Source - LSE Regulatory
RNS Number : 4792D
CEPS PLC
29 June 2021
 

 

29 June 2021

CEPS PLC

 ("CEPS" or the "Company")

 

Fundraise by Hickton Group Ltd

 

 

The Board of CEPS is pleased to announce that Hickton Group Ltd ("HGL"), a subsidiary of the Company, has today completed a fundraise in order to retain its working capital headroom while having sufficient funds to pay the deferred consideration of £299,999, as well as the maximum earnout consideration of £100,000 which is likely to become payable to the vendors of Millington Lord Limited ("MLL") by 22 September 2021, following its acquisition by HGL in March 2021.

 

The total raised from the fundraise is £433,800, split as at £12,050 raised by means of the issue of 12,050 shares of £1 each in HGL ("Equity") and £421,750 through the issue of 8% fixed rate, unsecured loan notes. by HGL ("Loan Notes") (together, the "Fundraise"). Interest on the Loan Notes will be paid on a quarterly basis commencing on 30 September 2021, with capital redemptions to be made in twelve quarterly instalments, commencing in September 2024.

 

Investments were made by the following parties:

 

Investor

Amount - Equity (£)

Amount - Loan Notes (£)

Total Investment (£)

CEPS

3,990

139,650

143,640

James Cook ("JC")

3,500

122,500

126,000

Janet Pryke ("JP")

3,500

122,500

126,000

Existing investors

1,060

37,100

38,160

Total

12,050

421,750

433,800

 

 

The investment by CEPS in HGL is being funded by a short-term loan of £150,000, made by Chelverton Asset Management Limited to CEPS ("Loan"). The Loan, which is repayable no later than 31 December 2021, attracts an interest of 5 per cent. per annum which is payable quarterly in arrears.  CEPS' obligations in respect of the Loan made by Chelverton Asset Management (which is itself a related party of the Company as it is an associate of David Horner) have been guaranteed by Mr David Horner, a director of the Company. Given that David Horner is a director of the Company, the provision of the Loan and the guarantee are considered to be related party transactions pursuant to AIM Rule 13.  The directors of the Company who are considered independent for the purposes of the Loan and the guarantee of the Loan, being the whole Board save for Mr David Horner, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, consider both the Loan and the guarantee of the Loan by David Horner to be fair and reasonable insofar as the Company's shareholders are concerned.  

 

Janet Pryke is a director of HGL and is, therefore, a related party for the purposes of AIM Rule 13. The investment in HGL by JP is, therefore, considered to be a related party transaction pursuant to AIM Rule 13.  The directors of the Company who are considered independent for the purposes of JP's investment in HGL, being the whole Board, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, consider JP's investment in HGL to be fair and reasonable insofar as the Company's shareholders are concerned.

 

In settlement of the investment of £126,000, James Cook has agreed to waive two historic and two future repayments under the deferred consideration loan note he received on the acquisition by HGL of Cook Brown Building Control Limited and Cook Brown Energy Limited in March 2020 of an equal amount ("Waiver"). This sum would otherwise have been due to JC over the period from December 2020 to September 2021.

 

JC is a director of HGL and is, therefore, considered a related party for the purposes of AIM Rule 13. The investment by JC in HGL and the Waiver are, therefore, considered to be related party transactions pursuant to AIM Rule 13.  The directors of the Company who are considered independent for the purposes of JC's investment in HGL and the Waiver, being the whole Board, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, consider JC's investment in HGL and the Waiver to be fair and reasonable insofar as the Company's shareholders are concerned.  

 

The remaining investments have been made in cash.

 

As a result of the Equity element of the Fundraise by HGL, CEPS' percentage equity holding in HGL has decreased from 54.7% (represented by 54,722 shares of HGL) to 52.4% (represented by 58,712 shares of HGL).

 

The Board of HGL has been encouraged by the first few months of trading by MLL under its ownership, and with the £100,000 additional performance-related element of the consideration for MLL anticipated to be paid when due in September, the additional equity funding now secured is expected to restore working capital headroom.

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018).

 

The directors of the Company accept responsibility for the content of this announcement.

 

Enquiries:

 

CEPS PLC

Vivien Langford, Group Finance Director

 

+44 1225 483030

 

Cairn Financial Advisers LLP

James Caithie / Sandy Jamieson /

Ludovico Lazzaretti

 

+44 20 7213 0880

 

 

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

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