TIDMSPSM
RNS Number : 4841E
Sports Stars Media plc
10 April 2014
9 April 2014
Sports Stars Media plc
("SSM" or the "Company")
Disposal of trading businesses, subscription to raise GBP300,000
at 0.06p per share, appointment of proposed directors and adoption
of investing policy
Introduction
On 14 February 2014, the Company provided a trading update in
respect of the group's financial position for the year ended 31
December 2013. In this update, the Group reported that the Group's
revenue for that year had been negligible, which largely reflected
a slower than anticipated initial take-up of The Mourinho product
range as a result of which and, as had been previously highlighted,
the Group expected to make a loss for the year. The unaudited
profit and loss account, balance sheet and cashflow statement for
the year ended December 2013, show that the Group made a loss of
EUR577,577 (2012: loss of EUR386,799) on revenue of EUR82,433
(2012: EUR25,966). Trading since the year end has continued to be
poor with unaudited revenues for the two months ended 28 February
2014 of EUR1,184 and losses of EUR226,485, and cash balances at 28
February of EUR76,830.
The announcement also stated that the initial take up of The
Game by Ronaldo had exceeded management expectations and that it
intended to launch a number of new marketing initiatives in order
to capitalise on the opportunities available to it which required
additional funds, and the Group was reviewing funding options for
this and its ongoing working capital requirements.
In order to address the Group's working capital requirements,
the Company has taken informal soundings from existing and
potential investors which have indicated negligible appetite for a
fund raising for the Company if it remains listed on AIM. The
Directors believe that this is due to a lack of revenue visibility,
historic and ongoing losses, the volatility of the Company's share
price and the fact that many of its shareholders are not based in
the UK. Conversely, however, there appears to be interest from
overseas investors, including existing shareholders, if the Company
were to be unquoted.
The board has now concluded that due to the limited resources
and difficult trading conditions faced by the trading subsidiaries,
the performance of the Company and its subsidiaries is not
currently strong enough to generate revenues to support the costs
associated with being quoted on a public market.
The Board is therefore faced with a situation where, if the
Company is to remain as an AIM listed company, it will be unable to
raise funds to enable it to continue to trade, let alone invest in
the development of its trading businesses. Alternatively, the board
could propose a delisting, which it believes would be supported by
sufficient shareholders for it to become effective which would mean
that there was effectively no market in the ordinary shares.
Finally, and as proposed in a circular to be posted to shareholders
today, the Company could dispose of the Business, introduce new
funds, appoint new directors, and adopt a new investing policy.
Having considered these alternatives at length with its advisers
the board has concluded that the best available option is to
dispose of the Business to Golden Rays Ventures ("Golden Rays"), a
newly incorporated company owned by the members of the consortium,
who are all shareholders in the Company (the "Consortium"), which
will also assume certain liabilities of the Company.
Pursuant to a sale and purchase agreement ("SPA") between the
Company and Golden Rays, Golden Rays has agreed to acquire the
Business and to assume the liabilities for an initial nominal
consideration of GBP1 ("Disposal"). Golden Rays will also make an
additional payment to the Company of GBP636,000 if certain trigger
events are achieved ("Additional Payment").
The Company has entered into a deed poll conditional upon
completion of the Disposal, whereby the Company has undertaken,
subject to any legal constraints, to pay the Additional Payment
(less costs and expenses incurred by the Company in connection with
the deed poll) if received pursuant to the SPA to shareholders
whose name appears on the register of members of the Company as at
9.00 a.m. on 9 May 2014 but excluding the members of the
Consortium, ("Qualifying Shareholders") (the "Deed Poll"). This
amount, if paid to Qualifying Shareholders would be worth
approximately 0.20 pence per share (not taking into account any
legal or administrative costs).
In addition, Golden Rays has agreed to assume responsibility for
all liabilities in relation to a shareholder loan of GBP215,498.70.
All other outstanding loans by the Company to the Business and vice
versa will be eliminated pursuant to the SPA.
