1st Apr 2009 15:15
ADDleisure Plc / Epic: ADE.L / Index: AIM / Sector: Leisure
1 April 2009
ADDleisure Plc ('ADDleisure' or 'the Company'
and together with its subsidiaries 'the Group')
Group Restructuring
The Board of ADDleisure Plc, the AIM traded company formed to develop products and services in the health and leisure sectors, has today undertaken a restructuring of the Group which will see it focus on Fitbug, the online personal health and well-being coach and Ez-Runner, the intelligent booking software business.
As part of the restructuring, Bupa Finance plc ('Bupa'), the UK market leader in health and care, as well as Allan Fisher and David Turner, ADDleisure Chairman and CEO respectively, will provide to ADDLeisure, in aggregate, a £1 million three year term loan to cover certain costs in respect of the administration of Movers & Shapers (see below) and to provide additional working capital to Fitbug.
Movers & Shapers
As highlighted in the Company's interim results announced on 30 January 2009, the Directors continue to believe that the Movers & Shapers concept can in the longer term offer attractive growth prospects. However, the current weak consumer confidence coupled with the funding required to get the concept to critical mass has meant that the Board has decided that it must prioritise on its core activities of Fitbug and Ez-Runner. As a result, Movers & Shapers Limited, a wholly-owned subsidiary of ADD Wellness Holdings Limited ('ADDWellness'), which in turn is a 50 per cent subsidiary of ADDleisure, has been put into administration today. Six of the Movers & Shapers stores as well as certain business assets of Movers & Shapers have been subsequently sold by Atherton Bailey LLP, administrators to Movers & Shapers, to Ben Margolis, previously CEO of Movers & Shapers, for a total consideration of £50,000 to be satisfied in cash. The remaining three stores will be closed immediately.
ADDWellness
As part of the rationalisation of the Group, ADDWellness has also today been put into administration. ADDWellness, a joint venture between ADDleisure and Bupa, was the holding company for Movers & Shapers and Fitbug Limited. Atherton Bailey LLP, administrators to ADDWellness, has subsequently sold Fitbug to ADDleisure for a total consideration of £1 to be satisfied in cash. In addition, Atherton Bailey LLP has assigned ADDWellness's receivable rights under an existing inter-company loan made by ADDWellness to Fitbug of £3.5 million to ADDleisure ('Fitbug Loan') for a total consideration of £250,000 to be satisfied in cash.
Term Loan
As part of the restructuring of the Group, Bupa is to provide an additional £800,000 to ADDleisure by way of a conditional three year secured term loan ('Bupa loan') to cover certain costs in respect of the administration of Movers & Shapers and provide additional working capital to further develop Fitbug,. The Bupa loan will be drawn down in three tranches with the final tranche to be drawn down conditional on the sum of £100,000 each to be loaned to the Company under the same terms as the Bupa loan by Allan Fisher, Chairman, and David Turner, CEO (together, 'the Directors' loan'). The Bupa loan and the Directors' loan are to be advanced at the rate of LIBOR plus 5 per cent.
As Bupa currently holds a 28.9 per cent shareholding in ADDleisure and Allan Fisher and David Turner are both Directors of the Company (each having a 10.6 per cent shareholding), the Bupa loan and the Directors' loan are deemed to be related party transactions under AIM Rule 13. David Cummin, Michael Mills and Geoffrey Simmonds ('the Independent Directors') consider, having consulted with Seymour Pierce, that the terms of the Bupa loan and the Directors' loan are fair and reasonable insofar as the Company's shareholders are concerned.
Year end
As announced on 22 January 2009, the Company changed its accounting reference date to 31 December. Having announced its extended unaudited interim results for the 12 months to 31 July 2008 on 30 January 2009, to ensure the restructuring changes set out above are adequately reflected in the audit process, the Company will now publish its audited final results for the 17 month period to 31 December 2008 in May 2009.
Commenting on the restructuring, Allan Fisher, Chairman of ADDleisure, said, "It has been a very difficult decision to put Movers & Shapers into administration. We believe in the longer term future of the concept but the current difficult market conditions, as well as the capital required to roll-out the concept meant we could no longer justify the high costs involved.
"We are however pleased that we now have 100 per cent control over Fitbug where we continue to see strong growth prospects, both in the private as well as the public sector with a number of Primary Care Trusts amongst others currently expressing interest in Fitbug. The additional financing from Bupa, as well as David and my further commitment to the business, will provide the funds necessary to support the growth of Fitbug."
** E N D S **
For further information visit www.ADDleisure.com or contact:
|
Mike Mills |
ADDleisure Plc |
Tel: 020 7449 1000 |
|
Mark Percy |
Seymour Pierce |
Tel: 020 7107 8000 |
|
Susie Callear |
St Brides Media & Finance Ltd |
Tel: 020 7236 1177 |
Related Shares:
BIDS.L