TIDMKBT
RNS Number : 7403H
K3 Business Technology Group PLC
12 June 2017
THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN,
INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL ("RESTRICTED JURISDICTION"). THIS ANNOUNCEMENT IS
NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES. THE
SECURITIES DISCUSSED HEREIN HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMED (THE "US
SECURITIES ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER
THE US SECURITIES ACT. NO PUBLIC OFFERING OF THE SECURITIES
DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE
INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFERING OF
SECURITIES FOR SALE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN,
SINGAPORE OR THE REPUBLIC OF SOUTH AFRICA.
FURTHER, THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY
AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION
TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SHARES IN K3 BUSINESS
TECHNOLOGY GROUP PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
12 June 2017
K3 Business Technology Group plc
Proposed Placing of 5,353,214 New Ordinary Shares at 140 pence
per share
and Open Offer of up to 719,984 New Ordinary Shares at 140 pence
per share
Key Points
-- Placing to raise up to GBP7.5 million before expenses at a price of 140 pence per share
-- Placing being conducted through an accelerated book build
process which will open with immediate effect following this
announcement
-- Open Offer to Qualifying Shareholders (with excess
application facility) to raise up to GBP1 million at a price of 140
pence per share
-- Proceeds of Placing and Open Offer to be used to strengthen
the Group's balance sheet and provide additional working capital
whilst the Board conducts its review of Group resources and
operations
-- Additional GBP0.7 million cash being invested in K3 through
exercise of warrants by Johan Claesson
-- Board changes also announced today, to take effect following the Placing
-- Issue Price represents a discount of approximately 9.4 per
cent to the closing mid-market price of K3's existing ordinary
shares of 154.5 pence on 9 June 2017
-- Placing Shares, assuming full take-up, will represent
approximately 14.9 per cent of the Company's existing issued share
capital
-- Open Offer Shares, assuming full take-up, will represent
approximately 2.0 per cent of the Company's existing issued share
capital
-- The Placing and Open Offer are conditional, inter alia, upon Admission
-- Further details of the Placing are set out in the appendix to this announcement
Adalsteinn Valdimarsson, CEO of K3, commented:
"As we have reported previously, we are now engaged in a review
of the Group's resources. The objective of this review is to
refocus K3's growth strategy around its cash generating business
units and the Group's large SME customer base.
"This proposed placing and open offer to qualifying shareholders
will strengthen the Group's balance sheet and provide additional
working capital during this review and enables us to operate with
full flexibility as we make strategic decisions.
"The Group is undergoing transition but we believe the strategic
steps we are taking create a solid platform for future growth. We
remain encouraged by the underlying strength and performance of
K3's profitable business units which generate significant recurring
revenues and cash flows from our large SME customer base. We are
also pleased with the pilot project underway for our new
cloud-based modular technologies, which we expect to generate
opportunities with both new and existing customers.
"We have also announced a number of changes to the composition
of K3's board today, including the retirement of Chairman David
Bolton and the appointment of Chief Financial Officer, Rob Price,
to the Board. We would like to thank David Bolton for his
significant contribution and counsel to K3 over almost 20 years. He
has shown a high level of commitment and dedication to the Company
during this time and we wish him well in his retirement.
Non-executive Director, Stuart Darling, will hold the role of
Chairman on an interim basis, while the Board undertakes a
recruitment process.
"We will report on the results of the placing and open offer in
due course."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR").
For further information, please contact:
K3 Business Technology Adalsteinn Valdimarsson, T: 0161 876 4498
Group plc CEO
Rob Price, CFO
finnCap Limited Julian Blunt/James T: 020 7220 0500
(NOMAD & Broker) Thompson (Corporate
Finance)
Emily Morris/Camille
Gochez (Corporate
Broking)
KTZ Communications Katie Tzouliadis/Emma T: 020 3178 6378
Pearson
Important notice
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
This announcement does not constitute, or form part of, a
prospectus relating to the Company, nor does it constitute or
contain any invitation or offer to any person, or any public offer,
to subscribe for, purchase or otherwise acquire any shares in the
Company or advise persons to do so in any jurisdiction, nor shall
it, or any part of it form the basis of or be relied on in
connection with any contract or as an inducement to enter into any
contract or commitment with the Company.
The content of this announcement has not been approved by an
authorised person within the meaning of the Financial Services and
Markets Act 2000 ("FSMA"). This announcement has been issued by and
is the sole responsibility of the Company. The information in this
announcement is subject to change.
This announcement is not an offer of securities for sale into
the United States. The securities referred to herein have not been
and will not be registered under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), and may not be offered or sold,
directly or indirectly, in or into the United States, except
pursuant to an applicable exemption from registration. No public
offering of securities is being made in the United States. This
announcement is not for release, publication or distribution,
directly or indirectly, in or into the United States, Australia,
Canada, the Republic of South Africa, Japan or any jurisdiction
where to do so might constitute a violation of local securities
laws or regulations (a "Prohibited Jurisdiction"). This
announcement and the information contained herein are not for
release, publication or distribution, directly or indirectly, to
persons in a Prohibited Jurisdiction unless permitted pursuant to
an exemption under the relevant local law or regulation in any such
jurisdiction.
finnCap Ltd ("finnCap") is authorised and regulated by the
Financial Conduct Authority in the United Kingdom. finnCap is
acting solely as nominated adviser, broker and bookrunner
exclusively for the Company and no one else in connection with the
contents of this announcement and will not regard any other person
(whether or not a recipient of this announcement) as its client in
relation to the contents of this announcement nor will it be
responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the contents of this announcement. Apart from the
responsibilities and liabilities, if any, which may be imposed on
finnCap by FSMA or the regulatory regime established thereunder,
finnCap accepts no responsibility whatsoever, and makes no
representation or warranty, express or implied, for the contents of
this announcement including its accuracy, completeness or
verification or for any other statement made or purported to be
made by it, or on behalf of it, the Company or any other person, in
connection with the Company and the contents of this announcement,
whether as to the past or the future. finnCap accordingly disclaims
all and any liability whatsoever, whether arising in tort, contract
or otherwise (save as referred to above), which it might otherwise
have in respect of the contents of this announcement or any such
statement.
In connection with the Placing, finnCap and its respective
affiliates, acting as investors for their own accounts, may
subscribe for or purchase ordinary shares in the Company ("Ordinary
Shares") and in that capacity may retain, purchase, sell, offer to
sell or otherwise deal for their own accounts in such Ordinary
Shares and other securities of the Company or related investments
in connection with the Placing or otherwise. Accordingly,
references to the Ordinary Shares being offered, subscribed,
acquired, placed or otherwise dealt in should be read as including
any offer to, or subscription, acquisition, placing or dealing by
finnCap and any of its respective affiliates acting as investors
for their own accounts. In addition, finnCap or its respective
affiliates may enter into financing arrangements and swaps in
connection with which it or its affiliates may from time to time
acquire, hold or dispose of Ordinary Shares. finnCap has no
intention to disclose the extent of any such investment or
transactions otherwise than in accordance with any legal or
regulatory obligations to do so.
