TIDMSSV
RNS Number : 4709Z
Siteserv PLC
16 March 2012
Siteserv plc ("Siteserv" or the "Company" or the "Group")
Proposed Disposal of the Siteserv Business
The board of Siteserv announces that it has conditionally agreed
to the proposed disposal of Siteserv's infrastructure, utilities
support services and access and formwork businesses carried on in
Ireland and the United Kingdom (together the "Siteserv Business")
to Millington, an acquisition vehicle controlled by Denis O'Brien,
for a Consideration of approximately EUR45.42 million in cash (the
"Proposed Disposal").
The Proposed Disposal constitutes a "substantial transaction"
under Rule 12 of the AIM Rules and the ESM Rules and also a
"disposal resulting in a fundamental change of business" under Rule
15 of the AIM Rules and ESM Rules. Accordingly, completion of the
Proposed Disposal is conditional, inter alia, on approval by
Shareholders at an extraordinary general meeting of the Company to
be convened in due course.
BACKGROUND TO AND REASONS FOR THE PROPOSED DISPOSAL
As part of its final results statement (for the year ended 30
April 2011), announced on 28 July 2011, Siteserv confirmed that the
Group's debt facilities had been renegotiated with IBRC and their
associated maturity date had been revised to December 31, 2012.
On 16 January 2012, Siteserv announced that the Group was, in
conjunction with its advisers, exploring a number of strategic and
corporate options for discussion with IBRC in advance of expiration
of its existing debt facilities in December 2012.
As part of this review it was recognised that the debt burden
being carried by the Company was unsustainable and that a sale of
the Siteserv Business may represent the best available option in
the circumstances. In order to maximise value for all stakeholders
the Board appointed Davy Corporate Finance and KPMG Corporate
Finance as joint financial advisors to assist in a detailed
exercise to proactively market the Siteserv Business to a number of
prospective buyers. The purpose of this exercise was to ascertain
the price and conditions attaching to a possible sale of the
Siteserv Business. Following this exercise and in consultation with
IBRC, the Company granted a short period of exclusivity to the
Purchaser to negotiate the final terms of the Share Sale
Agreement.
The Board, having consulted with Davy Corporate Finance and KPMG
Corporate Finance, determined that a sale of the Siteserv Business
was in the best interests of the Shareholders as a whole for the
following reasons:
-- As part of the Proposed Disposal, IBRC has agreed to accept
payment of an amount which is less than the full amount owed by the
Group in full and final discharge of the indebtedness of the Group.
Without this agreement from IBRC the proposed disposal would not be
capable of implementation and it is likely that Shareholders would
not have realised any return on their investment;
-- Notwithstanding the fact that the Group's senior debt
facilities expire on 31 December 2012, it has experienced
increasing pressures regarding its financial position and plans to
deal with same. The Directors believe that this pressure will
continue to increase as the expiration of the facilities draws
closer;
-- Net of repayment of debt and after providing for costs and
expenses associated with the transaction, Shareholders should
expect to receive approximately 3.92 cent per Ordinary Share which
represents:
o A premium of approximately 292.0 per cent. to 1.00 cent, the
share price on 13 January 2012 (being the last trading day
immediately prior to the announcement of the strategic review
referred to above);
o A premium of approximately 96.0 per cent. to 2.00 cent, the
share price on 15 March 2012 (being the last trading day
immediately prior to this announcement);
o A premium of approximately 53.7 per cent. to 2.55 cent, being
the average share price over the 6 month period prior to this
announcement; and
o A premium of approximately 26.9 per cent. to 3.09 cent, being
the average share price over the 12 month period prior to this
announcement.
Taking each of the above factors into consideration, the Board
believes it is in the interests of all stakeholders to put the
Proposed Disposal before Shareholders at this juncture.
