27th Mar 2009 18:12
PAN PACIFIC AGGREGATES PLC
PROPOSED PLACING, VARIATION OF LOAN NOTE TERMS, DISPOSAL
AND
NOTICE OF GENERAL MEETING
HIGHLIGHTS
Intention to raise up to £400,000
Variation to secured convertible loan notes terms with RAB
Proposed disposal of the property located at Wood Bay on the Sechelt Peninsular
The Board of Pan Pacific Aggregates plc ("PPA" or the "Company") has today posted a circular to its shareholders ("Shareholders") convening a general meeting ("General Meeting") of the Company to be held at the offices of Hammonds LLP, 7 Devonshire Square, Cutlers Gardens, London, EC2M 4YH at 10.00 a.m. on 14 April 2009.
At this meeting, Shareholders' consent will be sought to pass resolutions (the "Resolution") to increase the Directors' authority to allot shares and to grant rights to subscribe for shares free of pre-emption rights, and to approve the required increase in the authorised share capital of the Company. Additionally, Shareholders will be asked to pass a resolution approving the disposal of the Company's property situated at Wood Bay on the Sechelt Peninsular in British Columbia pursuant to AIM Rule 15 (the "Disposal").
The Company has today entered into a deed of variation with RAB Special Situations (Master) Fund Limited ("RAB"), pursuant to which the terms of the secured convertible loan notes issued by the Company to RAB will be amended, subject to certain conditions including completion of a minimum fundraising of £300,000 (before expenses) (the "Variation"). The principal terms of the Variation are set out below under the heading "Variation of Loan Note Terms".
Following its announcement on 18 March 2009, PPA today announces its intention to carry out a placing of ordinary shares to raise up to £400,000 (before expenses), at a price to be determined (the "Placing"). The net proceeds of the Placing will provide the Company with additional working capital, enable it to satisfy the agreed settlement of the claim made by HSBC and recommence operations at the Pumptown Quarry. The Placing is conditional on, inter alia, a minimum fundraising of £300,000 (before expenses), the Variation becoming unconditional (other than in respect of the Placing) and the Resolutions being passed by Shareholders.
The Board believe that if the Resolutions are passed and the Placing and Variation completed, the Company can overcome its immediate funding requirements and will be better placed to grow both organically and by acquisition.
For further information please see the Company's web site, www.panagg.com or contact:
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Pan Pacific Aggregates plc |
Tel: +44 (0) 20 7096 9580 |
|
William Voaden |
|
|
Dowgate Capital Advisers Ltd |
Tel: +44 (0) 20 7492 4777 |
|
James Caithie / Aaron Smyth |
|
|
VSA Capital Limited |
Tel: +44 (0) 20 7096 9589 |
|
Paul Backhouse |
|
|
Lothbury Financial Limited |
Tel: +44 (0) 20 7011 9411 |
|
Michael Padley / Libby Moss |
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Set out below is the expected timetable of events:
|
Posting date of the circular |
27 March 2009 |
|
Latest time and date for receipt of completed forms of proxy to be valid at the General Meeting |
10.00 a.m. on 12 April 2009 |
|
General Meeting |
10.00 a.m. on 14 April 2009 |
Each of the times and dates in the above timetable is subject to change. If any details in the above timetable should change, the revised times and dates will be notified to shareholders by means of an announcement through a Regulatory Information Service.
VARIATION OF LOAN NOTE TERMS
On 12 July 2006, the Company issued £2,000,000 convertible loan notes (the "Initial Notes") to RAB. On 10 April 2007, the Company entered into an agreement with RAB pursuant to which it agreed terms for the issue to RAB of a further £4,250,000 secured convertible loan notes (the "Further Notes") to be drawn down in three tranches. On 8 May 2007, the Company drew down the first tranche in the amount of £1,500,000 and issued £250,000 of secured convertible loan notes on account of interest accrued on the Initial Notes to such date. In addition, the terms of the Initial Notes were varied pursuant to a Deed of Variation entered into between the Company and RAB on 8 May 2007, such that the terms of the Initial Notes became the same as the Further Notes (the Initial Notes and the Further Notes, together being the "Loan Notes") and the Initial Notes became secured. As at 28 February 2009, the principal amount of the Loan Notes outstanding was £4,802,648 which includes accrued capitalised interest of £1,052,648.