In order to recapitalise the Company, Peterhouse has
conditionally raised GBP300,000 at 0.06 pence per Subscription
Share, through the subscription of 500,000,000 new Ordinary Shares
representing 53.7% of the issued ordinary share capital. The
members of the Consortium have each agreed to sell their entire
holdings in SSM (being 203,536,656 Ordinary Shares in aggregate,
representing 47.2 per cent. of the existing issued ordinary share
capital) to the investors, on a pro rata basis to their investment,
for a nominal sum of GBP1, the effect of which is to reduce the
price per share being paid by the Investors to 0.04 pence per
share.
In view of the Company's requirement for working capital, should
the Resolutions not be approved at the General Meeting, the Board
would have to consider a delisting from AIM; were this not
approved, it is unlikely that the Company would have sufficient
working capital to continue to trade.
Subject to the Resolutions being passed, it is proposed that
immediately following the General Meeting, David Ajemian and
Cameron Pearce will join the Board as Non-Executive Chairman and as
Non-Executive Director and that all of the Existing Directors will
resign from office.
Accordingly, the Company is today posting a circular to
shareholders ("Circular") containing a notice convening a general
meeting of the Company ("General Meeting") to be held on Friday, 9
May 2014 at 11.00 a.m.
The Circular contains proposals (the "Proposals") for, inter
alia:
-- disposal of the business including trading subsidiaries (the "Disposal")
-- subscription to raise GBP300,000
-- appointment of proposed directors
-- adoption of investing policy
-- adoption of new articles of association
-- change of name
The Disposal and Related Party Transaction
Pursuant to Rule 15 of the AIM Rules for Companies, the Disposal
is considered a fundamental change in the business and it also
constitutes a substantial property transaction for the purposes of
section 190 of the Companies Act, requiring the consent of
Shareholders. The Disposal is also a related party transaction
under the AIM Rules as each of Carlos Amaro, Sonia Magalhaes, Pedro
Maria and Miguel Mascarenhas is interested in Golden Rays as
proposed directors and shareholders, and they are all directors of
SSM and, in the case of Carlos Amaro, Pedro Maria and Miguel
Nascarenhas, also significant shareholders as they own 10 per cent.
or more of the existing issued share capital of SSM. Given their
interest in the Disposal none of the above has taken any part in
the negotiations between the Company and Golden Rays regarding the
terms of the Disposal.
The Independent Directors consider, having consulted with Sanlam
Securities UK Limited, the Company's nominated adviser, that the
terms of the Disposal are fair and reasonable insofar as the
Company's Shareholders are concerned.
Following completion of the Disposal, the Company will be an
investing company under the AIM Rules and as such will be required
to make an acquisition or acquisitions which constitutes a reverse
takeover under the AIM Rules or otherwise implement its proposed
Investing Policy on or before the date falling twelve months from
the adoption of the Investing Policy failing which, the Company's
Ordinary Shares would then be suspended from trading on AIM. In the
event that the Company's Ordinary Shares are so suspended and the
Company fails to obtain Shareholders' consent to renew such policy,
admission to trading on AIM would be cancelled six months from the
date of suspension.
The Subscription and the Warrants
Conditional upon the approval of the Proposals at the General
Meeting, Peterhouse has placed 500,000,000 new Ordinary Shares at a
price of 0.06 pence raising GBP300,000 before transaction expenses
of GBP77,000. The Directors have considered whether it would be
possible to offer shareholders the opportunity to participate in
the Subscription but have concluded that the costs thereof would be
prohibitive in the context of the amount being raised.
In connection with the Subscription, it is proposed that the
Company enter into a warrant instrument (the "Warrant Instrument")
pursuant to which the Company will issue one warrant for every
three Ordinary Shares subscribed for ("New Warrants") or a total of
166,666,667 New Warrants. Entry into the Warrant Instrument is
conditional on Admission of the Subscription Shares, and on
approval of all of the Resolutions.
The New Warrants may be exercised at any time within 18 months
of the completion of the Subscription and shall entitle the holders
to be issued with one Ordinary Share for each New Warrant
exercised, subject to payment of an amount equal to the
subscription price being 0.06 pence for each New Warrant
exercised.
In addition, Berwick Capital Limited will be issued with
30,000,000 New Warrants in connection with services rendered to the
Company in connection with the Subscription and this transaction.
The New Warrants may be exercised at any time within 18 months of
the completion of the General Meeting and shall entitle the holder
to be issued with one Ordinary Share for each New Warrant
exercised, subject to payment of an amount equal to the
Subscription Price for each New Warrant exercised.