INFORMATION ON THE CABLE BUSINESS AND ITS FINANCIAL
PERFORMANCE
The Siteserv Business represents Siteserv's infrastructure,
utilities support services and access and formwork businesses
carried on in Ireland and the United Kingdom by each of Deborah,
Sierra Communications (which now incorporates Holgate's business),
Easy Access, Donohoe Scaffolding, Rent-a-Fence, Roankabin Holdings
and Eventserv and certain of their respective subsidiary
undertakings.
The following table illustrates the financial performance of the
Siteserv Business:
6 months ended 12 Months ended 12 Months ended
31 October 30 April 2011 30 April 2010
2011
(unaudited) (audited) (audited)
EUR'm EUR'm EUR'm
Revenue 92.2 168.5 151.4
Operating Profit 4.8 8.3 8.3
In the year to 30 April 2011, revenues grew by 11% to EUR168.5m,
reflecting growth in the Sierra and Deborah businesses partly
offset by reduced activity in Holgate and Roankabin. Operating
profit however, remained flat at EUR8.3m, with increased profits in
the UK being offset by the impact of reduced government spending in
Ireland. After providing for interest costs of EUR8.2m, pre tax
profit amounted to EUR0.1m.
In the six months to 30 October 2011, revenues increased by 9%
to EUR92.2m relative to the corresponding six month period of 2010.
Growth in Sierra and Deborah was again partly offset by reductions
in the other Irish businesses, given continued government austerity
measures. Operating profit amounted to EUR4.8m, an increase of
EUR0.2m on the corresponding six month period of 2010. After
providing for interest costs of EUR3.7m, the Group produced a pre
tax profit of EUR1.1m for the six month period.
INFORMATION ON THE PURCHASER
Millington is a company controlled by Mr Denis O'Brien and was
incorporated specifically to facilitate the acquisition of the
Siteserv Business. Denis O'Brien has confirmed to Siteserv that he
will procure that the Purchaser has, on Completion, sufficient
funds to pay the Consideration.
SUMMARY OF THE SHARE SALE AGREEMENT
Pursuant to the Share Sale Agreement the Purchaser has agreed to
purchase the Siteserv Business for an aggregate amount equal to
EUR45.42 million at Completion.
Completion is subject to and conditional upon the following
conditions being satisfied or if capable of waiver, waived, on or
before the Long Stop Date:
(1) Receipt of approval of the transaction from the Irish
Competition Authority;
(2) Approval by Shareholders of the Proposed Disposal at the
EGM;
(3) There having been no material adverse change in the
business, assets or financial position of the Group prior to
Completion;
(4) Customer consent to a change in control of Sierra
Communications; and
(5) The novation or release of certain obligations and
liabilities of Siteserv on terms acceptable to Siteserv and the
Purchaser.
In the event that the Conditions are not satisfied by the Long
Stop Date, Completion is likely not to occur unless the Conditions
which are capable of being waived by the Purchaser or by Siteserv
are waived by the Purchaser or, as the case may be, Siteserv or the
deadline for satisfying the Conditions is extended.
FUTURE STRATEGY OF THE COMPANY FOLLOWING THE PROPOSED
DISPOSAL
Following Completion, the Group will not have any revenue
generating operating businesses. The Board has determined that it
is in the best interests of Shareholders as a whole to return the
net proceeds of the Proposed Disposal (after repaying the amount
agreed with IBRC and covering professional and closure costs) to
Shareholders as efficiently and expediently as possible and to wind
up the Company to facilitate the distributions to the Shareholders
in a tax efficient manner.
Assuming Completion occurs, the subsequent winding up of the
Company will need to be approved by a special resolution. It is
anticipated that a further extraordinary general meeting of the
Company will be convened in due course to approve the proposed
winding up.
