11th Dec 2015 07:00
11 December 2015
SnackTime plc
Fund raising and debt restructuring
Summary
SnackTime plc ("SnackTime", the "Company" or the "Group") today announces that it has reached agreement with certain investors, loan noteholders and creditors to raise in aggregate £3,024,645 through the issue of 40,746,451 new ordinary shares of 2p each in the Company ("New Ordinary Shares"). Of the total, £1,050,000 will be subscribed for by new and existing investors at 5p per New Ordinary Share in the form of new funds to provide working capital for the Group, with the balance raised through the conversion of loan notes and other creditor balances to strengthen the Group's balance sheet. The transactions, certain of which are subject to shareholders' approval, are expected to be completed during December 2015. In addition, the Company has reached agreement with its bank, The Cooperative Bank ("CooP"), to restructure its repayment schedule under the secured loan facility during 2016 and extend the overdraft facility.
Jeremy Hamer, Chairman of the Company, commented: "These transactions have taken longer to conclude than originally expected, which reflects the complexity of the Group's balance sheet. I would like to thank all parties for being so constructive and, in particular, our new and existing investors for their support. I would also like to thank our bankers The Cooperative Bank, a number of suppliers and customers whose patience and trust have made these transactions possible. Overall, the transactions will significantly strengthen the Group's balance sheet and provide a sound platform to take advantage of the increasing opportunities open to the Company across all business lines. We look to the future with confidence."
Fund raising
In December 2015, the Company proposes to raise in two tranches a total of £1,050,000 before expenses, the proceeds of which will be used for working capital purposes.
Tranche 1
The Company will with immediate effect issue 9,500,000 New Ordinary Shares at a price of 5p per share, raising a total of £475,000, to certain subscribers, including Mrs Veronika Belotserkovsky, the wife of Boris Belotserkovsky, a non-executive director of the Company.
Tranche 2
The Company has convened a general meeting to be held at 10.00am on 23 December 2015 ("General Meeting") to seek shareholder approval for the Board to allot new ordinary shares of 2p each in the Company up to a nominal value of £800,000 on a non pre-emptive basis. Subject to shareholders' approval being obtained at the General Meeting, the Company has agreed to issue 11,500,000 New Ordinary Shares at a price of 5p per share, raising a total of £575,000, to certain subscribers, including Elderstreet Investments Limited, a company connected with Michael Jackson, a non-executive director of the Company, Sergei Kornienko, a non-executive director of the Company, Mrs Veronika Belotserkovsky, the wife of Boris Belotserkovsky, a non-executive director of the Company, and Versatel Limited, a substantial shareholder in the Company.
Debt restructuring
Conversion of 2008 loan notes
Subject to shareholders' approval being obtained at the General Meeting, the Company has agreed with the holders of the 2008 loan notes to convert all existing notes (amounting to £600,000 nominal) and accrued interest and redemption premiums (amounting to £73,931) into 6,739,315 New Ordinary Shares at a price of 10p per share. The owners of the 2008 loan notes include Elderstreet Investments Limited, a company connected with Michael Jackson, a non-executive director of the Company.
Conversion of 2013 loan notes
Agreement has been reached to convert certain of the 2013 loan notes, with an aggregate nominal value of £885,000 and associated accrued interest and redemption premiums, amounting to a further £85,714), into New Ordinary Shares in two tranches.
Tranche 1
With immediate effect, loan notes with a nominal value of £185,000 and associated accrued interest and redemption premiums (amounting to £15,771) will be converted into 2,007,711 New Ordinary Shares at a price of 10p per share. Holders of the 2013 loan notes who have agreed to convert include Jeremy Hamer and Michael Jackson, non-executive directors of the Company, Tim James who was a director of the Company until 6 November 2015 and the WE Jackson Trust, a trust for the benefit of the children of Michael Jackson, a non-executive director of the Company.
