Avanti Capital PLC Completion of Disposal (9015D)

TIDMAVA

RNS Number : 9015D

Avanti Capital PLC

12 July 2016

12 July 2016

Avanti Capital plc ("Avanti" or the "Company")

Update relating to the conditional disposal of investment in Mblox Inc. ("Mblox")

Further to the 13 May 2016 announcement, the board of directors of Avanti (the "Board") wishes to update its shareholders with regard to further information concerning the conditional disposal of the Company's interests in Mblox. CLX Communications AB ("CLX") has today announced that completion of the merger agreement with Mblox has now occurred.

Based on the terms of the merger agreement between Mblox and CLX, Avanti has been advised that it will receive cash of approximately US$2.9m (approximately GBP2.1m assuming an exchange rate of GBP1 = $1.40). The balance of the consideration of approximately US$0.9m (approximately GBP0.6m) has been confirmed by Mblox as the amount that is required to be held in the escrow retention account, being Avanti's share of the overall consideration held in in the escrow retention account. The terms of the escrow retention account are such that, subject to any warranty or other claims that may be brought by CLX, the retention monies will be paid out 18 months after completion, with Avanti receiving their pro rata entitlement.

The Board estimates that the pro forma 31 December 2015 net asset value, taking into account the sale of Avanti's interests in Mblox, is GBP3.1m or 39 pence per ordinary share (assuming an exchange rate of GBP1 = $1.40, being the assumed exchange rate as at 31 December 2015).

Following receipt of monies from CLX and having obtained legal advice from the Company's solicitors, it is the intention of the board of Avanti to settle its outstanding liabilities. These are principally Odyssey Partners Limited, a company in which Richard Kleiner has a 50% interest, who under the terms of the investment management agreement entered into in November 2008 ("IMA"), are due a payment of accrued unpaid management fees of GBP132,000 (excluding VAT) and a carried interest payment of approximately GBP800,000, of which GBP617,000 is payable now and the balance payable following release of monies from the escrow retention account (assuming no claims have been made by CLX).

Following receipt of monies due from CLX and payment of amounts due under the IMA, the Board's intention is to declare a dividend of 22 pence per share, equivalent to approximately GBP1.8m. Further details will be provided once the dividend has been declared by the Board, including record date and payment date.

With effect from 1 July, the Board has agreed not to take any further directors fees. In addition, other than payment of amounts due to Odyssey Partners Limited under the IMA as described in the previous paragraph of up to GBP915k (excluding VAT), Odyssey Partners Limited and the Board have reached agreement such that there will be no further amounts payable to Odyssey Partners Limited with effect from 1 July 2016.

Following receipt of monies from the disposal of Avanti's Mblox interests and payment of amounts due under the IMA, the Board believes that it is appropriate to seek shareholders' approval for a delisting from AIM, in order to reduce overhead costs to very modest levels for the period until the receipt of monies from the Mblox escrow retention account. The Board will also seek to monetise any value for its other investments all of which are currently written down to GBPnil, although there is no current expectation that any value will be monetised.

Following the receipt of monies from the escrow retention account, referred to above, the Board's current intention is that it would then appoint a liquidator in order to effect a liquidation and return of remaining cash to shareholders.

The application to de-list from AIM will be subject to special resolution of the shareholders and further information regarding this, including a shareholder circular and notice of extraordinary general meeting, will be notified in due course.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

ENQUIRIES:

   Avanti Capital Plc                             Tel: [phone] 

Richard Kleiner

   Panmure Gordon (UK) Limited         Tel: [phone] 

Andrew Potts

Notes:

The Company entered into the IMA, in November 2008 in the aftermath of the Lehman collapse and when the share price was 67p. In addition to the dividends of 105p per share paid in early 2014, following the sale of the Company's investment in Eclectic Bar Group plc, and the intended 22 pence dividend (expected to be declared following completion), shareholders return would have been a total of 127 pence per share, representing a return since November 2008 of 1.89x or 89.6% (equivalent to approximately 8% per annum compound). These figures ignore any final distribution following the ultimate liquidation of the Company.

This information is provided by RNS

The company news service from the London Stock Exchange

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July 12, 2016 02:32 ET (06:32 GMT)