Released: 01/10/2009
com:20091001:RnsA0142A
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RNS Number : 0142A
Spiritel PLC
01 October 2009
1 October 2009
SPIRITEL PLC
("SpiriTel" or "The Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 APRIL 2009
SpiriTel plc (AIM: STP), the business communications group, is pleased to
announce preliminary results for the year ended 30 April 2009.
Commenting on the results, Chairman, Lord St. John of Bletso said: "I am pleased
to report on a further year of growth and development for SpiriTel plc. The
Company has made significant progress despite an increasingly tough operating
environment which has seen several competitors fall by the wayside. As a fully
integrated business communications provider delivering fixed, mobile, data and
networking services to a substantial customer base the Group is very well placed
to progress its chosen strategy of 'acquire, integrate, grow' to deliver
increased shareholder value."
Highlights:
- Underlying EBITDA* 61% ahead of prior year at £1.5 million (2008: £0.9
million)
- Revenue up 18% to £19.7 million (2008: £16.7 million)
- Gross profit up 19% to £7.6 million (2008: £6.4 million)
- Pre tax loss £1.7 million (2008: £4.0 million), after non-cash finance costs**
of £0.8 million (2008: £3.1 million)
- Post year end new 5 year debt and overdraft facility of £4.5m agreed with
Clydesdale Bank
- Earnings enhancing acquisition of ED Communications completed
- Cross selling contracts signed worth £7 million over their term
- Customer base increased to 2,337 at year end (2008: 1,525)
- Post year end balance sheet restructure - conversion terms agreed over up to
£6.85 million of Penta debt and waiver of up to £550,000 of annual interest
costs
* Operating profit after adding back charges for depreciation, amortisation,
share-based payments and exceptional costs
** Non-cash finance costs comprise loss arising on modification and conversion
of preference shares and change in fair value of embedded derivatives.
Chief Executive, Alastair Mills added: "We operate in a dynamic sector and the
Board believes that we now stand at a particularly exciting point in the
Company's development. We have demonstrated our ability to enhance earnings
through acquisitions, followed up by significant cross-selling successes from
our range of converged products and services into both new and existing customer
bases. The foundations are in place to deliver ongoing value to shareholders
and I look forward to the coming year with confidence."
For further information please visit www.SpiriTelplc.com or contact:
SpiriTel plc Tavistock Communications finnCap
Alastair Mills Simon Hudson Geoff Nash
Chief Executive Duncan McCormick Marc Young
Tel: 020 7160 0100 Tel: 020 7920 3150 Tel: 020 7600 1658
CHAIRMAN'S STATEMENT
Lord St John of Bletso, Chairman
I am pleased to report on a further year of growth and development at SpiriTel.
The Company has made significant progress despite an increasingly tough
operating environment which has seen several competitors fall by the wayside.
SpiriTel made its sixth acquisition during the year to 30 April 2009, acquiring
and fully integrating ED Communications ("EDC") into the SpiriTel Business
Division. The Group is now a well established, fully integrated business
communications provider. During the year the Company has proven the value of its
integrated offering to the enlarged customer base by successfully cross-selling
its expanded range of products and services. These results include full year
contributions from all six acquisitions with the exception of EDC, which is
included for the eight months since acquisition.
Results
As a result of both acquisitive and organic growth - including initial sales
from over £7 million of cross-selling contract wins signed during the year -
revenues are up markedly, by 18% to £19.7 million (2008: £16.7 million). Most
significantly, underlying EBITDA (defined as operating profit after adding back
charges for depreciation, amortisation, share-based payments and exceptional
costs) increased by 61% to £1.5 million (2008: £0.9 million). The results, and
in particular the impressive growth in earnings, demonstrate ongoing success in
the execution of the Company's "Acquire, Integrate, Grow" strategy. The
economies of selectively bolting on acquired assets are now evident.
The previously reported decline in profitability from the Technologies Division
continues to adversely impact Group profits. However, this decline, combined
with rapid growth in the Business Division, has reduced our exposure to riskier
and more volatile wholesale markets. 52% of overall Group revenues in 2009
result from the Business Division's higher quality, contracted B2B revenues,
compared to 40% in 2008. This trend has continued since the year end.
Dividend
SpiriTel is still pursuing its acquisition, integration and growth strategy and
is continuing to invest funds into the business. The Directors are therefore not
recommending the payment of a dividend for the year to 30 April 2009.
