RNS Number : 4945D
Loanmakers (Holdings) PLC
16 September 2008
16 September 2008
Loanmakers (Holdings) plc
("Loanmakers" or the "Company")
Open Offer of up to 745,715,976 New Ordinary Shares at 0.25 pence per share on the basis of 24 Offer Shares for every 1 Existing
Ordinary Share
Capital Reorganisation
Waiver from Provisions of Rule 9 of the Takeover Code
The Board has today published a circular to Shareholders (the "Circular") in relation to, inter alia, a proposed Open Offer to raise up
to �1.86 million (before expenses) which will be fully underwritten by the Company's Chief Executive, Ges Ratcliffe. Ges Ratcliffe will also
be taking up his full entitlement under the Open Offer.
Existing Shareholders are being offered the opportunity to participate in the fundraising through the Open Offer on the basis of:
24 Offer Shares for every 1 Existing Share
The net proceeds of the Open Offer are expected to be up to �1.7 million. The proceeds of the Open Offer provide the Company with
sufficient resources to further reduce its level of debt and provide general working capital for the Company.
Background to and reasons for the Open Offer
The Company announced its preliminary results for the year ended 31 March 2008 on the 19 June 2008 at which time it reported that the
year had been extremely challenging for the Group, leading to a disappointing set of full year results. In October 2007 it was announced
that in light of the impact of certain modifications to its core IVA business, the Board would undertake a strategic review of the business,
which culminated in the disposal of the IVA Book to a consortium comprising of Grant Thornton UK LLP and Payplan Solutions Limited. This
resulted in the complete exit from the IVA and debt resolution activities of the Group and refocused the business on Loanmakers, its loan
broking subsidiary, which was acquired in June 2006.
The loan broking subsidiary performed well in the first half to September 2007, and had a record month in November achieving 600 loan
completions. However, as foreshadowed in both the Group's interim results in December 2007 and in the disposal announcement of February
2008, the 'credit crunch' has increasingly impacted Loanmakers' performance during 2008, though, in comparison with many of Loanmaker's
competitors, the loan broking business has performed relatively well. Loanmakers has a reputation of having high lead conversion rates among
master brokers and has internal software systems in place that allows the business to operate effectively and efficiently.
On 8 July 2008, the Company released a trading statement stating that First Plus, Barclays Bank plc's main secured loan brand and the
market's largest provider of secured loans ("First Plus") indicated that it intended to cease accepting new business with effect from 9
August 2008, which it has now done. First Plus was the leading provider of secured loans to Loanmakers and its withdrawal from the market
will inevitably affect the Company's business. The Board is currently undertaking a review of the situation and this will encompass sourcing
additional capacity from other providers of secured loans in order to alleviate the impact of First Plus' ceasing to accept further
business.
In the opinion of the Directors, the 'credit crunch', tighter lending standards, the withdrawal of First Plus as a lending provider of
secured loans and general financial turmoil will continue to impact the business negatively in 2008. The Directors believe that it will not
be possible in the short term to maintain levels of completions at the current rate of 300 to 400 cases per month and more likely these will
reduce to around 200 completions per month. The proposed additional capital injection should ensure that the Company is able to protect its
infrastructure, remain in a strong position to increase volumes when conditions allow and give the Company time to identify new loan
providers. Accordingly, the Board is proposing to raise approximately �1.86 million (gross) through an Open Offer, which Ges Ratcliffe will
fully underwrite, subject to the passing of the Resolutions and Admission taking place as further detailed in Part V of the Circular.
Details of the Open Offer
Qualifying Shareholders are invited to apply for Offer Shares at the Open Offer Price, payable in full on application and free of all
expenses, pro rata to their existing shareholdings on the basis of:
24 Offer Shares for every 1 Existing Ordinary Share
held at the Open Offer Record Date and so on in proportion for any other number of Existing Ordinary Shares then held. Entitlements of
Qualifying Shareholders will be rounded down to the nearest whole number of Offer Shares. Fractional entitlements which would have otherwise
arisen will not be issued.
The Open Offer is subject, inter alia, to the satisfaction of the following conditions on or before 14 October 2008, (or such later date
being not later than 28 October 2008, as the Company may decide):
(i) the passing without amendment of the Resolutions; and
(ii) Admission becoming effective by 8.00 a.m. on 14 October 2008, (or such later time or date not being later than 8.00 a.m. on 28
October 2008 as the Company may decide).
The Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the
right to receive all dividends and other distributions declared, made or paid after the date of Admission.
The Directors have given irrevocable undertakings to take up in full their respective entitlements under the Open Offer, amounting to,
in aggregate, 244,136,280 Offer Shares.