In addition, 30,000,000 New Warrants will be issued to Cameron
Pearce.
The New Warrants will not be admitted to trading on AIM.
Use of Proceeds
As part of the Proposals, the Board has come to agreements with
certain creditors to settle the amounts owed to them by the
Company. Following the settlement of these creditors, the Company
will be substantially free of debt, apart from those occurring from
ongoing administrative costs. The ongoing annual costs of the
Company are expected to be no more than GBP140,000.
The proceeds of the Subscription will be used to settle
outstanding creditors, as mentioned above, and, in the opinion of
the Proposed Directors, will provide the Company with sufficient
working capital for at least 12 months from becoming an Investing
Company.
Following completion of the Proposals, the Company will be a
cash shell with cash of approximately GBP160,000.
Sale of Ordinary Shares to Peterhouse
Should Shareholders wish to divest their investment in the
Company, such Shareholders may do so by notifying Peterhouse within
14 calendar days of the date of this Circular. Peterhouse has
agreed to arrange the execution of a sale of any Ordinary Shares
held by Shareholders wishing to sell the same to its clients for
GBP0.0006 per Ordinary Share. This sale facility effectively values
the whole of the issued Ordinary Shares, prior to the Subscription,
at approximately GBP258,788.
Alternatively, Shareholders are free to retain their Ordinary
Shares or sell them in the market as they see fit. Shareholders
wishing to take advantage of the above sale facility should contact
Peterhouse directly on 020 7469 0934 or 020 7469 0936.
Change of Name
Subject to Shareholders' approval of the Proposals, it is
proposed that the name of the Company be changed to Stallion
Resources plc.
Proposed Directors
Subject to the Resolutions being passed, it is proposed that
immediately following the General Meeting, David Ajemian and
Cameron Pearce will join the Board as Non-Executive Chairman and as
Non-Executive Director and that all of the Existing Directors will
resign from office.
David Ajemian (aged 35) - Non-Executive Chairman
David Ajemian is an entrepreneur and investor based in London.
Mr Ajemian is the founder of the United Lions Sports Agency and
conducts business between the UK, Europe and the Middle East. He is
accredited by FIBA and FIFA as a licensed players' agent for both
basketball and football. His investments include the real estate
sector in the Middle East.
Cameron Pearce (aged 42) - Non-Executive Director
Mr Pearce has extensive professional experience in both the
Australian and United Kingdom finance industries. In recent times
he has provided corporate, strategic, financial and advisory
assistance to private and public companies in both Australia and
the United Kingdom. Mr Pearce is a member of the Australian
Institute of Chartered Accountants and has been in commerce over
fifteen years holding senior financial and management positions in
both publically listed and private enterprises in Australia,
Europe, Asia, Africa and Central America. Mr Pearce has
considerable corporate and international expertise and over the
past decade has focussed on mining and exploration activities. Mr
Pearce is currently a Non-Executive Director of ASX listed Magnolia
Resources Limited and AIM listed CEB Resources plc.
Cameron Pearce and David Ajemian, the Proposed Directors, have
invested GBP25,000 each as part of the Subscription. As a result,
following Admission, Cameron Pearce will hold 58,628,054 Ordinary
Shares representing 6.3% of the issued share capital of the Company
and 43,888,888 New Warrants. David Ajemian will hold 58,628,054
Ordinary Shares representing 6.3% of the Company and 13,888,888 New
Warrants.
Investing Policy
The Company's proposed new Investing Policy is to invest in
and/or acquire companies and/or projects within the natural
resources and/or energy sector with potential for growth. The
Company will also consider opportunities in other sectors as they
arise if the Proposed Directors consider there is an opportunity to
generate an attractive return for Shareholders.
In selecting investment opportunities, the Proposed Directors
will focus on businesses, assets and/or projects that are available
at attractive valuations and hold opportunities to unlock embedded
value.
Where appropriate, the Proposed Directors may seek to invest in
businesses where it may influence the business at a board level,
add their expertise to the management of the business, and utilise
their significant industry relationships and access to finance. The
ability to work alongside a strong management team to maximise
returns through revenue growth will be something the Proposed
Directors will focus upon initially.