Forward-looking Statements
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Company's
business strategy, plans and objectives of management for future
operations, or any statements proceeded by, followed by or that
include the words "targets", "believes", "expects", "aims",
"intends", "will", "may", "anticipates", "would", "could" or
similar expressions or negatives thereof. Such forward-looking
statements involve known and unknown risks, uncertainties and other
important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Company to be
materially different from future results, performance or
achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous
assumptions regarding the Company's present and future business
strategies and the environment in which the Company will operate in
the future. No undue reliance should be placed upon forward-looking
statements. These forward looking statements speak only as at the
date of this announcement. The Company expressly disclaims any
obligation or undertaking to disseminate any updates or revisions
to any forward-looking statements contained herein to reflect any
change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statements are based, unless required to do so by applicable law or
the AIM Rules for Companies.
K3 Business Technology Group plc
Proposed Placing of 5,353,214 New Ordinary Shares at 140 pence
per share
and Open Offer of up to 719,984 New Ordinary Shares at 140 pence
per share
1. Introduction
The Company announces today the conditional Placing by finnCap
of 5,353,214 new Ordinary Shares at 140p per share to raise GBP7.5
million (before expenses) and an associated Open Offer to raise up
to GBP1.0 million. The Placing is being conducted through an
accelerated book build process which will be launched with
immediate effect following this Announcement. The net proceeds of
the Placing and Open Offer, amounting to between GBP7.2 million and
GBP8.2 million, will be used to strengthen the Group's balance
sheet and to provide additional working capital whilst the Board
undertakes its review of the Group's resources, as announced on 16
May 2017. The Company also announces today a number of Board
changes, conditional on Admission, details of which are set out
below.
The Placing is conditional on, inter alia, the passing of the
Resolution at the General Meeting and Admission. The Open Offer is
conditional on the Placing becoming unconditional in all respects
save for Admission. It is expected that, subject to passing this
Resolution, the New Ordinary Shares will be admitted to trading on
AIM on 5 July 2017.
The Issue Price represents a discount of approximately 9.4 per
cent. to the closing mid-market price of 154.5 pence per Ordinary
Share on 9 June 2017 (being the last practical date prior to the
announcement of the Placing).
The Directors and certain other Shareholders holding 13,969,555
Ordinary Shares, directly or indirectly, representing approximately
38.8 per cent. of the total voting rights of the Company intend to
vote in favour of the Resolution to be proposed at the General
Meeting.
2. Background to and Reasons for the Placing and Open Offer
At the time of the appointment of the Group's new Chief
Executive, Adalsteinn Valdimarsson, last October we instigated a
programme to review the Group's senior management team in order to
support the Group's long term growth plans. This process was
substantially complete by the announcement of our interim results
to 31 December 2016 on 27 March 2017 and included the appointment
of Robert Price as the new Chief Financial Officer (in a non-board
capacity) as well as a range of changes to the operational
management with a view to streamlining the Group's management
structure and promoting better cross-selling of products and
services across the business. Ongoing annualised cost savings of
approximately GBP3 million were achieved as a result of this
management and associated operational restructuring. The Board
believed that the tighter focus on cross-selling and the simplified
organisational structure provided cause for optimism. At the time
of the interim results we were able to announce a major new
contract with The British Heart Foundation. We also reported a
significantly improved pipeline of potential new deals.
Taken together, these factors gave the Board confidence that the
Group's prospects were secure and that potential deals, including
certain projects delayed earlier in the financial year, would start
to come through. As we announced on 16 May 2017, this has not
happened in the way we previously envisaged. Whilst some major
deals have closed (such as those with The British Heart Foundation,
as referred to above), other large contracts were not secured as
expected. As a result of this, and despite the normal high
seasonality inherent in the Group's fourth quarter trading (June
being a key month for closing sales), the Board reduced guidance
for the outturn for the year to 30 June 2017.
The Directors believe that a number of factors have contributed
to this shortfall including:
l a softening in end market conditions, in particular in the
retail sector;
l longer sales cycles inherent in securing larger scale
deals;
l the accelerating industry shift to cloud-based consumption;
and
l customers trending towards smaller incremental upgrades to
existing ERP systems to extend useful life, as an alternative to
wholesale new system implementation.
As a consequence of this, the Board has instigated a review to
look specifically at the Group's resources and capabilities with
the intention of:
l refocusing the growth strategy around the profitable and cash
generative business units;
l driving down cost of customer acquisition and maximising
client retention through a clear focus on the Group's existing
large installed SME customer base;
l increasing the focus on the development and sale of the
Group's own intellectual property, with a view to improving
operating margin percentages;
l developing multiple "niche" software solutions capable of
deployment in a wider range of Enterprise Resource Planning ("ERP")
environments;
l increasing the quality of Group earnings through a greater
focus on contracted, recurring revenue;
l continuing to migrate earnings away from discrete licence
sales towards more "consumption based" revenue streams; and
l further focusing on centralisation and rationalisation of
Group costs.
This review process may lead to the Board concluding that
certain parts of the Group are non-core and therefore suitable for
exit. During the course of this process, and given its inherent
uncertainty, the Board has concluded that raising further working
capital and strengthening the Group's balance sheet by way of the
Placing and Open Offer would help to provide maximum flexibility to
the Board when making strategic decisions and avoid circumstances
in which decisions have to be made in a manner which is not
conducive to maximising value for Shareholders. Further updates on
this process will be provided in due course. The Placing is also
key in securing certain amendments to the terms of the Group's
existing facility agreement with its lending banks, as more fully
described below.
3. Current Trading and Prospects
The Board has concluded a thorough review of the Group's trading
outlook for the year to 30 June 2017 since the trading update
released on 16 May 2017. In the absence of unforeseen
circumstances, the Directors now expect to report an operating loss
(before exceptional reorganisation costs and impairment charges) of
between GBP0.4 million and GBP2.4 million. The broadness of this
estimate reflects the range of possible outcomes during June 2017
which remains a key selling month for the Group. Broadly speaking
however the Directors expect profitable business units to generate
an operating profit in the range of GBP6 million to GBP7 million,
with loss-making business units generating operating losses of the
same magnitude (after non-recurring write-downs of approximately
GBP1.8 million). Exceptional costs are expected to rise to
approximately GBP3.5 million from the GBP3.0 million reported on 10
January 2017. In addition, based on the loss-making performance of
some of the business units, the Board now expects an impairment
charge of approximately GBP2.0 million to write- down the carrying
value of goodwill and other intangible assets.
