30 Apr 2009 18:00
Styles & Wood Group plc
30 April 2009
NOT FOR DISTRIBUTION OR TRANSMISSION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR THE REPUBLIC OF SOUTH AFRICA
STYLES & WOOD GROUP PLC
£10M PLACING, £2.25M OPEN OFFER, DEBT FOR EQUITY SWAP AND DEBT RESTRUCTURING AND 1 for 25 SHARE CAPITAL CONSOLIDATION
The Board of Directors (the "Board") of Styles & Wood Group plc ("Styles & Wood" or the "Company") today announces a substantial refinancing of the Company designed to put it on a solid financial footing and provide Styles & Wood with the requisite cash and debt resources to trade through the current economic cycle. The refinancing comprises a £10.0 million Placing, an Open Offer of approximately £2.25 million, a debt for equity swap and debt restructuring and a share capital consolidation whereby each holding of 25 existing Ordinary Shares of 1p each will be consolidated into 1 New Ordinary Share of 25p (together referred to as the "Refinancing").
The key terms of the Refinancing are as follows:
A £10.0 million Placing of 40,000,000 New Ordinary Shares at 25p per share
A £2.66 million debt for equity swap of 10,644,935 New Ordinary Shares at 25p per share
A £5.0 million debt for equity swap of existing bank debt into Non Voting Deferred Ordinary Shares
Conversion of £15.0 million of current bank debt into long term Convertible Preference Shares
The Convertible Preference Shares are convertible into New Ordinary Shares at a conversion price of 93.75p, will not pay or accrue dividends until September 2012, following which they will pay dividends at 3 per cent. per annum and, if not converted, have a rising redemption profile between December 2013 and December 2019
An Open Offer of approximately £2.25 million of New Ordinary Shares open to all existing Shareholders pro rata to their existing shareholdings at a subscription price of 25p per New Ordinary Share
Shareholders wishing to apply for New Ordinary Shares under the Open Offer in excess of their pro rata entitlements will be able to apply for additional shares to the extent that other existing Shareholders do not take up their entitlements
The provision of £10.9 million of ongoing bank facilities in the form of a £6.9 million term loan, repayable over 4 years and £4.0 million of revolving credit facilities.
Post Refinancing, the Company will have a net cash position
The Refinancing is conditional upon the passing of the required resolutions of the Company's shareholders, the publication of a prospectus and on the listing of the New Ordinary Shares to be issued in connection with the Placing, Open Offer and debt for equity swap.
A circular containing details of the Refinancing and including a notice of general meeting setting out the required resolutions will be posted (or communicated by other permitted means) to Shareholders as soon as practicable and will be available on the Company's website, www.stylesandwood.co.uk. Listing of the New Ordinary Shares will require the production of a prospectus, which will be produced and posted (or communicated by other permitted means) to Shareholders as expeditiously as possible. Styles & Wood's annual results for the financial year ended 31 December 2008 are also being released today in a separate statement and a copy of the annual report in relation thereto will be posted (or communicated by other permitted means) to Shareholders and available on the Company's website later today.
Shore Capital & Corporate Limited ("SCC") is acting as sponsor and financial adviser to the Company in relation to the Refinancing and Shore Capital Stockbrokers Limited ("SCS") is acting as broker.
Ivan McKeever, Chief Executive of Styles & Wood, commented:
"This refinancing will provide us with the funds we need to secure our position as one of the leading players in the property services market. It provides a huge boost to our balance sheet, relieves concerns about our short and medium term debt burden and should allow us to work closely with our customers to take advantage of the expected upturn in our business as we emerge from recession."
"Since I took the job of CEO in June 2008, we have taken some tough action to prepare the business for these challenging economic conditions including controlling costs, preserving cash and easing margin pressure. This funding and debt restructure is a central piece in our overall strategy to strengthen the business and prepare it for the future."
For further information, please contact:
| Styles & Wood Group plc | Tel: 0161 926 6000 |
| Ivan McKeever, CEO | |
| Graham Clark, Group Finance Director | |
| Financial Dynamics | Tel: 020 7831 3113 |
| Billy Clegg / Georgina Bonham / Alex Beagley | |
| Shore Capital and Corporate Limited | Tel: 020 7408 4090 |
| Guy Peters/Dru Danford |
This announcement has been issued by, and is the sole responsibility of Styles & Wood. SCC, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as sponsor and financial adviser to the Company in connection with the Placing, Open Offer and Refinancing and SCS is acting as broker. Neither SCC nor SCS will be responsible to any person other than the Company for providing the protections afforded to its customers, or for advising any such person on the contents of this announcement or any other transaction, arrangement or matter referred to herein.
