Ace Liberty & Stone - Open Offer
RNS Number : 1581O
Ace Liberty & Stone PLC
05 February 2016
 

 

 

 

Press Release

5 February 2016

 

Ace Liberty and Stone Plc

 

(''Ace'' or "the Company'')

 

Open Offer

                                      

Ace Liberty and Stone Plc (ISDX: ALSP), the active property investment company capitalising on commercial property investment opportunities across the UK, today announces that it is seeking to raise up to £3.5 million (before fees and expenses) through an Open Offer by way of the issue of New Ordinary Shares at an Issue Price of 1 pence per New Ordinary Share.

 

Highlights

 

·     Proposal to raise up to £3.5 million before fees and expenses

·     Allows Ace to continue to build its portfolio of properties with good rental income, sound covenants and potential for capital value increases

·     Allows the Company to move into a higher price bracket of properties and maintain current margins

·     Future purchases will be consistent with the existing successful strategy

·     Up to 350,000,000 New Ordinary Shares will be issued through the Open Offer at 1 pence per New Ordinary Share

·     Subject to a minimum of £2 million being raised (before fees and expenses), representing 200,000,000 New Ordinary Shares

·     Qualifying Shareholders can subscribe for 1 Open Offer Share for every 2 Existing Ordinary Shares, with the possibility of acquiring additional Open Offer Shares through the Excess Application Facility

·     The Open Offer Document ("The Document") and the application form are expected to be posted to shareholders today

 

Ismail Ghandour, Chief Executive of Ace Liberty & Stone, commented: "This fundraising follows the Company's strong track record in capitalising from the regional commercial property market.  The Directors are conscious of the support provided by shareholders and believe that this is the right time for them to participate in taking Ace into the next stage of investment.  We plan to use the funds raised to continue the Company's strategy to grow the value of the portfolio of investment properties."

 

 

- Ends -

 

For further information, please contact:

Ace Liberty & Stone Plc

 

Ivan Minter, Financial Director

Tel: +44 (0)  20 7201 8340

 

http://acelibertyandstone.com

Alfred Henry Corporate Finance Ltd, ISDX Corporate Adviser

 

Jon Isaacs / Nick Michaels

Tel: +44 (0) 20 7251 3762

 

www.alfredhenry.com

Hybridan LLP, Corporate Broker

 

Claire Noyce / Darshan Patel 

Tel: +44 (0)203 764 2341

 

www.hybridan.com

Media enquiries:

Abchurch

 

Quincy Allan / Canace Wong

Tel: +44 (0) 20 7398 7720

quincy.allan@abchurch-group.com

www.abchurch-group.com

 

 

Notes to Editors

 

Ace Liberty & Stone Plc is a London-based property investment company with a diverse portfolio of properties located across the UK, currently including Leeds, Doncaster, Sunderland, Dudley and Gateshead Tyne and Wear. The Company locates commercial properties which have the potential for an increase in value through creative asset management activity, such as change of tenancy, change of use or new lease negotiation.  Ace has maintained a track record of generating strong profits at disposal of properties and achieving better-than average returns on capital. With strong support from shareholders and mortgage lenders, the Company is currently seeking further investment opportunities in the UK to create value for existing and new investors.

 

The London property market has seen considerable recovery since the 2008 financial crisis. However, in some UK regions smaller properties have begun to appreciate in value, and this trend is starting to appear amongst larger properties.

 

Ace is run by a board with extensive property experience, an excellent network of contacts and relevant professional qualifications. This sector expertise has allowed the Board to identify opportunities and act promptly to secure investments.

 

For more information on the Company please visit: http://acelibertyandstone.com/ 

 

 

 

Extracts from the Open Offer Document (the or this "Document") posted to shareholders today

 

LETTER FROM THE CHAIRMAN

 

To Shareholders

 

Open Offer of up to 350,000,000 New Ordinary Shares at 1 pence per Ordinary Share

 

1.        Introduction

 

The Company announced today that it will raise up to £3.5 million (before fees and expenses) through an Open Offer by way of the issue of New Ordinary Shares at an Issue Price of 1 pence per New Ordinary Share. The Issue Price represents an approximate 73 per cent. discount to the Closing Price of 3.75 pence per Ordinary Share on the Latest Practicable Date. The New Ordinary Shares will automatically be admitted to trading on the ISDX Growth Market following an announcement by the Company confirming completion of the Open Offer. It is expected that Admission will occur on 26 February 2016.