Annualised costs savings of in excess of GBP3 million are
expected to accrue as a result of the exceptional spending already
incurred, as announced on 10 January 2017. With plans to continue
to restructure so as to streamline and centralise activities, the
Directors anticipate the run rate profitability of the Group to
improve further. The Board also expects to continue investment in
the Group's growing, profitable and cash generative business
units.
The Group's profitable business units continue to see
encouraging progress focused around SME customers. Furthermore, the
Company's new cloud-based modular technologies have secured a pilot
customer and the products are expected to generate sales
opportunities with both new and existing customers.
As previously announced, the Board has taken the decision to
change the Company's accounting reference date and financial
year-end from 30 June to 30 November. As a result of this change,
K3's next published financial information will comprise unaudited
second interim results for the six months to 30 June 2017 together
with unaudited results for the 12 months to 30 June 2017. These are
expected to be announced during September 2017. The Company will
then release audited results for the 17 months to 30 November 2017
by no later than 31 March 2018, and thereafter revert to a normal,
biannual reporting calendar based on a 30 November year end. The
Group intends to adopt IFRS 15 from the start of the new financial
year, 1 December 2017, which is expected to assist in aligning
reporting operating profits with cash generation in the medium term
and in the short term improve reported working capital flows.
In tandem with the Board's review of the Group's trading the
Directors have also undertaken a review of K3's financial position
including discussion with the Group's senior debt lenders (Barclays
Bank plc and HSBC Bank plc (together, the "Banks")) regarding its
lending arrangements. In view of the Group's trading during the
earlier part of this year, as referred to above, the Group has
requested a deferral of the next due banking covenant test date (30
June 2017), at which point a technical breach of covenant would
likely occur, until 30 November 2017 (with quarterly testing
thereafter, in line with K3's new financial year) as well as
relaxation of covenant levels at 30 November 2017 and 28 February
2018. Throughout this process the Banks have been, and remain,
fully supportive of the Company and have formally agreed to waive
the financial covenant tests at 30 June 2017, subject to Admission.
Relaxation of the 30 November 2017 and 28 February 2018 covenant
levels (together with bringing the test dates in line with K3's new
financial year) remains subject to finalisation and execution of an
agreement between the Banks and the Company in terms to be approved
by finnCap amending the Group's existing facility agreement
("Facility Amendment Agreement"). This is expected to take place
prior to the date of the General Meeting. The Board is confident of
a successful outcome to this process and remains in constructive
dialogue with its banking partners.
In view of the change of year end and the review process now
being embarked upon, the Board does not envisage declaring a final
dividend in respect of the 12 months to 30 June 2017. In the
absence of unforeseen circumstances however and reflecting the
Board's confidence in this process, the Directors anticipate being
in a position to declare a final dividend when reporting results
for the 17 months to 30 November 2017, although any such dividend
will reflect a twelve (rather than 17) month trading period.
4. Details of the Placing
Under the terms of the Placing Agreement entered into today
between finnCap and the Company, finnCap has agreed to use its
reasonable endeavours to procure persons to subscribe for the
Placing Shares at the Issue Price of 140 pence each to raise up to
GBP7,494,500 for the Company. The Placing is being conducted
through an accelerated book build process which will be launched
with immediate effect following this Announcement. The Bookbuild
process is expected to close at or before 6.00 p.m. today. A
further announcement will be made later today confirming the number
of Placing Shares to be issued and the amount to be raised under
the Placing.
The Issue Price represents a discount of approximately 9.4 per
cent to the closing mid-market price of shares in the Company at 9
June 2017, the latest practicable date prior to the publication of
this announcement. The aggregate net proceeds after costs related
to the Placing are expected to be GBP7.2 million. If all the
Placing Shares are issued, they will represent approximately 14.9
per cent of the Company's existing issued share capital.
The Placing Shares will, following Admission, rank pari passu
with the existing issued Ordinary Shares and will have the right to
receive all dividends and other distributions declared, made or
paid in respect of the issued Ordinary Share capital of the Company
following Admission. It is expected that Admission will occur and
that dealings will commence at 8.00 a.m. on 5 July 2017.
The Placing is conditional upon, amongst other things:
(i) the Placing Agreement becoming unconditional in all respects
(save for Admission) and not having been terminated;
(ii) agreement and execution of the Facility Amendment Agreement;
(iii) the Resolution being passed at the General Meeting; and
(iv) admission of the Placing Shares to trading on AIM becoming
effective by not later than 8.30 a.m. on 5 July 2017 or such later
date (being not later than 8.00 a.m. on 31 July 2017) as the
Company and finnCap may agree.
The Placing Agreement contains warranties from the Company in
favour of finnCap in relation to, inter alia, the accuracy of the
information contained in this announcement, the Circular and
certain other matters relating to the Company and its business. In
addition, the Company has agreed to indemnify finnCap in relation
to certain liabilities that it may incur in respect of the Placing.
finnCap may terminate the Placing Agreement in specified
circumstances (including for breach of warranty at any time prior
to Admission, if such breach is reasonably considered by finnCap to
be material in the context of the Placing) and in the event of a
force majeure event or material adverse change occurring at any
time prior to Admission.
5. Details of the Open Offer
The Company considers it important that Qualifying Shareholders
have an opportunity (where it is practicable for them to do so) to
participate at the same price per Ordinary Share as the Placing and
accordingly the Company is making the Open Offer to Qualifying
Shareholders. The Company is proposing to raise a maximum of GBP1.0
million (before expenses) (assuming full take up of the Open Offer
but being less than the EUR5 million maximum amount permitted
without requiring the publication by the Company of a prospectus
under the Prospectus Rules) through the issue of up to 719,984 Open
Offer Shares.
The Open Offer Shares are available to Qualifying Shareholders
pursuant to the Open Offer at the Issue Price of 140 pence per Open
Offer Share, payable in full on acceptance. Any Open Offer Shares
not applied for by Qualifying Shareholders will be available to
Qualifying Shareholders under the Excess Application Facility.
Qualifying Shareholders may apply for Open Offer Shares under
the Open Offer at the Issue Price on the following basis:
1 Open Offer Share for every 50 Existing Ordinary Share[s] held
by the Qualifying Shareholder on the Record Date
Entitlements of Qualifying Shareholders to apply for Open Offer
Shares will be rounded down to the nearest whole number of Open
Offer Shares. Fractional entitlements which would otherwise arise
will not be issued to the Qualifying Shareholders but will be
aggregated and made available under the Excess Application
Facility. The Excess Application Facility enables Qualifying
Shareholders to apply for Excess Shares in excess of their Open
Offer Entitlement. Not all Shareholders will be Qualifying
Shareholders. Shareholders who are located in, or are citizens of,
or have a registered office in the United States or certain other
Restricted Jurisdictions, as set out in the Circular.