IMPORTANT NOTICE:
The information in this press release is not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, Japan, Australia or the Republic of South Africa.
The information in this press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the securities referred to herein in the United Kingdom or in any other jurisdiction in which such offer, solicitation or sale would require preparation of further prospectuses or other offer documentation, or be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.
The information in this press release does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act"). The securities mentioned herein may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States.
The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorized. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS:
Certain statements made in this press release constitute ''forward-looking statements'' within the meaning of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ''believes'', ''estimates'', ''plans'', ''anticipates'', ''targets'', ''aims'', ''continues'', ''expects'', ''intends'', ''hopes'', ''may'', ''will'', ''would'', ''could'' or ''should'' or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not facts. They appear in a number of places throughout this press release and include statements regarding the Company's intentions, beliefs or current expectations concerning, amongst other things, the Company's results of operations, financial condition, liquidity, financial covenants, prospects, growth, strategies and the industries in which the Company operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation: conditions in the markets; the market position of the Company or its subsidiaries; earnings, financial position, cash flows, liquidity, financial covenants, return on capital and operating margins of the Company; anticipated investments and capital expenditures of the Company; changing business or other market conditions; and general economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this press release based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Save as required by law or by the Listing Rules, the Prospectus Rules or the Disclosure and Transparency Rules, Styles & Wood does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which are applicable only as at the date of this press release.
This summary should be read in conjunction with the full text of the following announcement.
NOT FOR DISTRIBUTION OR TRANSMISSION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR THE REPUBLIC OF SOUTH AFRICA
STYLES & WOOD GROUP PLC
£10M PLACING, £2.25M OPEN OFFER, DEBT FOR EQUITY SWAP AND DEBT RESTRUCTURING AND 1 for 25 SHARE CAPITAL CONSOLIDATION
1. Introduction
The Board of Styles & Wood today announces a substantial refinancing of the Company designed to put it on a solid financial footing and provide Styles & Wood with the requisite cash and debt resources to trade through the current economic cycle. The refinancing comprises a £10 million placing, an open offer of approximately £2.25 million, a debt for equity swap and debt restructuring and a share capital consolidation whereby each holding of 25 existing Ordinary Shares of 1p each will be consolidated into 1 New Ordinary Share of 25p (the "New Ordinary Shares") (together referred to as the "Refinancing").
The key terms of the Refinancing are as follows:
A £10.0 million placing of 40,000,000 New Ordinary Shares at 25p per share (the "Placing");
A £2.66 million debt for equity swap resulting in the issue of 10,644,935 New Ordinary Shares at 25p per share, equating to 19.99% of the issued share capital immediately following the Placing;
A £5 million debt for equity swap of existing bank debt into 20,000,000 new non voting deferred ordinary shares at 25p per share;
Conversion of £15 million of current bank debt into long term convertible preference shares (the "Convertible Preference Shares");
The Convertible Preference Shares are convertible into New Ordinary Shares at a conversion price of 93.75p, will not pay or accrue dividends until September 2012, following which they will pay dividends at 3% per annum and, if not converted, have a rising redemption profile between December 2013 and December 2019;
An open offer of approximately £2.25 million of New Ordinary Shares, open to all existing Shareholders pro rata to their shareholdings at a subscription price of 25p per New Ordinary Share (the "Open Offer");
Shareholders wishing to apply for New Ordinary Shares under the Open Offer in excess of their pro rata entitlements will be able to apply for additional shares to the extent that other shareholders do not take up their entitlements; and
The provision of £10.9 million of ongoing bank facilities in the form of a £6.9 million term loan, repayable over 4 years and £4.0 million of revolving credit facilities.
2. Background to the Refinancing
In the past year we have experienced an extremely difficult market environment for our UK retail customers. The retail sector was an early casualty of the economic slowdown. In response to the negative economic outlook and intense financial pressure, many of our customers chose to cancel, delay or defer their store investment programmes.
Our construction services business (StoreFit) had a challenging year in 2008 resulting in significantly reduced revenues which, combined with gross margins being under pressure in many of the framework arrangements, accounted for a major fall in profits. Despite this the business retained a market leading position.