Tranche 2
Subject to shareholders' approval being obtained at the General Meeting, the Company has agreed with certain owners of the 2013 loan notes to convert loan notes with a nominal value of £700,000 and associated accrued interest (amounting to £69,942) into 7,699,425 New Ordinary Shares at a price of 10p per share. Holders of the 2013 loan notes who have agreed to convert include Elderstreet Investments Limited, a company connected with Michael Jackson, a non-executive director of the Company.
Balance of 2013 loan notes
Holders of the remaining 2013 loan notes (amounting to £137,456 in total) are to be offered conversion rights on the same terms as set out above subject to shareholders' approval being obtained at the General Meeting and loan note holders' acceptance of the terms by 31 December 2015. Alternatively, holders of the remaining 2013 loan notes may retain their loan notes on revised terms or on the current terms.
Conversion of certain other creditor obligations
Subject to shareholders' approval being obtained at the General Meeting, agreement has been reached with two parties to convert certain amounts payable to them into New Ordinary Shares at a price of 10p per share. Jeremy Hamer, Chairman of the Company, has agreed to convert £100,000, representing the fee due to him following the November 2014 subscription, into 1,000,000 New Ordinary Shares and Unicum Limited, a company controlled by Boris Belotserkovsky, a non-executive director of the Company, has agreed to convert £230,000, representing payments due for the supply of vending machines to the Company during 2015, into 2,300,000 New Ordinary Shares.
Amendments to the agreements with the CooP
Subject to final documentation, agreement has been reached with the CooP to extend the Company's existing £750,000 overdraft facility to the end of 2016. In addition, agreement has been reached in respect of the secured loan facility to waive all covenant testing to the end of 2016, defer the two principal repayments of £260,000 due in the last quarter of 2015 (this includes the £200,000 commitment announced on 13 May 2015 and referred to again in the announcement on 23 July 2015), and reduce repayments during 2016 from £610,000 to £350,000. In all this represents a £520,000 reduction in the Company's short-term cash requirements.
General Meeting
The Company has convened the General Meeting, to be held at 10.00am on 23 December 2015, to seek shareholder approval for the Board to allot new ordinary shares up to a nominal value of £800,000 on a non pre-emptive basis. The notice of General Meeting was posted to shareholders on 30 November 2015 and is available to view at www.snacktime.com.
Current Trading
Trading in recent months has been impacted by the Company's restricted access to working capital, as well as on-going costs of restructuring the Company and debt servicing. However, year on year the impact of the restructuring is beginning to bear fruit driven by cost reductions and rationalisation of the machine estate. In addition, in recent months the Company has started to win new NHS tenders allowing it to deploy successfully the new vending machines supplied by Unicum, clearly differentiating itself from its competitors and establishing a platform for future growth once the fund raising and debt restructuring is completed.
Report & Accounts for the year ended 31 March 2015, Interim Results for the six months ended 30 September 2015 and suspension of trading on AIM
Trading in the Company's shares on AIM was suspended on 17 September 2015 as the Company was unable to publish its report and accounts for the year ended 31 March 2015 within six months of the year end as required by the AIM Rules for Companies ("AIM Rules"). Following completion of the fund raising and debt restructuring referred to in this announcement, the Company expects that its Annual Report & Accounts for the year ended 31 March 2015 will be published and its unaudited interim results to 30 September 2015 will be announced in due course, and that dealings in the Company's shares will be restored soon thereafter. Further announcements will be made in due course.
