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RNS Number : 5006V
Hot Tuna (International) plc
13 January 2012
Hot Tuna (International) PLC
("Hot Tuna" or "the Group")
Proposed sale of the Assets
Proposed Investing Policy
Proposed Board Changes
Proposed change of name to Concha plc
Notice of General Meeting
Hot Tuna (International) PLC (AIM: HTT), a leading surf wear and
fashion brand, has today agreed, conditionally upon the approval of
shareholders in a general meeting to be held on 6 February 2012
("General Meeting"), to dispose of the domain names, trade marks
("Intellectual Property Rights") and certain of the Group's stock
(collectively "the Assets") to Project J Newco No.10 Limited, a
wholly owned subsidiary of Brands Holdings Limited, ("the
Purchaser") for a consideration of GBP950,000 to be satisfied in
cash ("the Disposal").
Further details of the Disposal, including details of the
Consideration are set out below under the heading "Principal Terms
of the Disposal".
Following completion of the Disposal ("Completion"), the Group
will have no meaningful trading activities. As a result, the
Disposal will constitute a fundamental change of business of the
Company. Under Rule 15 of the AIM Rules, this change requires
shareholder approval. As a result, in accordance with the AIM Rules
and the Companies Act 2006, the Company has today sent a circular
to Shareholders setting out the reasons for, and the principal
terms of, the Disposal.
Background to and reasons for the Disposal
Following material trading losses in 2010 and 2011, the Board
undertook a strategic review of the business and affairs of the
Group ("Strategic Review"). Following the Strategic Review and in
light of trading below budget and the Board's belief that it would
be difficult for the Company to raise new investment from
Shareholders for the development of the Hot Tuna brand, the Board
announced on 14 November 2011 that the Board believed it was in the
Shareholders best interests to seek a buyer for the Hot Tuna brand,
assets and liabilities of the Company.
In the Company's final results for the year ended 30 June 2011,
announced on 30 December 2011, the Company reported a disappointing
year with sales over the year across all geographic regions of
GBP0.21 million (2010: GBP0.5 million), resulting in an operational
loss prior to exceptional items of GBP0.86 million (2010: loss
GBP1.40 million). Net assets as at 30 June 2011 were GBP1.36
million (2010: GBP1.09 million). The value of the Assets was
approximately GBP618,000 (of which approximately GBP495,000 was the
value for the Intellectual Property Rights).
Principal terms of the Disposal
Pursuant to the asset sale agreement between the Company and the
Purchaser dated 12 January 2012 ("Asset Sale Agreement"), the
Company has conditionally agreed, inter alia, following shareholder
approval, to sell the Assets to the Purchaser.
The total consideration receivable by the Company in respect of
the Disposal is GBP950,000 in cash, payable in full on
Completion.
The Asset Sale Agreement includes customary warranties and
indemnities which have been provided in favour of the Purchaser by
the Company.
Immediately following Completion the Company proposes, subject
to Shareholder approval, to change its name to Concha plc, as
required by the Asset Purchase Agreement.
Use of Proceeds
Certain of the proceeds arising from the Disposal will be used
to repay the remaining liabilities of the Group. The Board
estimates that after the repayment of current liabilities,
transaction fees and payments arising in relation to Completion,
the Group will retain cash balances of approximately
GBP600,000.
The Group has also taken steps to reduce central costs in order
to minimise expenditure until either an acquisition is completed or
it is agreed to distribute the cash assets of the Group to
Shareholders.
Investing Company Status, Proposed Investing Policy
Following Completion, the Board will focus on identifying
attractive acquisition opportunities for the Company. In addition,
the Board will look to satisfy the Group's outstanding liabilities
following Completion.
The Board believes it is in Shareholders' interests to examine
possible investment opportunities, whilst the process of satisfying
residual liabilities continues and the warranty claim period
arising from the Asset Purchase Agreement elapses. The Ordinary
Shares shall remain trading on AIM.
Proposed Investing Policy
Following Completion, and the passing of the resolutions at the
General Meeting, under Rule 15 of the AIM Rules, the Company will
become an Investing Company with no material trading
activities.
The Board believes that the funds which will remain in the
Company could be attractive to a number of potential acquisition
targets seeking admission to AIM by reversing into a cash
shell.
The Board is therefore seeking shareholder approval for the
Investing Policy set out below to examine potential opportunities
to be satisfied by the issue of new ordinary shares of the Company
and/or cash as appropriate in a single transaction which will
amount to a "reverse takeover". The Directors main investment
criteria are that such a company should be:
(i) a business operating in the technology, media or
entertainment sector within the UK and Europe; and
(ii) one whose growth prospects, if achieved, will be earnings
enhancing for Shareholders.