Our support services businesses (StorePlanning, StoreCare and StoreData) performed well in 2008. Customers continue to outsource non core property functions benefiting our support services business model.
On the positive side, we have retained all of our framework customers and overall there has been an increase in our customer base and, whilst general retailers have been most affected by the financial turbulence, we have seen relative strength from customers in the food retail sector. We increased our share in this sector and our food retail customers now include Tesco, Asda, Morrisons, The Co-operative Group, Waitrose, Sainsbury's and as we entered 2009 Lidl became our latest "Customer for Life".
We have taken early and positive action to align overheads with the reduced size of the business. Measures have been taken to improve cash and margin controls for each contract and where necessary commercial and financial management has been strengthened.
The demise of some high street brands and the closure of unprofitable stores in the retail sector have freed up prime retail space which will inevitably lead to property related activity. Retailers are making strategic space acquisitions to strengthen their market position and using current market conditions to renegotiate new space rentals on more favourable terms. This activity should lead to the fit out and rebrand of newly acquired space. In addition, recent bank mergers and strategic acquisitions by certain retailers to strengthen their businesses will eventually drive activity in these sectors.
We have successfully pursued a strategy based on providing a range of property services exclusively targeted at major UK retailers and the banking sector. We will continue to follow this strategy but in addition pursue new market sectors including public sector, office and leisure markets. In addition, we will look to strengthen our support services business by growing customer uptake of our existing offer and adding new services. Our strategic focus on the food retail sector delivered growth in 2008 as these retailers thrive in the current challenging consumer conditions.
3. Reasons for the Refinancing
In view of the difficult recent operating conditions in our markets, a period of increased ongoing investment in working capital, and the Company's significant level of leverage, the Board and its advisers have spent recent months examining ways of accelerating the reduction of the Company's debt in order to create additional financial headroom and a more appropriate long-term capital structure. Despite the ongoing support of the Bank, it was clear that the Company's existing debt facilities were not sustainable, this led to the announcement in March 2009 that the Board was looking at a number of options to strengthen the Company's balance sheet.
The Board concluded that raising additional equity capital combined with a debt restructuring and new bank facilities would be the optimal route to achieving a stronger balance sheet, providing a more appropriate capital structure and the desired increase in financial headroom appropriate to a more challenging trading environment.
4. Key elements of the proposals
Placing
The Company has undertaken a Placing with a number of existing Shareholders and new institutional investors, raising £10.0 million (before expenses related to the equity financing) through the issue of 40,000,000 New Ordinary Shares, which are not subject to clawback, at an issue price of 25 pence per New Ordinary Share (the "Issue Price"). The Issue Price represents an 85.1 per cent. discount to the Closing Price on the London Stock Exchange of 6.7 pence per Ordinary Share on 29 April 2009, after taking into account the proposed 1 for 25 share consolidation.
The Board believes that the support of both existing shareholders (the "Shareholders") and new investors for the Placing represents an important endorsement of the Company's long-term strategy and vision, and underscores the confidence of these investors in Styles & Wood and its management team.
As a result of his participation in the Placing, it is anticipated that Mr Paul Anthony Bell ("Mr Bell"), the largest single Styles & Wood Shareholder, will own 20,412,000 New Ordinary Shares in the Company, representing between a minimum of 32.80 per cent. and a maximum of 38.35 per cent. of the enlarged ordinary share capital following the Placing and Open Offer, depending upon the level of take up of the Open Offer, but prior to any conversion of the Convertible Preference Shares. As Mr Bell already owns in excess of 10 per cent. of Styles & Wood's existing ordinary share capital, Mr Bell's participation in the Placing is a related party transaction under the Listing Rules and will require Shareholders' approval at a general meeting of Shareholders ("General Meeting") where Mr Bell will be prohibited from voting in respect of the relevant resolution.
The estimated net proceeds of the Placing are anticipated to amount to approximately £9.15 million, after payment of all expenses incurred in relation to the Placing, including the preparation of appropriate circulars in relation to the Refinancing, the related party's aspects of the Placing and the Takeover Code Rule 9 waivers referred to below and a prospectus in relation to the issue of the New Ordinary Shares.
Open Offer
In order to provide Shareholders who have not taken part in the Placing with an opportunity to participate in the Refinancing, the Company is providing all Shareholders with the opportunity to subscribe at the Issue Price of 25 pence per New Ordinary Share for approximately 9,000,000 New Ordinary Shares (in aggregate) (the "Open Offer Shares"). This allows Shareholders to participate on a pre-emptive basis in part of the Refinancing whilst providing the Company with the flexibility to raise additional equity capital to further improve its financial position.