 

The Open Offer is subject to a minimum of £2 million (before fees and expenses) being raised, representing 200,000,000 New Ordinary Shares.  If the total number of New Ordinary Shares for which applications are received within the Offer Period is lower than the number required to raise the minimum amount of £2 million, the Open Offer will not proceed.  Those who have applied for Offer Shares will have their application and the amounts subscribed for Offer Shares returned.

 

Each Qualifying Shareholder will be entitled to apply for additional Offer Shares under the Excess Application Facility.  The number of Excess Shares for which Qualifying Shareholders may apply is limited to the number that represents the same number of Offer Shares as those within the Open Offer Entitlement.  The entitlement to Excess Shares is subject to the total number of Offer Shares for which applications are received during the Offer Period not being greater than the maximum of 350,000,000 New Ordinary Shares, in which case the Excess Shares for which Qualifying Shareholders have applied will be scaled back in proportion to the respective numbers of Offer Shares of those who have applied for Excess Shares.

 

I am writing to set out the background to and reasons for the Open Offer. The funding will be used to allow the Company to start implementing the strategy to acquire additional properties as set out in the section headed Background to and Reasons for the Open Offer below. The proposals allow existing shareholders to participate in the fundraising in order to raise equity for the implementation of this strategy in a cost effective manner.

 

Your attention is drawn to paragraph 4 of Part II of this document which sets out the actions to be taken by Qualifying Shareholders seeking to participate in the Open Offer.

 

2.        Background to and reasons for the Open Offer

 

The Company has enjoyed substantial growth during the last three years. New equity investment has increased the Company's resources and enabled the purchase of properties with the support of secured loan finance.  With the purchase of Bridge House, Dudley in April 2015, these funds became fully invested. The interim results recently announced for the six months ended 31 October 2015 show the ongoing level of rental income generated by the portfolio of properties that have been acquired by the Company.

 

The Company is in a strong position with a good level of rental income and a portfolio of properties which has potential for a further increase in capital value.

 

The Directors continue to seek out further property purchase opportunities which would be to the Company's advantage if they can be realised. These are now to be found in a higher price range than the existing properties and additional funding by way of equity investment will enable the Company to move into that price bracket.

 

The Directors are conscious of the support provided by shareholders and believe it is right and fair to offer the opportunity to participate at the present time on advantageous terms before further equity investment is sought.

 

The Board acknowledges the importance of the continuing support of shareholders.  The Open Offer gives smaller Shareholders the opportunity to participate in the fundraising. The Open Offer also enables all Shareholders to participate in the fundraising on a pro rata basis and with the ability to apply for Offer Shares in addition to their proportionate entitlement.

 

Accordingly, the Directors believe that an Open Offer of New Ordinary Shares is in the best interests of the Company and Shareholders as the funds raised should enable the Company to progress with its strategy to grow the value of the portfolio of investment properties.

 

3.         Current trading and outlook

 

The Company has recently published its interim results for the six months ended 31 October 2015, which show a steady increase in all KPIs monitored by the Directors. It is noteworthy that revenue has increased by 145% and profit by 82% compared to the equivalent results in the previous year. The Company has recently announced the acquisition of Shildon House and the sale of Hume House, the latter netting a profit of £1.88m. Further property transactions are currently being negotiated which will enhance the portfolio and annual rental income.

 

4.         Use of Proceeds

 

The Company is seeking up to £3.5 million to continue to build its portfolio of properties with good rental income, sound covenants and potential for capital value increases. The Directors are in continuous touch with the commercial property market and constantly receive approaches for purchase and sale transactions. These are evaluated and pursued depending on the quality of the opportunity and available funds. It is not possible to specify which properties are to be purchased once the additional funding is available.  The amount that is raised by way of the Open Offer will allow the Directors to identify those opportunities that are most attractive. Future purchases will be consistent with the existing successful strategy; all property transactions are announced on the ISDX market.

 

5.         Information on the Open Offer

 

Fundraising Structure

 

The Directors have given careful consideration to the structure of the proposed fundraising and have concluded that the Open Offer is the most suitable option available to the Company and its Shareholders at this time having regard to the importance of pre-emption rights to Shareholders, the composition of the Shareholders, the current share price and the objective of achieving a cost effective and efficient fundraising.

 

Up to 350,000,000 New Ordinary Shares will be issued through the Open Offer at 1 pence per New Ordinary Share to raise aggregate gross proceeds of up to £3.5 million.

 

Principal terms of the Open Offer

 

The allotment of New Ordinary Shares by way of the Open Offer shall take place pursuant to the shareholder authorities granted at the Company's Annual General Meeting on 29 October 2015.

