8th Nov 2006 07:30
Flightstore Group PLC08 November 2006 Flightstore Group plc ("Flightstore" or the "Company") PROPOSED SUBSCRIPTION AND CAPITAL REORGANISATION The Board of Flightstore Group plc ("Flightstore" or the "Company") is pleasedto announce that it has entered into an agreement to raise approximately£200,000, before expenses, by way of a subscription for 2,000,000,000 newordinary shares at 0.01p per share (the "Subscription") to a consortium ofinvestors (the "Concert Party"). The Company has also announced the issue of1,025,000,000 warrants to subscribe for new ordinary shares. In order to facilitate the Subscription the Company has today announced aproposed capital reorganisation. On 21 September 2006, the London Stock Exchange indicated that it was likely tosuspend the dealing facility in the Company's ordinary shares if it had notcompleted an acquisition by 5 December 2006. The Company, following theSubscription, will have additional funds to strengthen its balance sheet so thatin the short term the Company may continue to seek suitable acquisitionopportunities. However, the Company will not have completed an acquisition by 5December 2006 and the ordinary shares and the new ordinary shares to be issuedunder the Subscription are expected to be suspended. Capital Reorganisation In order to facilitate the Subscription certain changes to the capital of theCompany are necessary. The Company proposes that each existing issued ordinaryshare of 1p each ("Exiting Ordinary Share") will be subdivided into one newordinary share of 0.01p each ("New Ordinary Share") and one deferred share of0.99p each ("Deferred Share"). Each New Ordinary Share will have the same rights(including voting rights, dividend rights and rights on a return of capitalalbeit on the basis of a reduced nominal amount) as each Existing OrdinaryShare. Certificates for each Existing Ordinary Share will remain valid for thesame number of New Ordinary Shares arising on the Capital Reorganisation. Therights of the Deferred Shares will render them effectively worthless. It isproposed that, in due course, the Deferred Shares will be cancelled. Eachunissued Existing Ordinary Share will be sub-divided into 100 unissued NewOrdinary Shares. The Subscription The Company is proposing to allot 2,000,000,000 new ordinary shares ("Subscription Shares") to the Concert Party. The Subscription Shares, when fullypaid, will rank pari passu in all respects with the New Ordinary Shares.Assuming all the Subscription Shares are issued, the Concert Party will hold95.23 per cent. of the Enlarged Share Capital immediately following Admission. In addition it is proposed that each member of the Concert Party and CFA will beissued with Warrants to subscribe for, in the case of the Concert Party 1additional ordinary share for every 2 Subscription Shares for which theysubscribe and in the case of CFA, 25,000,000 ordinary shares. The Warrants willbe exercisable at a price of 0.01p per Ordinary Share at any time from the dateof Admission for a period of 6 years from that date or 31 December 2012,whichever is the later. Assuming full exercise of all the Warrants an additional £102,500 of workingcapital will be raised by the Company and the Concert Party would holdapproximately 96.77 per cent. of the then enlarged issued share capital of theCompany (assuming no other share issues have taken place or warrants granted andexercised). Application will be made for the New Ordinary Shares and the Subscription Sharesto be admitted to trading on AIM and it is expected that trading in the NewOrdinary Shares and the Subscription Shares will commence on 4 December 2006. No application will be made to admit the Deferred Shares to trading on AIM. Concert Party The Concert Party is a group of high net worth individuals, who have previouslyinvested in private and public companies and were brought together byChristopher Potts through his connections with the stockbroking sector. Earlierthis year the Concert Party pooled their experience and access to capital andsecured a controlling interest in Readybuy PLC a small AIM traded company, andwere subsequently instrumental in the reverse takeover by Readybuy PLC of AvactaLimited. This transaction led Christopher Potts to seek to identify other smallAIM traded companies with a market capitalisation of less than £500,000.Flightstore was identified as a company which met this criteria. Details of the Concert Party are set out below: Christopher Potts Chris began his career in 1986 with stockbrokers Keith, Bayley, Rogers & Co.before moving to Winterflood Securities as a market maker in 1988. In 2002, hemoved to Evolution to expand their trading operation and was appointed Head ofMarket Making, overseeing in excess of 700 smaller companies. Chris has beeninvolved with a number of private companies and was a founder shareholder of ZGroup Plc and assisted their £21m float on AIM in June last year. He was alsorecently instrumental in the reverse takeover by Readybuy PLC of Avacta Limited. Stephen James Stephen worked in the UK until 1986 when he travelled to Zimbabwe as part of aBritish Government Aid package to further secondary and tertiary education inthat country. In 1986 he resumed his career in education in the UK and in 1992moved to the United Arab Emirates where his interests are centred upon tertiaryeducation and in particular woman's educational development in the Middle East.Stephen has been an active investor in UK equities over the last decade. Robert Quested Robert is resident in the United Arab Emirates where his business interestsinclude pharmaceutical importation and wholesaling. His career in the MiddleEast started in Saudi Arabia in the 1970s where he was involved in the provisionof pharmacy services to the military and continued in a similar capacity in TheSultanate of Oman. He has been an active investor in the UK stockmarket over thelast 30 years. Robert