Proposed debt conversion
Since the year end, we have agreed a further planned restructuring of the
indebtedness to Penta Capital Partners ("Penta") in our balance sheet, the terms
of which will be communicated to shareholders in a circular that also convenes a
shareholder meeting to approve the transaction. The proposals include Penta
converting up to £6.9 million of debt into equity at a price of 0.6p per
ordinary share. The Directors consider that the proposals will significantly
strengthen the balance sheet and better position the Company to raise capital
for acquisitions. This is an important step for the Group and we value Penta's
support through their proposed debt for equity conversion.
Outlook
Whilst the Business Division has continued to perform in line with expectations,
trading remains challenging for the Technologies Division and we do not foresee
a significant turnaround in its core wholesale markets. However, the
Technologies Division continues to add significant value through managing our
IP-based infrastructure, on which several of the Business Division's product
solutions are based.
The Group now benefits from much higher levels of earnings visibility, due to
the Business Division's emphasis on contracted and recurring revenues from SMEs
and larger corporate customers. This, combined with a wide range of
business-critical products and services, means SpiriTel is well positioned to
weather the ongoing economic storm. Through a combination of further earnings
enhancing acquisitions for the Business Division and organic growth, driven by
the cross-selling of an integrated product portfolio, we expect to continue to
increase revenue and earnings for the benefit of all shareholders.
Lord St John of Bletso
Chairman
30 September 2009
CHIEF EXECUTIVE'S REVIEW
Alastair Mills, Chief Executive
SpiriTel has matured considerably in the year under review. Our sixth
acquisition further enhances our reputation as a leading consolidator of the
telecoms reseller sector and together with our success in cross-sales
demonstrates our ability to deliver organic and acquisitive growth. As a
management team, we are constantly reviewing acquisition opportunities that can
grow earnings, enhance the product set and provide more cross-selling
opportunities. We operate in a dynamic sector and the Board believes that we now
stand at a particularly exciting point in the Company's development. The
accelerating migration to converged communications is a driving force behind
increased levels of corporate activity in the sector. Convergence is also
changing customer behaviour with more businesses insisting that their supplier
offers the full range of fixed, mobile, voice and data services. For those
companies that have capital to deploy for acquisitions and an integrated product
range to sell to business customers, these are exciting times.
Financial highlights
The year to 30 April 2009 represents a full year's contribution from all of
SpiriTel's acquisitions to date, apart from EDC. This is reflected in
significantly improved financial results despite one of the most challenging
trading environments seen for many years, particularly in the Technologies
Division's wholesale markets. Performance was improved in each of the following
key financial metrics:
- Revenue up 18% to £19.7 million (2008: £16.7 million).
- Gross profit up 19% to £7.6 million (2008: £6.4 million).
- Underlying EBITDA* up 61% to £1.5 million (2008: £0.9 million).
The 18% increase in Group revenue is pleasing given the difficult economic
conditions, but even more so is the 53% growth in Business Division revenues
largely offsetting a 5% decline in the lower margin, wholesale services from the
Technologies Division. The increasing contribution from our Business Division
represents a significant change in the Group's earnings profile. The majority of
the Business Division's revenues are generated from long-term contracts, of up
to seven years, providing a greater level of earnings visibility to the Group as
a whole.
The 61% increase in underlying EBITDA* demonstrates the success of our "Acquire,
Integrate, Grow" model.
In particular, we are able to convert significant elements of gross profit
directly into EBITDA by bolting acquisitions quickly and efficiently onto our
already established operations and existing cost base. By effective profiling of
newly-acquired customers, we then identify and pursue cross-sale opportunities.
The loss before taxation for the year was £1.7 million (2008: £4.0 million
loss), after deducting non-cash finance charges of £0.8 million (2008: £3.1
million). The non-cash finance charges relate to IFRS costs on modification and
conversion of indebtedness to Penta.
Since the year end we have agreed a proposed balance sheet restructuring with
Penta converting up to £6.9 million of debt into equity at a price of 0.6p per
ordinary share. This follows on from a similar £2.6 million debt to equity
conversion by Penta in May 2008.