Valid applications by Qualifying Shareholders will be satisfied
in full up to their Open Offer Entitlements as shown on the
Application Form. Applicants can apply for less or more than their
entitlements under the Open Offer but the Company cannot guarantee
that any application for Excess Shares under the Excess Application
Facility will be satisfied as this will depend in part on the
extent to which other Qualifying Shareholders apply for less than
or more than their own Open Offer Entitlements. The Company may
satisfy valid applications for Excess Shares of applicants in whole
or in part but reserves the right not to satisfy any excess above
any Open Offer Entitlement. The Board may scale back applications
made in excess of Open Offer Entitlements on such basis as it
reasonably considers to be appropriate.
Application has been made for the Open Offer Entitlements to be
admitted to CREST. It is expected that such Open Offer Entitlements
will be credited to CREST on 13 June 2017. The Open Offer
Entitlements will be enabled for settlement in CREST until 11.00
a.m. on 29 June 2017. Applications through the CREST system may
only be made by the Qualifying CREST Shareholder originally
entitled or by a person entitled by virtue of bona fide market
claims. The Open Offer Shares must be paid in full on application.
The latest time and date for receipt of completed Application Forms
or CREST applications and payment in respect of the Open Offer is
11.00 a.m. on 29 June 2017. The Open Offer is not being made to
certain Overseas Shareholders, as set out in the Circular.
Qualifying Shareholders should note that the Open Offer is not a
rights issue and therefore the Open Offer Shares which are not
applied for by Qualifying Shareholders will not be sold in the
market for the benefit of the Qualifying Shareholders who do not
apply under the Open Offer. The Application Form is not a document
of title and cannot be traded or otherwise transferred.
Further details of the Open Offer and the terms and conditions
on which it is being made, including the procedure for application
and payment, are set out in the Circular.
The Open Offer is conditional on the Placing becoming
unconditional in all respects and not being terminated before
Admission (as the case may be). Accordingly, if the conditions to
the Placing are not satisfied or waived (where capable of waiver),
the Open Offer will not proceed and the Open Offer Shares will not
be issued and all monies received by the Receiving Agent will be
returned to the applicants (at the applicants. risk and without
interest) as soon as possible, but within 14 days thereafter. Any
Open Offer Entitlements admitted to CREST will thereafter be
disabled.
The Open Offer Shares will be issued free of all liens, charges
and encumbrances and will, when issued and fully paid, rank pari
passu in all respects with the New Ordinary Shares, including the
right to receive all dividends and other distributions declared,
made or paid after the date of their issue.
Kestrel Partners LLP has signed an irrevocable agreement not to
take up its Open Offer Entitlements in respect of 139,108 Open
Offer Shares in aggregate. These Open Offer Shares will therefore
be available to Qualifying Shareholders under the terms of the
Excess Application Facility.
6. Related Party Transactions
Mr Valdimarsson, Mr Price and Mr Darling intend to subscribe for
71,429, 50,000 and 14,286 Placing Shares respectively as part of
the Placing. Mr Valdimarsson, Mr Price and Mr Darling are related
parties of the Company for the purposes of the AIM Rules by virtue
of their status as Directors of the Company, or subsidiary
companies within the Group. Mr Bolton, Mr Claesson, Mr Manley and
Mr Morland (being the independent directors for these purposes)
consider, having consulted with the Company's nominated adviser,
finnCap, that the terms of the Placing with such related parties is
fair and reasonable insofar as the Company's Shareholders are
concerned.
7. Arrangements with Johan Claesson
Johan Claesson currently holds (through entities directly or
indirectly controlled by him) warrants over 1.1 million ordinary
shares at exercise prices of between 90p and GBP1.235. Mr Claesson
has undertaken to exercise, conditional on the Placing, 700,000 of
such warrants which are now exercisable to bring, in addition to
the proceeds of the Placing and Open Offer, a further GBP663,500
into the Company. The 700,000 new Ordinary Shares to be so issued
are expected to be admitted to AIM at the time as the Placing
Shares and the Open Offer Shares.
CA Fastigheter AB, a company controlled by Mr Claesson is also
currently owed GBP640,000 by the Company under the terms of a loan
advanced by him to the Company in 2004. Under the terms of the
Group's banking facilities, conversion or repayment of this loan is
subject to approval of the Banks which has now been granted. Mr
Claesson therefore intends, conditional on the Placing, to convert
this loan into new Ordinary Shares at the Issue Price. The 457,142
new Ordinary Shares to be so issued are expected to be admitted to
AIM at the same time as the Placing Shares and the Open Offer
Shares.
Following the exercise of warrants referred to above Mr Claesson
(through entities directly or indirectly controlled by him) will
still hold warrants over a further 400,000 Ordinary Shares
exercisable at a price of GBP1.235 subject to K3's share price
reaching GBP2.50 per share (300,000 warrants) and GBP3.25 (100,000
warrants). Upon the repayment or conversion of Mr Claesson's loan,
as referred to above, these remaining warrants are, absent
amendment, automatically cancelled. The Independent Directors
(excluding Mr Claesson) consider that in current circumstances it
is appropriate that the terms of these remaining warrants be
amended such that they are not now cancelled and that Mr Claesson
be allowed to continue to hold them for a further five years from
Admission. Such amendment is a related party transaction for the
purposes of the AIM Rules. The Board (excluding Mr Claesson)
considers, having consulted with finnCap that such amendments are
fair and reasonable insofar as the Company's shareholders are
concerned.
8. Board Changes
It was also announced today that the following Board changes
will occur, with effect from Admission:
-- David Bolton has decided to retire from the Board. David has
contributed significantly to K3 over almost 20 years and the Board
would like to thank him for his high level of commitment,
dedication and counsel to the Company over this time, and wishes
him well in his retirement.
-- Robert Price will join the Board of K3 as Finance Director.
Robert has been Chief Financial Officer to the Company since
October 2016, in a non-board capacity. Further details on Robert
Price are set out below.
-- Stuart Darling will become interim Chairman of the Company.
The Board intends to recruit a suitable Chairman in due course
and to establish new management incentivisation packages.
9. Effect of the Placing and Open Offer
Upon Admission, and assuming full take up of the Open Offer
Entitlements and no further exercise of options under the Company's
share schemes, the Enlarged Issued Share Capital (including the
additional shares to be allotted to Johan Claesson as described in
paragraph 7 above) is expected to be 43,229,541 Ordinary Shares. On
this basis, the New Ordinary Shares will represent approximately
14.0 per cent. of the Company's Enlarged Issued Share Capital.