The Company's interests in a proposed investment and/or
acquisition may range from a minority position to full ownership
and may comprise one investment or multiple investments. The
proposed investments may be in either quoted or unquoted companies;
be made by direct acquisitions or farm-ins; and may be in
companies, partnerships, earn-in joint ventures, debt or other loan
structures, joint ventures or direct or indirect interests in
assets or projects. The Proposed Directors may focus on investments
where intrinsic value can be achieved from the restructuring of
investments or merger of complementary businesses.
The Proposed Directors expects that investments will typically
be held for the medium to long term, although short term disposal
of assets cannot be ruled out if there is an opportunity to
generate an attractive return for Shareholders. The Proposed
Directors will place no minimum or maximum limit on the length of
time that any investment may be held. The Company may be both an
active and a passive investor depending on the nature of the
individual investment.
There is no limit on the number of projects into which the
Company may invest, and the Company's financial resources may be
invested in a number of propositions or in just one investment,
which may be deemed to be a reverse takeover under the AIM Rules.
The Directors intend to mitigate risk by appropriate due diligence
and transaction analysis. Any transaction constituting a reverse
takeover under the AIM Rules will also require Shareholder
approval. The Proposed Directors considers that as investments are
made, and new promising investment opportunities arise, further
funding of the Company may also be required.
Where the Company builds a portfolio of related assets it is
possible that there may be cross holdings between such assets. The
Company does not currently intend to fund any investments with debt
or other borrowings but may do so if appropriate. Investments in
early stage assets are expected to be mainly in the form of equity,
with debt potentially being raised later to fund the development of
such assets. Investments in later stage assets are more likely to
include an element of debt to equity gearing. The Proposed
Directors may also offer new Ordinary Shares by way of
consideration as well as cash, thereby helping to preserve the
Company's cash for working capital and as a reserve against
unforeseen contingencies including, for example, delays in
collecting accounts receivable, unexpected changes in the economic
environment and operational problems.
Investments may be made in all types of assets and there will be
no investment restrictions on the type of investment that the
Company might make or the type of opportunity that may be
considered. The Company may consider possible opportunities
anywhere in the world.
The Proposed Directors will conduct initial due diligence
appraisals of potential business or projects and, where they
believe further investigation is warranted, intend to appoint
appropriately qualified persons to assist. The Proposed Directors
believe they have a broad range of contacts through which they are
aware of various opportunities which may prove suitable, although
at this point only preliminary due diligence has been undertaken.
The Proposed Directors believe their expertise will enable them to
determine quickly which opportunities could be viable and so
progress quickly to formal due diligence. The Company will not have
a separate investment manager. The Company proposes to carry out a
comprehensive and thorough project review process in which all
material aspects of a potential project or business will be subject
to rigorous due diligence, as appropriate.
As an Investing Company, the Company will be required to make an
acquisition or acquisitions which constitutes a reverse takeover
under the AIM Rules or otherwise implement its proposed Investing
Policy on or before the date falling twelve months from the
adoption of the Investing Policy failing which, the Company's
Ordinary Shares would then be suspended from trading on AIM. In the
event that the Company's Ordinary Shares are so suspended and the
Company fails to obtain Shareholders' consent to renew such policy,
the admission to trading on AIM would be cancelled six months from
the date of suspension.
