TIDMREAT
RNS Number : 6587X
React Group PLC
14 August 2018
14 August 2018
REACT Group plc ("REACT" or "Company")
Placing to raise GBP420,000; Notice of General Meeting
The Company
The Company announces that it has conditionally raised gross
proceeds of GBP420,000 via the placing of 140,000,000 new Ordinary
Shares (the "Placing Shares") with new and existing investors at a
price of 0.3 pence per Placing Share (the "Placing Price") (the
"Placing"). The Placing was undertaken by Peterhouse Capital
Limited.
The Placing is subject to the requisite Shareholder approval
and, accordingly, the issue of the abovementioned new Ordinary
Shares is conditional on, inter alia, the passing of certain
resolutions by the Company's shareholders (the "Resolutions") at a
general meeting of the Company (the "GM") to be held on 31 August
2018.
As such the Board is seeking the authority to allot and issue
the Placing Shares, as well as Ordinary Shares (and/or rights to
subscribe to them) up to the aggregate nominal value of
GBP400,000.
Use of proceeds
The proceeds of the Placing will strengthen the Company's
balance sheet and provide additional working capital which will
enable it to target larger contracts in its core areas of
expertise. The Company will also invest in additional sales and
marketing as well as continuing to improve its internal systems and
controls.
The Placing and the Placing Agreement
The Placing Shares will be issued at the Placing Price to
existing investors and clients of Peterhouse Corporate Finance (
"Peterhouse"), raising GBP420,000 for the Company (before
expenses).
The Placing Shares will be issued at an issue price of 0.3 pence
per share ("Placing Price") which represents a discount of
approximately 20 per cent. to the closing middle market price of
0.375 pence per ordinary share on 13 August 2018, the latest
practicable date before this announcement.
The Placing Shares represent approximately 33.7 per cent. of the
Company's issued ordinary share capital (as enlarged by the issue
of the Placing Shares immediately following admission of those
shares to trading on the AIM market of London Stock Exchange plc
("AIM") ("Enlarged Share Capital").
Peterhouse has entered into a placing agreement ("Placing
Agreement") with the Company and SPARK Advisory Partners Limited
("SPARK") under which Peterhouse has agreed to use its reasonable
endeavours, as agent for the Company, to procure placees for the
Placing Shares.
The Placing is conditional upon, inter alia:
-- the Resolutions (as defined below) being duly passed at the
GM by 31 August 2018, and Admission becoming effective on or before
8:00 a.m. on 3 September 2018 or such later time and/or date as the
Company, Peterhouse and SPARK may agree, but in any event by no
later than 8:00 a.m. on 10 September 2018;
-- the Placing Agreement having become unconditional in all
respects and not having been terminated;
The Placing is not being underwritten.
The Placing Agreement contains warranties from the Company in
favour of Peterhouse and SPARK in relation to, inter alia, the
accuracy of the information in this announcement and other matters
relating to the Company and its business. In addition, the Company
has agreed to indemnify Peterhouse and SPARK in relation to certain
liabilities it may incur in respect of the Placing. Peterhouse and
SPARK each have the right to terminate the Placing Agreement in
certain circumstances prior to Admission, in particular, in the
event of a material breach of the warranties.
Dealings
The Placing Shares will be allotted following the GM.
Application will be made for these to be admitted to trading on
AIM, and admission is expected on 3 September 2018
("Admission").
Related party transactions
Helium Rising Stars Fund ("Helium") and Mr S Rogerson (and
connected parties) own 65,385,029 and 32,500,000 shares
respectively, representing 23.74% and 11.80% of the current issued
share capital of the Company, and are "substantial shareholders" in
the Company.
Helium and Mr Rogerson (and connected parties)have agreed that
they will participate in the Placing, by subscribing GBP99,708 and
GBP49,568.25 respectively for 33,236,000 and 16,522,750 Placing
Shares as set out below. Helium and Mr Rogerson (and connected
parties) is participating on the same terms as all other
placees.
Name Amount subscribed Number of No of Ordinary % of Ordinary
Placing Shares Shares held Share Capital
post Admission held post
Admission
Helium GBP99,708 33,236,000 98,621,029 23.74%
------------------- ---------------- ---------------- ---------------
Mr S Rogerson
(and connected
parties) GBP49,568.25 16,522,750 49,022,750 11.80%
------------------- ---------------- ---------------- ---------------
The participation in the Placing by Helium and Mr Rogerson (and
connected parties) constitute related party transactions under the
AIM Rules for Companies.
The Directors, who are considered to be independent directors of
the Company for the purposes of AIM Rule 13 in relation to these
related party transactions, have considered the participation of
Helium and Mr Rogerson (and connected parties) in the Placing.
Having consulted with SPARK Advisory Partners Limited, the
Company's nominated adviser, the independent directors consider
that the terms of Helium's and Mr Rogerson's (and connected
parties') participation in the Placing are fair and reasonable
insofar as Shareholders are concerned.
General meeting
The Company has today sent out to shareholders a notice
("Notice") convening a general meeting to be held on 31 August
2018. At the GM resolutions will be proposed ("Resolutions")
to:
1) authorise the Directors to allot the Placing Shares and
further ordinary shares up to an aggregate nominal value of
GBP400,000; and
2) disapply statutory pre-emption rights in relation to the
Placing Shares and further ordinary shares up to an aggregate
nominal value of GBP400,000.
If the Resolutions are passed at the GM on 31 August 2018,
Admission is expected to become effective on 3 September 2018.
Board Recommendations
The directors of the Company consider that the Placing and all
of the proposals to be considered at the GM are in the best
interests of the Company and its shareholders as a whole. The
directors unanimously recommend that you vote in favour of all of
the proposed resolutions as they intend to do in respect of their
own beneficial holdings.
Gill Leates, Chairman said:
"I would like to thank all the investors for their support in
the Placing. The additional working capital provided by the Placing
will enable REACT to invest in additional sales and marketing and
to target larger contracts in its core areas of expertise."
For further information, please contact:
REACT Group plc
Gill Leates - Chairman 07799 662642
SPARK Advisory Partners Limited
Neil Baldwin 0113 370 8974
Peterhouse Capital (Broker)
Duncan Vasey / Martin Lampshire 0207 459 0930
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLLFVETEIVLIT
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