 

Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to subscribe for one Offer Share for every two Existing Ordinary Shares held on the Record Date at the Issue Price of 1 pence.

 

The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising pro rata to their current holdings of Existing Ordinary Shares with the option for subscribing for more pursuant to the Excess Application Facility subject to scaling down by the Company in the event that the Open Offer becomes oversubscribed. Any fractional entitlements to Offer Shares shall be aggregated and made available as part of the Excess Application Facility.

 

The Excess Application Facility being made available as part of the Open Offer enables Shareholders who so wish to apply for Open Offer Shares in excess of their Open Offer Entitlement up to an amount equal to their primary entitlement to Offer Shares.

 

It should be noted that the Open Offer is not a rights issue. The Application Form is not a document of title and cannot be traded. The Open Offer does not exceed a maximum aggregate amount of EUR5 million, in order to take advantage of the exemption of the Prospectus Directive 2003/71/EC which avoids the Company incurring the cost of publishing a prospectus.

 

If a Qualifying Shareholder does not take up any of his or her Open Offer Entitlement, his or her proportionate ownership and voting rights in the Company will be diluted by up to 36.12 per cent. by the issue of the New Ordinary Shares (based on a maximum subscription under the Open Offer).

 

The Open Offer is not underwritten. There can be no certainty as to the aggregate level of subscription for New Ordinary Shares. If the aggregate level of subscription within the Offer Period is less than 200,000,000 New Ordinary Shares the Open Offer will not proceed and subscription monies will be returned to applicants.

 

The latest date and time for acceptance and payment in full under the Open Offer is 11 a.m. on 22 February 2016. Any applications received after this time will not be accepted. Full details of the terms and conditions of the Open Offer and how to apply are set out in Part II of this document.

 

Assuming that the conditions are satisfied the Open Offer will raise gross proceeds of up to £3.5 million.

 

The Issue Price of 1 pence represents a 73.34 per cent. discount to the Closing Price of 3.75 pence per Ordinary Share on the Latest Practicable Date.

 

The Open Offer Shares will when issued be credited as fully paid and will rank equally in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares.

 

Open Offer Entitlement

 

Qualifying Shareholders are invited, on and subject to the terms and conditions of the Open Offer, to apply for any number of Open Offer Shares at the Issue Price up to their Open Offer Entitlement. Qualifying Shareholders have an Open Offer Entitlement of one Open Offer Share for every two Existing Ordinary Shares registered in the name of the relevant Qualifying Shareholder on the ex entitlement date for the Open Offer.

 

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Offer Shares will be disregarded in calculating Open Offer Entitlements.

 

The aggregate number of Open Offer Shares available for subscription pursuant to the Open Offer (including pursuant to the Excess Application Facility) will not exceed 350,000,000 New Ordinary Shares.

 

Application procedure under the Open Offer

 

Qualifying Shareholders may apply for any whole number of Open Offer Shares up to their Open Offer Entitlement referred to above. The Open Offer Entitlement, in the case of Qualifying Shareholders, is equal to the number of Open Offer Entitlements as shown in Box 2 on their Application Form. In addition, subject to availability, Qualifying Shareholders which apply for their full Open Offer Entitlement may apply for further Open Offer Shares under the Excess Application Facility (up to the same amount of shares as permitted under their Open Offer Entitlement).

 

Qualifying Shareholders should note that their Application Form is not a negotiable document and cannot be traded.

 

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part II of this document and, where relevant, on the Application Form.

 

Application for Admission

 

The New Ordinary Shares will be admitted to trading on the ISDX Growth Market automatically following an announcement by the Company confirming completion of the Open Offer. It is expected that Admission will occur and trading in the New Ordinary Shares will commence at 8.00 a.m. on 26 February 2016. No temporary documents of title will be issued.

 

The New Ordinary Shares will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares in issue at the date of this document and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

 

Important notice

 

Qualifying Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike with a rights issue, any Open Offer Shares not applied for by Qualifying Shareholders under their Open Offer Entitlements will not be sold in the market on behalf of, or otherwise placed for the benefit of those Qualifying Shareholders who did not apply for their Open Offer Entitlements but will be made available to Shareholders as part of the Excess Application Facility.

 

Qualifying Shareholders are being invited to participate in the Open Offer and (subject to certain exceptions) will have received an Application Form with this document.

 

In issuing this document and structuring the Open Offer in this manner, the Company is relying on the exemption from issuing a prospectus in section 85(5) and paragraph 9 of Schedule 11A of FSMA.

