6th Apr 2006 07:01
Corvus Capital Inc06 April 2006 6 April 2006 Corvus Capital Inc ("Corvus") Re: Commoditrade Inc - Proposed Acquisition Corvus holds 76.07 per cent of the issued share capital of Commoditrade Inc. ("Commoditrade") which has announced today that it has conditionally agreed toacquire Tambelan Company Limited's interest in its contract with Sucden (UK)Limited, a UK based commodities trading firm ("the Brokerage"), in respect ofmetals trading by the Brokerage's LME Trading Team on the London Metal Exchange. Summary points of the Proposed Acquisition (the "Acquisition") and Placing byCommoditrade (together the "Proposals"): • Commoditrade has agreed to acquire Tambelan's interest in its contract with the Brokerage ("Tambelan Agreement") for an initial aggregate consideration of £24.4 million, to be satisfied as to the payment of £14 million in cash and by the issue of 83.4 million new ordinary shares in the capital of Commoditrade. In addition, 6 million deferred consideration shares may be issued on the achievement of certain performance criteria. The Acquisition is conditional upon, inter alia, upon the approval of Commoditrade. • The acquisition will allow Commoditrade to receive 75 per cent. of the trading profits (after certain expenses) attributable to the LME Trading Team. • Gross profits attributable to the Tambelan Agreement have grown over the last three years to £7.1 million in the year ended 31 December 2005. • The LME Trading Team is well established and successful, with an in-depth knowledge of the markets on which it is represented and has developed strong client and market relationships. • Placing by Commoditrade of 144,000,000 new Ordinary Shares with institutional investors at 12.5 pence per share. to satisfy the cash consideration in respect of the Acquisition, and to provide working capital for the Enlarged Group. The Placing is expected to raise £18 million gross (approximately £15.2 million net of expenses). • Following completion of the Proposals Corvus will remain interested in 78.5 million ordinary shares, representing 21.14 per cent. of the enlarged share capital of Commoditrade. Graham Porter is the sole shareholder of Tambelan and is also the ExecutiveChairman of Corvus, which in turn holds 76.07 per cent. of the entire issuedshare capital of Commoditrade Accordingly, the Acquisition is classified as arelated party transaction under the AIM Rules. Graham Butt, a Director ofCorvus, is also deemed to be interested in the Acquisition by virtue of hisposition as a trust officer of Rampart Management Inc, a company associated withGraham Porter. The Independent Directors (being those Directors other thanGraham Porter and Graham Butt who are not deemed to be independent for thepurposes of the Acquisition) consider, having consulted with Strand PartnersLimited, that the terms of the Acquisition Agreement are fair and reasonable inso far as shareholders are concerned. In providing its advice to the IndependentDirectors, Strand Partners Limited has taken into account the IndependentDirectors' commercial assessments of the Acquisition. A copy of the admission document to be sent to Commoditrade shareholders todayis available at www.commoditrade.net Commenting, Andrew Regan, Chief Executive of Corvus Capital Inc, said: "We believe the proposed acquisition will deliver value to all stakeholders inthe business and we are delighted to see such a strong level of support frominstitutional investors in the placing which was oversubscribed." Enquiries: John Bick tel: 0870 389 6999 ends This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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