18 June 2020
Angelfish Investments Plc
("Angelfish" or "the Company")
Proposed Fund Raising, Company Restructuring, New Investment Strategy and Proposed Board appointment
The Board of Angelfish is pleased to announce the following update on the Company.
The Company has been unable to pay the dividend on its 7.1% Cumulative Redeemable Preference Shares 2021 ("Preference Shares") since Q1 2019 due to accumulated accounting losses arising from compliance with IFRS9. In July 2019, it was announced that the Board was to seek a capital reduction which would have the effect of cancelling the Preference Shares and raising replacement capital through the issue of bonds carrying an equivalent yield. It was intended that the bonds would be raised through SVS Securities plc ("SVS") who had placed a significant proportion of the Preference Shares, however SVS entered special administration on 5 August 2019 and so the intended capital restructuring was not able to proceed as planned.
In October 2019 it was announced that YBOO Limited ("Yboo"), the Company's largest investment, had been put into administration as a result of its failure to raise the funds it required to complete its technology development programme and move into full commercialisation. Angelfish had invested GBP650,000 for a 35% stake in YBOO and in addition provided GBP1,020,181 by way of a secured working capital loan. Whilst the administrator was able to sell some of the assets of Yboo, after associated costs the disposal did not yield any funds for Angelfish.
As a result of the Preference Share position and the loss of significant funds from the administration of Yboo, the Board has been reviewing alternative options for the Company and has now resolved to proceed with the proposals set out below.
Proposed fund raising and Company restructuring
The Company has today entered into a framework agreement with Brian Jones under which, subject to a Company restructuring being effected, he will provide up to £50,000 of funding and acquire a 29.9% shareholding in the enlarged issued ordinary share capital of the Company following the proposed restructuring.
The proposed Company restructuring will comprise (a) the conversion ("Preference Conversion") of the Preference Shares into ordinary shares, and (b) a subdivision and/or consolidation of the ordinary shares ("Capital Reorganisation") to facilitate the Preference Conversion and the Loan Conversion. The proposed Company restructuring is subject to the approval of the Company's shareholders in general meeting and of the holders of the Preference Shares in a separate class meeting. The Company's authorities to allot securities will also be renewed and extended as necessary. The detailed terms of the Company restructuring are currently being finalised, and a full circular ("Circular") will be issued shortly to all shareholders detailing the Board's proposals for their consideration.
The principal terms of the framework agreement are as follows:
· £15,000 will be advanced on the terms of a convertible loan note ("Loan Notes") upon execution of the framework agreement. The Loan Notes are unsecured, interest-free, and are not repayable.
· A further £15,000 of Loan Notes will be issued upon posting of the Circular.
· Subject to the approval of the Preference Conversion and Capital Reorganisation:
o the Loan Notes will automatically be converted into ordinary shares; and
o Brian Jones will subscribe a further £20,000 for ordinary shares.
Following the Loan Conversion and share subscription, Brian Jones will hold 29.9% of the enlarged issued ordinary share capital of the Company.
The funding provided by Brian Jones will facilitate the restructuring process and provide ongoing working capital to the Company.
New investment strategy
As part of these proposals, it is proposed to revise the Company's investment strategy, to focus on the health sector. Further details of this strategy will be set out in the Circular.
Following completion of these proposals, the Board will seek to raise additional finance to allow it to take advantage of investment opportunities arising within that sector.
The Board is also pleased to announce the proposed appointment of Brian Jones as Non-executive Chairman, subject to the requisite regulatory procedures and a further announcement will be made once these procedures have been completed. Brian is Chief Executive Officer of 'The Partnership of East London Cooperatives', a Social Enterprise delivering healthcare services to the population of East London. The organisation recently won a major five-year contract to operate four new Urgent Treatment Centres.
Brian Jones commented: I am delighted at the prospect of joining the board of Angelfish and look forward to working with colleagues to develop an exciting new strategy to build shareholder value.
Richard Walker, Director of Angelfish commented: "The Board are very pleased to be in a position to put these proposals to shareholders after a difficult period for the Company. We look forward to working with Brian to identify new opportunities to grow and strengthen our investments in the coming months.''
This announcement contains information which, prior to its disclosure, was inside information for the purposes of Article 7 of EU Regulation 596/2014.
The Directors of the Company take responsibility for this announcement.
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Angelfish Investments Plc +44 (0)7772 013116
Richard Walker, Director
Novum Securities Limited +44 (0)207 399 9400
AQSE Corporate Adviser
David Coffman / Daphne Zhang
About Angelfish Investments Plc
The Company's Ordinary Shares and Preference Shares are admitted to trading on the AQSE Growth Market in London. The Company has the trading symbol ANGP for its Ordinary Shares and the trading symbol ANGS for its Preference Shares.