 

Any Qualifying Shareholder who has sold or transferred all or part of his registered holding(s) of Existing Ordinary Shares prior to the date on which the shares are marked 'ex-entitlement' is advised to consult his stockbroker, bank or other agent through or to whom the sale or transfer was effected as soon as possible since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from him by the purchasers under the rules of the ISDX.

 

Effect of the Open Offer

 

Upon completion of the Open Offer, the New Ordinary Shares will represent approximately 36.12 per cent. of the Enlarged Share Capital on the basis that the Open Offer will be subscribed in full.

 

6.         Action to be taken by Qualifying Shareholders in respect of the Open Offer

 

Qualifying Shareholders are holders of Existing Ordinary Shares, who are not Excluded.

 

If you are a Qualifying Shareholder you will receive an Application Form which gives details of your Open Offer Entitlement under the Open Offer (as shown by the number of Open Offer Entitlements set out in Box 2 of the Application Form). If you wish to apply for Open Offer Shares under the Open Offer, you should complete the Application Form in accordance with the procedure for application set out in paragraph 4 of Part II of this document and on the Application Form itself.

 

Completed Application Forms, accompanied by full payment by cheque or banker's draft in accordance with the instructions in paragraph 4 of Part II of this document, should be posted using the accompanying reply-paid envelope (if posted from the UK only) or returned by post or by hand (during normal business hours only) to the Company at 3a Pont Street, London SW1X 9EJ in either case, as soon as possible and in any event so as to be received by no later than 11 a.m. on 22 February 2016.  Payment for applications may also be made via CHAPS, BACS or electronic bank transfer. If you wish to make payment by such means, please notify the Company in advance either by telephone on 020 7201 8340 or by email iminter@acelibertyandstone.com. Please make all bank transfers, to the Company's bank account, details of which are set out on the Application Form.

 

If you would like to make an application but are unable to post the Completed Application Form to the Company so as to be received by 11 a.m. on 22 February 2016, please contact the Company without delay and in any event before 22 February 2016 either by telephone or email (as set out in the preceding paragraph). The Company has the discretion, but not the obligation, to accept Completed Application Forms electronically.

 

If you do not wish to apply for any Open Offer Shares under the Open Offer, you should not complete or return the Application Form.

 

7.        Overseas Shareholders

 

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Ordinary Shares for the benefit of such persons (including, without limitation, subject to certain exceptions, custodians, nominees, trustees and agents), or who have a contractual or other legal obligation to forward this document or (if applicable) an Application Form to such persons, is drawn to the information which appears in paragraph 5 of Part II of this document.

 

In particular, Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including, without limitation, the United States or any other Restricted Jurisdiction) should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their Open Offer Entitlements.

 

8.        Taxation

 

Shareholders who are in any doubt as to their tax position, or who are subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser immediately.

 

9.        Working Capital

 

The Company intends to invest the proceeds of the issue in investment properties. The Directors are of the opinion that there is sufficient working capital to pursue this strategy.

 

10.      Risk Factors

 

Shareholders should consider fully the risk factors associated with the Open Offer. Your attention is drawn to the risk factors set out in Part III of this document (Risk Factors).

 

11.      Further Information

 

Your attention is drawn to the further information set out in Parts II to V of this document. Shareholders should read the whole of this document and not rely solely on the information set out in this letter. In particular, you should consider the risk factors set out in Part III of this document.

 

12.      Intentions of the Directors in relation to the Open Offer

 

The Directors intend to take up their Open Offer Entitlements in full and subscribe for shares in the Excess Application Facility to subscribe for an aggregate of 68,094,484 Open Offer Shares as set out below:

 

Directors

Open Offer Entitlement Shares

Excess Application

Facility

Total Number of Open Offer Shares

Keith Pankhurst (Non-Executive Chairman)

964,638

964,638

1,929,276

Ismail Ghandour (Chief Executive)

18,354,941

18,354,941

36,709,882

Mark Thomas (Commercial Director)

81,305

81,305

162,610

Ivan Minter (Chief Financial Officer)

200,980

200,980

401,960

Anthony Ghorayeb (Senior Independent Director)

6,666,666

6,666,666

13,333,332

Kayssar Ghorayeb (Non-Executive Director)

2,107,662

2,107,662

4,215,324

Hikmat El-Rousstom (Non-Executive Director)

5,671,050

5,671,050

11,342,100

 

The Directors, in aggregate together with their immediate families or persons connected with them (within the meaning of Section 252 of the Act) hold 173,569,604 Existing Ordinary Shares, representing approximately 28 per cent. of the Existing Ordinary Shares in issue at the Latest Practicable Date. Please refer to Part V of this document for details of shareholdings owned by persons connected to the Directors.

