25th Apr 2007 08:00
Promethean India PLC25 April 2007 Embargoed for 8 am 25 April 2007 Promethean India PLC Announces First Day of Dealing on AIM following successful fundraising of £50 million Promethean India PLC ("Promethean India" or "the Company"), an investmentcompany that focuses on businesses that are established or operating in India,today announces the flotation of its Ordinary Shares and Warrants on theAlternative Investment Market ("AIM"), under the ticker symbol PTHI for theOrdinary Shares and PTHW for the Warrants. The Company has raised £50 million (gross of expenses) via a Placing of newOrdinary Shares and Warrants. The Company and its subsidiaries (the "Group")will be advised by Promethean Investments LLP (the "Investment Manager") and byan Indian resident investment adviser (the "Investment Adviser"). This is thesecond AIM listed company whose investments are managed by the InvestmentManager, the first being Promethean Plc, who has to date made a number ofsuccessful acquisitions. Members of the Burman family, the Indian family thatcontrols Dabur India Limited, will be closely involved in managing and advisingon the Group's investments. Sir Peter Burt, who is also chairman of the Company,and Gaurav Burman are founder members and principles of the Investment Manager.Gaurav's brother, Mohit Burman, is heading up the Investment Advisor. Fundraising Statistics Placing Price £1.00 Number of new Ordinary Shares in issue following the Placing 50,000,000 Number of Warrants in issue following the Placing 11,500,000 Gross proceeds of the Placing £50,000,000 Net proceeds of the Placing after expenses £48,250,000 About Promethean India Promethean India is a recently established public limited company, incorporatedin the Isle of Man. The Company intends to generate returns for its Shareholdersby investing through the Group in businesses that are established or operatingin India, through the utilisation of the knowledge and skills of a highlyconnected and credible advisory team with a track record of successfulinvestments in India. Investment Rationale India has one of the fastest growing GDPs in the world, with growing stock andcapital markets. The Investment Adviser will be headed up by Mohit Burman, whois a member of the family that controls Dabur India Limited, the fourth largestfast moving consumer goods company in India, and Dabur Pharma Limited, which isthe largest oncology focused pharmaceutical company in India. Both are listed onthe Bombay Stock Exchange and have a combined market capitalisation ofapproximately US$1.9 billion. The members of the executive team of theInvestment Advisor have been responsible for a number of joint ventures in Indiawith various blue chip institutions such as Fidelity, Aviva and ABN Amro. It isanticipated that the Investment Manager's experience in identifying,structuring, executing and managing investment opportunities, combined with theaccess to an extensive network of Indian businesses provided by Mohit Burman andhis team, will fuel a high-quality deal-flow, giving the Group a significantcompetitive advantage in investing in businesses in the high-growth Indianmarket. Investment Strategy The Group will be a value and growth orientated investor, targetingopportunities in the areas below where there is a clear ability for the team toadd value by various methods, including by virtue of its network, operatingknowledge, ability to secure local licenses, and find high quality managementwhere required. Domestic growth - the Investment Adviser believes thatthere is a significant opportunity to invest in companies which are in aposition to take advantage of the high-growth Indian domestic market. Theseinvestments would be across a broad range of sectors, including, for example,financial services. International expansion - the Investment Adviserbelieves that there are many Indian businesses which are currently domesticallyfocused but which could become successful international businesses through thecompetitive advantages that result from factors such as the lower labour andproduction costs in India. These investments would be across a broad range ofsectors. Restructuring - the Investment Adviser believes thatthere are many Indian businesses which provide excellent opportunities for valuecreation through operational, corporate or financial restructuring. Investment Policy The Group may invest in both private and public businesses and across the small,mid and large-cap range of companies. The Group's investments will be nonsector-specific but its exposure to any one sector will be carefully managed.Investments will be by way of cash, with shares in the Company not being used asconsideration for any acquisitions. The Group will combine the knowledge of the local Investment Adviser with theinvestment and structuring skills of the Investment Manager and will look toensure the factors listed below are considered before making an investment. Management - the intention is to invest only inopportunities where there is a high quality, well proven management team inplace or where a management team has been identified that will drive theinvestee company going forward and deliver the levels of performance required. Valuation - the Investment Manager and InvestmentAdviser will look to find opportunities where it is expected that IRRs arelikely to be at least 25 per cent. per annum. The Investment Manager andInvestment Adviser will identify and evaluate opportunities through the networkand credibility of the local team, generating unique and proprietarytransactions much like the ones the team has executed over the last decade. Fullfinancial analysis will be done prior to any investment, using professionaladvisers where it is necessary. Operations - there will be a disciplined approach to thedue diligence. Extensive research will be done in order to ensure that theoperations of the business are acceptable, with an acceptable risk profile, andif there are any issues that these can be addressed post investment. Exit options - the achievability of an exit will be acritical factor, and all exit options will be considered including a trade saleto both domestic and international businesses, or a flotation in India, the US,or the UK. The Investment Manager will actively manage a concentrated portfolio ofinvestments. The Investment Manager believes that it is better to manageinvestments in an active manner. This approach is likely to result in aconcentrated portfolio. The Investment Manager believes that such an approachhas the potential to improve returns and reduce risk. As a result, it is envisaged that all equity investments would be between £5million and £35 million, which is expected to give a portfolio of 6 - 10individual investments being managed at any given time. The Group intendsgenerally to take stakes of a minimum of 5 per cent. in each portfolio company.It may use leverage in individual investments and it is intended that no morethan 25 per cent. of the net assets of the Group will be invested in a singletransaction. The Investment Manager intends to invest at least half the funds raised withinthe first 12 months. The Group intends to be fully invested