PipeHawk PLC Sale of interest in SUMO (6098T)
October 13 2017 - 10:15AM
UK Regulatory
TIDMPIP
RNS Number : 6098T
PipeHawk PLC
13 October 2017
13 October 2017
PipeHawk plc
("PipeHawk" or the "Company")
Sale of interest in SUMO
PipeHawk announces that it has sold its 28.4 per cent. joint
venture interest in the ordinary share capital of SUMO Limited
("SUMO") to Gordon Watt, the Executive Chairman of the Company, for
a consideration of GBP197,499, being the original cost of the
investment, subject to shareholder approval ("the SUMO Share
Sale"). The consideration will be satisfied in cash. Gordon Watt
has agreed to pay the consideration immediately and therefore the
payment of GBP197,499 will be treated as a loan, on identical terms
to the existing loans due to Gordon Watt, until such amount becomes
payable under the agreement for the SUMO Share Sale.
In the consolidated accounts as at 31 December 2016, the
investment in SUMO was held at a net book value of GBP53,000. In
the year ended 31 December 2016, management accounts supplied by
SUMO indicate that the SUMO Group incurred an unaudited loss before
tax of GBP35,305 and in the half year ended 30 June 2017 the SUMO
Group achieved an unaudited profit before tax of GBP20,260 and had
unaudited net assets of GBP191,517.
SUMO is a multi-disciplinary survey practice which operates
primarily in a highly competitive market place in South-East of
England and does not compete with the Company's wholly-owned
subsidiary, Adien Limited, which operates primarily in Scotland,
Northern Ireland, the Midlands and the North of England. The Board
considered that the investment in SUMO was non-core.
In accordance with the articles of association of SUMO, before
the Company could enter into the agreement with Gordon Watt, the
shares in SUMO held by PipeHawk had to be offered at the same price
to all other SUMO shareholders. No SUMO shareholder chose to
exercise their right to acquire the shares.
Gordon Watt has agreed that in the event that SUMO effects a
fundraising at a pre-money valuation in excess of GBP700,000
(equivalent to GBP2 per SUMO share, the price being paid by Gordon
Watt) before 30 June 2018 or SUMO effects a sale of the company or
an IPO at a price greater than GBP2 per SUMO share before 13
October 2020, then further consideration of 50 per cent. of the
value of such excess will be payable in cash to the Company by
Gordon Watt.
The independent directors, Randal MacDonnell and Soumitra
Padmanathan, having consulted with the Company's nominated adviser,
Allenby Capital Limited, consider that the terms of the sale of the
investment in SUMO and the loan provided by Gordon Watt are fair
and reasonable insofar as the shareholders of PipeHawk are
concerned.
A resolution to approve the sale of the 28.4 per cent. joint
venture interest in the ordinary share capital of SUMO will be
proposed at the Annual General Meeting in December, notice of which
will be sent to shareholders in due course.
Enquiries:
PipeHawk Plc
Gordon Watt (Chairman) Tel. No. 01252 338 959
Allenby Capital Limited Tel. No. 020 3328 5656
(Nomad and Broker)
David Worlidge/James Thomas
This information is provided by RNS
The company news service from the London Stock Exchange
END
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