 

An announcement will be released to the market in due course notifying the market of the acceptance by Directors and their families or connected persons of any Open Offer Entitlements and Excess Open Offer Entitlements and the effect on their subsequent shareholdings in the Company.

 

13.      Dilution

 

On completion of the Open Offer (and on the basis that it is fully subscribed) the issued ordinary share capital of the Company will be increased by approximately 57 per cent., resulting in an immediate dilution of approximately 36 per cent. in aggregate for holders of Existing Ordinary Shares, save to the extent that they subscribe for their Open Offer Entitlement and Excess Open Offer Entitlement.

 

14.      Share Capital

 

On Admission, on the basis that the Open Offer is fully subscribed, the Company will have 968,818,417 Ordinary Shares in issue. The Open Offer Shares will represent a maximum of 36.12 per cent. of the Enlarged Share Capital.

 

15.      Recommendation

 

The Board of Directors of the Company has resolved that the Open Offer is in the best interest of Shareholders as a whole. The Directors are not making a recommendation to Qualifying Shareholders as to whether they should take up their entitlement under the Open Offer, such decision will depend on each Qualifying Shareholder's individual circumstance. Accordingly, the Board of Directors of the Company strongly recommends that Qualifying Shareholders take their own independent financial advice before making a decision as to whether or not to take up their entitlement under the Open Offer. The Directors intend to take up their aggregate maximum Open Offer Entitlements of 34,047,242 New Ordinary Shares under the Open Offer in respect of a total of 68,094,489 Existing Ordinary Shares representing 11 per cent. of the Existing Ordinary Shares of the Company. In addition certain Directors (as set out in the table at paragraph 12 above) intend to apply for up to 34,047,242 New Ordinary Shares under the Excess Application Facility.

 

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

Record Date for entitlement to participate in the Open Offer

5.00 p.m. on 2 February 2016

Announcement of the Open Offer and dispatch of the Circular and the Application Form

 

5 February 2016

Expected ex-entitlement date for the Open Offer

8.00 a.m. on 5 February 2016

Latest time and date for splitting Application Forms

(to satisfy bona fide market claims only)

 

3.00 p.m. on 18 February 2016

Latest time and date for receipt of completed Application Forms

and payment in full under the Open Offer 

 

11.00 a.m. on 22 February 2016

Allotment of New Ordinary Shares

8.00 a.m. on 26 February 2016

Admission of the New Ordinary Shares to trading on

ISDX Growth Market

 

8.00 a.m. on 26 February 2016

Expected date of dispatch of definitive share certificates for the

New Ordinary Shares in certificated form (certificated holders only)

 

by 4 March 2016

 

Notes:

 

(1)  The ability to participate in the Open Offer is subject to certain restrictions relating to Qualifying Shareholders with registered addresses or located or resident in countries outside the UK (particularly the Excluded Overseas Shareholders), details of which are set out in paragraph 5 of Part II of this document. Subject to certain exceptions, Application Forms will not be dispatched to, shareholders with registered addresses in any of the Restricted Jurisdictions or any other jurisdiction where to do so might constitute a violation of local securities laws or regulations.

(2)  Each of the times and dates set out in the above timetable and mentioned in this document refer to London time and is final and will not be changed. Any applications received after 11.00 a.m. on 22 February 2016 will not be accepted.

 

 

OPEN OFFER STATISTICS

 

Issue Price per New Ordinary Share

1 pence

Closing Price per Existing Ordinary Share on the Latest Practicable Date

 

3.75 pence

Discount to Closing Price of an Existing Ordinary Share on the Latest Practicable Date

 

73.34 per cent

Open Offer Entitlement of Qualifying Shareholders under the Open Offer

One Open Offer Share for every

two Existing Ordinary Shares

Maximum number of New Ordinary Shares to be issued by the Company pursuant to the Open Offer

 

350,000,000

Number of Existing Ordinary Shares

618,818,417

Maximum gross proceeds of the Open Offer

£3,500,000

Maximum number of Ordinary Shares in issue immediately following Admission

968,818,417

New Ordinary Shares as a percentage of the Enlarged Share Capital at full subscription

36.12 per cent.

New Ordinary Shares as a percentage of the Enlarged Share Capital at minimum subscription

24.43 per cent.

Estimated net cash proceeds of the Open Offer at full subscription

£3.5 million

Estimated net cash proceeds of the Open Offer at minimum subscription

£2 million

 

 


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