is not a director of any company at present. The Concert Party is financing the transaction wholly in cash from existingresources and there are therefore no existing circumstances where the repaymentof any security or liability by a member of the Concert Party to any third partydepends to any extent on the future business of the Company. Future Composition of the Board David Sebire will resign as Non-Executive Chairman following conclusion of theSubscription. The composition of the Board will change further upon anysuccessful acquisition by the Company. Under the terms of the SubscriptionAgreement John Caulcutt and Marcus Bicknell, have both agreed to resign asdirectors upon the completion of any reverse acquisition. Investing Strategy As a result of the Company not currently trading, it is deemed under the AIMRules to be an 'Investing Company' and is therefore required to have aninvesting strategy. The Company has considered a range of acquisition targets in the past but todate has been unable to identify and conclude negotiations with a suitable thirdparty. Following the Subscription, the Company will have additional funds tostrengthen its balance sheet so that in the short term the Company may continueto seek suitable acquisition opportunities. Further, the Directors understandthat the Concert Party has long-term access to finance to fund acquisitions. The Directors understand that the Concert Party is currently looking to make anacquisition through the Company and it is concentrating on those businessesinvolved in solar technology using platform technologies. At the date of thisdocument no binding agreement had been reached with any third party. The Takeover Code Under Rule 9 of the Takeover Code, any person who acquires an interest (asdefined in the Takeover Code) in shares which, taken together with shares inwhich he is already interested and in which persons acting in concert with himare interested, carry 30 per cent. or more of the voting rights of a companywhich is subject to the Takeover Code, that person is normally required to makea general offer to all remaining shareholders to acquire their shares. Similarly, where any person, together with persons acting in concert with him,is interested in shares which in aggregate carry not less than 30 per cent. ofthe voting rights of a company, but does not hold shares carrying more than 50per cent. of the voting rights of the company, a general offer will normally berequired if any further interests in shares are acquired by any such person. An offer under Rule 9 must be made in cash and at the highest price paid pershare by the person required to make the offer, or any person acting in concertwith him, for any interest in shares of the Company acquired during the 12months prior to the announcement of the offer. The members of the Concert Party are deemed to be acting in concert for thepurpose of the Takeover Code. Immediately following the Subscription, assumingall Subscription Shares are subscribed for by the Concert Party, the members ofthe Concert Party would be interested in shares representing in aggregate up to95.23 per cent. of the voting rights of the Enlarged Share Capital. If themembers of the Concert Party exercised all their Warrants in full, this wouldincrease their aggregate holding to approximately 96.77 per cent. of the thenenlarged share capital of the Company (assuming no further share issues havetaken place). A table showing (i) the respective individual shareholdings of themembers of the Concert Party upon completion of the Subscription (assuming allSubscription Shares are issued and allotted to all members of the Concert Party)and (ii) following full exercise of the Warrants by the Concert Party in thethen enlarged share capital of the Company (assuming no other share issues havetaken place) is set out below:- (i) (ii)Member Current holding Post Subscription Post Warrant exercise* Stephen James Nil 35.71% 36.29%Christopher Potts Nil 23.81% 24.19%Robert Quested Nil 35.71% 36.29% 95.23% 96.77% * The Warrants are exercisable at a price of 0.01p per Ordinary Share atanytime from the date of Admission for a period of 6 years from that date or 31December 2012, whichever is later. The Panel has agreed, subject to the passing of Resolution 1 at an ExtraordinaryGeneral Meeting ("EGM") on a poll by holders of Existing Ordinary Shares towaive the obligation on the members of the Concert Party to make a general offerto Shareholders under Rule 9 of the Takeover Code that would otherwise arise asa result of the implementation of the Proposals or the exercise of the Warrantsissued to the Concert Party. To be passed, a simple majority of the votes mustbe cast in favour of Resolution 1 at the EGM. Following completion of the Proposals, the members of the Concert Party willhold more than 50 per cent. of the Company's voting share capital and (for solong as they continue to be treated as acting in concert) may accordingly beable to increase their aggregate interests in shares without incurring anyobligation under Rule 9 to make a general offer, although individual members ofthe Concert Party will not be able to increase their percentage interests inshares through a Rule 9 threshold without Panel consent. Extraordinary General Meeting The Subscription, proposed issue of warrants, Capital Reorganisation and thewaiver under Rule 9 of the Takeover Code are all conditional on the passing ofthe necessary resolutions at an extraordinary general meeting. A Circularcontaining full details of the proposed transaactions and convening anExtraordinary General Meeting for 1 December 2006 is expected to be posted toshareholders today. Enquiries please contact: City Financial Associates LimitedRoss Andrews, Director 0207 090 7800 Seymour Pierce Ellis LimitedNeil Badger 01293 517 744 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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