BLS Block Shield

 

TIDMBLS 
 
RNS Number : 4999O 
Block Shield Corporation PLC 
09 March 2009 
 
?                                                                  Block Shield 
Corporation plc 
 
  ('Block Shield' or 'the Group') 
 
 
Amendment of to Terms of Cloverleaf Credit Facility 
 
 
Block Shield has in place a working capital facility of US$5 million ("the 
Facility") with Cloverleaf Holdings Limited ("Cloverleaf Holdings"). The 
Facility is the sole source of working capital facilities for the Group. It is 
currently unsecured, carries interest at US LIBOR plus 1%, penalty interest at 
LIBOR plus 5% and is repayable on demand, or on the termination date being 31st 
December 2009 or at such other time as an insolvency event occurs (as defined in 
the terms of the Facility). 
 
 
As at 28 February 2009, the balance due under the Facility was approximately 
US$ 600,000. 
 
 
Block Shield announces that Cloverleaf Holdings has agreed, at the request of 
the Company, to continue to make the Facility available to it and to extend the 
termination date by one year to 31 December 2010, in consideration for which 
Block Shield is to provide direct security over certain of the assets of the 
Group (the "Security") to Cloverleaf Holdings. The Security extended will 
comprise a debenture together with first ranking security interests over the 
entirety of the shares Block Shield holds in each of its two trading 
subsidiaries, Wave Zero Inc. ("WaveZero") and Mu-Gahat Holdings Inc. to be 
granted by Block Shield, and a security interest to be granted by WaveZero over 
certain of its assets and intellectual property. 
 
 
Block Shield is currently reliant on the Facility to provide sufficient working 
capital for the Group to remain trading. The Facility will require refinancing 
by a third party or further re-negotiation prior to the extended termination 
date of 31 December 2010 and the Board will review the most suitable financing 
structure in light of the Group's trading and prospects prior to the termination 
date. 
 
 
Cloverleaf Holdings is a substantial shareholder in Block Shield and is 
currently interested in approximately 22.3% of the issued share capital of Block 
Shield. As such, the amendments to the terms of the Facility represent a related 
party transaction under the AIM Rules for Companies. 
 
 
Michael Fitzgerald and David Whelan are directors of Block Shield and, whilst 
neither are directors of Cloverleaf Holdings, they are directors of Cloverleaf 
Ventures Holdings Inc., an associated company of Cloverleaf Holdings. Cloverleaf 
Holdings is associated with certain members of the family of Michael Fitzgerald 
but not with Michael Fitzgerald himself. In the circumstances, both Michael 
Fitzgerald and David Whelan consider it appropriate that they should not be 
treated as independent for the purposes of considering the amendments to the 
terms of the Facility. The remaining Board members, who are independent 
directors, consider, having consulted with Block Shield's nominated adviser 
Ambrian Partners Limited, that the amendments to the terms of the Facility are 
fair and reasonable insofar as its shareholders are concerned. 
 
 
 
 
Enquiries: 
 
 
+-----------------------------+------------------+--------------------------------------+ 
| Block Shield Corporation    |                  |                                      | 
| Plc                         |                  |                                      | 
+-----------------------------+------------------+--------------------------------------+ 
| Edwin Oh, Chief Executive   | +1 408 830 5100  |                                      | 
| Officer                     |                  |                                      | 
+-----------------------------+------------------+--------------------------------------+ 
| Catherine H van Zuylen      | +1 408 702 1800  | catherine.van.zuylen@blockshield.com | 
+-----------------------------+------------------+--------------------------------------+ 
|                             |                  |                                      | 
+-----------------------------+------------------+--------------------------------------+ 
| Ambrian Partners Limited    | +44 20 7634 4700 |                                      | 
+-----------------------------+------------------+--------------------------------------+ 
| Nominated Adviser           |                  |                                      | 
+-----------------------------+------------------+--------------------------------------+ 
| Samantha Harrison           |                  |                                      | 
+-----------------------------+------------------+--------------------------------------+ 
 
 
 
 
-END- 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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