The Open Offer has been structured so as to allow Qualifying Shareholders to subscribe for New Ordinary Shares at the Open Offer Price
pro rata to their existing holdings.
Settlement and dealings
Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that
such Admission will become effective and that dealings will commence on 14 October 2008. Further information in respect of settlement and
dealings in the Offer Shares is set out in paragraph 7 of Part II in the Circular.
The Offer Shares will, when issued, rank pari passu in all respects with the New Ordinary Shares, including the right to receive
dividends and other distributions declared following Admission.
Overseas Shareholders
Certain Overseas Shareholders may not be permitted to subscribe for Offer Shares pursuant to the Open Offer and should refer to
paragraph 6 of Part II of the Circular.
Background and information on Ges Ratcliffe
Ges Ratcliffe, aged 42, is the current Chief Executive of Loanmakers (Holdings) plc. He graduated from UMIST in 1987 with a BSc in
Management Sciences, joined Arthur Andersen in 1987 and qualified as a chartered accountant in 1990. Following this he joined Leonard Curtis
and Partners and moved to Latham Crossley & Davies in 1993. In 1994 he set up Ratcliffe & Co Insolvency Practitioners before founding
Debtmatters Limited in 2003 which was admitted to AIM in June 2005 and which later changed its name to Loanmakers (Holdings) plc. Ges
Ratcliffe currently owns 10,070,645 Existing Ordinary Shares in the Company representing 32.42 per cent. of the total voting rights of the
Company.
As mentioned in paragraphs 1 and 2 Ges Ratcliffe will fully underwrite the Open Offer and his commitment in relation to the underwriting
agreement is solely being met from his existing cash resources and is not dependent on third party financing. Accordingly, the provision of
Ges Ratcliffe's finance is not reliant on the current or future performance of Loanmakers.
Directors' Interests
The interests of the Directors (and their immediate families and/or persons connected with them), as at the date of this announcement
and on completion of the Proposals, in the issued share capital of the Company are as follows:
Name Existing Holding Holding post Open Offer
Offer shares
Number of Existing % Number of Ordinary %
Ordinary shares Number of New Shares Number of Deferred
Ordinary Shares Shares
Ges Ratcliffe 10,070,645 32.41 241,665,480 251,766,125 32.41 10,070,645
753,345,821* 96.98* 10,070,645
Noel Guilford 56,080 0.18 1,345,920 1,402,000 0.18 56,080
Mark Prideaux 45,620 0.15 1,094,880 1,140,500 0.15 45,620
* Assuming Ges Ratcliffe takes up his full underwriting participation due to no take up by Qualifying Shareholders other than the
Board.
Use of proceeds
The proceeds of the Open Offer will be used to reduce the levels of Company indebtedness and to provide the Company with general working
capital.
Current trading and future prospects
There are widely differing views as to how long the 'credit crunch' will last, but the Directors are confident that when confidence
returns to the sector, the Company is positioned to increase volumes and return to growth. However, in the interim the Board are fully
committed to supporting the Loanmakers business in order to ensure that the business will deliver value to Shareholders in the future and it
is the intention of the Board to continue trading and maintain the Company's status on AIM following the proposed Open Offer. However,
should Ges Ratcliffe be required to take up all or a substantive amount of his underwriting participation, the Directors will have to assess
the Company's ongoing suitability to remain listed on AIM given the absence of any free float in the Company's shares. Should the Company be
de-listed as a consequence, it will continue its business in the private arena and the Directors may, inter alia, then seek to establish an
off market facility to be administered by the Company to allow shares to be bought and sold in the Company.
Ges Ratcliffe, has confirmed that he has no intention to change the conduct of the Company's business following the implementation of
the Proposals, whether it be a public or a private limited company. Similarly, there is no intention to relocate the business, to redeploy
any of the Company's fixed assets and it is not anticipated that there will be any material change to the conditions of the employees of the
Company.
Trading is currently stable with the loan broking business maintaining levels of completed cases at between 300 to 400 per month.
However, following the withdrawal of First Plus from the market volumes are likely to fall to around 200 completions per month which the
Directors believe will be sufficient to break even in the future once a cost savings programme has been completed.
Capital Reorganisation
The New Ordinary Shares to be issued pursuant to the Open Offer are all being issued at the Open Offer Price. This represents a discount
of 66.7per cent. to the 0.75p closing mid-market price of the Existing Ordinary Shares on 15 September 2008, being the last day of trading
prior to posting of this document.