The Directors believe that the proposed conversion of Penta debt will benefit
SpiriTel in a number of ways. The Company will have a much stronger balance
sheet, unencumbered by £6.9 million of Penta indebtedness and, at the conversion
price, the proposed conversion will significantly increase the market
capitalisation of the Company. In addition, the Company will not be liable for
the £550,000 annual interest cost which is due to accrue from May 2010. With a
stronger balance sheet SpiriTel will be better positioned to raise capital and
continue its recent successful acquisitive strategy, focusing on earnings
enhancing transactions. Penta's support for SpiriTel is invaluable and we thank
them for their continued faith in our business model and management team.
We also continue to benefit from the support of Clydesdale Bank. During the year
under review we secured an extension to our loan facility to fund the
acquisition of ED Communications and at the year end we had a total facility of
£3.4million with the bank. In May 2009 the Group's facilities were increased to
£4.5million, repayable over five years.
Strategy
Despite the ongoing consolidation in our sector, the UK telecommunications
market remains highly fragmented. This, alongside the accelerating demand from
customers for converged, IP-based services, provides the opportunity for us to
further execute the Group's "Acquire, Integrate, Grow" strategy. Our strategy is
to grow shareholder value through selective, earnings enhancing acquisitions,
followed by consistent organic growth being driven by cross-selling our
integrated product portfolio.
SpiriTel continues to pursue selective acquisitions as we look to build a
business with the operational scale and the broad product offering that business
and corporate consumers increasingly demand. Having completed six acquisitions,
led by the same management team, not only are we clear on the type of businesses
that we are looking for in terms of quickly adding value to the Group, but we
are also experienced in the critical phase of integration, which commences well
in advance of completion of the deal. All acquisitions now follow the same
integration framework which was developed internally to meet our corporate
objectives. The process is led by a senior member of the management team and
helps ensure that we maximise both cost and revenue synergy opportunities,
whilst minimising disruption to the Group and the newly-acquired business.
We expect to continue to target growth through earnings enhancing acquisitions
and following the proposed restructure of our balance sheet, we expect to be
well positioned to raise new capital to deploy in the acquisition of new
customers and products in order to enhance earnings.
In recent months we have been particularly encouraged by our successes in
cross-sales of our growing product range to existing customers. During the 12
month period to April 2009, we secured cross-sales contracts valued at more than
£7 million. This is contracted and recurring revenue and delivers a new level of
earnings visibility to the Group. During the year we profiled our expanded
customer base and estimated that our existing customers are spending a total of
over £80 million on telecoms services that SpiriTel could potentially provide
from our current product portfolio. Although rapidly growing, our penetration of
this spend is currently less than 15% which illustrates the upside opportunity
which we intend to exploit by deploying our successful cross-selling strategy.
Acquisitions
SpiriTel continued its recent series of acquisitions this year with the purchase
of ED Communications, which added approximately 700 business customers who were
rapidly integrated into our Networks line of business. This acquisition provides
a typical example of how the Group is now able to bolt on a customer base
efficiently and then enhance its contribution through cost synergies and
cross-selling. The total consideration for this company will total £1.4 million,
including earn out.
The full year contribution from mobile business WN1, acquired in April 2008,
proved even more successful than we had hoped and this line of business
continues to deliver strong organic growth. WN1 is highly profitable and, by
adding a range of mobile voice and data services, the transaction completed our
integrated product portfolio. Since the year end, converged voice and data
mobile solutions have grown to over one third of our total mobile sales. Not
only are we delighted with the earnings contribution from WN1, now integrated as
SpiriTel Mobile, but the mobility offering is a differentiator in comparison to
many competitors who are limited to a fixed line offering.
During the year we looked closely at a number of acquisition opportunities,
including several larger companies. We believe we have demonstrated our ability
to grow shareholder value from the selective addition of bolt on acquisitions
and we continue to actively pursue opportunities which deliver short-term
earnings enhancement benefits and cross-sell opportunities.
Operations
SpiriTel's customer base now numbers some 2,300 separate accounts for business
and public sector companies and organisations. Greater customer numbers result
in increased cross-selling opportunities and although we focus on larger
customers more than many of our competitors, the size of the base is an obvious,
yet important key performance indicator for the Business Division. The current
customer base is 53% larger than at April 2008 and 227% above 2007 levels.