Financial Information on the Company and Group
SPORTS STARS MEDIA PLC
-------------------------------------------------------------------------
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
-------------------------------------------------------------------------
FOR THE YEAR ENDED 31 DECEMBER 2013
-------------------------------------------------------------------------
2013 2012
----------------------------------- ----------------- -----------------
EUR EUR
----------------------------------- ----------------- -----------------
Revenue 82,433 25,966
----------------------------------- ----------------- -----------------
Cost of sales -12,106 -34,759
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Gross loss 70,327 -8,793
----------------------------------- ----------------- -----------------
Distribution and Administrative
expenses -626,471 -221,013
----------------------------------- ----------------- -----------------
Other expenses -5,152 -42,395
----------------------------------- ----------------- -----------------
Proportion of AIM costs
charged to income statement - -134,696
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Operating loss -580,552 -406,897
----------------------------------- ----------------- -----------------
Financial income 6,709 21,232
----------------------------------- ----------------- -----------------
Financial expenses -3,735 -1,134
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Loss before tax -577,577 -386,799
----------------------------------- ----------------- -----------------
Tax charge for the year - -554
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Loss for the year attributable
to equity holders of the
company -577,577 -387,353
----------------------------------- ----------------- -----------------
======= ========
----------------------------------- ----------------- -----------------
Other comprehensive expenses
----------------------------------- ----------------- -----------------
Currency translation on
foreign currency net investments -5,224 -34,680
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Total comprehensive loss
attributable to equity holders
of the company -582,802 -422,033
----------------------------------- ----------------- -----------------
======= ========
----------------------------------- ----------------- -----------------
Loss per share
----------------------------------- ----------------- -----------------
Basic and diluted 0 0
----------------------------------- ----------------- -----------------
======= ========
----------------------------------- ----------------- -----------------
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
-------------------------------------------------------------------------
FOR THE YEAR ENDED 31 DECEMBER 2013
-------------------------------------------------------------------------
2013 2012
----------------------------------- ----------------- -----------------
EUR EUR
----------------------------------- ----------------- -----------------
ASSETS
----------------------------------- ----------------- -----------------
Non-current assets
----------------------------------- ----------------- -----------------
Property, plant and equipment 89,297 111,424
----------------------------------- ----------------- -----------------
Intangible assets 1,177,808 558,432
----------------------------------- ----------------- -----------------
Investments - -
----------------------------------- ----------------- -----------------
Long-term loans to subsidiaries - -
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
1,267,105 669,856
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Current assets
----------------------------------- ----------------- -----------------
Trade and other receivables 388,076 244,712
----------------------------------- ----------------- -----------------
Cash and cash equivalents 179,308 1,396,205
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Total current assets 567,384 1,640,917
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
TOTAL ASSETS 1,834,489 2,310,773
----------------------------------- ----------------- -----------------
========== ==========
----------------------------------- ----------------- -----------------
EQUITY AND LIABILITIES
----------------------------------- ----------------- -----------------
Equity attributable to owners
of the parent
----------------------------------- ----------------- -----------------
Share capital 154,988 132,116
----------------------------------- ----------------- -----------------
Share premium reserve 2,336,831 1,562,172
----------------------------------- ----------------- -----------------
Retained loss -1,047,303 -422,395
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
TOTAL EQUITY 1,444,516 1,271,893
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
Current liabilities
----------------------------------- ----------------- -----------------
Trade and other payables 389,972 1,038,880
----------------------------------- ----------------- -----------------
---------------- ----------------
----------------------------------- ----------------- -----------------
TOTAL EQUITY AND LIABILITIES 1,834,489 2,310,773
----------------------------------- ----------------- -----------------
======== ========
----------------------------------- ----------------- -----------------
Members of the Consortium holding more than 3% in SSM or
Directors of SSM
Holding in
Sports Stars
Media plc
-------------------------- --------------------
Name Shares %
-------------------------- ----------- -------
Mr Miguel Mascarenhas*^ 51,422,500 11.92%
-------------------------- ----------- -------
Mr Pedro Manuele Valente
Matias Maria* 40,000,000 9.27%
-------------------------- ----------- -------
Mr Carlos Emanuel Santos
Da Conceicao*^ 24,000,000 5.56%
-------------------------- ----------- -------
* Director of Stars Sports Media plc
^ Both Mr Miguel Mascarenhas and Mr Carlos Amaro will hold more
than 10% in the issued share capital of Golden Rays
A copy of the Circular is available at the Company's website
www.sportsstarsmedia.com.
The definitions used above have the same meaning as they have in
the Circular.
For further additional information please contact:
Sports Stars Media plc
+1 604 902
Ruben Dias, Co-CEO 2214
Carlos Amaro, Co-CEO + 971 506762328
Sanlam Securities UK Limited (Nominated +44 20 7628
adviser and joint broker) 2200
Lindsay Mair
Catherine Miles
Peterhouse Corporate Finance Limited +44 20 7469
(Joint broker) 0930
Jon Levinson
Duncan Vasey
Eran Zucker
This information is provided by RNS
The company news service from the London Stock Exchange
END
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