The Existing Ordinary Shares have a nominal value of 10 pence each. The 1985 Act provides that a company may only lawfully issue new
shares for a subscription price at or above the nominal value of those shares. In order that the Company may issue the New Ordinary Shares,
pursuant to the Proposals, the Company proposes that each share in the capital of the Company currently having a nominal value of 10 pence
each, be sub-divided so that every Existing Ordinary Share in issue be sub-divided and reclassified into one New Ordinary Share having a
nominal value of 0.01 pence and one Deferred Share with a nominal value of 9.99 pence. The Deferred Shares will have no practical economic
value, will not be listed, will be non-voting, will carry no right to a dividend and will be subject to eventual redemption by the Company
for a nominal amount. The proposed rights and restrictions attaching to the Deferred Shares will be set out in the new Articles to be
adopted pursuant to Resolution 5 in the General Meeting Notice attached to the Circular.
The proposed Capital Reorganisation will not affect the rights attaching to the Existing Ordinary Shares, other than to alter their
nominal value. The proposed Capital Reorganisation will not affect the voting rights of the holders of Existing Ordinary Shares and will be
made by reference to holdings of Existing Ordinary Shares on the register of members as at the close of business on 13 October 2008.
Certificates will not be issued for the Deferred Shares and the Company may, for administrative purposes register the Deferred Shares in
the name of a nominee for the Shareholders.
Replacement certificates will not be sent out in relation to the newly denominated Existing Ordinary Shares. Existing share certificates
will remain valid in relation to the number of Ordinary Shares that each shareholder is entitled to following the Capital Reorganisation.
New share certificates will only be sent out in relation to trades or transfers of Ordinary Shares effected on or after 14 October 2008.
Dispensation from Rule 9 of the Takeover Code
Under Rule 9 of the Code, any person who acquires an interest (as defined in the Code) in shares which, taken together with shares in
which he is already interested and in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting
rights of a company which is subject to the Code, is normally required to make a general offer to all the remaining shareholders to acquire
their shares.
Similarly, when any person together with persons acting in concert with him, is interested in shares which in the aggregate carry not
less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of such voting
rights, a general offer will normally be required if any further interests in shares are acquired by any such person.
Any offer under Rule 9 must be in cash and at the highest price paid during the 12 months prior to the announcement of the offer for any
interest in shares of the company by the person required to make the offer or any person acting in concert with him.
Shareholders should be aware that, if approved at the General Meeting, the issue of Offer Shares to Ges Ratcliffe, will result in Ges
Ratcliffe holding 32.41 per cent. of the then issued share capital if he only takes up his entitlement under the Open Offer. However, as Ges
Ratcliffe is also underwriting the entire Open Offer, his holding in the Company may increase up to 753,345,821 Ordinary Shares representing
96.98 per cent. of the entire issued share capital of the Company, assuming Ges Ratcliffe takes up his full underwriting participation due
to no take up by any other Qualifying Shareholders.
The Panel has been consulted and has agreed, subject to the passing on a poll by the Independent Shareholders of Resolution 3 set out in
the Notice, to waive the obligation on Ges Ratcliffe to make a general offer to Shareholders under Rule 9 of the Code which could otherwise
arise upon completion of the Open Offer.
Following the completion of the Proposals Ges Ratcliffe will potentially hold more than 50 per cent. of the Company's issued share
capital and may accordingly thereafter increase his aggregate interests in shares without incurring any obligation under Rule 9 to make a
general offer.
Shareholders should be aware that if Ges Ratcliffe does take up his full underwriting participation his resultant shareholding will be
96.98 per cent. of the Company. Should Ges Ratcliffe be required to take up all or a substantive amount of his underwriting participation
the Directors will have to assess the Company's ongoing suitability to remain listed on AIM given the absence of any free float in the
Company's shares. Should the Company be de-listed as a consequence it will continue its business in the private arena and the Directors may,
inter alia, then seek to establish an off market facility to be administered by the Company to allow shares to be bought and sold in the
Company.
General Meeting
The proposals set out in this announcement and the Circular to shareholders posted today require Shareholder approval which will be
sought at a General Meeting of the Company to be help at the offices of Halliwells LLP, 3 Hardman Square, Spinningfields, Manchester M3 3EB
on 13 October 2008 at 11.00 a.m.
Irrevocable undertakings
The Company has received irrevocable undertakings to vote in favour of the Resolutions to be proposed at the General Meeting from each
of the Independent Directors holding in aggregate, 101,700 Existing Ordinary Shares representing approximately 0.33 per cent. of the
Existing Share Capital and has also received an irrevocable undertaking from Ges Ratcliffe to vote in favour of all Resolutions but for
Resolution number 3 to approve the waiver proposed to be granted by the Panel in respect of any obligation which might arise under Rule 9 of
the Code. Ges Ratcliffe currently holds 10,070,645 Existing Ordinary Shares representing 32.41 per cent. of the Company's Existing Share
Capital.