CONSIDERATION AND USE OF PROCEEDS
As outlined above, the Siteserv Business is being sold for a
cash consideration of EUR45.42 million. Following payment of the
amount agreed with IBRC in satisfaction of the outstanding
borrowings and the payment of professional fees and expenses and
taxation, it is anticipated that there will be a cash balance of
approximately EUR4.96 million available for distribution to
Shareholders. Accordingly it is further anticipated that
approximately 3.92 cent per share will be distributed to
Shareholders following Completion of the Proposed Disposal and the
winding up of the Company. Amounts payable to Shareholders will be
rounded down to the nearest whole cent.
THE EXPECTED AMOUNT WHICH IS PROPOSED TO BE DISTRIBUTED TO
SHAREHOLDERS IS BASED ON THE ASSUMPTIONS SET OUT BELOW. THE ACTUAL
AMOUNT MAY BE LOWER OR HIGHER IF ANY OF THESE ASSUMPTIONS
CHANGE.
1) Total number of shares in issue as at the date of this
announcement is 126,392,041. The "per share" calculation above is
based on the assumption that no further shares are issued from the
date of this announcement up to the date of distribution.
Therefore, it is assumed that the total number of shares in issue
at the Record Date is 126,392,041.
2) The Proposed Disposal completes on the terms as described in
this announcement on or before the Long Stop Date.
3) Discount for time value of money is not reflected.
4) Amounts due to IBRC include estimated interest to the anticipated repayment date.
5) Professional fees and expenses include corporate finance,
legal, accounting and tax advice fees in relation to the
transaction, the day to day running costs of Siteserv (which is not
being sold on Completion), tax and an estimate of the costs of the
subsequent period to liquidation.
It is anticipated that the distribution to Shareholders will be
made in July 2012 (assuming Completion takes place in early May
2012).
PROPOSED BOARD CHANGES
Assuming Completion occurs, Brian Harvey's and Niall Devereux's
employment will transfer with the Siteserv Business to the
Purchaser but they will each remain as Non-Executive Directors of
Siteserv until the conclusion of its liquidation. Each of Hugh
Cooney, Robert Dix and Patrick Jordan will also remain as
Non-Executive Directors of Siteserv up to the date of conclusion of
its liquidation. Directors' fees are estimated to be less than
EUR30,000 between Completion and the conclusion of the liquidation
process.
RECOMMENDATION
TheDirectors, having consulted with Davy Corporate Finance and
KPMG Corporate Finance consider the terms of the Proposed Disposal
to be fair and reasonable as far as the shareholders are concerned.
In providing such advice, Davy Corporate Finance and KPMG Corporate
Finance have taken into account the Directors' commercial
considerations in respect of the Proposed Disposal. Accordingly,
the Directors unanimously recommend that all Shareholders vote in
favour of the Resolution.
EXTRAORDINARY GENERAL MEETING
A circular to shareholders containing notice of an extraordinary
general meeting and further details of the Proposed Disposal is
expected to be posted to Shareholders shortly.
Enquiries:
Siteserv plc
Brian Harvey, Chief Executive
Niall Devereux, Group Finance
Director
Tel: +353 1 601 1550
Davy Corporate Finance
Des Carville, Director
Nicholas O'Gorman
Stephen Barry
Tel: +353 1 679 6363
The following definitions apply throughout this announcement,
unless it is otherwise specifically provided:
"AIM" or "AIM Market" AIM, a market operated by the London Stock
Exchange;
"AIM Rules" the rules for AIM companies and their nominated
advisers issued by the London Stock Exchange in relation to AIM
traded securities;
"Board" the board of directors of the Company as constituted
from time to time;
"Company" or "Siteserv" Siteserv plc, an Irish registered
company, under registration number 393096;
"Completion" completion of the Proposed Disposal in accordance
with the Share Sale Agreement;
"Conditions" the matters upon which Completion is expressed to
be conditional, including approval from the Irish Competition