There New Ordinary Shares available to Shareholders under the Open Offer will be fixed at a maximum of approximately 9,000,000 New Ordinary Shares, subject to ensuring that the Open Offer does not exceed €2.5 million in aggregate value at the time it is made. Shareholders are being offered the opportunity to apply for additional Open Offer Shares in excess of their pro rata entitlements to the extent that other Shareholders do not take up their entitlements in full. Any excess applications will be scaled back pro rata to existing shareholdings. The Open Offer Shares have not been placed subject to clawback nor have they been underwritten. Consequently, there may be no or fewer than approximately 9,000,000 New Ordinary Shares issued pursuant to the Open Offer.
Both the Placing and the Open Offer are conditional upon, amongst other things, the approval of Shareholders at a General Meeting and upon the Placing Agreement becoming unconditional in all respects. The agreements between Styles & Wood and its lending bank, Royal Bank of Scotland (the "Bank") are conditional upon the completion of the Placing and, as such, also rely on Shareholders passing the necessary resolutions to approve the Placing. Completion of all elements of the Refinancing will also be conditional upon the issue by the Company of a prospectus in relation to the issue of the New Ordinary Shares, the grant of the Rule 9 waivers referred to in paragraph 6 below and Shareholders' approval of the related party's aspects of the Placing as described in this paragraph 4. Neither the Placing nor the Open Offer are being underwritten and there is no guarantee that the proposals referred to in this announcement will be implemented.
The estimated net proceeds of the Open Offer, assuming that it is subscribed in full and 9,000,000 New Ordinary Shares are issued, are anticipated to amount to approximately £2.1 million, after payment of all expenses incurred in relation to the Open Offer including the work involved in the preparation of an appropriate circular.
Debt for equity swap and debt restructuring
Conditional on, amongst other things, completion of the Placing, the Company has reached agreement with the Bank in relation to a debt for equity swap and a debt restructuring.
The Bank has agreed to convert approximately £2.66 million of the debt currently owed to it by the Company into 10,644,935 New Ordinary Shares - via a debt for equity swap at the Issue Price of 25p per share.
The Bank has also agreed that £5.0 million of the debt currently owed to it by the Company will be converted into non voting deferred ordinary shares of the Company ("Non Voting Deferred Ordinary Shares"). The Non Voting Deferred Ordinary Shares, which will be issued at a par value of 25p, will carry no rights to vote or to receive dividends and their sole right will be to a return of capital upon a liquidation of the Company.
In addition, the Bank has agreed to the conversion of £15.0 million of the debt currently owed to it by the Company into 15,000,000 long term Convertible Preference Shares with a par value of £1. The Convertible Preference Shares will be convertible into up to 16,000,000 New Ordinary Shares at a conversion price of 93.75p per New Ordinary Share, equivalent to a 275 per cent. premium to the Issue Price, on one month's notice given by the Bank at any time between August 2012 and August 2019. The Convertible Preference Shares will have no rights to the payment of a dividend until September 2012, following which they will have the right to receive a cumulative dividend of 3 per cent. per annum on their par value, payable on 31 December and 30 June in each year, in respect of all outstanding Convertible Preference Shares save those which in respect of which a conversion notice has been served. To the extent that the Convertible Preference Shares have not been converted into New Ordinary Shares or had a conversion notice served in relation to them, they shall be redeemable between December 2013 and December 2019 on 31 December in each such year in the following tranches:
31 December 2013 £1m or 6.67% of the outstanding Convertible Preference Shares if lower
31 December 2014 £1m or 6.67% of the outstanding Convertible Preference Shares if lower
31 December 2015 £2m or 13.33% of the outstanding Convertible Preference Shares if lower
31 December 2016 £2m or 13.33% of the outstanding Convertible Preference Shares if lower
31 December 2017 £3m or 20.0% of the outstanding Convertible Preference Shares if lower
31 December 2018 £3m or 20.0% of the outstanding Convertible Preference Shares if lower
31 December 2019 £3m or 20.0% of the outstanding Convertible Preference Shares if lower.
The Company may at its option choose to redeem some or all of the Convertible Preference Shares, subject to a minimum redemption of 250,000 shares, at any time prior to 31 December 2013 on giving the Bank one month's notice and may choose to redeem amounts in excess of the above tranches at any time thereafter on giving the Bank one month's notice. In such circumstances, if the notice is given between August 2012 and August 2019, the Bank may choose to convert the Convertible Preference Shares the subject of such notice into New Ordinary Shares at the conversion price of 93.75p per New Ordinary Share instead.