Related Party Transaction
Ges Ratcliffe's underwriting of the Open Offer is deemed to be a related party transaction for the purposes of AIM Rule 13.
The Independent Directors, who are independent for the purposes of the AIM Rules, having consulted with Charles Stanley, the Company's
Nominated Adviser, consider the terms of the underwriting agreement between Ges Ratcliffe and the Company to be fair and reasonable insofar
as the Company's Shareholders are concerned.
Recommendation
The Directors holding respectively 10,070,645, 56,080 and 45,620 Existing Ordinary Shares in the Company, who have been so advised by
Charles Stanley, consider the Proposals apart from Resolution 3 to be fair and reasonable and in the best interests of the Company and its
Shareholders as a whole and accordingly unanimously recommend Shareholders to vote in favour of the Resolutions to be proposed at the
General Meeting as they have irrevocably undertaken to do in respect of their beneficial holdings amounting to, in aggregate, 10,172,345
Existing Ordinary Shares, representing approximately 32.74 per cent. of the Existing Share Capital.
The Independent Directors, who have been so advised by Charles Stanley, consider the proposal in relation to Resolution 3, to approve
the waiver granted by the Panel in respect of any obligation which might arise under Rule 9 of the Code to be fair and reasonable and in the
best interests of the Company and the Independent Shareholders as a whole. They accordingly unanimously recommend Shareholders to vote in
favour of Resolution 3 to be proposed at the General Meeting as those Independent Directors holding Existing Ordinary Shares have
irrevocably undertaken to do in respect of their beneficial holdings amounting to, in aggregate, 101,700 Existing Ordinary Shares,
representing approximately 0.33 per cent. of the Existing Share Capital.
For further information please contact:
Ges Ratcliffe CEO, Loanmakers (Holdings) plc 01204 845 700
Mark Prideaux Finance Director, Loanmakers
(Holdings) plc
Rick Thompson / Carl Holmes Charles Stanley Securities 020 7149 6000
Nominated Adviser and Broker
EXPECTED TIMETABLE OF EVENTS
2008
Open Offer Record Date 12 September
Dispatch of the document 16 September
Open Offer entitlements credited to CREST stock
accounts of Qualifying CREST Shareholders 17 September
Recommended latest time for requesting withdrawal of Open Offer
Entitlements from CREST 4.30 pm 3 October
Latest time for depositing Open Offer Entitlements
into CREST 3.00 pm on 7
October
Latest time for splitting of Applications Forms (to satisfy bona fide market claims) 3.00 pm on 8 October
Latest time and date for receipt of Forms of Proxy
for the General Meeting 11.00 am on 11 October
Latest time and date for receipt of completed Application Forms and payment in full
under the Open Offer or settlement of relevant CREST
instruction (as appropriate) 11.00 am on 10 October
General Meeting 11.00 am on 13 October
Record Date for Capital Reorganisation 6.00 pm on 13 October
Admission effective and dealings commence on AIM 14 October
CREST accounts credited 14
October
Share certificates dispatched by 21
October
Notes:
1. References to time in this announcement are to London time.
2. lf any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement
on a RIS.
3. All events in the above timetable following the General Meeting are conditional upon approval by Shareholders of the Resolutions to
be proposed at the General Meeting.