Following the issue of the New Ordinary Shares pursuant to the
Placing and Open Offer, assuming full take up of the Open Offer
Entitlements and no further exercise of options under the Company's
share schemes, Qualifying Shareholders who do not take up any of
their Open Offer Entitlements nor participate in the Placing will
suffer a dilution of approximately 16.7 per cent. to their
interests in the Company. If a Qualifying Shareholder takes up his
Open Offer Entitlement in full, and does not participate in the
Placing, he will suffer a dilution of approximately 15.1 per cent.
to his interest in the Company.
10. General Meeting
The Circular will contain a notice convening the General Meeting
to be held at the offices of finnCap Ltd at 60 New Broad Street,
London EC2M 1JJ on 4 July 2017 at 10.00 a.m.. The notice will
contain the text of the special Resolution that is to be proposed
at the General Meeting to authorise the Directors to allot the
Placing Shares under the Placing and to disapply Shareholders'
pre-emption rights under the Companies Act 2006 in respect of the
Placing Shares. The Placing and Open Offer (by virtue of being
conditional on the Placing becoming unconditional in all respects
save for Admission) are conditional on the passing of this
Resolution.
The Resolution, if passed, will allow the Placing Shares to be
issued at a price of 140 pence each (representing a 9.4 per cent
discount to the closing middle market price for an Ordinary Share
of 154.5 pence for the business day immediately prior to the date
of this document) without them first being offered to Shareholders
generally in accordance with their statutory pre-emption rights.
The Directors have concluded that proceeding with the Placing,
alongside the Open Offer, is the most suitable option available to
the Company for raising additional funds through the issue of
Ordinary Shares and that issuing the Placing Shares at such a
discount under the Placing is fair and reasonable so far as all
existing Shareholders are concerned. The Issue Price has been set
by the Directors following their assessment of market conditions
and following discussions with a number of institutional
investors.
11. Recommendation
The Directors consider the Resolution to be proposed at the
General Meeting to be in the best interests of the Company and the
Shareholders as a whole. Consequently, the Directors unanimously
recommend that Shareholders vote in favour of the Resolution to be
proposed at the General Meeting, as they intend to do in respect of
the 7,014,135 Ordinary Shares held, directly or indirectly, by them
representing approximately 19.5 per cent. of the total voting
rights of the Company.
In addition to the Board's voting intentions referred to above,
the Company has further received an irrevocable undertaking to vote
in favour of the Resolution from Kestrel Partners LLP in respect of
6,955,420 Existing Ordinary Shares representing approximately 19.3
per cent. of the total voting rights of the Company.
12. Further details on Robert Price
Save for the following additional directorships of companies
within the Group now held by Robert Price, the disclosures made
regarding Mr Price in the announcement dated 18 October 2016 remain
effective. Save for those disclosures and the directorships set out
below, there are no additional disclosures to be made regarding
Robert Price for the purposes of Schedule Two paragraph (g) of the
AIM Rules for Companies:
K3 Landsteinar Limited Colne Investments Limited
K3 Information Services Limited K3 Information Engineering Limited
K3 Syspro Limited Syspro Limited
Syspro Europe Limited Syspro (UK) Limited
K3 BTG Limited K3 AX Limited
K3 Hosting Limited K3 FDS Limited
Sense Enterprise Solutions Limited K3 Business Solutions Limited
Clarita Support Limited FDS Holdco Limited
Fifth Dimension Systems Limited Intelligent Solutions Consultancy Limited
K3 FD Systems Limited Shine Marketing UK Limited
Retail Systems Group Limited Retail Computer Maintenance Limited
K3 Systems Support Limited K3 Retail Solutions Limited
K3 CRM Limited K3 Retail and Business Solutions Holdco
Limited
K3 Business Systems Holdco Limited K3 Managed Services Holdco Limited
Retail Technology Limited Starcom Technologies Limited
K3 Global Products Limited Merac Limited
Retail Support International ApS DdD Retail A/S
APPIX
TERMS AND CONDITIONS OF THE PLACING
For Invited Placees only - Important Information
1. Introduction
All the information in this Appendix is directed only at persons
("FSMA Qualified Investors") who are both "qualified investors" as
referred to at section 86(7) of the Financial Services and Markets
Act 2000 ("FSMA") and are persons at or to whom any private
communication relating to the Company that is a "financial
promotion" (as such term is used in relation to FSMA) may lawfully
be issued, directed or otherwise communicated without the need for
it to be approved, made or directed by an "authorised person" as
referred to in FSMA.
Members of the public are not eligible to take part in the
Placing.
In this Appendix:
(a) "you" or "Placee" means any person who becomes committed
through the Bookbuild to subscribe for Placing Shares; and
(b) terms defined elsewhere in this announcement have the same
meanings, unless the context requires otherwise.
Various dates referred to in this announcement are stated on the
basis of the expected timetable for the Placing. It is possible
that some of these dates may be changed. The expected date for
Admission is 5 July 2017 and, in any event, the latest date for
Admission is 31 July 2017 (the "Long Stop Date").
2. Bookbuild
finnCap is proceeding with a share placing bookbuild process
(the "Bookbuild") for the purpose of assessing demand from
institutional and other investors for subscribing for Placing
Shares at the Placing Price and the Company then issuing those
shares under the Placing to raise up to GBP7.5 million for the
Company before expenses. finnCap is acting as the Company's agent
in respect of the Bookbuild and the Placing.
The Bookbuild is expected to close at or before 6.00 p.m. today.
The Company will then release an announcement through the London
Stock Exchange's Regulatory News Service confirming the number of
Placing Shares to be issued and the amount to be raised under the
Placing. finnCap will determine the basis for allocating Placing
Shares to bids submitted to it in the Bookbuild and may at its
discretion (i) accept bids, either in whole or in part, (ii) accept
bids that are received after the Bookbuild has closed, and/or (iii)
scale down all or any bids on such basis as it considers
appropriate. finnCap may carry out the Placing by any alternative
method to the Bookbuild as it chooses. Neither finnCap nor any
other finnCap Person will have any liability to Placees (subject to
applicable law) or to anyone else other than the Company in respect
of the Placing or in respect of its conduct of the Bookbuild or of
any alternative method that it may adopt for carrying out the
Placing.
The Company and finnCap may, by agreement with each other,
increase the amount to be raised through the Placing. The Company
also reserves the right to allow officers of the Company and/or
Group employees to subscribe for some of the Placing Shares at the
Placing Price, with finnCap's agreement, on substantially the same
or similar terms as apply to those FSMA Qualified Investors
subscribing for shares under the Placing.