These criteria are not intended to be exhaustive; however the
Company may make an investment which does not fulfil all the
investment criteria if the Directors believe that it is in the
interests of Shareholders as a whole to proceed with such an
investment. Any acquisition by the Company will be put to
Shareholders for their approval at the appropriate time.
In accordance with AIM Rule 15, the Investing Policy must be
approved by Shareholders in a general meeting and the Company must
implement the Investing Policy or make an acquisition or
acquisitions constituting a reverse takeover under Rule 14 of the
AIM Rules within 12 months of the Company becoming an Investing
Company.
Failure to do so will result in the suspension of the Ordinary
Shares on AIM pursuant to AIM Rule 40. If, following suspension of
the Ordinary Shares, they have not been re-admitted to trading on
AIM within six months, the admission of the Ordinary Shares to
trading on AIM will be cancelled. The Directors will consider
whether they should convene a general meeting of the shareholders
to consider whether to continue seeking investment opportunities or
to wind up the Company and distribute any surplus cash back to
shareholders. To complete this process, any liquidation will need
to allow time for the settlement of all creditors and inter alia,
agreement of the Group's tax computations with HMRC.
The assessment of whether or not the Investing Policy has been
implemented must be made to the satisfaction of AIM.
Proposed changes to the Board
It is proposed that Francis Ball, Geoffrey O'Connell and Oscar
Verden resign from the Board on Completion. Marcus Yeoman will
remain a director. It is proposed that Mark Barney Battles will be
appointed as non-executive Chairman.
Mark Barney Battles has over 20 years experience working within
the technology, media and telecommunications sector operating as
both CEO and CFO of many private and publicly traded businesses. He
is currently Chairman of Nexus Management plc, former Chairman of
Avisen plc plus a director of many private companies within the
well-being, magazine and telephony sectors.
He trained with Ernst & Young as a Scottish Chartered
Accountant, built and sold one of London's first and largest
digital marketing agencies in 2000 now trading under the brand name
of "LBI". Since 2003, Mark Battles has assumed the role as Chairman
or non-executive director across a range of international media and
technology businesses assisting with their growth and exit
strategies. Prior public roles include CEO of Silvanus One plc, a
PLUS traded vehicle now renamed Fast Bet plc.
Mark Battles, aged 45, is or has been a director of the
following companies during the previous five years:
Current Directorships Directorships held in past 5 years
Balgownie Ventures Limited CC Media Live (UK) Limited
Avisen PLC Citizen TV Limted
Tabitha Accessories Limited Yes Payments (Europe) Limited
Agent Morton Ltd Strategic Change Management Solutions
Limited
Twin Flame Media Ltd Acceleris Marketing Communications
Limited
Star Psychics Limited Adore Fashion Limited
Nexus Management plc Sticky Media TV Limited
TBY 2012 Ltd Makishima Enterprise (Europe) Limited
Hermitage Productions Limited
Mark Barney Battles has no beneficial interest in the Ordinary
Shares in the Company.
There is no other information that is required to be disclosed
under paragraph (g) of Schedule Two to the AIM Rules for Companies
of the London Stock Exchange.
General Meeting
Shareholders have today been sent with the Circular a notice
convening the General Meeting to be held at the offices of Brown
Rudnick LLP, 8 Clifford Street, London, W1S 2LQ at 10.00 a.m. on 6
February 2012 for the purposes of considering and, if thought fit,
passing the following Resolutions:
(i) Resolution 1, is to approve the Disposal;
(ii) Resolution 2, is to approve the new Investing Policy;
(iii) Resolution 3, is to approve the appointment of Mark Barney
Battles as a non-executive director; and
(iv) Resolution 4, is to approve the change of the Company's name to Concha plc.
Board recommendation
The Board considers the Disposal and the adoption of the
proposed Investing Policy to be in the best interests of the
Company and the Shareholders as a whole. Accordingly, the Board
recommends Shareholders to vote in favour of the Resolutions to be
proposed at the General Meeting. As at 12 January 2012 the
Directors aggregate beneficial holdings, amounted to 22,169,334
Ordinary Shares, representing approximately 1 per cent. of the
existing issued share capital of the Company.
Enquiries:
Hot Tuna (International) PLC
Francis Ball, Executive Chairman 0845 685 2050
Seymour Pierce Limited (Nominated Adviser and Joint Broker)
Mark Percy / Catherine Leftley +44 (0)20 7107 8000
Allenby Capital Ltd (Joint Broker)
Nick Naylor +44 (0)20 3328 5656
This information is provided by RNS
The company news service from the London Stock Exchange
END
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