9th Jul 2008 15:40
This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful. This announcement is not an offer of securities in the UK, United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful.
Helphire GROUP PLC ("Helphire" or the "Company")
PROPOSED PLACING AND OPEN OFFER
HIGHLIGHTS
Helphire announces its intention to raise £45.0 million by means of the Placing and Open Offer
Cenkos Securities has conditionally placed 40,871,027 New Ordinary Shares at 110 pence per share with a number of existing institutional investors
The Issue Price represents a premium of 8.9 per cent. to yesterday's closing mid-market price of 101 pence
Shareholders will be offered the opportunity to subscribe for the New Ordinary Shares under the Open Offer
A Prospectus relating to the Placing and Open Offer and a notice of a General Meeting to consider the proposals will be posted to shareholders as soon as practicable.
Rodney Baker-Bates. Chairman of Helphire said:
"As we reported on 7 July, the credit hire market is continuing to grow, Helphire is trading in line with market expectations and its prospects are good. This fundraising, which has been undertaken at a premium to the market price, demonstrates our shareholders' commitment to the Company and will reduce our reliance on debt finance."
There will be a briefing for analysts at the offices of College Hill Associates, The Registry, Royal Mint Court, London EC3N 4QN at 9.30 a.m. on 10 July 2008. If you wish to attend this briefing, please contact Rebecca Hougham on 020 7457 2020.
ENQUIRIES:
|
Helphire Group Rodney Baker-Bates, Chairman Mark Adams, Chief Financial Officer |
on 9/10 July 020 7457 2020 |
|
|
Cenkos Securities Ian SoanesAdrian Hargrave |
020 7397 8921 |
|
|
College Hill Roddy Watt Keat Liew |
020 7457 2020 |
Cenkos Securities plc, which is authorised and regulated by the Financial Services Authority, is acting for Helphire Group plc and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Helphire Group plc for providing the protections afforded to its customers or for providing advice to any other person in relation to the matters referred to in this announcement.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, purchase or subscribe for any securities. Any such offer or invitation will be made solely by means of the prospectus to be published by the Company in due course. This announcement has not been examined or approved by the FSA or the London Stock Exchange or any other regulatory authority. The distribution for this announcement in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement is not a prospectus and any purchase of or application for shares in the Placing and the Open Offer should only be made on the basis of information contained in the formal prospectus to be issued in connection with the Placing and the Open Offer and any supplement thereto, copies of which will be made available at the Company's registered office: 1 White Hart House, High Street, Limpsfield, Surrey RH8 0DT.
This announcement and the information contained herein does not constitute an offer to sell, exchange or transfer any securities of the Company and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction where the offer, sale, exchange or transfer is not permitted or to any person or entity to whom it is unlawful to make that offer, sale, exchange or transfer.
This announcement and the information contained herein are not an offer for sale of securities in or into the United States, Canada, South Africa, Australia, Japan or in any other jurisdiction and the information contained herein is not for publication or distribution in or into the United States, Canada, South Africa, Australia or Japan . The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the "Act"), as amended, and may not be offered or sold in the United States or to or for the account or benefit of US persons (as such term is defined in Regulation S under the Act) absent registration under the Act or an available exemption from registration. No public offering of the securities referred to herein will be made in the United States.
The information contained in this announcement is not for publication or distribution to persons in Australia, Canada, Japan or the Republic of South Africa. The shares referred to herein may not, directly or indirectly, be offered, sold, taken up or delivered in, into or from Australia, Canada, Japan or the Republic of South Africa.
Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties and assumptions because they relate to events and/or depend on circumstances that may or may not occur in the future and could cause actual results to differ materially from those expressed in, or implied by, the forward looking statements. These include, among other factors: the Group's ability to obtain capital/additional finance; the limitations of the Group's internal financial controls; any increase in competition; an unexpected decline in turnover; legislative, fiscal and regulatory developments including, but not limited to, changes in environmental and safety regulations; and currency and interest rate fluctuations. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward looking statements contained in this announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Subject to any requirement under the Listing Rules of the UK Listing Authority, neither the Company nor Cenkos Securities plc undertakes any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward looking statements, which speak only as of the date of this announcement.
This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful. This announcement is not an offer of securities in the UK, United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful.
HELPHIRE GROUP PLC ("Helphire" or the "Company")
PROPOSED PLACING AND OPEN OFFER
1. INTRODUCTION
The Board of Helphire (the "Board") is pleased to announce a conditional placing and open offer (the "Placing and Open Offer") of 40,871,027 new ordinary shares of 5 pence each in the share capital of the Company (the "New Ordinary Shares") to raise £45.0 million (approximately £43.3 million net of expenses).
The New Ordinary Shares have been conditionally placed with certain existing institutional investors on behalf of the Company by Cenkos Securities plc ("Cenkos Securities") at a price of 110 pence per New Ordinary Share (the "Issue Price"), an 8.9 per cent. premium to yesterday's closing mid-market price of 101 pence.
