27th Dec 2006 07:01
Rotala PLC27 December 2006 Rotala plc ('Rotala' or 'the Company') Acquisition and Issue of £400,000 of Convertible Loan Notes and Warrants The Company announces that it has acquired the bus business and certain assetsof Birmingham Motor Traction Limited and Birmingham Motor Traction (North)Limited (together "BMT") for a total consideration of £34,000. BMT is a smallbut established independent bus operator in the West Midlands with a turnover of£600,000. The assets acquired consist of 9 vehicles and the right to operate anumber of contracts with the West Midlands Passenger Transport Executive("Centro"), Staffordshire County Council and Birmingham City Council. Following the acquisition, the vehicles and operations of BMT will betransferred to and integrated with the existing bus operations at Rotala's 4.5acre depot in Birmingham. This step will eliminate duplicated administrationand maintenance overheads and realise immediate cost savings. Thus theacquisition is expected to be earnings enhancing from the outset. In connection with the acquisition, the Company has issued £400,000 nominalvalue convertible loan notes ('Loan Notes') to a number of placees amongst whomare John Gunn, the non-executive chairman of the Company, Renate Gunn (JohnGunn's wife), the Ingrid Croft Trust and the Natalie Haynes Trust (of which JohnGunn is a trustee) and the Flight Pension Trust (of which Geoffrey Flight, a nonexecutive director of the Company is a beneficiary). These funds will financethe acquisition and its associated costs. The funds raised will also finance thelease of the 11 further vehicles necessary to operate the contracts acquiredfrom BMT and the investment in working capital which will initially be incurred.Any remaining funds will augment the general working capital of the Company. In addition, the Company has issued to the subscribers of the Loan Notes anaggregate of 8,000,000 warrants to subscribe for ordinary shares of 1p each inthe Company at 2.5 pence per share (the 'Warrants'). The Loan Notes and Warrants issued to John Gunn and Geoffrey Flight and/or theirconnected persons are as follows: John Gunn Loan Notes WarrantsJohn Gunn £25,000 500,000Renate Gunn £25,000 500,000Trustees of the Ingrid Croft Trust £20,000 400,000Trustees of the Natalie Haynes Trust £20,000 400,000 Geoffrey Flight Loan Notes WarrantsFlight Pension Trust £35,000 700,000 The Loan Notes entitle the holders to an annual 6 per cent. coupon, payable semiannually. The Loan Notes are repayable or convertible into ordinary shares atthe option of the holder at a price of 2.5p per ordinary share up to 31 December2008. The Warrants are exercisable at a price of 2.5 pence per ordinary share at anytime between issue and 31 December 2008. As a result of the issue of the Loan Notes and Warrants, John Gunn and personsconnected with him hold 77,093,119 ordinary shares, representing 20.97 per cent.of the issued ordinary share capital and 4,300,000 warrants to subscribe forordinary shares. Geoffrey Flight and his connected persons hold 23,091,667ordinary shares representing 6.28 per cent. of the issued ordinary share capitalof the Company and 700,000 warrants to subscribe for ordinary shares. The acquisition is in line with the Company's ongoing acquisition strategy toinvest in bus operations and act as a consolidator in the bus market generallyaround its local hubs. John Gunn, Non-executive Chairman of Rotala commented: "The Company is delighted with the acquisition of BMT's business as it adds tothe presence we established in the West Midlands bus market with the acquisitionof Zak's in October 2006. We believe that government policy on transport willinvolve the expansion of urban bus services. This has been highlighted inseveral recent reports, including the Eddington report at central governmentlevel and a report specific to the West Midlands produced by the West MidlandsMetropolitan Authorities in September 2006. Both reports predicted a rise incongestion under existing transport policies and identified significantinvestment in public transport as a requirement to reduce real congestionlevels. We believe that Rotala, through its bus operations, will play ameaningful part in this process. We intend to pursue growth in the bus divisionover the coming years and we will update shareholders when such furtheracquisitions are made." Enquiries: Corporate Synergy Plc 020 7448 4400Rhod CruwysDavid Seal Rotala plc 0121 322 2370Kim Taylor This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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