25th Mar 2013 13:30
Press Release | 25 March 2013 |
Sorbic International plc
("Sorbic" or the "Company")
Fundraising of £0.7 million
Sorbic International plc (AIM:SORB), the third largest sorbates producer in China, is pleased to announce that it proposes, conditional upon admission and in part on shareholder approval, to raise approximately £0.7 million (before expenses) through the issue of £125,000 of convertible loan notes (the "New A Loan Notes") and 8,331,429 new ordinary shares of 6 pence each to be issued at 7 pence each ("New Ordinary Shares").
The proceeds of the fundraising will be used to meet the ongoing costs of Sorbic International plc whilst it continues to work towards repatriating funds from the PRC to the UK. As previously reported, the Group had net cash resources in China of £4.3 million at 31 December 2012. The Company remains in positive dialogue with the Inner Mongolian government over its compensation package in respect of the Company's factory and expects to inform the market of progress in the coming months.
The required majority of holders of A and B loan notes have agreed to amend the terms of the loan note instruments such that the redemption date is now 31 August 2014. The New A Loan Notes will be issued subject to the terms of the A loan note instrument and will have the same terms as the A and B loan notes currently in issue.
Key terms of New A Loan Notes (and the revised A and B loan notes) are:
● | Conversion price is set at price of 9 pence; |
● | Interest remains at 10% p.a. compounded semi-annually and rolled up to redemption; |
● | Interest may, at the election of the loan note holders, be paid through the issue of new ordinary shares; |
● | Redemption premium equal to 1.5% per month, from date of new loan note instrument, if Company chooses to redeem early; and |
● | Redemption date of 31 August 2014. |
The Company also proposes to issue and allot the New Ordinary Shares as follows:
● | 7,260,000 New Ordinary Shares to certain institutional and other investors ("Placing Shares"); |
● | 3,482,858 New Ordinary Shares to the holders of the A and B loan notes as a one off fee of approximately £243,800, being 10% of the outstanding A and B loan notes, as consideration for their agreeing to the new terms and extended redemption date ("Loan Note Shares"); |
● | 285,714 New Ordinary Shares to finnCap as partial consideration for its fee in connection with the fundraising and ongoing fees ("Payment Shares"); and |
● | 1,071,429 New Ordinary Shares in respect of the accrued liabilities and ongoing costs of John McLean (the Chairman, who is to receive 714,286 of these Liability Shares) and two ex-directors of the Company in settlement of accrued fees and ongoing fees ("Liability Shares"). |
Follow the issue of these Liability Shares, John Mclean, will hold 1,095,715 ordinary shares, representing 1.9% of the share capital, as enlarged by the issue of the New Ordinary Shares.
Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that such Admission will occur in two tranches, with 3,417,143 shares, being 2,202,857 of the Placing Shares, the Liability Shares and half of the Payment Shares, being admitted at 8.00 a.m. on 27 March 2013 and, subject to shareholder approval at the Company's forthcoming AGM of the relevant resolutions required by the Company to issue them, 8,682,858 shares, being 5,057,143 Placing Shares, the Loan Note Shares and the balance of the Payment Shares being admitted at 8.00 a.m. on 24 April 2013. Following admission of the New Shares, the Company will have 57,154,552 ordinary shares of 6 pence each in issue.
The New A Loan Notes will be issued following the passing of the requisite shareholder authority at the forthcoming AGM.
The Company continues to see strong demand for its products and trading is in line with market expectations. The Company expects to post its report and accounts for the year ended 30 September 2012 on 28 March 2013 and will hold its AGM on 23 April 2013.
- Ends -
For further information: | |
Sorbic International plc | Tel: +44 (0)7768 031 454 |
John McLean, Chairman | www.sorbicinternational.com |
finnCap | |
Geoff Nash / Ben Thompson Simon Starr (broking) | Tel: +44 (0) 20 7220 0500 |
Hybridan LLP | |
Claire Louise Noyce / William Lynne, joint brokers to the Placing | Tel: +44 (0) 20 7947 4350
|
Media enquiries:
Abchurch Communications | |
Henry Harrison-Topham / Joanne Shears | Tel: +44 (0)20 7398 7709 |
www.abchurch-group.com |
Notes to Editors: www.sorbicinternational.com
About Sorbic International plc
Sorbic International's principal activity is the production and sale of the food preservatives Sorbic Acid and Potassium Sorbate from its base in Linyi City, Shandong Province, Peoples Republic of China. Approximately half of Sorbic International's production is sold to overseas markets, across 46 countries and half into the Chinese domestic market.
Sorbic Acid is a naturally occurring organic compound that is used in all kinds of foods for its anti-decomposition and anti-fungus function and also in grains, medicines, cosmetics, toothpaste, tobacco, animal feed, latex, paper-manufacturing and pesticides. Potassium Sorbate is used to inhibit moulds and yeasts in many foods, such as cheese, wine, yogurt, dried meat, baked goods, cosmetics and pharmaceuticals.
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Sorbic International