3. Participation and settlement
Participation in the Bookbuild is only available to persons who
are invited to participate in it by finnCap.
If you are invited to participate in the Bookbuild and wish to
do so, you should communicate your bid by telephone to your usual
broking contact at finnCap. Each bid should state the number of
Placing Shares which you wish to subscribe for at the Placing
Price. If your bid is successful, in whole or in part, your
allocation will be confirmed orally following the close of the
Bookbuild. finnCap's oral confirmation of your allocation will
constitute a legally binding commitment on your part to subscribe
for the number of Placing Shares allocated to you at the Placing
Price on the terms and subject to the conditions set out or
referred to in this Appendix and subject to the Company's
constitution.
A person who submits a bid in the Bookbuild will not be able,
without finnCap's agreement, to vary or revoke the bid before the
close of the Bookbuild. Such a person will not be able, after the
close of the Bookbuild, to vary or revoke a submitted bid in any
circumstances.
If you are allocated Placing Shares in the Bookbuild, you will
be sent a written confirmation stating (i) the number of Placing
Shares allocated to you, (ii) the aggregate amount you will be
required to pay for those Placing Shares at the Placing Price,
(iii) relevant settlement information, and (iv) settlement
instructions. Settlement instructions will accompany each written
confirmation and, on receipt, should be confirmed back to finnCap
by the date and time stated in it. Settlement of transactions in
the Placing Shares will take place within the CREST system, subject
to certain exceptions, on a "delivery versus payment" (or "DVP")
basis. finnCap reserves the right to require settlement for and/or
delivery to any Placee of any Placing Shares to be made by such
other means as it may deem appropriate if delivery or settlement is
not possible or practicable within the CREST system within the
timetable set out in this announcement. If your Placing Shares are
to be delivered to a custodian or settlement agent, you should
ensure that the written confirmation is copied and delivered
promptly to the appropriate person within that organisation.
Each Placee's obligations to subscribe and pay for Placing
Shares under the Placing will be owed to each of the Company and
finnCap. No commissions will be paid to or by Placees in respect of
their agreement to subscribe for any Placing Shares.
Placees' commitments in respect of Placing Shares will be made
solely on the basis of the information contained in this
announcement and on the terms contained in it. No admission
document for the purposes of the AIM Rules nor any prospectus is
required to be published, or has been or will be published, in
relation to the Placing or the Placing Shares.
4. Placing conditions
Under the terms of the Placing Agreement finnCap has agreed to
use its reasonable endeavours as the Company's agent to procure
subscribers for Placing Shares at the Placing Price.
The Placing is conditional on (i) finnCap's obligations under
the Placing Agreement not being terminated in accordance with its
terms, (ii) the passing of a resolution at a general meeting of the
Company that is to be proposed in the notice of that meeting that
is to be included in the Company's circular to its shareholders
concerning the Placing and the Open Offer, (iii) Admission taking
place not later than 8.30 a.m. on 5 July 2017, (iv) agreement and
execution of the Facility Amendment Agreement and (v) finnCap's
obligations under the Placing Agreement becoming unconditional in
all other respects. finnCap may extend the time and/or date for the
fulfilment of any of the conditions in the Placing Agreement to a
time no later than 5.00 p.m. on the Long Stop Date. If any such
condition is not fulfilled (and, if capable of waiver under the
Placing Agreement, is not waived by finnCap) by the relevant time,
the Placing will lapse and your rights and obligations in respect
of the Placing will cease and terminate at such time.
finnCap may terminate its obligations under the Placing
Agreement prior to Admission in certain circumstances including,
among other things, following a material breach of the Placing
Agreement by the Company. The exercise of any right of termination
pursuant to the Placing Agreement, any waiver of any condition in
the Placing Agreement and any decision by finnCap whether or not to
extend the time for satisfaction of any condition in the Placing
Agreement are within finnCap's absolute discretion (as is the
exercise of any right or power of finnCap under the terms of this
Appendix). finnCap will have no liability to you or to anyone else
in respect of any such termination, waiver or extension or any
decision to exercise or not to exercise any such right of
termination, waiver or extension.
5. Placees' warranties and undertakings
By communicating a bid to finnCap under the Bookbuild you will
irrevocably acknowledge and confirm and warrant and undertake to,
and agree with, each of the Company and finnCap, in each case as a
fundamental term of your application for Placing Shares of the
Company's obligation to allot and/or issue any Placing Shares to
you or at your direction, that:
(a) you agree to and accept all the terms set out in this announcement;
(b) your rights and obligations in respect of the Placing will
terminate only in the circumstances referred to in this
announcement and will not be subject to rescission or termination
by you in any circumstances;
(c) this announcement, which has been issued by the Company, is
within the sole responsibility of the Company;
(d) you have not been, and will not be, given any warranty or
representation in relation to the Placing Shares or to the Company
or to any other member of its Group in connection with the Placing,
other than by the Company as included in this announcement or to
the effect that the Company is not now in breach of its obligations
under the London Stock Exchange's AIM Rules for Companies or under
the EU Market Abuse Regulation (596/2014) to disclose publicly in
the correct manner all such information as is then required to be
so disclosed by the Company;
(e) you have not relied on any representation or warranty in
reaching your decision to subscribe for Placing Shares under the
Placing, save as given or made by the Company as referred to in the
previous paragraph;
(f) you are not a client of finnCap in relation to the Placing
and finnCap is not acting for you in connection with the Placing
and will not be responsible to you in respect of the Placing for
providing protections afforded to its clients;
(g) you have not been, and will not be, given any warranty or
representation by any finnCap Person in relation to any Placing
Shares, the Company or any other member of its Group and no finnCap
Person will have any liability to you for any information contained
in this announcement or which has otherwise been published by the
Company or for any decision by you to participate in the Placing
based on any such information or on any other information provided
to you;
(h) you will pay the full subscription sum at the Placing Price
as and when required in respect of all Placing Shares finally
allocated to you and will do all things necessary on your part to
ensure that payment for such shares and their delivery to you or at
your direction is completed in accordance with the standing CREST
instructions (or, where applicable, standing certificated
settlement instructions) that you have in place with finnCap or
puts in place with finnCap;
(i) you are permitted to subscribe for Placing Shares in
accordance with the laws of all relevant jurisdictions which apply
to you and you have complied, and will fully comply, with all such
laws (including where applicable, the Anti-Terrorism, Crime and
Security Act 2001, the Proceeds of Crime Act 2002 and the Money
Laundering Regulations 2007) and have obtained all governmental and
