Nipson restructures finances
Friday, October 17, 2008
Press release from the issuing company(October 16, 2008) Polar Communications Ltd, the majority shareholder of Nipson Digital Printing Systems Plc and Polar's affiliate, Koonras BV BVBA, have today entered into an agreement with Creacorp NV, a Belgian incorporated company, whereby Polar Group have agreed to:
1. assign the benefit of loans (with outstanding principal and accrued interest value of approximately €14.7 million owed by Nipson and its subsidiaries, to Creacorp (the "Loan Assignments"), and
2. grant Creacorp a call option to acquire up to 22,992,709 ordinary shares in the capital of Nipson (the "Call Option" and the "Ordinary Shares") (representing 41.82 per cent. of the current issued and outstanding Ordinary Share) currently held by the Polar Group in Nipson, subject to the Polar Group maintaining an interest of 10% of the issued share capital of Nipson (on a non-dilutive basis for 3 years) at the time the Call Option is exercised, less any shares sold by Polar before such exercise,
(the "Call Option" and the "Loan Assignments" being the "Transaction"). The consideration payable by Creacorp in aggregate for the Loan Assignments and the Call Option is €1.
In connection with the Loan Assignments, Nipson has consented to the transfer by Polar to Creacorp of €564,500 in nominal value of 5% unsecured convertible loan notes issued by Nipson to Polar on 12 May 2008, in accordance with an agreement dated 30 January 2008 (the "Loan Notes"). Furthermore, Nipson has also agreed (on more favourable terms to Nipson) to an amendment to the terms of the remaining €2,200,000 in nominal value of the Loan Notes held by Polar following such transfer, such that the Loan Notes are interest free, and become repayable over a period of five years starting in October 2009 (without any conversion right by either party to capitalise the debt into Ordinary Shares) (the "Retained Loan Notes").
In connection with the Call Option, Polar has agreed to vote the Ordinary Shares in accordance with the instructions of Creacorp. Creacorp has agreed to acquire Polar's remaining shareholding, following certain events such as sale of more than 50% of the Ordinary Shares or assets of Nipson, in the event that Nipson merges with another company or in the event a resolution is passed to cancel the admission of its share capital to trading on AIM.
Finally, as part of the transaction, Polar has agreed to pay the sum of €2,200,000 owed by Nipson SAS, the main French trading subsidiary of Nipson, to Bank Hapoalim.
Information on Creacorp
Creacorp is a private Belgian company controlled by the Belgian Dumarey family. It holds a diversified portfolio of technology, property and entertainment companies. It has been involved in a number of successful restructurings in the graphics, automotive and entertainment business. It currently has assets of more than 100 M Euros. Creacorp holds a 31% shareholding in the Euronext (Brussels) listed conglomerate, Punch International NV ("Punch"), of which Guido Dumarey is Executive Chairman. Punch International NV owns automotive, telematics and property business activities and is a major manufacturer of printing equipment. Punch last reported profits on ordinary activities before taxation of 28.5 million Euros on sales turnover of 331.7 million Euros and assets of 315 million Euros.
The Directors of Creacorp are Guido Dumarey and Brigitte Dumolijn.
Related party transaction
The Loan Assignments (to which the Company is a party) and the variation on the terms of the remaining Loan Notes to be held by Polar is a Related Party Transaction under AIM Rule 13 as Polar currently holds 54.2 per cent of the Company's issued and outstanding Ordinary Shares.
As previously reported in the Company's trading update on 10 October, 2008, whilst the Group has shown some improvement in sales over the last year, cash has been tight and there has been a working capital requirement beyond the levels agreed with the Group's bankers and major shareholder, Polar. In the light of the present financial position of Nipson SAS and taking into account the severe market conditions which make it extremely difficult for businesses to raise any new equity or debt finance from external sources, the Board considers that the transaction as set out above represents the only realistic way of avoiding an insolvent liquidation of the Group. To facilitate the Transaction, the Board notes that Polar is giving up a major part of its debt and equity interests in the Group for nominal consideration as well as agreeing to revised terms on the retained debt (in the form of the Retained Loan Notes) owed by the Company (on terms more favourable to the Company).
Messrs. Rimon Ben-Shaoul, Chairman of Nipson, and Ken Lalo, Executive Director of Nipson, are respectively President and CEO and Executive Vice President of Polar and hold interests in the Polar Group and accordingly are treated as being involved in the Loan Assignments for the purposes of AIM Rule 13.
Therefore, the remaining Directors, not being interested in this transaction consider, having consulted the Company's Nominated Adviser, that the terms of the Loan Assignments are fair and reasonable insofar as Shareholders are concerned.