Debt facilities
The Bank has agreed, conditional on completion of the Placing, in substitution for any outstanding facilities, to provide Styles & Wood with the following bank facilities (the "New Bank Facilities"):
A term loan of £6.9 million (the "New Term Loan") bearing an interest rate of 5% above LIBOR. The term loan is repayable in the following tranches between 2009 and 2013:
| Date of Repayment | Repayment Amount |
| On or by first anniversary of Effective Date | £1,000,000 |
| On or by second anniversary of Effective Date | £1,000,000 |
| On or by third anniversary of Effective Date | £2,000,000 |
| On or by Final Maturity Date | £2,900,000 |
| The Effective Date being the date of completion of the Placing and the Final Maturity Date being the date 4 years from the Effective Date | |
A revolving credit facility of £4.0 million (the "New Revolving Credit Facility") bearing an interest rate of 5 per cent. above LIBOR. The New Revolving Credit Facility is available for drawdown until one moth prior to the Final Maturity Date and will be repayable in full on the Final Maturity Date;
The Bank and the Company have agreed financial covenants for the first year of the New Debt Facilities. In addition, the Bank and the Company have also decided that, within 180 days of signing the New Debt Facility agreements, they will, acting reasonably, agree the financial covenants for the second, third and fourth year.
In consideration of the provision of the New Bank Facilities, the Bank will receive a total arrangement fee of £650,000, £500,000 of which being payable on the Effective Date and £150,000 being payable on 1January 2010.
The other expenses incurred in relation to the work associated with the provision of the New Bank Facilities and the debt for equity swap are estimated to amount to approximately £200,000.
The Company believes that the proceeds of the Placing and the positive impact of the debt for equity swap and debt restructuring to be implemented as a result of the Refinancing, coupled with the New Bank Facilities, will provide it with significant covenant and liquidity headroom throughout the life of the New Bank Facilities. Any additional proceeds from the Open Offer will also improve the Company's liquidity position. The Company is aiming to reduce its net debt by 2012 to a level which the directors believe will facilitate the refinancing of any remaining debt, even if the current credit conditions persist.
5. Use of Proceeds
Immediately following completion of the Refinancing, Styles & Wood will have outstanding debt facilities with the Bank of approximately £5.84 million, before taking into account the net proceeds of the Placing or any proceeds from the Open Offer. The existing bank facilities are expected to be repaid in full from the net proceeds of the Placing and the New Bank Facilities will then be made available to the Company with immediate effect. The Company intends to draw down the New Term Loan in full on completion but will utilise the New Revolving Credit Facility only as and when required by the cashflow swings in its business. On the basis of its current internal plans and projections, the Board believes that it is unlikely that the Company will utilise the New Revolving Credit Facility significantly or at all within the next 12 months.
The net proceeds of the Placing and the Open Offer, together with the New Bank Facilities, will provide ongoing working capital which the Board believes will help enable the Company to configure its business in such a way as to enable it secure better margins from its suppliers and its customers.
6. Waivers of Rule 9 of the City Code ("Rule 9")
As described above, as a result of his participation in the Placing, it is anticipated that Mr Bell, the largest single Styles & Wood shareholder, will own 20,412,000 New Ordinary Shares in the Company, representing between a minimum of 32.80 per cent. and a maximum of 38.35 per cent. of the enlarged ordinary share capital following the Placing and Open Offer, depending upon the level of take up of the Open Offer, but prior to any conversion of the Convertible Preference Shares.
The Bank, as a result of the debt restructuring, will own Convertible Preference Shares which would on conversion in full and taken together with the New Ordinary Shares to be issued to them in connection with the debt restructuring, mean that they could own between a minimum of 34.06 per cent. and a maximum of 38.49 per cent. of the enlarged ordinary share capital following the Placing and Open Offer, depending upon the level of take up of the Open Offer, although the Board consider it unlikely that the Bank would exercise their conversion rights and retain such a significant shareholding in the Company without either having first sold any existing equity stake or having agreed to sell some or all of the New Ordinary Shares resulting from such exercise.