Upon the Variation becoming unconditional, the Company would be required to put its property situated at Wood Bay on the Sechelt Peninsular of British Columbia ("Wood Bay") on the market within 14 days of the completion of the proposed Placing and the Company would then pay the net sale proceeds to RAB on completion of the sale, such proceeds to be applied to discharging in part the outstanding principal amount of Loan Notes.
Upon the Variation becoming unconditional and effective, if the Company is able to raise a further £2,500,000 at any time prior to 31 March 2010, it shall be entitled to discharge all of its obligations under the Loan Notes by paying to RAB the amount of £750,000 (in addition to the net proceeds from the sale of Wood Bay), together with the amount of the interest accrued at 6 per cent per annum on the principal amount of the Loan Notes from the effective date of the Variation, whereupon the remaining principal amount outstanding under the Loan Notes will be converted into such number of shares as will result in RAB having a fully diluted interest (including their existing holding) in the amount of 10 per cent. of the Company's issued ordinary share capital, immediately following such conversion.
Such conversion will take place at the time the £750,000 payment is made, unless RAB elects to defer conversion, which it may do up to 31 March 2010. If the Company is able to raise not less than £6,000,000, RAB will not be entitled to make such an election, and such conversion shall take place at the time the £750,000 payment is made. No additional warrants to subscribe for Ordinary Shares will be issued to RAB on such conversion and remain outstanding. The Loan Notes will not be otherwise redeemable or convertible during the period ending 31 March 2010.
In the event that the Company does not raise a further £2,500,000 prior to 31 March 2010, or does so but does not repay the Loan Notes before that date, the current terms of the Loan Notes shall apply as from 31 March 2010 (including the right for the Loan Notes to be repaid at par and the conversion rights), except that RAB shall not be entitled to repayment of the outstanding Loan Notes until after 31 August 2010.
The Variation is conditional on the passing of the Resolutions to be proposed at the General Meeting of the Company set out in the Notice and a minimum of £300,000 (before expenses) being raised under the Placing. Under the terms of the Variation, RAB has irrevocably undertaken to vote in favour of the Resolutions and in favour of any Shareholder resolutions proposed to enable an acquisition or equity fundraising to be carried out by the Company prior to 31 March 2010.
Details of the Disposal
Owing to its expected value as against the Company's current market capitalisation, the Disposal is deemed to be a disposal which would fall to be treated as a fundamental change of business pursuant to AIM Rule 15 and is conditional on the consent of Shareholders. The Company acquired Wood Bay in July 2006 for CAD$1,900,000. However, the Directors believe that, due to a fall in regional property prices since this date, the realisable value will be lower than this. Further details of the Disposal will be announced in due course.
RELATED PARTY TRANSACTION
As at the date of the Circular RAB, together with its respective underlying funds, has been deemed to be a substantial shareholder and a related party for the purposes of the Variation. The Variation is a Related Party Transaction for the purposes of the AIM Rules.
Taking into account the Company's need to raise additional working capital, and the anticipated benefit to Shareholders which may result from a likely reduction of the dilution arising on the conversion of the Loan Notes, the Directors consider, having consulted with Dowgate Capital Advisers Limited, the Company's Nominated Adviser, that the terms of the Variation, a Related Party Transaction with RAB, are fair and reasonable insofar as the Company's shareholders are concerned.
AVAILABILITY OF DOCUMENT
Copies of the circular and form of proxy will be available from the Company's registered office, 7 Devonshire Square, Cutlers Gardens, London, EC2M 4YH, during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) and can be downloaded from the Company's website, www.panagg.com.
Related Shares:
Adm Energy