limited as to the contents of this announcement, without limitingthe statutory rights of any person to whom this announcement is issued. NeitherStrand Partners Limited nor Walker Crips Stockbrokers Limited will be offeringadvice, nor will they otherwise be responsible for providing customerprotections to recipients of this announcement or for advising them on thecontents of this announcement or any other matter. The information contained inthis announcement is not intended to inform or be relied upon by any subsequentpurchasers of Ordinary Shares (whether on or off exchange) and accordingly noduty of care is accepted in relation to them. DefinitionsThe following definitions apply throughout this announcement, unless the contextrequires otherwise:+---------------+--------------------------------------------------------------+|Acquisition |the proposed acquisition by the Company of the entire issued || |share capital of Upstream pursuant to the Acquisition || |Agreement |+---------------+--------------------------------------------------------------+|Acquisition |the conditional agreement dated 19 September 2006 between the ||Agreement |Company and the Vendors relating to the Acquisition |+---------------+--------------------------------------------------------------+|Acquisition |the 79,675,002 new Ordinary Shares in the Company to be ||Shares |allotted and issued to the Vendors pursuant to the Acquisition|| |Agreement |+---------------+--------------------------------------------------------------+|Admission |the effective admission of the Enlarged Share Capital of the || |Company to trading on AIM in accordance with the AIM Rules |+---------------+--------------------------------------------------------------+|Admission |the admission document compiled in accordance with the ||Document |Regulations and the AIM Rules |+---------------+--------------------------------------------------------------+|AIM |the AIM market operated by the London Stock Exchange |+---------------+--------------------------------------------------------------+|AIM Rules |the rules applicable to companies whose shares are traded on || |AIM published by the London Stock Exchange from time to time |+---------------+--------------------------------------------------------------+|CA 1985 |the Companies Act 1985, as amended |+---------------+--------------------------------------------------------------+|Combined Code |the corporate governance code issued by the Financial || |Reporting Council |+---------------+--------------------------------------------------------------+|Commitment |the obligation, made at the time of the Original Placing, of || |certain persons to subscribe for further Ordinary Shares |+---------------+--------------------------------------------------------------+|Company |Raven Capital Inc, incorporated and registered in the Cayman || |Islands with number 141920 |+---------------+--------------------------------------------------------------+|Completion |completion of the Proposals |+---------------+--------------------------------------------------------------+|CREST |the system for paperless settlement of trades and the holding || |of uncertificated securities administered by CRESTCo Limited |+---------------+--------------------------------------------------------------+|Deed Poll |the deed poll dated 1 December 2004 made by Capita IRG || |Trustees Limited dealing with the creation and issue of || |Depositary Interests |+---------------+--------------------------------------------------------------+|Depositary |interests in uncertificated form, representing Ordinary ||Interests |Shares, that can be settled electronically through and held in|| |CREST |+---------------+--------------------------------------------------------------+|Directors or |the existing directors of the Company ||Board | |+---------------+--------------------------------------------------------------+|EGM or |the extraordinary general meeting of the Company to be held at||Extraordinary |11 a.m. GMT (noon CET) on 13 October 2006 at Quai Gustave - ||General |Ador 30, 1207 Geneva, Switzerland ||Meeting | |+---------------+--------------------------------------------------------------+|Enlarged |the Directors and the Proposed Directors ||Board | |+---------------+--------------------------------------------------------------+|Enlarged |the Company as enlarged by the Acquisition ||Group | |+---------------+--------------------------------------------------------------+|Enlarged Share |the issued ordinary share capital of the Company on Admission ||Capital |as enlarged by the issue of the New Ordinary Shares |+---------------+--------------------------------------------------------------+|EP |EP (Singapore) Pte Limited |+---------------+--------------------------------------------------------------+|Existing |the 44,366,668 Ordinary Shares in issue at the date of this ||Ordinary |announcement ||Shares | |+---------------+--------------------------------------------------------------+|Fee Shares |the 7,000,000 new Ordinary Shares in the Company to be || |allotted and issued to Strand Partners and Silk Route || |Investments for services provided in relation to the || |Proposals |+---------------+--------------------------------------------------------------+|Form of |a Form of Direction for use by holders of Depositary Interests||Direction |to direct how Capita IRG Trustees Limited votes at the EGM |+---------------+--------------------------------------------------------------+|Form of Proxy |a Form of Proxy for use by Shareholders in relation to the || |EGM |+---------------+--------------------------------------------------------------+|HKD |Hong Kong dollar |+---------------+--------------------------------------------------------------+|Hong Kong |the Hong Kong Special Administrative Region of the PRC |+---------------+--------------------------------------------------------------+|London Stock |London Stock Exchange plc ||Exchange | |+---------------+--------------------------------------------------------------+|New Ordinary |together the Acquisition Shares, the Fee Shares and the ||Shares |Placing Shares |+---------------+--------------------------------------------------------------+|Official List |the official list of the United Kingdom