within the first 24months, although there is no fixed period within which the Group is required tomake an investment or return funds to shareholders. The Investment Managerbelieves that in a high growth economy like India it is possible to retain astake in a business for, and realise value in, the long-term. Although the Groupwill be focused on getting its initial investment returned to it within 36months of the date of investment, the Investment Manager believes that if abusiness is performing well and continuing to create sufficient value then itmay be appropriate to hold an investment in that business for more than 36months. The Company's target internal rate of return across the portfolio will be aminimum of 25 per cent. per annum. (This is a target, not an estimate or aforecast, and there can be no assurance that it will be achieved.) Management The Board of Directors of the Company (the "Board"), the Investment Manager andthe local Investment Advisor have between them considerable experience inprivate equity, venture capital, portfolio management, corporate transactionsand structuring and fund analysis. This experience was typically obtained whilstworking for leading US, UK and Indian financial institutions. The Board believesthat this experience, in combination with the access to established businessnetworks provided by the Investment Adviser in India, will provide the Companywith sufficient investment opportunities to allow it to execute its investmentstrategy. The Board has overall responsibility for the Company's activities. The Board isresponsible, inter alia, for monitoring the performance of and for appointing,supervising, directing, and, if necessary, replacing the Company's serviceproviders. Investment Manager The Investment Manager, which is required to provide discretionary investmentmanagement services to the Group, will manage the Group's investments, assistedby advice from the Investment Adviser. The members of the Investment Managerinclude Promethean plc, Sir Peter Burt and Gaurav Burman. Investment Adviser The Investment Adviser will provide non-binding investment advice to assist theInvestment Manager in identifying, structuring, executing, monitoring, managingand exiting from investments. The Investment Adviser, which is headed up by Mohit Burman, is required toprovide investment advice to the Group and to the Investment Manager. Investment by the Burman Family The Burman family has agreed to invest alongside the Group through aco-investment arrangement with the Group. The initial commitment of the BurmanFamily is an amount in Rupees equivalent to £7.5 million at admission. Further enquiries: Promethean India PLCMichael Burt +44 20 7016 5112Gaurav Burman +44 7802 181811 Insinger de BeaufortNandita Sahgal/Peter Ward 020 7190 7000 No offer or invitation to purchase or subscribe for shares of the Company isbeing made at this time. Any such offer will be made in or by reference to theAIM admission document published by the Company and any acquisition of ordinaryshares of the Company should be made only on the basis of the informationcontained in the AIM admission document. The price and value of, and incomefrom, shares may go down as well as up. Persons needing advice should consult anindependent financial adviser. The contents of this announcement have been prepared and issued by the Companyand have been approved by Insinger de Beaufort solely for the purposes ofsection 21(2)(b) of the Financial Services and Markets Act 2000. The distribution of this announcement outside the United Kingdom may berestricted by law. No action has been taken to permit its distribution, otherthan in the United Kingdom. Persons into whose possession this announcementcomes are required to inform themselves about, and to observe, any suchrestrictions. In particular, this announcement is not for publication,distribution or release, in whole or in part, in or into the United States ofAmerica, Australia, Canada or Japan, or their respective territories orpossessions. Any person in the EEA who acquires any shares of the Company in any offer or towhom any offer is made will be deemed to have represented and agreed that it isa qualified investor within the meeting of Article 2(1) (e) of the ProspectusDirective (Directive 2003/71/EC). This document does not constitute an offer to buy or to subscribe for, or thesolicitation of an offer to buy or subscribe for, ordinary shares of PrometheanIndia in any jurisdiction in which such offer or solicitation is unlawful. The shares have not been and will not be registered under the United StatesSecurities Act of 1933 (the "Securities Act"), or under the securitieslegislation of any state of the United States of America, nor under the relevantsecurities laws of Canada, Australia and Japan, and may not be offered or soldin the United States of America, Canada, Australia or Japan except pursuant toan exemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act and in compliance with any applicable statesecurities laws. Neither the United States Securities and Exchange Commissionnor any state securities commission or other regulatory authority has approvedor disapproved of these securities or determined if this announcement istruthful or complete. Any representation to the contrary is a criminal offence.There will be no offering of shares in or into United States of America, Canada,Australia or Japan or in any country, territory or possession where to do so maycontravene local securities laws or regulations. This announcement (or any partof it) is not to be reproduced, distributed, passed on, or the contentsotherwise divulged, directly or indirectly, in or into the United States ofAmerica, Canada, Australia or Japan or in any country, territory or possessionwhere to do so may contravene local securities laws or regulations. Certain statements contained in this announcement are, or may be deemed to be,'forward-looking statements'. In some cases, these forward-looking statementscan be identified by the use of forward-looking terminology, including the terms'believes', 'estimates', 'anticipates', 'expects', 'intends', 'may', 'will' or'should'. By their nature, forward looking statements involve risks anduncertainties and may be based on a number of assumptions and readers arecautioned that any such forward-looking statements are not guarantees of futureperformance. In light of these risks, uncertainties and assumptions, theforward-looking events described in this announcement may not occur and theCompany's actual results and performance may differ materially from theimpression created by the forward-looking statements. Due to such risks,uncertainties and assumptions, readers should not rely on such forward-lookingstatements, which speak only as at the date of this announcement. The Companyexpressly disclaims any obligations or undertaking to publicly update or revisethese forward-looking statements after the date of this announcement, except asrequired by applicable law or regulation. No statement in this announcement isintended to be a profit forecast or to be relied upon as a guide to futureperformance. 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