DEFINITIONS
"1985 Act" the Companies Act 1985
**2006 Act** the Companies Act 2006, to the extent in force and applicable
*Admission* admission of the New Ordinary Shares to trading on AIM becoming
effective in accordance with the AIM Rules
*AIM* the AIM market of the London Stock Exchange plc
*AIM Rules* the rules published by the London Stock Exchange governing
admission to, and the operation of, AIM
*Application Form** the application form to be used by Qualifying non-CREST
Shareholders in connection with the Open Offer
"Board" or "the Directors" the directors of the Company as at the date of this announcement
"Capital Reorganisation" the splitting of the current 31,071,499 ordinary shares with a
nominal value of 10 pence each into 31,071,499 New Ordinary
Shares with a nominal value of 0.01 pence each and 31,071,499
Deferred Shares with a nominal value of 9.99 pence each
"Capita Registrars" a trading name of Capita Registrars Limited
*certificated* or *in an Existing Ordinary Share which is not in uncertificated form
certificated form*
*Charles Stanley* Charles Stanley Securities, a trading division of Charles Stanley
& Co. Ltd, Loanmakers' Nominated Adviser and Broker, a member of
the London Stock Exchange and authorised and regulated by the FSA
**Code** the City Code on Takeovers and Mergers, as amended from time to
time
*Companies Act* or the *Act* the 1985 Act, as amended or repealed by the 2006 Act from time to
time
**Company**or **Loanmakers* Loanmakers(Holdings) plc
*CREST* the computerised settlement system operated by Euroclear Limited
to facilitate the transfer of title to shares in uncertificated
form. The Relevant System (as defined in the CREST Regulations)
in respect of which Euroclear Limited is the Operator (as defined
in the CREST Regulations)
*CREST Regulations* the Uncertificated Securities Regulations 2001
"Debtmatters" Debtmatters Limited
"Deferred Shares" the deferred shares of 9.99 pence each in the share capital of
the Company to be created pursuant to the Capital Reorganisation
"Disclosure Period" the period of 12 months preceding the date of the circular to
Shareholders
**Enlarged Share Capital** the 776,787,475 Ordinary Shares in issue on Admission, assuming
full subscription under the Open Offer or full underwriting
"Euroclear" Euroclear UK & Ireland Limited
*Excluded Territories* Any jurisdiction where to do so might constitute a violation of
local securities law or regulation, including, but not limited to
the United States Canada, South Africa, New Zealand, Australia
and Japan
"Existing Ordinary Shares" the ordinary shares of 10 pence each in the share capital of the
Company in issue at the date of this announcement
*Existing Share Capital* the Existing Ordinary Shares
*Form of Proxy* the form of proxy which accompanies the circular to Shareholders,
for use at the General Meeting
*FSA* the UK Financial Services Authority
*FSMA* the UK Financial Services and Markets Act 2000 (as amended)
*General Meeting* the general meeting of Loanmakers convened for 13 October 2008
"Group" the Company and its subsidiaries and subsidiary undertakings at
the date of this announcement
*Independent Directors* Noel Guilford and Mark Prideaux
"Independent Shareholders" the Shareholders other than Ges Ratcliffe
*IVA* Individual Voluntary Arrangement
"IVA Book" all the IVA arrangements of Debtmatters as at 8 February 2008
including the benefit of the IVAs and partly performed services
allocated to such IVAs in respect of which nominee fees,
supervisor fees and disbursements receivable by Debtmatters
*London Stock Exchange* London Stock Exchange plc
"New Ordinary Shares" the new ordinary shares of 0.01 pence each in the capital of the
Company to be created pursuant to the Capital Reorganisation
*Notice* the notice convening the General Meeting
*Offer Shares** the 745,715,976 New Ordinary Shares which are to be made
available for subscription by Qualifying Shareholders under the
Open Offer
*Official List** the Official List of theUKListing Authority
**Open Offer** the conditional offer to Qualifying Shareholders to subscribe for
the Offer Shares at the Open Offer Price, as described in the
circular to Shareholders
**Open Offer Entitlements** entitlements to subscribe for Offer Shares, allocated to a
Qualifying Shareholder pursuant to the Open Offer
**Open Offer Record Date** the close of business on 12 September 2008
*Ordinary Shares* the ordinary shares in the share capital of Loanmakerswhich may
be in issue from time to time which for the avoidance of doubt
shall include the Existing Ordinary Shares and the New Ordinary
Shares
**Overseas Shareholders** Shareholders resident in, or citizens of, jurisdictions outside
the United Kingdom
*Panel* the Panel on Takeovers and Mergers
"Open Offer Price" 0.25 pence per New Ordinary Share
*Proposals* the proposals set out in this announcement and the circular to
Shareholders including the Open Offer
*Prospectus Rules* the Prospectus Rules published by the FSA
**Qualifying CREST Qualifying Shareholders whose Existing Ordinary Shares on the
Shareholders** register of members of the Company on the Open Offer Record Date
are held in uncertificated form
**Qualifying non-CREST Qualifying Shareholders whose Existing Ordinary Shares on the
Shareholders** register of members of the Company on the Open Offer Record Date
are held in certificated form
**Qualifying Shareholders** holders of Existing Ordinary Shares at the Open Offer Record Date
**Resolutions** the resolutions to be proposed at the General Meeting as set out
in the Notice
*RIS* Regulated Information Service
*Shareholder* a holder of Ordinary Shares from time to time
*UK* the United Kingdom of England, Scotland, Wales and Northern
Ireland
*UKLA* theUKListing Authority
*US*, *USA* or *United States* the United States of America, each State thereof (including the
District of Columbia), its territories, possessions and all areas
subject to its jurisdiction
This information is provided by RNS
The company news service from the London Stock Exchange
END
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