Edit Content ↓ and Banner ↑
Proposed investment and re-banking announcement
11th April 2012
We are delighted to report that today the release below has been issued to the London Stock Exchange confirming that our largest single shareholder, McNally Bharat Engineering Company Ltd (“MBE”), a leading Indian engineering group, has agreed – subject to shareholder approval - to invest £5 million directly into our parent company thereby enabling us to improve our working capital/credit facilities whilst at the same time leverage off MBE’s operations in India, Africa and South America.We likewise see a range of operational benefits flowing from the Transaction which we believe will be of transformational importance to Hayward Tyler allowing us to better service our international customer-base and extend our presence around the world.
Proposed Subscription to raise £5 million, proposed new borrowing facilities and potential MBE Cologne Acquisition & Notice of Results
Specialist Energy Group plc (AIM: SEGR), the specialist engineering group, is pleased to announce that on Thursday 5 April 2012 a Circular and Notice of General Meeting were posted to Shareholders regarding:
- A Subscription by MBE Mineral Technologies Pte Ltd (“MBE”) for 10,000,000 New Ordinary Shares at 50 pence representing a 108 per cent premium to the closing share mid-price on 4 April;
- Proposed new borrowing facilities of £12 million from Standard Chartered and MBE;
- Authority to issue of 4,000,000 Additional New Ordinary Shares to acquire 20 to 24 per cent of MBE Cologne Engineering GmbH, a wholly owned subsidiary of MBE;
- Approval for waiver of obligations under Rule 9 of the Takeover Code.
Copies of the Circular, Notice of General Meeting and Proxy Forms are also available for download from the Company’s website, www.segroupplc.com/shareholderinformation.htm. A copy of the text from the Circular appears below. Defined terms used in this announcement have the same meaning as those in the Circular.
Financial Highlights of the Transaction
- MBE has agreed to subscribe to 10,000,000 New Ordinary Shares at 50 pence representing a 108 per cent premium to the closing share mid-price on 4 April of 24 pence, raising £5 million before expenses;
- The Company to seek authority to issue 4,000,000 Additional New Ordinary Shares to acquire a 20 to 24 per cent of MBE Cologne Engineering GmbH, a wholly owned subsidiary of MBE which specialises in the manufacture of specialist machinery and components for the material handling and power generation sectors;
- MBE’s holding in SEG to increase from 25.27 per cent to 41.69 per cent following the Subscription;
- Funds raised to be used to settle existing derivative instruments with the Company’s existing bank enabling it to re-bank with Standard Chartered;
- Anticipated net debt within SEG after the repayment of the derivative instruments to be reduced from £9.4 million to £8.4 million before costs on a pro-forma basis;
- Loan facilities available to the Company to increase by 26 per cent to £12 million via proposed borrowing facilities from Standard Chartered and MBE; and
- £2.8 million of Bonds and Guarantees to be additionally provided by Standard Chartered which combined with the loans will significantly improve working capital for the Company.
Operational Highlights of the Transaction
- MBE is the wholly owned investment subsidiary of McNally Bharat Engineering Company Limited, one of India’s leading Engineering, Procurement and Construction groups and an existing shareholder in SEG;
- Through McNally Bharat, the Company will have increased access to key growth markets – in particular India, Africa and South America;
- Through SEG’s Hayward Tyler subsidiary, McNally Bharat will have improved access to North American and Chinese markets and a broader portfolio of products and services to market;
- MBE Cologne to deliver operational benefits to assist in enhancing Hayward Tyler’s procurement and supply chain management;
- Hayward Tyler’s Luton facility to be developed further as a centre of engineering excellence;
- Three new directors proposed by MBE to join the Board replacing Christopher Every and Ronald Emerson who are due to step down on completion of the Transaction.
Notice of Results
The Company also draws Shareholders attention to comments made in the Current Trading and Prospects section of the Circular and confirms it expects to release its preliminary results for the year ended 31 December 2011 on or around 16 April 2012. As highlighted in the Circular and the pre-close statement of 1 February 2012, trading levels experienced in the second half significantly exceeded those achieved in the first six months of the year. However, as previously indicated, performance in the manufacturing division was poor. As a result, overall revenues for the year are expected to be in the region of £32.1 million with trading operating profit of £2.5 million and trading profit after tax of £1.5 million (before any non-cash non-trading items). Furthermore, as highlighted in the Circular, the Board is currently reviewing the specific uncertainty surrounding the collectability of various receivables which may require a provision of up to £1 million.
John May, Chairman of Specialist Energy Group, commented:
“We are delighted to have reached these agreements with MBE which we believe will be transformational for the Group and in the long term interest of all our customers, staff and shareholders. MBE is fully supportive of our Company’s senior management team, its strategic plan for Hayward Tyler and supporting the development of the Group. It is likewise committed to maintaining the Company’s listing on AIM for a minimum of two years. Subject to the proposed resolutions being passed at the General Meeting, the Board believes that the significant premium to the pre-announcement share price will be appreciated by shareholders as will the proposed benefit of a supportive banking relationship.”
The General Meeting of the Company will be held at Irwin Mitchell LLP, 40 Holborn Viaduct, London EC1N 2PZ at 9 a.m. on 30 April 2012.
Edit Related Documents ↓
Additional Information
Download other documents related to this product