Any further restructuring of the loans subject to the Loan Assignments or of the Loan Notes or any other future transactions involving Creacorp or any of its associated parties are likely to need to be dealt with in accordance with AIM Rule13.
In connection with the Transaction, Rimon Ben-Shaoul and Ken Lalo have resigned as Directors of Nipson, while Alfons Buts was asked to terminate his position as board member, and each of Nipson's subsidiaries of which they were also directors, with effect from today's date.
Robert Cahill, Chief Financial Officer of Nipson, together with David Gestetner, Independent Non-Executive Director of Nipson are continuing in their respective PLC roles.
The following individuals (all of whom are affiliated to Creacorp) were appointed as Directors of Nipson with effect from today's date:
Guillaume Dumarey Managing Director
Ghislain Yves Marie Segard Executive Director
Marc Josef Maria Maes Executive Director
Guillaume Dumarey aged 22, is a Belgian entrepreneur from the Dumarey family, active in the High-Tech Industry. He started his professional career back in 2004 in the fitness sector and was a distributor of High-Tech fitness equipment. Afterwards, he acquired a Belgian company active in the entertainment sector. He restructured and refocused the company successfully to sell it in January 2008. Last year, Guillaume became the manager of Creacorp. He is a son of Guido Dumarey.
Guillaume Dumarey has held the following directorships in companies or partnerships in the past five years:
Dumpro International BVBA
Body Coach NV
Flanders Indoor Karting NV
Mr Dumarey has no shareholding in the Company and has no options.
Ghislain Segard (a French national) is 55 years old and is an external consultant in management acting as Chairman or Managing Director in various French businesses. Over the last 10 years, Mr Segard's experience includes sectors as diverse as machinery for the dairy products and the automotive industry. His experience also includes 20 years as Commercial Director of a number of medium sized French companies in a wide variety of activities: textiles, food business, electronics and computers.
Ghislain Segard has held the following directorships in companies or partnerships in the past five years:
SRT Elevage SARL
Solutions Robotisees pour la Traite SA
Punch Dufour SAS
Punch Diringer SAS
Punch Telematix France SAS
Ghislain Segard has been involved as a director in the liquidations of the French Companies SRT Elevage SARL, Solutions Robotisees pour la Traite SA, Punch Dufour SAS, and Cerplex SAS. Punch Dufour went into creditors' voluntary liquidation in 2002, SRT Elevage SARL and Solutioins Robotisees pour la Traite SA in 2005.
Mr Segard has no shareholding in the Company and has no options.
Marc Maes (a Belgian national) is 43 years old, and holds a Master degree in Law and a Master in Business Administration. Marc Maes has extensive experience in starting and reorganizing companies. Marc has considerable experience working within different business groups of Punch, especially fulfilling CEO and Director roles.
Marc Maes has held the following directorships in companies or partnerships in the past five years:
RMSInternational BV (NL)
Prolion Holding NV (later renamed Punch Technix NV and later renamed Punch Graphix NV)
RMS International NV (B)
RMS Roboter Vertriebs (Germany)
RMS A/S (Denmark)
Marc Maes was appointed as a director of Acunia NV (a Belgian entity) in 1995. Acunia NV went into creditors' voluntary liquidation in December 2003.
Mr Maes has no shareholding in the Company and has no options.
There are no further details in relation to the above appointment which require disclosure under paragraph (g) (iii) to (viii) of Schedule 2 to the AIM Rules.
The new Directors have no interest in shares in Creacorp.
Collectively, the new Directors have held responsibilities in reorganising companies in industries as diverse as automotive, electronics, dairy equipment, entertainment and others. It will be the first task of the new Directors to evaluate and assess the operational and financial situation of the Group and make recommendations to the Board. Based on the outcome, appropriate actions and procedures will be considered.
Strategy for the Group and ongoing financing
The Transaction allows Creacorp and the new Directors to evaluate the performance of the Company and its subsidiaries, in particular, Nipson SAS, with a view to resolving the financial difficulties for the benefit of all shareholders. The Board will further update shareholders following the completion of the evaluation process.
Although the Company is incorporated in England, the place of central management of the Company is currently located outside of the UK, the Channel Islands and the Isle of Man because the main place of business is in France. Accordingly, the Company is one to which paragraph 3(a)(ii) of the Takeover Code does not apply, and the Panel has confirmed that the Company is not subject to the Takeover Code and shareholders will not be afforded any protection under the Code.
If circumstances change, including if changes to the Board are made, the Company will consult with the Panel to ascertain whether this will affect the central place of management of the Company. If the Panel determines that, as a result of such changes, the Takeover Code becomes applicable to the Company, an announcement will be made.
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