The New Ordinary Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing ordinary shares of 5 pence each in the capital of the Company ("Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the New Ordinary Shares save that they will not carry an entitlement to any final dividend declared for the year ended 30 June 2008.
A prospectus ("Prospectus") relating to the Placing and Open Offer and a notice of a general meeting of the Company ("General Meeting"), which will be convened for the purpose of approving the Placing and Open Offer, will be posted to shareholders as soon as practicable. The Prospectus is presently expected to be dispatched on or around 14 August 2008.
2. BACKGROUND TO AND REASONS FOR THE PLACING AND OPEN OFFER
The Helphire group (the "Group") is one of the UK's leading providers of credit hire and other accident management services. The Company was formed in 1992 and floated on the London Stock Exchange in 1997 and has recorded significant organic growth since that time. Additionally Helphire has made a small number of strategic acquisitions including the Albany Group in October 2004 and Swift Rentacar in September 2005.
The Group is headquartered in Bath and it has operations in Peterlee, Northwich and Bristol and a vehicle distribution network consisting of 31 branches. The Group employs approximately 3,200 staff, and has a fleet of approximately 18,500 vehicles.
The Group's principal service is the hire of an equivalent replacement vehicle to non-fault drivers involved in motor accidents whilst their vehicle is off the road. The Group is also able to arrange for the necessary repairs to be undertaken without any initial payment by the customer. The cost of these services, which are provided on credit, is claimed from the party at fault in the accident. Furthermore, the Group markets a range of pre and post accident insurance policies enabling it to arrange legal assistance in the event of a personal injury claim and provides accident management services to owners of vehicle fleets.
Helphire has been at the forefront of the growth in the credit hire industry in the UK. In recent years a key source of its growth has been the increasing willingness of motor insurers to embrace the principle of credit hire and participate in the credit hire industry by introducing cases to credit hire organisations. Helphire has established very good working relations with the insurance industry and has benefited significantly from the acceptance of credit hire.
Helphire is a subscriber to the General Terms of Agreement (GTA), a set of protocols agreed between the Association of British Insurers and the credit hire industry to provide a structure for credit hire and credit repair claims, and the majority of its claims are subject to the GTA. The GTA provides a financial incentive for insurers to settle claims within a reasonable timescale and if claims are not settled within 90 days the rate charged reverts to the standard commercial rate. Nevertheless a large proportion of claims are not settled within the 90 day period prescribed by the GTA. Helphire funds the provision of these services and, via the provision of a legal expenses insurance policy, helps its customers make claims against the at-fault driver's insurer once the service provision has come to an end. If the at-fault party's insurer disputes the claim or otherwise fails to pay promptly the period over which Helphire funds the claim is extended. The Board considers that the average settlement period across Helphire's business is unduly long and is focussed on actions to reduce it.
A number of measures have been instituted in the past 9 months to create more effective trading arrangements between Helphire and motor insurers. Responsibility for cash collection within the UK accident management business, which was previously a central function, has been devolved to the three constituent business units: Helphire, based in Bath and Bristol, Albany, based in Peterlee and Automotive based in Northwich. As a result, claims settlement and cash collection is now part of an integrated sales, fulfilment and collection process within each division and management is incentivised based on cash collection as well as profit. Litigation is a legitimate and normal feature of claim collection and will always be an important element of Helphire's collection process, particularly for those claims not subject to the GTA. If claims remain outstanding beyond an acceptable period clients' claims are litigated using dedicated solicitors. Helphire has begun to adopt a more rigorous stance on litigation and is moving as quickly as possible to ensuring solicitors are instructed to litigate all clients' claims outstanding beyond an acceptable threshold and is deploying the resource required to implement this policy.
As Helphire's business has grown its working capital facilities have been increased to provide part of the funding for that growth. Helphire has facilities of £220 million in aggregate in addition to its fleet leasing facilities and these facilities provide sufficient headroom for the Company's present requirements. As elements of the facilities fall due for renegotiation the Board expects the terms available to the Company to become less favourable and considers that the terms might constrain the Company's strategy, particularly with regard to ownership of the vehicle fleet. The Company prefers to maintain flexibility with regard to corporate strategy and is therefore raising additional equity finance in order to reduce reliance on debt facilities and to ensure compliance with the terms of its borrowings. The Board expects, however, to maintain facility limits at around their present level.
3. THE PLACING AND OPEN OFFER
Cenkos Securities has agreed, as agent for the Company, to invite holders of Ordinary Shares ("Shareholders") on the register on 11 July 2008 (the "Record Date") ("Qualifying Shareholders") to apply for the New Ordinary Shares at the Issue Price payable in full in cash on application and free of all expenses on the basis of
5 New Ordinary Shares for every 17 existing Ordinary Shares
held at the close of business on the Record Date.