Our customers are served by our two complementary Divisions: SpiriTel Business
and SpiriTel Technologies - working alongside and supporting each other. The
Business Division has three lines of business: IP Communications, Networks and
Mobile. SpiriTel IP Communications provides an advanced range of IP networking
services to business customers alongside traditional structured cabling,
equipment and maintenance services. SpiriTel Networks offers fixed line services
including calls, lines and broadband. SpiriTel Mobile provides mobile voice and
data services, including BlackBerry and other converged voice and data
services.
Whilst ensuring our team delivers an exceptional level of customer service,
during the year we have focused on cost control and despite the EDC acquisition
and the associated addition of 700 new customers staff numbers have only risen
to 109 at the year end. (2008: 104). We continue to offer nationwide engineering
coverage to our customers along with 24/7/365 support. We have also been able to
reduce our cost base through the utilisation of our own technological expertise
in the remote management of customer sites. Over 70% of customer faults reported
to our IP Communications service team are now fixed remotely from our operations
centres in London and Wigan, with no employee visit to the customer's site being
required.
A key aspect of our Business Division is its ability to act as a one stop shop
for business customers by providing a fully integrated product offering. Whilst
we remain cautious on heavy investment in the research and development of new
technology, our strategic partnerships with leading vendors such as O2 and Mitel
enable us to remain well positioned to capitalise on the rapidly changing
telecoms market.
Of particular note is the continued growth of our hosted VoIP offering, where
extensions sold and supported grew by 86% over the year. Major contract wins
included hosted VoIP, as part of a managed services contract, across Young & Co
Brewery's estate and SpiriTel's success was recognised when we won the VoIP
Solution of the Year award in October 2008 at the National Comms Business
Awards. SpiriTel also won a number of other industry awards over the past year
and continues to build on the excellent relationships that we have forged with
industry leading partners including 02, BlackBerry and Mitel. Our newly acquired
Mobile business also achieved 02 Centre of Excellence status in August 2008.
To support integration of acquisitions and ensure we maximise the cross-sell
opportunity for all acquired customer bases, we implemented a Group-wide CRM
facility during the year. Following several notable cross-selling wins in early
2009, we achieved our largest cross-sale to date in May 2009, a 30 month network
services deal with a global hotel group that is expected to generate up to £4
million in revenue over the contract term. The deal involved SpiriTel replacing
BT, that still has an estimated 50% total market share, as supplier. The
contract win provides evidence of our ability to service major corporates as
well as our 2,300 SME customers and also illustrates clearly the steps we are
taking to maximise the significant cross-sell opportunities we are identifying.
Summary and outlook
The year to 30 April 2009 was a year of significant progress for SpiriTel. We
delivered strong revenue growth and an even greater uplift in underlying
EBITDA*. We also continued to gain widespread recognition for the quality of our
IP-based services and the innovation we have demonstrated in the delivery of
converged communications services.
Our strategy of targeted acquisitions which bring immediate earnings
enhancement, and ongoing cross-sell opportunities, has seen revenue and profits
rise substantially in the past year, as we start to benefit from full
contributions from acquisitions. We have a highly scalable model where we can
bolt on new, earnings enhancing assets whilst maintaining the delivery of
consistent organic growth.
Whilst we have felt the challenges of a severe economic downturn and more
specifically an ongoing, declining profitability in the wholesale markets, the
contribution from our rapidly growing Business Division is very encouraging. We
have demonstrated our ability to enhance earnings through acquisitions, followed
up by significant cross-selling successes from our range of converged products
and services into both new and existing customer bases. Although we are not
immune to the impact of a recessionary economic environment, our product set is
naturally defensive and our downside exposure is mitigated. We are witnessing a
renewed and growing interest in cost savings that are prompting new sales
opportunities. Our ability to add value to our customers through innovative and
cost effective solutions, gives us confidence about our prospects through the
economic downturn.
SpiriTel has an experienced and energised management team, and a highly skilled
and committed staff who have together proved their ability to execute strategy.
The foundations are in place to deliver ongoing value to shareholders and I look
forward to the coming year with confidence.
Alastair Mills
Chief Executive
30 September 2009
* Operating profit after adding back charges for depreciation, amortisation,
share-based payments and exceptional costs.