Authority, the passing of the Resolution, no matter having occurred
which would amount to material adverse change on the Siteserv
Business, customer consent to a change in control of Sierra
Communications and the novation or release of certain obligations
and liabilities of Siteserv on terms acceptable to Siteserv and the
Purchaser;
"Consideration" the full amount of the consideration to be
received by the Company under the Share Sale Agreement;
"Davy" J&E Davy, trading as Davy; including its affiliate
Davy Corporate Finance and any other affiliates, or any of its
subsidiary undertakings;
"Deborah" the Deborah division incorporating both Deborah
Industrial Services and Deborah Services and their respective
subsidiary undertakings;
"Deborah Industrial Services" Deborah Industrial Services
Limited, a company registered in Ireland, and a subsidiary of
Siteserv;
"Deborah Services" Deborah Services (Holdings) Limited, a
company registered in England and Wales, and a subsidiary of
Siteserv;
"Directors" thedirectors of the Company at the date of this
announcement;
"Donohue Scaffolding" Donohue Scaffolding Limited, a company
registered in Ireland and a subsidiary of Siteserv;
"Easy Access" Easy Access Limited, a company registered in
Ireland and a subsidiary of Siteserv;
"EGM" or "Extraordinary General Meeting" the extraordinary
general meeting of the Company to be held on a date to be
determined for the purpose of passing the Resolution;
"ESM" or "ESM Market" theEnterprise Securities Market, a market
regulated by the Irish Stock Exchange;
"ESM Rules" the rules for ESM companies and their nominated
advisers issued by the Irish Stock Exchange in relation to ESM
traded securities;
"Euro" or "EUR" euro, the lawful currency of Ireland and "cent"
refers to parts thereof;
"Eventserv" Eventserv Logistics Limited, a company registered in
Ireland and a subsidiary of Siteserv;
"Existing Issued Share Capital" the issued ordinary share
capital of the Company at the date of this announcement, being
126,392,041 Ordinary Shares;
"GBP" or "GBP" pound, the lawful currency of the United Kingdom
and
"pence" refers to parts thereof;
"Group" Siteserv and each of its subsidiaries;
"Holgate Fencing" Holgate Fencing (Ireland) Limited, a company
registered in Ireland and a subsidiary of Siteserv;
"IBRC" Irish Bank Resolution Corporation Limited;
"Ireland" or the "Republic of Ireland" the island of Ireland
excluding Northern Ireland, and the word "Irish" shall be construed
accordingly;
"Irish Stock Exchange" The Irish Stock Exchange Limited;
"London Stock Exchange" London Stock Exchange plc;
"Long Stop Date" 13 July 2012;
"Ordinary Shares" ordinary shares of EUR0.0016 each in the
capital of the Company;
"Proposed Disposal" the disposal of the Siteserv Business in
accordance with the terms of the Share Sale Agreement;
"Purchaser" or "Millington" Millington Limited, a company
incorporated in the Isle of Man under registration number
007773V;
"Rent-a-Fence" Rent-a-Fence Limited, a company registered in
Ireland and a subsidiary of Siteserv;
"Resolution" the resolution to be proposed at the EGM;
"Roankabin Holdings" Roankabin Holdings Limited, a company
registered in Ireland and a subsidiary of Siteserv;
"Shareholders" holder(s) of Ordinary Shares from time to
time;
"Share Options" or "Options" options to subscribe for Ordinary
Shares granted pursuant to the terms of the Share Option
Scheme;
"Share Option Scheme" Siteserv plc Share Option Scheme;
"Share Sale Agreement" the conditional share sale agreement
dated 15 March 2012 between the Company and the Purchaser;
"Sierra" or "Sierra Communications" Sierra Communications
Limited, a company registered in Ireland and a subsidiary of
Siteserv;
"Siteserv Business" Siteserv's infrastructure, utilities support
services and access and formwork businesses;
"Subsidiary" has the meaning set out in section 155 of the Act;
and
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
DISEAFDSFDNAEAF
Siteserv (LSE:SSV)
Historical Stock Chart
From May 2024 to Jun 2024
Siteserv (LSE:SSV)
Historical Stock Chart
From Jun 2023 to Jun 2024