Entitlements to New Ordinary Shares under the Open Offer will be rounded down to the nearest whole number of New Ordinary Shares. Fractional entitlements to New Ordinary Shares will be aggregated and placed for the benefit of the Company. It should be noted that the Open Offer is not a rights issue. The application form is not a document of title and cannot be traded. Unlike a rights issue, any New Ordinary Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders.
Application will be made for the New Ordinary Shares to be admitted to the Official List maintained by the UK Listing Authority and to be admitted to trading by the London Stock Exchange plc on its market for listed securities (together, "Admission"). The Placing is conditional on the passing of resolutions to be proposed at the General Meeting.
Cenkos Securities has entered into a placing agreement (the "Placing Agreement") with the Company pursuant to which it has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours as agent of the Company to procure placees to subscribe for the New Ordinary Shares.
The Placing is conditional on the passing of resolutions to be proposed at the General Meeting and the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The Placing and Open Offer is not underwritten but Cenkos has conditionally placed all of the New Ordinary Shares at the Issue Price (subject to clawback by Qualifying Shareholders in order to satisfy valid applications under the Open Offer). The pre-placing is conditional upon the placing agreement having become unconditional in all respects and not having been terminated prior to Admission.
Cenkos Securities' obligations under the Placing Agreement are conditional on, inter alia:
4. PLACING AND SHARE STATISTICS
|
Issue Price |
110p |
|
Number of New Ordinary Shares |
40,871,027 |
|
Number of Ordinary Shares in issue immediately following Admission |
179,832,516 |
|
Market capitalisation upon Admission at the Issue Price |
£197.8 million |
|
Estimated net proceeds of the Placing and Open Offer receivable by the Company |
£43.3 million |
|
Percentage of the enlarged issued ordinary share capital represented by the New Ordinary Shares |
22.7 per cent |
5. TIMETABLE OF PRINCIPAL EVENTS
The following timetable sets out the expected timing of principal events. It is subject to change and any such change will be notified via a regulatory information service.
|
Ex-entitlement date for the Open Offer |
10 July 2008 |
|
Record Date for the Open Offer |
14 July 2008 |
|
Prospectus published |
14 August 2008 |
|
General Meeting |
8 September 2008 |
|
Admission and dealings in New Ordinary Shares commence |
8.00 a.m. on 9 September 2008 |
ENQUIRIES:
|
Helphire Group Rodney Baker-Bates, Chairman Mark Adams, Chief Financial Officer |
on 9/10 July 020 7457 2020 |
|
|
Cenkos Securities Ian SoanesAdrian Hargrave |
020 7397 8921 |
|
|
College Hill Roddy Watt Keat Liew |
020 7457 2020 |
Cenkos Securities plc, which is authorised and regulated by the Financial Services Authority, is acting for Helphire Group plc and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Helphire Group plc for providing the protections afforded to its customers or for providing advice to any other person in relation to the matters referred to in this announcement.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, purchase or subscribe for any securities. Any such offer or invitation will be made solely by means of the prospectus to be published by the Company in due course. This announcement has not been examined or approved by the FSA or the London Stock Exchange or any other regulatory authority. The distribution for this announcement in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement is not a prospectus and any purchase of or application for shares in the Placing and the Open Offer should only be made on the basis of information contained in the formal prospectus to be issued in connection with the Placing and the Open Offer and any supplement thereto, copies of which will be made available at the Company's registered office: 1 White Hart House, High Street, Limpsfield, Surrey RH8 0DT.
This announcement and the information contained herein does not constitute an offer to sell, exchange or transfer any securities of the Company and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction where the offer, sale, exchange or transfer is not permitted or to any person or entity to whom it is unlawful to make that offer, sale, exchange or transfer.
This announcement and the information contained herein are not an offer for sale of securities in or into the United States, Canada, South Africa, Australia, Japan or in any other jurisdiction and the information contained herein is not for publication or distribution in or into the United States, Canada, South Africa, Australia or Japan . The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the "Act"), as amended, and may not be offered or sold in the United States or to or for the account or benefit of US persons (as such term is defined in Regulation S under the Act) absent registration under the Act or an available exemption from registration. No public offering of the securities referred to herein will be made in the United States.
The information contained in this announcement is not for publication or distribution to persons in Australia, Canada, Japan or the Republic of South Africa. The shares referred to herein may not, directly or indirectly, be offered, sold, taken up or delivered in, into or from Australia, Canada, Japan or the Republic of South Africa.
Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties and assumptions because they relate to events and/or depend on circumstances that may or may not occur in the future and could cause actual results to differ materially from those expressed in, or implied by, the forward looking statements. These include, among other factors: the Group's ability to obtain capital/additional finance; the limitations of the Group's internal financial controls; any increase in competition; an unexpected decline in turnover; legislative, fiscal and regulatory developments including, but not limited to, changes in environmental and safety regulations; and currency and interest rate fluctuations. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward looking statements contained in this announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Subject to any requirement under the Listing Rules of the UK Listing Authority, neither the Company nor Cenkos Securities plc undertakes any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward looking statements, which speak only as of the date of this announcement.
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