Released: 25/02/2008
RNS Number:6173O
Spiritel PLC
25 February 2008
For release 07.00, 25 February 2008
SPIRITEL PLC
("Spiritel" or "the Company")
PROPOSED BALANCE SHEET RESTRUCTURING
-Penta Capital to convert up to a total of £11m of Loan Facilities and
Preference Shares into new Ordinary Shares at substantial premium to current
share price
-Penta Capital also to waive £800,000 annual interest charges
Spiritel plc, (AIM:STP), the business communications service provider, is
pleased to announce that it has agreed terms with Penta Capital Partners
("Penta"), its funding partner, granting conversion rights over Penta's holding
of 4,100,000 redeemable preference shares of £1 each in the Company (the
"Preference Shares") and up to £7 million of the loan facilities that have been
made by Penta to the Company (the "Loan Facilities") into new ordinary shares of
1p each (the "Ordinary Shares"), subject to shareholder approval at an
Extraordinary General Meeting ("EGM") and the receipt of a waiver from the Panel
on Takeovers and Mergers of the Rule 9 obligation on Penta to make a general
offer for the Company. As part of the agreement, Penta will waive interest
charges on the Loan Facilities saving the company approximately £800,000 in a
full year.
Under the proposed terms, Penta shall, immediately after the EGM, convert such
of the Company's indebtedness in respect of the Loan Facilities and Preference
Shares into Ordinary Shares at a price of 1.1p per Ordinary Share so that
following the said conversion, Penta shall have 49.99% of the Company's issued
share capital. The conversion price of 1.1p per Ordinary Share represents a
premium to the share price of 69% based on the closing price of 0.65 pence on 22
February 2008,
Following the conversion immediately after the EGM, Penta shall thereafter have
the right to convert up to a further £8.4 million of Spiritel's remaining
indebtedness in respect of the Loan Facilities and Preference Shares into
Ordinary Shares at a price per Ordinary Share which is the higher of (i) 1.5p
per Ordinary Share or (ii) the most recent placing price for Ordinary Shares.
The minimum conversion price of 1.5p per Ordinary Share represents a premium to
the share price of 131% based on the closing price of 0.65 pence on 22 February
2008. However, all conversions thereafter will also be limited such that Penta's
maximum equity holding does not exceed 49.99% of Spiritel's issued ordinary
share capital.
Based on the current issued share capital, immediately after the EGM Penta will
convert £2.61 million of Loan Facilities and Preference Shares at 1.1p, taking
its total shareholding in Spiritel to 276,819,845 Ordinary Shares, which
represents approximately 49.99% of the Company's issued share capital post
conversion and leaves £8.41 million of Loan Facilities and Preference Shares
outstanding. Following this conversion, the remaining Loan Facilities and
Preference Shares will be convertible at the higher of 1.5p or the price of the
most recent equity placing.
Penta has waived the interest on the Loan Facilities with effect from 1 November
2007 and this will save the Company approximately £0.8 million in interest
charges annually and £67,000 per month in the current half of this financial
year, which began on 1 November 2007. If the debt to Penta has not been redeemed
or converted by 1 May 2010, interest will be charged at 8% per annum from that
date, but only if the share price is below 1.5 pence per share.
Commenting on the announcement Alastair Mills, CEO of Spiritel said: "We are
delighted to have reached this significant agreement with Penta. It represents a
clear endorsement from Penta of their confidence in the restructured Company and
our growth strategy. In our recent Interim Results announcement we demonstrated
how far the Company had progressed since the adoption of our new strategy to
grow the business and restore value to shareholders. A combination of
acquisitions, new customer wins and product developments are delivering
underlying profitability and enhanced visibility of future earnings. Penta's
conversion will significantly strengthen our balance sheet, reduce interest
charges and increase scope for further strong, profitable growth."
Steven Scott, a director of Penta and Spiritel added: "Spiritel has undergone a
fundamental turnaround in the past 18 months and we have been supporting the
Company throughout this successful period of transition. We are already seeing
the benefits of the new strategy and our debt conversion is a transformational
step in Spiritel's development. We continue to follow Spiritel's progress with
interest and offer our full support to the management team as they position
Spiritel as a leading provider of business communications services."
A circular detailing the particulars of Penta's proposed conversion and
convening an Extraordinary General Meeting to seek shareholder approval for the
proposals and the waiver granted by the Panel on Takeovers and Mergers will be
sent to shareholders in due course.
For further information please visit www.spiritelplc.com or contact:
Spiritel plc Tavistock Communications Daniel Stewart & Co.
Alastair Mills Simon Hudson Simon Leathers
Chief Executive Clemmie Carr Stewart Dick
Tel : 020 7160 0100 Tel: 020 7920 3150 Tel. 020 7776 6550
Notes to Editors
Spiritel is a business communications group which seeks to take advantage of the
opportunities created by rapidly changing telecoms markets in the UK as the
migration to Internet Protocol (IP) based services accelerates. The Group is a
consolidator of the highly fragmented UK telecoms reseller market and aims to
build a substantial customer base and scale through selective acquisitions. We
are organised into two divisions, Spiritel Technologies - focused on our
infrastructure and IP products and services - and Spiritel Business, which
provides our customer services.
Today, the Group offers a broad range of telecommunications services and
products to a customer base of small and medium sized enterprises and an
increasing number of larger national organisations. We are a leader in the
provision of new, but proven, Voice over IP (VoIP) solutions that are firmly
based on the traditional service values which run throughout the Group.
This information is provided by RNS
The company news service from the London Stock Exchange
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