Rule 9 stipulates, inter alia, that if (a) a person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company; or (b) a person, together with persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of the voting rights in which he is interested; such person will normally be required by the Panel on Takeovers and Mergers (the "Panel") to make a general offer to shareholders of that company to acquire the balance of the equity share capital of that company not held by such person or group of persons acting in concert with him. An offer under Rule 9 must be in cash and at the highest price paid by the person required to make the offer or any person acting in concert with him for any interest in shares in the company during the twelve months prior to the announcement of the offer.
The Company and its advisers intend to approach the Panel to seek waivers of any obligation upon either Mr Bell or the Bank which would otherwise be imposed upon them under Rule 9 of the City Code, as a result of Mr Bell's participation in the Placing and as a result of the conversion by the Bank of the Convertible Preference Shares. Any such waivers are expected to be conditional upon the approval of waiver resolutions on a poll by Independent Shareholders at a General Meeting of Styles & Wood. The effect of any such waivers, if approved by Independent Shareholders, would be that neither Mr Bell nor the Bank would be required to make a general offer under Rule 9 of the City Code which would otherwise arise due to the increase in their respective shareholdings as a result.
7. Details of the Open Offer
Shareholders, on and subject to the terms and conditions of the Open Offer, will be given the opportunity under the Open Offer to apply for any number of Open Offer Shares at the Issue Price pro rata to their holdings, which represents an 85.1 per cent. discount to the Closing Price on the London Stock Exchange of 6.7 pence per Ordinary Share on 29 April 2009, after taking into account the proposed 1 for 25 share consolidation, on the following or a similar basis, after adjusting the number of shares available to take into account currency fluctuation:
7 New Ordinary Shares for every 2 existing Ordinary Shares
There are expected to approximately 9,000,000 New Ordinary Shares available to shareholders under the Open Offer. This number may be scaled back or increased so as to ensure that the total size of the Open Offer is close to but not exceeding €2.5 million, thereby avoiding the need to issue a prospectus prior to the making of the Open Offer. Shareholders are also being offered the opportunity to apply for additional Open Offer Shares in excess of their pro rata entitlements to the extent that other Shareholders do not take up their entitlements in full. Any excess applications will be scaled back pro rata to existing shareholdings. The Open Offer Shares have not been placed subject to clawback nor have they been underwritten. Consequently there may be no or fewer than approximately 9,000,000 New Ordinary Shares issued pursuant to the Open Offer.
The Open Offer will be conditional, amongst other things, upon the passing of the requisite Shareholder resolutions at a general meeting of the Company and Admission of the New Ordinary Shares to the Official List.
40,000,000 New Ordinary Shares will be issued pursuant to the Placing and up to approximately 9,000,000 New Ordinary Shares will be issued pursuant to the Open Offer.
Upon completion of the Placing and Open Offer, assuming full take up of the Open Offer, the New Ordinary Shares will represent approximately 95.85 per cent. of the Enlarged Issued Share Capital and the existing Ordinary Shares will represent approximately 4.15 per cent. of the Enlarged Issued Share Capital.
8. Share Consolidation
As part of the Refinancing, the Board is proposing a share capital consolidation to reduce the total number of shares that will be in issue upon completion and to try to avoid the swings in share price and large dealing spreads which might otherwise occur if the Company had a 1p share price. Consequently the Board is proposing a share consolidation whereby each 25 existing Ordinary Shares of 1p each will be consolidated into 1 New Ordinary Share of 25p. Fractions of shares will not be issued and holdings of New Ordinary Shares will be rounded down to the nearest multiple of 25 shares.
9. Circular, Prospectus and General Meeting
A circular containing details of the Placing, the Open Offer and the Refinancing as a whole is expected to be posted (or communicated by other permitted means) to Shareholders as soon as practicable. For the purposes of effecting the Refinancing, the requisite resolutions will be proposed at a General Meeting of the Company.
A prospectus in relation to the listing of the New Ordinary Shares will be posted (or communicated by other permitted means) to shareholders as soon as reasonably practical. It is likely that this prospectus will not be available until after the General Meeting has been called.
10. Annual Results of Styles & Wood for the financial period ended 31 December 2008
Styles & Wood's annual results for the financial year ended 31 December 2008 are being released today in a separate statement and a copy of the annual report in relation thereto will be posted (or communicated by other permitted means) to shareholders and made available on the Company's website, www.stylesandwood.co.uk, later today.