CONSOLIDATED INCOME STATEMENT
Year ended 30 April 2009
2009 £000 2008 £000
Continuing operations
Revenue 19,718 16,674
Cost of sales (12,087) (10,259)
Gross profit 7,631 6,415
Administrative expenses (8,280) (7,261)
Underlying EBITDA 1,514 938
Depreciation (212) (180)
Share-based payments (204) (190)
Exceptional costs (663) (620)
Amortisation of other intangible assets (1,084) (794)
Operating loss (649) (846)
Operating loss (649) (846)
Finance income - 5
Finance costs (1,059) (3,206)
Loss before taxation (1,708) (4,047)
Tax credit 774 289
Loss for the financial year (934) (3,758)
Loss per share in pence
Basic and diluted (0.16) (1.19)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share capital £000 Share premium £000 Reverse acquisition reserve £000 Other reserves £000 Retained losses £000 Total £000
Balance at 1 May 2007 3,162 4,550 (5,763) 97 (6,107) (4,061)
Loss and total recognised loss for the financial year - - - - (3,758) (3,758)
Credit for equity-settled share-based payments - - - 190 - 190
Equity component of compound financial instruments - - - 333 - 333
Transfer between reserves - - - (55) 55 -
Balance at 30 April 2008 3,162 4,550 (5,763) 565 (9,810) (7,296)
Loss and total recognised loss for the financial year - - - - (934) (934)
Credit for equity-settled share-based payments - - - 204 - 204
Issue of share capital (net of expenses) 3,114 385 - - - 3,499
Modification and conversion of financial instruments - - - - 1,545 - 1,545
equity component
Transfer between reserves - - - (349) 349 -
Balance at 30 April 2009 6,276 4,935 (5,763) 1,965 (10,395) (2,982)
CONSOLIDATED BALANCE SHEET
As at 30 April 2009
2009 £000 2008 £000
Assets
Non-current assets
Goodwill 5,695 5,292
Other intangible assets 4,484 4,392
Property, plant and equipment 696 438
10,875 10,122
Current assets
Inventories 384 353
Trade and other receivables 2,493 2,151
Cash and cash equivalents - 1,058
2,877 3,562
Total assets 13,752 13,684
Current liabilities
Trade and other payables (4,471) (4,595)
Borrowings (1,536) (457)
Obligations under finance leases (61) (84)
Current tax payable (36) (442)
(6,104) (5,578)
Non-current liabilities
Trade and other payables (116) (432)
Borrowings (9,468) (13,603)
Obligations under finance leases - (55)
Deferred tax liabilities (1,046) (1,312)
(10,630) (15,402)
Total liabilities (16,734) (20,980)
Net liabilities (2,982) (7,296)
Equity attributable to equity holders of the parent
Capital and reserves
Share capital 6,276 3,162
Share premium 4,935 4,550
Reverse acquisition reserve (5,763) (5,763)
Other reserves 1,965 565
Retained losses (10,395) (9,810)
Total equity (2,982) (7,296)
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 30 April 2009
Note 2009 £000 2008
£000
Cash flows from operating activities
Loss before taxation (1,708) (4,047)
Adjustments for:
Net finance costs 1,059 3,201
Depreciation and amortisation 1,296 974
Impairment of tangible fixed assets - 64
Impairment of intangible fixed assets 113 -
Impairment of goodwill 199 -
(Increase)/decrease in inventory (31) 63
Increase in receivables (146) (17)
(Decrease)/increase in payables (1,168) 617
Equity-settled share-based payments 204 190
Interest paid (230) (135)
Cash (used in)/from operating activities (412) 910
Income taxes paid (259) -
Net cash (used in)/from operating activities (671) 910
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired 2 (797) (998)
Payment of deferred and contingent consideration (382) (1,227)
Purchase of property, plant and equipment (470) (229)
Net cash used in investing activities (1,649) (2,454)
Cash flows from financing activities
Net proceeds from issue of share capital 333 -
Proceeds from borrowings (net) 480 2,347
Payment of finance lease liabilities (78) (67)
Net cash from financing activities 735 2,280
Net (decrease)/increase in cash and equivalents (1,585) 736
Cash and equivalents at beginning of year 1,058 322
Cash and equivalents at end of year (527) 1,058
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The financial information in this preliminary announcement has been prepared in
accordance with International Financial Reporting Standards (IFRS), as adopted
by the European Union (EU) under the accounting policies set out in the
financial statements of Spiritel plc for the year ended 30 April 2008. These
accounting policies have remained unchanged for the financial year ended 30
April 2009.