other consents (if any) which may be required for the purpose of,
or as a consequence of, such subscription, and you will provide
promptly to finnCap such evidence, if any, as to the identity or
location or legal status of any person which finnCap may request
from you (for the purpose of its complying with any such laws or
ascertaining the nationality of any person or the jurisdiction(s)
to which any person is subject or otherwise) in the form and manner
requested by finnCap on the basis that any failure by you to do so
may result in the number of Placing Shares that are to be allotted
and/or issued to you or at your direction pursuant to the Placing
being reduced to such number, or to nil, as finnCap may decide;
(j) you have complied and will comply with all applicable
provisions of the FSMA with respect to anything done or to be done
by you in relation to any Placing Shares in, from or otherwise
involving the United Kingdom and you have not made or communicated
or caused to be made or communicated, and you will not make or
communicate or cause to be made or communicated, any "financial
promotion" in relation to Placing Shares in contravention of
section 21 of FSMA;
(k) you are a FSMA Qualified Investor;
(l) you are acting as principal only in respect of the Placing
or, if you are acting for any other person (i) you are duly
authorised to do so, (ii) you are and will remain liable to the
Company and/or finnCap for the performance of all your obligations
as a Placee in respect of the Placing (regardless of the fact that
you are acting for another person), (iii) you are both an
"authorised person" for the purposes of FSMA and a "qualified
investor" as defined at Article 2.1(e)(i) of Directive 2003/71/EC
(known as the Prospectus Directive) acting as agent for such
person, and (iv) such person is either (1) a FSMA Qualified
Investor or (2) a "client" (as defined in section 86(2) of FSMA) of
yours that has engaged you to act as his agent on terms which
enable you to make decisions concerning the Placing or any other
offers of transferable securities on his behalf without reference
to him;
(m) nothing has been done or will be done by you in relation to
the Placing or to any Placing Shares that has resulted or will
result in any person being required to publish a prospectus in
relation to the Company or to any Ordinary Shares in accordance
with FSMA or the UK Prospectus Rules or in accordance with any
other laws applicable in any part of the European Union or the
European Economic Area;
(n) you will not treat any Placing Shares in a manner that would
contravene any legislation applicable in any territory or
jurisdiction and no aspect of your participation in the Placing
will contravene any legislation applicable in any territory or
jurisdiction or cause the Company or finnCap to contravene any such
legislation;
(o) (in this paragraph "US person" and other applicable terms
have the meanings that they have in Regulation S made under the US
Securities Act of 1933, as amended) (i) none of the Placing Shares
have been or will be registered under that Act or under the
securities laws of any State of or other jurisdiction within the
United States, (ii) subject to certain exceptions, no Placing
Shares may be offered or sold, resold, or delivered, directly or
indirectly, into or within the United States or to, or for the
account or benefit of, any US person, (iii) you are (unless
otherwise expressly agreed with finnCap) neither within the United
States nor a US person, (iv) you have not offered, sold or
delivered and will not offer sell or deliver any of the Placing
Shares to persons within the United States, directly or indirectly,
(v) neither you, your affiliates, nor any persons acting on your
behalf, have engaged or will engage in any directed selling efforts
with respect to the Placing Shares, (vi) you will not be
subscribing Placing Shares with a view to resale in or into the
United States, and (vii) you will not distribute this announcement
or any offering material relating to Placing Shares, directly or
indirectly, in or into the United States or to any persons resident
in the United States;
(p) finnCap may satisfy its obligations to procure Placees by
itself agreeing to become a Placee in respect of some or all of the
Placing Shares or by nominating any other finnCap Person or any
person associated with any finnCap Person to do so or by allowing
officers of the Company and/or Group employees to subscribe for
Placing Shares under the Placing at the Placing Price;
(q) time is of essence as regards your obligations under this Appendix;
(r) this Appendix and any contract which may be entered into
between you and finnCap and/or the Company pursuant to this
Appendix or the Placing, and all non-contractual obligations
arising between you and finnCap and/or the Company in respect of
the Placing, will be governed by and construed in accordance with
the laws of England, for which purpose you submit (for yourself and
on behalf of any person on whose behalf you are acting) to the
exclusive jurisdiction of the English courts as regards any claim,
dispute, or matter arising out of or relating to this Appendix or
such contract, except that each of the Company and finnCap will
have the right to bring enforcement proceedings in respect of any
judgement obtained against you in the English courts or in the
courts of any other relevant jurisdiction;
(s) each right or remedy of the Company or finnCap provided for
in this Appendix is in addition to any other right or remedy which
is available to such person and the exercise of any such right or
remedy in whole or in part will not preclude the subsequent
exercise of any such right or remedy; and
(t) any document that is to be sent to you in connection with
the Placing will be sent at your risk and may be sent to you at any
address provided by you to finnCap.
6. Payment default
Your entitlement to receive any Placing Shares will be
conditional on finnCap's receipt of payment in full for such shares
by the relevant time to be stated in the written confirmation
referred to above, or by such later time and date as finnCap may
decide, and otherwise in accordance with that confirmation's terms.
finnCap may waive this condition, and will not be liable to you for
any decision to waive it or not.
If you fail to make such payment by the required time for any
Placing Shares (1) the Company may release itself, and (if it
decides to do so) will be released from, all obligations it may
have to allot and/or issue any such Placing Shares to you or at
your direction which are then unallotted and/or unissued, (2) the
Company may exercise all rights of lien, forfeiture and set-off
over and in respect of any such Placing Shares to the full extent
permitted under its constitution or by law and to the extent that
you then have any interest in or rights in respect of any such
shares, (3) the Company or, as applicable, finnCap may sell (and
each of them is irrevocably authorised by you to do so) all or any
of such shares on your behalf and then retain from the proceeds,
for the account and benefit of the Company or, where applicable,
finnCap (i) any amount up to the total amount due to it as, or in
respect of, subscription monies, or as interest on such monies, for
any Placing Shares and (ii) any amount required to cover dealing
costs and/or commissions necessarily or reasonably incurred by it
in respect of such sale and (4) you will remain liable to the
Company and to finnCap for the full amount of any losses and of any
costs which it may suffer or incur as a result of it (i) not
receiving payment in full for such Placing Shares by the required
time, and/or (ii) the sale of any such Placing Shares to any other
person at whatever price and on whatever terms are actually
obtained for such sale by or for it. Interest may be charged in
respect of payments not received by finnCap for value by the
required time referred to above at the rate of two percentage
points above the base rate of National Westminster Bank plc.
