TIDMNKTN
RNS Number : 0491Z
Nektan PLC
07 January 2020
7 January 2020
NEKTAN PLC
("Nektan", the "Company" or the "Group")
Update on Restructuring
Nektan plc (AIM: NKTN), the fast growing, award-winning
international gaming technology platform and services provider,
announces an update on the proposed Group restructuring and the
potential sale of its UK B2C business, as announced on 23 December
2019 (the "Announcement").
As part of its restructuring plan, the Group's main trading
subsidiary, Nektan (Gibraltar) Limited ("NGL"), has sought the
protection afforded through an administration process, in order to
deliver the restructuring plan to the benefit of all shareholders
and creditors. The Board, therefore, confirms that Mark Phillips
and Julie Swan of PCR London LLP were appointed joint
administrators ("Administrators") to NGL today by court order in
the High Court of Justice. This will have no operational impact on
Nektan or any of its other subsidiaries, which will continue to
trade as normal, as detailed below.
Following discussions with the Administrators, the Board
understands that it is likely the UK B2C business, currently held
within NGL, will be sold to Grace Media Limited (the "prospective
buyer"), part of the Active Win Group. The sale of the UK B2C
business out of administration allows the prospective buyer to be
unencumbered by any legacy issues within NGL. If the sale of the UK
B2C business proceeds, the Company will seek to enter into a B2B
partnership with the prospective buyer to facilitate continued,
uninterrupted delivery of services to the full complement of
Nektan's existing UK B2C white label partners. In this instance, as
per the normal business model for a B2B partnership, Nektan would
receive ongoing monthly royalties from the prospective buyer. The
proceeds from any sale would remain within NGL and be utilised by
the Administrators in the course of the administration. The Group
will continue to support the operations of its UK B2C business
through NGL's administration or until the potential sale of the
business completes.
In addition, the restructuring of the Group, executed via the
administration of NGL, allowed for all other assets of NGL,
excluding the UK B2C business for reasons detailed above, to be
transferred for value into other Nektan subsidiaries, as required,
taking all regulatory obligations into account and in order to
facilitate continued, uninterrupted trading, within the remaining
businesses of the Group.
The Directors confirm that details of the Group's restructuring
plan, including the potential sale of the UK B2C business to the
prospective buyer by the Administrators, has today been advised to
the UK Gaming Commission ("UKGC"). The Company will continue
discussions with the UKGC, should it have any further inquiries in
relation to the restructuring of the Group or the potential sale of
the UK B2C business.
As announced by the Company on 18 September 2019, NGL had an
outstanding debt to HMRC in relation to Remote Gaming Duty ("RGD")
of GBP4.6 million. The liability has increased to GBP5.6 million as
at 30 November 2019. The RGD debt relates to the Group's activities
in the UK B2C business. Following the appointment of the
Administrators, this liability has been ringfenced, protecting the
Company from any claim by HMRC. However, the Company has been
working with its advisors and the Administrators to develop a
repayment plan acceptable to HMRC to allow the RGD liability to be
repaid in full over time. With NGL in administration, the repayment
of this debt will be negotiated between HMRC and the
Administrators.
The Directors believe that the Group restructuring will
re-position the Company to target new emerging markets with a
strengthened balance sheet and cash position. Ongoing trading will
not be affected during this period and the Directors believe that
this will facilitate all suppliers being paid in full over
time.
The Group will provide further updates as required.
Gary Shaw, Interim Chief Executive Officer of Nektan, said:
"I wish to place on record Nektan's appreciation of the
continued support from all of its employees, partners, suppliers
and shareholders.
The Group restructuring reaffirms the Directors' decision to
focus on emerging opportunities in international markets both
directly and through our established reseller relationships. The
completion of our recent fundraising has provided the Company with
the financial strength to complete this restructuring, and with the
support afforded by all stakeholders, the Directors are confident
of the future.
The potential sale of the UK B2C business to a group of the
calibre of Active Win Group demonstrates the significance of the
white label operation which the Group has built over recent years.
If the sale of the UK B2C business proceeds, and the Company
secures a B2B partnership with the prospective buyer, we look
forward to a bright future working in partnership with the
prospective buyer as they take this business onto the next stage of
its journey. The completion of the Group restructuring allows
Nektan to focus on its expanding international B2C and B2B
business."
For further information on the Group, please contact:
Nektan
Gary Shaw, Interim Chief Executive Officer
Simon Hay, Chief Financial Officer
Kam Bansil, IR +44 203 478 2648
Shore Capital (Nominated Adviser and Joint Broker)
Tom Griffiths / David Coaten +44 207 408 4050
-----------------
Novum Securities (Joint Broker)
Jon Belliss / Colin Rowbury +44 207 399 9425
-----------------
Further information on Nektan can be found on the Group's
website at www.nektan.com.
About Nektan:
Nektan is a fast growing, international gaming technology and
services provider, specialising in mobile casino. It licenses its
proprietary technology to leading operators, including BetVictor,
and provides end-to-end technology and white label casino services
for leading brands, including News International's The Sun
Play.
Nektan's full end-to-end technology platform, Evolve, enables
the management of the full customer experience and back-office
operations, allowing partners to focus on marketing the product to
their consumers.
The E-Lite platform is Nektan's B2B gaming content aggregator
and bonusing platform that delivers a wide range of premium content
from the world's leading game studios. It is an easily-integrated
add on module for operators, giving them an array of options and
flexibility on how they manage and distribute a breadth of premium
gaming content across their networks.
Nektan has a material stake in US-based interactive gaming
operator Rapid Games, which provides US land-based casinos with an
in-venue mobile gaming solution. It allows operators to add mobile
technology and content making products accessible to players across
both cabinets and mobile devices inside casinos.
Headquartered in Gibraltar, Nektan is regulated by the Gibraltar
Licensing Authority, the UK Gambling Commission and the Information
Commissioners Office. As a socially responsible license holder,
Nektan endeavours to deliver a safe, secure and robust player
gaming experience.
Nektan plc was admitted to the AIM market of the London Stock
Exchange in November 2014.
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END
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