Additional information - shareholdings
The table below sets out the interests of the Belotserkovsky Concert Party (as described in the Company's circular dated 10 October 2014), their families, their connected persons, and certain other shareholders, including directors of the Company, as at the most recent practicable date prior to the release of this announcement, and as they are expected to be immediately following Tranches 1 and 2:
As at 10 Dec 2015 | Post Tranche 1 | Post Tranche 2 | ||||
Concert Party | ||||||
B Belotserkovsky* | 1,616,400 | 4.88% | 1,616,400 | 3.62% | 1,616,400 | 2.19% |
Mrs V Belotserkovsky | 4,843,616 | 14.61% | 9,843,616 | 22.04% | 11,843,616 | 16.03% |
Unicum Limited | - | - | - | - | 2,300,000 | 3.11% |
S Kornienko* | 100,000 | 0.30% | 100,000 | 0.22% | 600,000 | 0.81% |
Versatel Limited | 15,800,000 | 47.66% | 15,800,000 | 35.38% | 23,800,000 | 32.21% |
Oleg Chulkov | - | - | - | - | - | - |
Gillian White | 50,000 | 0.15% | 50,000 | 0.11% | 50,000 | 0.07% |
Concert Party total | 22,410,016 | 67.60% | 27,410,016 | 61.38% | 40,210,016 | 54.41% |
Unicorn VCT | 1,392,747 | 4.20% | 1,392,747 | 3.12% | 1,392,747 | 1.88% |
Unicorn Asset Mgmt Ltd | - | - | - | - | 9,475,590 | 12.82% |
Elderstreet VCT | 1,796,296 | 5.42% | 1,796,296 | 4.02% | 1,796,296 | 2.43% |
Elderstreet Invts Ltd | - | - | - | - | 4,963,150 | 6.72% |
J Hamer* | 280,000 | 0.84% | 719,967 | 1.61% | 1,719,967 | 2.33% |
M Jackson* | 397,000 | 1.20% | 781,971 | 1.75% | 1,781,971 | 2.41% |
M Stone* | 100,000 | 0.30% | 100,000 | 0.22% | 100,000 | 0.14% |
*denotes a director of the Company
Related Party transactions
Sergei Kornienko, Michael Jackson and Boris Belotserkovsky (through his wife), each being a director of the Company, are subscribing for New Ordinary Shares at 5p per share. In addition, Versatel Limited, a substantial shareholder (as defined in the AIM Rules is subscribing for New Ordinary Shares at 5p per share. Certain directors of the Company (namely Jeremy Hamer, Michael Jackson and/or companies connected with Mr Jackson) and Tim James, a former director of the Company, are converting 2008 loan notes and/or 2013 loan notes into New Ordinary Shares at 10p per share. In addition, Jeremy Hamer, Chairman of the Company, and Unicum Limited, a company connected with Boris Belotserkovsky, a director of the Company, are converting amounts payable to them into New Ordinary Shares at 10p per share.
Mark Stone, as the sole independent director of the Company in relation to the fund raising and debt restructuring, considers, having consulted with the Company's nominated adviser, Westhouse Securities Limited, that the terms of the fund raising and debt restructuring are fair and reasonable insofar as shareholders of the Company are concerned.
Total Voting Rights and admission of New Ordinary Shares to trading on AIM
The Company proposes to issue with immediate effect in aggregate 11,507,711 New Ordinary Shares, comprising Tranche 1. Application will be made to the London Stock Exchange for the 11,507,711 New Ordinary Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective on 17 December 2015. Therefore, the total number of shares in issue following admission to AIM of the 11,507,711 New Ordinary Shares will be 44,656,725 ordinary shares of 2p each. The figure of 44,656,725 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency Rules.
In addition, subject to shareholders' approval being obtained at the General Meeting, the Company will issue a further 29,238,740 New Ordinary Shares, comprising Tranche 2. Application will be made to the London Stock Exchange for the 29,238,740 New Ordinary Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective on or around 24 December 2015. Therefore, the total number of shares in issue following admission to AIM of the 29,238,740 New Ordinary Shares will be 73,895,465 ordinary shares of 2p each. The figure of 73,895,465 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency Rules.
Enquiries
SnackTime Tel No. 020 8879 8300
Jeremy Hamer
Michael Maltby
Westhouse Securities Tel No. 020 7601 6100
Tom GriffithsRichard Johnson
Related Shares:
Uvenco Uk