This financial information has been prepared under the historical cost
convention, except for the revaluation of certain financial instruments. The
financial information set out in this announcement does not constitute the
Group's statutory accounts for the years ended 30 April 2009 or 30 April 2008,
but is derived from those accounts. Statutory accounts for 2008 have been
delivered to the Registrar of Companies and those for 2009 will be delivered
following the Company's Annual General Meeting. The auditors have reported on
those accounts and their reports were unqualified.
2. Business combinations
On 4 August 2008, SpiriTel plc acquired 100% of the issued share capital of ED
Communications Limited, a company based in the UK. The total cost includes the
components stated below. The purchase price was settled in cash.
£000
Purchase price 800
Contingent consideration under earn out agreement payable 90
in cash (discounted)
Deferred consideration payable in cash (discounted) 426
Due diligence fees 36
Other professional fees 54
1,406
A maximum of £1,700,000 of consideration may become payable depending on the
level of gross profit achieved by the business during July 2009. In the opinion
of the Directors, the likely amount of contingent consideration payable is
£100,000.
The assessment of the fair values of the assets and liabilities of ED
Communications Limited for each class of the acquiree's assets and liabilities
recognised at the acquisition date are as follows:
Book value £000 Fair value adjustments £000 Fair value to the Group £000
Intangible fixed assets identified - 1,289 1,289
Property, plant and equipment 97 (97) -
Trade and other receivables 196 - 196
Cash and cash equivalents 44 - 44
Total assets 337 1,192 1,529
Trade payables (53) - (53)
Other taxes (40) - (40)
Other payables (175) - (175)
Deferred tax - (361) (361)
Total liabilities (268) (361) (629)
Net assets acquired 69 831 900
Goodwill arising on the acquisition 506
Consideration 1,406
Satisfied by:
Cash 890
Deferred and contingent consideration to be settled 516
in cash (discounted)
1,406
Goodwill on the acquisition of ED Communications Limited is largely attributable
to the cross-selling opportunities.
During the period from the date of acquisition to 30 April 2009, ED
Communications Limited generated revenue of £1,121,000 and an operating profit
of £287,000. Due to the lack of IFRS specific data for ED Communications Limited
prior to its acquisition, the pro-forma revenue and profit of the Group, had
this acquisition taken place on 1 May 2008, have not been disclosed as they
cannot be reliably determined.
Reconciliation to the consolidated statement of cash flows:
Cash consideration 890
Cash and cash equivalents acquired (44)
Refund of WN1 Limited consideration - completion accounts (49)
adjustments
Net cash flow arising on acquisitions 797
3. Post balance sheet events
During September 2009, the Company entered into an agreement with Penta Capital
LLP, the manager of the Penta Funds, for the modification of the conversion
terms attaching to the Penta loans, loan notes and redeemable preference shares.
The agreement is conditional upon the following:
* the granting of a waiver by the Panel on Takeovers and Mergers of the
requirement under Rule 9 of the City Code on Takeovers and Mergers, that would
otherwise arise on Penta Fund 1 Limited Partnership and Penta Fund 1 SP Limited
Partnership (the "Penta Funds"), to make a general offer to shareholders of the
Company as a result of the allotment of new ordinary shares to the Penta Funds
which would take the aggregate holding of the Penta Funds to greater than 50% of
the issued ordinary share capital.
* a review of the conversion terms by the Company's nominated adviser and
confirmation that the directors consider the terms of conversion are fair and
reasonable so far as the SpiriTel shareholders are concerned
* approval of the waiver and modification of the conversion terms by the
ordinary shareholders at an Extraordinary General Meeting.
Subject to shareholder approval at an Extraordinary General Meeting:
* all of the current rights to convert the Company's indebtedness to the Penta
Funds into ordinary shares will lapse immediately
* all of the current rights to interest on the Company's indebtedness to the
Penta Funds will lapse immediately
* the Penta Funds will immediately convert up to £6.85 million of the Company's
indebtedness into ordinary shares of the Company at the price of 0.6p per
ordinary share so that, following this conversion, the Penta Funds aggregate
holding will represent up to 82.3% of the Company's issued ordinary share
capital.
Copies of the Annual Report and Accounts will be posted to shareholders shortly.
Copies are available from the Company's head office at 18 King William Street,
London EC4N 7BP. It will also be possible to download the Annual Report and
Accounts from the Group's website www.spiritel.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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