Listing Authority |+---------------+--------------------------------------------------------------+|Option Scheme |the Company's share option scheme |+---------------+--------------------------------------------------------------+|Ordinary |ordinary shares of 0.25p each in the capital of the Company ||Shares | |+---------------+--------------------------------------------------------------+|Original |the placing of 8,000,000 Ordinary Shares at a placing price of||Placing |5p per share which was effected at the time of the Company's || |admission to AIM on 15 December 2004 |+---------------+--------------------------------------------------------------+|Penkenna |Penkenna Limited of Palm Grove House, PO Box 438, Road Town, || |Tortola, British Virgin Islands |+---------------+--------------------------------------------------------------+|Placees |subscribers for Placing Shares |+---------------+--------------------------------------------------------------+|Placing |the proposed conditional placing by the Company of the Placing|| |Shares at the Placing Price |+---------------+--------------------------------------------------------------+|Placing Price |20p per Placing Share |+---------------+--------------------------------------------------------------+|Placing |the 2,500,000 new Ordinary Shares which are proposed to be ||Shares |issued pursuant to the Placing |+---------------+--------------------------------------------------------------+|PRC |the Peoples' Republic of China |+---------------+--------------------------------------------------------------+|Proposals |together the Acquisition, the allotment and issue of the New || |Ordinary Shares, the appointment of the Proposed Directors, || |the change of the Company's name, the Placing and Admission |+---------------+--------------------------------------------------------------+|Proposed |Shahed Mahmood, David Ketchum and Jane McGuire Ketchum ||Directors | |+---------------+--------------------------------------------------------------+|Registrar |Capital IRG (Offshore) Limited of Victoria Chambers, || |Liberation Square, 1/3 The Esplanade, St Helier, Jersey JE4 || |0FF |+---------------+--------------------------------------------------------------+|Re-Introduction|the conditional agreement dated 19 September 2006 between the ||Agreement |Company (1), the Directors (2), the Proposed Directors (3), || |Strand Partners (4) and Walker Crips (5) |+---------------+--------------------------------------------------------------+|Resolutions |the resolutions to be proposed at the EGM and reference to a || |"Resolution" is to the relevant resolution set out in the || |notice of EGM |+---------------+--------------------------------------------------------------+|RMB |Yuan Renminbi, the official currency of the PRC |+---------------+--------------------------------------------------------------+|SGD |Singaporean dollar |+---------------+--------------------------------------------------------------+|Share Dealing |the code on dealings in the Company's securities adopted by ||Code |the Company, that complies with the AIM Rules |+---------------+--------------------------------------------------------------+|Shareholders |holders of Ordinary Shares |+---------------+--------------------------------------------------------------+|Strand |Strand Partners Limited, the Company's nominated adviser ||Partners | |+---------------+--------------------------------------------------------------+|Strand |the warrant certificate dated 1 December 2004 in favour of ||Warrant |Strand Partners for the right to subscribe for new Ordinary || |Shares |+---------------+--------------------------------------------------------------+|subsidiary and |have the meanings given to them by CA 1985 ||subsidiary | ||undertaking | |+---------------+--------------------------------------------------------------+|Takeover Code |the Takeover Code published by the Takeover Panel |+---------------+--------------------------------------------------------------+|Takeover |the Panel on Takeovers and Mergers ||Panel | |+---------------+--------------------------------------------------------------+|Techpacific |techpacific.com (BVI) Investments Limited |+---------------+--------------------------------------------------------------+|UK or United |the United Kingdom of Great Britain and Northern Ireland ||Kingdom | |+---------------+--------------------------------------------------------------+|UK Transfer |Capita Registrars of The Registry, 34 Beckenham Road, ||Agents |Beckenham, Kent BR3 4TU |+---------------+--------------------------------------------------------------+|United Kingdom |the Financial Services Authority, acting in its capacity as ||Listing |the competent authority for the purposes of Part VI of the ||Authority |Financial Services and Markets Act 2000, as amended |+---------------+--------------------------------------------------------------+|Upstream |Upstream Asia Limited, a company incorporated in the British || |Virgin Islands with registered number 422581 whose registered || |office is at Trident Chambers, PO Box 146, Road Town, Tortola,|| |British Virgin Islands |+---------------+--------------------------------------------------------------+|Upstream Group |Upstream and its subsidiary undertakings ||or Group | |+---------------+--------------------------------------------------------------+|US or United |the United States of America, its territories and possessions,||States |any state of the United States of America and the district of || |Columbia and all other areas subject to its jurisdiction |+---------------+--------------------------------------------------------------+|US person |a citizen or permanent resident of the United States, as || |defined in Regulation S promulgated under the Securities Act || |1933 |+---------------+--------------------------------------------------------------+|Vendors |the existing shareholders in Upstream |+---------------+--------------------------------------------------------------+|Walker Crips |Walker Crips Stockbrokers Limited, the Company's broker |+---------------+--------------------------------------------------------------+ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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