ZATT Zattikka

TIDMZATT

RNS Number : 4142G

Zattikka PLC

06 June 2013

 
 For immediate release   6 June 2013 
 

ZATTIKKA PLC

('Zattikka' or the 'Group')

Loan note restructuring and new working capital facility

Zattikka, the online games entertainment group, is pleased to provide an update on a new secured working capital facility and the Group's unsecured loan notes.

As part of the acquisition of Hattrick Holdings Limited, Concept Art House Inc. and Sneaky Games Inc., the Group issued certain unsecured loan notes, totalling $11.9m in aggregate, to the vendors of each of the acquired entities (the "Hattrick Loan Notes", "Concept Loan Notes" and "Sneaky Loan Notes", respectively, and together the "Original Loan Notes"), the terms of which are set out in the Company's Admission Document dated 16 April 2012. The Original Loan Notes were re-payable on 16 April 2013, with a one year extension at the option of the Group to 16 April 2014, which was exercised in March 2013. The Original Loan Notes also contained certain consent rights relating to, inter alia, the incurrence of additional indebtedness by the Group. The Hattrick Loan Notes, in addition, contained certain consent rights relating to the acquisition or disposal of shares or material assets, and the issuance by the Company of further equity.

The Group is pleased to announce that the holders of the Original Loan Notes have agreed to extend the final maturity date of each of the Original Loan Notes to 16 October 2014, permit the establishment of a secured working capital facility (as described more fully below) and provide certain conditional consents to the completion of further acquisitions and to the Company raising further financing. The Company is not currently in active in further financing (other than in relation to the new working capital facility outlined below), nor proposing the completion of any further acquisition at this time.

In addition, the Group has agreed with the holders of the Original Loan Notes that the Group shall have the right to refinance and restructure the Original Loan Notes prior to 30 November 2013. With respect to the Hattrick Loan Notes and Concept Loan Notes, if the Group redeems 50 per cent of the relevant Original Loan Notes, then 25 per cent of the relevant Original Loan Notes will convert into ordinary shares and the remaining 25 per cent of the relevant Original Loan Notes will convert into a new convertible unsecured loan note due in April 2016 with a floating annual interest rate of 9.5 per cent over the base rate. Similarly, with respect to the Sneaky Loan Notes, if the Group redeems 20 per cent of the Sneaky Loan Notes, then 80 per cent of the Sneaky Loan Notes will convert into ordinary shares.

The new loan note instruments (the "New Loan Notes") to be issued on conversion of the Hattrick Loan Notes and Concept Loan Notes will be on terms similar to the Original Loan Notes but will not contain any consent rights in favour of the holders of the New Loan Notes.

The Group continues to evaluate all financing options including taking advantage of the opportunity to redeem and convert the Original Loan Notes as set out above.

The Group has also agreed with the holders of the Original Loan Notes that, in the event the Group does not implement its refinancing strategy by 30 November 2013, and subject to shareholder approval to issue and allot the relevant shares, the holders of the Original Loan Notes shall have the option to convert their Original Loan Notes into equity at the lower of GBP1.00 per ordinary share and the volume weighted average price of the Zattikka's shares for the preceding 20 Business Day period. If any of the holders of the Original Loan Note do exercise this option, they, together with any holders of shares in the Company deemed to be acting in concert with such holders of Original Loan Notes, shall not be permitted as a result of the option exercise to hold an interest in shares in Zattikka which in aggregate carries more than 29.9 per cent. of the voting rights of the Company. In the event that shareholder approval to issue and allot the relevant shares is not obtained, the holders of the Original Loan Notes shall have the right to require the redemption of the notes.

Certain of the holders of the Original Loan Notes, including Matthew Le Merle, a non-executive director of Zattikka, and James Zhang, a substantial shareholder of Zattikka, are related parties to Zattikka, for the purposes of Rule 13 of the AIM Rules for Companies. The directors of Zattikka, other than Matthew Le Merle, consider, having consulted with Canaccord Genuity Limited, that the terms of the agreements to amend the Original Loan Notes are fair and reasonable insofar as Zattikka shareholders are concerned.

Consistent with the new agreements set out above, the Group is pleased to announce that it has entered into a new secured working capital facility with Barclays Bank plc in the amount of up to GBP1m ($1.6m) to provide the Group with additional liquidity. The on-demand working capital facility will be secured against the shares held by Zattikka in Hattrick Europe Limited ("HEL"), the assets of HEL and a parent company guarantee from Zattikka of up to GBP1m. The Group intends to utilise this facility for on-gong working capital requirements, including GBP0.25m deferred consideration payable to certain vendors of Hattrick. The Group had cash and cash equivalents at 31 March 2013 in excess of $1.0m.

Mark Opzoomer, Group Chief Executive, commented:

"We are pleased to reach acceptable arrangements with our note holders for a restructuring of the notes which will provide us with greater strategic flexibility going forward to drive growth in our existing assets and more closely aligns their interests with all shareholders. Building on this agreement, we look forward to developing a long term and mutually beneficial lending relationship with Barclays, which we have commenced with this initial working capital facility."

For further information, please contact:

 
Zattikka 
Mark Opzoomer, Chief Executive Officer   +44 (0) 20 7491 6410 
Rob Gorle, Chief Financial Officer 
 
  Canaccord Genuity Limited 
  Nominated Adviser and Broker 
  Simon Bridges 
  Peter Stewart                            +44 (0) 20 7523 8000 
 
  Buchanan 
  Jeremy Garcia 
  Clare Akhurst 
  www.buchanan.uk.com                      +44 (0) 20 7466 5000 
 

About Zattikka:

Zattikka plc is a digital games entertainment group, developing games and providing publishing services in this sector of the rapidly evolving multi-billion dollar global digital entertainment market. Zattikka is executing a clear vision to become a large scale, diverse games publisher through strategic acquisitions and by accelerating organic growth. Headquartered in the United Kingdom with shares listed on London's AIM (ZATT), Zattikka games studios include Sneaky Games (USA), Spellgun (USA and China) and Hattrick (Europe). Business to business services include high quality game art and design services provided by Concept Art House (USA and China) and in-game analytics insights through its bespoke SNAP technology platform developed in London.

For more information visit www.zattikka.com

This information is provided by RNS

The company news service from the London Stock Exchange

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