7. Overseas jurisdictions
The distribution of this announcement and the offering and/or
issue of shares pursuant to the Placing in certain jurisdictions is
restricted by law. FSMA Qualified Investors who seek to participate
in the Placing must inform themselves about and observe any such
restrictions. In particular, this document does not constitute or
form part of any offer or invitation, nor a solicitation of any
offer or invitation, to subscribe for or acquire or sell or
purchase or otherwise deal in Ordinary Shares in the United States,
Canada, Japan, the Republic of Ireland, the Republic of South
Africa or Australia or in any other jurisdiction in which any such
offer, invitation or solicitation is or would be unlawful. New
Ordinary Shares have not been and will not be registered under the
US Securities Act of 1933, as amended or under the securities laws
of any State of or other jurisdiction within the United States,
and, subject to certain exceptions, may not be offered or sold,
resold or delivered, directly or indirectly, in or into the United
States, or to, or for the account or benefit of, any US persons (as
defined in Regulation S under that Act). No public offering of New
Ordinary Shares is being or will be made in the United States.
DEFINITIONS
In addition to the terms previously defined, the following
definitions apply throughout this Announcement unless the context
otherwise requires:
"Admission" the admission of the Placing Shares and to the
extent taken up Open Offer Shares to trading on AIM, becoming
effective in accordance with the AIM Rules
"AIM" the market of that name operated by London Stock
Exchange
"AIM Rules" the AIM Rules for Companies, published by London
Stock Exchange
"Application Form" the application form for use by Qualifying
Non-CREST Shareholders in connection with the Open Offer
"Board" the board of directors of the Company
"Circular" the circular to Shareholders expected to be posted
later today containing the notice convening the General Meeting and
details of the Open Offer
"the Company" or "K3" K3 Business Technology Group plc
"CREST" the relevant system (as defined in the Uncertificated
Securities Regulations 2001) for the paperless settlement of trades
and the holding of uncertificated securities operated by Euroclear
UK & Ireland Limited
"CREST Regulations" the Uncertificated Securities Regulations
2001 (S.I. 2001 No. 3755)
"Dealing Day" a day on which the London Stock Exchange is open
for business in London
"Directors" the directors of the Company
"Enlarged Issued Share Capital" all of the Ordinary Shares in
issue on Admission, assuming full take up of the Open Offer
Shares
"Euroclear" Euroclear UK & Ireland Limited, the operator of
CREST
"Excess Application Facility" the arrangement pursuant to which
Qualifying Shareholders may apply for additional Open Offer Shares
in excess of their Open Offer Entitlement in accordance with the
terms and conditions of the Open Offer
"Excess CREST Open Offer in respect of each Qualifying CREST
Shareholder, the entitlement
Entitlements" (in addition to his Open Offer Entitlement) to
apply for Open Offer Shares pursuant to the Excess Application
Facility, which is conditional on him taking up his Open Offer
Entitlement in full and which may be subject to scaling back in
accordance with the provisions of this document
"Excess Open Offer Entitlements" an entitlement for each
Qualifying Shareholder to apply to subscribe for Open Offer Shares
in addition to his Open Offer Entitlement pursuant to the Excess
Application Facility which is conditional on him taking up his Open
Offer Entitlement in full and which may be subject to scaling back
in accordance with the provisions of this document
"Excess Shares" Open Offer Shares applied for by Qualifying
Shareholders under the Excess Application facility
"Ex-entitlement Date" the date on which the Existing Ordinary
Shares are marked "ex" for entitlement under the Open Offer, being
12 June 2017
"Existing Ordinary Shares" the 35,999,201 existing ordinary
shares of 25 pence each in issue at the date of this document, all
of which are admitted to trading on AIM
"FCA" the Financial Conduct Authority
"finnCap" finnCap Limited
"Form of Proxy" the form of proxy for use by Shareholders in
connection with the General Meeting
"FSMA" the Financial Services and Markets Act 2000
"General Meeting" the general meeting of the Company to be
convened for 10.00 a.m. on 4 July 2017
"Group" the group comprising the Company and its subsidiary
undertakings
"Issue Price" 140 pence per New Ordinary Share
"London Stock Exchange" London Stock Exchange plc
"Money Laundering Regulations" the Money Laundering Regulations 2007
"New Ordinary Shares" together, the Placing Shares and the Open Offer Shares
"Ordinary Shares" ordinary shares of 25p each in the capital of
the Company
"Placing" the conditional placing of the Placing Shares pursuant
to the
Placing Agreement
"Open Offer" the conditional invitation by the Company to
Qualifying Shareholders to apply to subscribe for the Open Offer
Shares at the Issue Price on the terms and subject to the
conditions set out in this document and, in the case of Qualifying
Non-CREST Shareholders, in the Application Form
"Open Offer Entitlement" the individual entitlements of
Qualifying Shareholders to subscribe for Open Offer Shares
allocated to Qualifying Shareholders pursuant to the Open Offer
"Open Offer Shares" the up to 719,984 new Ordinary Shares to be
issued by the Company
pursuant to the Open Offer
"Overseas Shareholders" Shareholders with a registered address
outside the United Kingdom
"Placing Agreement" the agreement dated 12 June 2017 between the
Company and finnCap relating to the Placing
"Placing Shares" 5,353,214 new Ordinary Shares
"Prospectus Rules" the prospectus rules made by the FCA pursuant
to section 73A of FSMA
"Qualifying CREST Shareholders" Qualifying Shareholders holding
Existing Ordinary Shares in uncertificated form
"Qualifying Non-CREST Qualifying Shareholders holding Existing
Ordinary Shares in
Shareholders" certificated form
"Qualifying Shareholders" holders of Existing Ordinary Shares on
the register of members of the Company at the Record Date but
excluding any Overseas Shareholder who has a registered address in
any Restricted Jurisdiction
"Receiving Agent" Capita Asset Services, Corporate Actions
"Record Date" 8 June 2017
"Regulatory Information Service" a service approved by the FCA
for the distribution to the public of regulatory announcements and
included within the list maintained on the FCA's website
"Resolution" the resolution set out in the Notice of General
Meeting
"Shareholders" holders of Ordinary Shares
"UK" the United Kingdom of Great Britain and Northern
Ireland
"US" or "United States" the United States of America, each State
thereof, its territories and possessions (including the District of
Columbia) and all other areas subject to its jurisdiction
"uncertificated" or "in an Ordinary Share recorded on a
company's share register as being
uncertificated form" held in uncertificated form in CREST and
title to which, by virtue
of the CREST Regulations, may be transferred by means of CREST
"GBP", "pounds sterling", are references to the lawful currency
of the United Kingdom
"pence"or "p"
"EUR" or "Euros" are references to a lawful currency of the
European Union
This information is provided by RNS
The company news service from the London Stock Exchange
END
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June 12, 2017 02:00 ET (06:00 GMT)
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K3 Business Technology (LSE:KBT)
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From May 2023 to May 2024