Clear Leisure Plc Business Update

 
TIDMCLP 
 
7 December 2017 
 
                               Clear Leisure Plc 
 
                ("Clear Leisure", "the Group" or "the Company") 
 
                                Business Update 
 
Recent Events 
 
The past two months have been especially challenging for the Company's 
management; as they must have been frustrating for shareholders. 
 
On 10 October 2017, through no fault of the Company, the Company's then 
nominated adviser, ZAI Corporate Finance Limited had its status as a Nominated 
Advisor removed. As the Company had not confirmed a replacement nominated 
adviser by 19 October 2017, AIM temporarily suspended trading in the Company's 
shares. 
 
On the same day, the Ivrea Court in Turin, announced on its website, that it 
had found in favour of a petition by the Court Prosecutor to wind up Clear 
Leisure's Italian subsidiary, Mediapolis srl. Despite the original claim 
against Mediapolis, which triggered the petition having been settled by the 
Company, the Court, surprisingly, elected not only to continue with the 
petition but also found in favour of the prosecutor. Following this, on 21 
November 2017, the Company announced that having received and carefully studied 
the formal judgment, the Company and Mediapolis jointly appealed the Court's 
decision. 
 
On 17 November 2017, the Company was very pleased to announce that it had 
appointed SP Angel as nominated adviser and joint broker, as a consequence of 
which, trading in the Company's ordinary shares recommenced on the same day. 
 
Investment Portfolio 
 
GeoSim Systems Ltd ("GeoSim") 
 
Clear Leisure has a 4.53% shareholding in GeoSim, a company which develops very 
sophisticated 3D modeling software.  The value of this investment was 
written-off in the 2014 annual accounts. Clear Leisure has now been advised 
that the most recent round of fundraising by GeoSim took place at a pre-money 
valuation in excess of US$11 million, corresponding to a valuation for Clear 
Leisure's stake of US$667,487(or approximately GBP500,000). 
 
Currently GeoSim has management and R&D teams based in Tel Aviv, Israel, where 
it has 15 employees. In Vancouver, Canada it has a team of three people. The 
production centers are in India & Poland employing a further 15 people. 
 
It is currently undergoing a round of funding as follows: an internal fund 
raising with existing shareholders is being completed at a valuation of US$15 
million pre-money and a roadshow to attract new investors is at a valuation of 
over US$20 million pre-money. 
 
Geosim's new 3D model of city of Vancouver has been released and a short demo 
can be found at:  http://new.geosimmovies.com. 
 
Mediapolis 
 
On 24 November 2017, subsequent to the winding up ruling by the Ivrea Court and 
the tabling of the joint appeal by Clear Leisure and Mediapolis, a Court 
hearing took place to determine the process for the auction of the land over 
which Clear Leisure holds a first charge. 
 
The receiver challenged some of the Company's claims on the technical nature of 
the first charge, however the receiver did not dispute the first charge itself. 
The receiver therefore agreed to proceed with an auction without restarting the 
auction procedure, which could have delayed the disposal of the land by more 
than 12 months. 
 
The Court ruled in favour of the receiver's request, a decision which the 
Company and its legal advisors support because, notwithstanding a successful 
appeal against the winding up decision, it makes more imminent the recovery of 
the asset or the EUR3.86 million valuation of the Court appointed surveyor. 
 
Ondaland 
 
The Company continues to pursue a solution with the management of T.L.T S.a.s, 
owner of the Ondaland waterpark in Northern Italy, which recognises the 
substantial investment made by Clear Leisure's subsidiary, Sipiem SpA, in 
T.L.T. 
 
The Company remains optimistic of reaching a mutually beneficial solution which 
will result in Clear Leisure securing a substantial stake in T.L.T. 
 
The waterpark is a popular summer destination for Italians living in north east 
Italy and there are plans to create an all year family oriented theme park 
facility, using the existing empty building comprising of 7,500 square meters 
of space erected in 2012. 
 
For the fiscal year ended 31 October 2017, which includes the peak summer 
season, T.L.T recorded revenues of EUR2.9 million (GBP2.5 million) generating an 
EBITDA of nearly 30% (approximately GBP750,000). No dividend has been declared as 
T.L.T's debt position is such that the balance sheet will require substantial 
restructuring. 
 
Debt Reduction 
 
During the past 18 months, the Company has reduced Group debt by approx. EUR10 
million (GBP8.8 million) at a cost to the Group of under EUR2 million 
(approximately GBP1.75 million) including securing a prior charge over 
Mediapolis.  This has been achieved through negotiating discounts with various 
Italian banks and creditors on the face value of debt averaging 80%. It is the 
Company's intention to continue with this policy which has resulted in a 
considerable improvement in the Group balance sheet and reduction in debt 
servicing payments. 
 
Most recently, the Company began discussions with two Clear Leisure bondholders 
on discounted advance payment for cash and shares on nearly EUR2 million of bonds 
outstanding, with maturity of 15 December 2018. While there is no guarantee on 
a successful outcome of the negotiations, the climate of the negotiations is 
positive. 
 
Legal Claims being made by the Company 
 
Since its appointment just over two years' ago, the Board has undertaken a 
major and ongoing investigation into the status of the Company's investments. 
While priorities had to be assigned on investments which required immediate 
action, in depth analyses on recovered documents for other investments 
continued and now the Company is in a position to file two legal claims for an 
approximate combined value of GBP2.5 million. The Company, as advised by its 
lawyers, is currently unable to disclose the names of the defendants at this 
stage. For the sake of clarity, no former director of Clear Leisure is involved 
in these two claims. 
 
The first claim relates to an investment into an Italian subsidiary regarding 
serious misrepresentations about the company's accounts, which were used as the 
primary basis for the investment, and on the day-by-day management of the 
investment itself by the former owner, then a manager of the subsidiary. A 
complaint for criminal offences has been filed with the prosecutor of the 
relevant Italian jurisdiction and a claim for damages will be approved by Clear 
Leisure, the controlling shareholder, at the subsidiary shareholders meeting, 
in the next few weeks. The amount of the claim is estimated in the region of EUR 
1.7million (GBP1.5 million). 
 
The second claim relates to rights owned by Clear Leisure on the sharing of the 
final upside on exit by the buyer of a formerly disposed UK based portfolio 
investment. A Letter before Action has been served to the defendant, for a 
settlement of GBP700,000 against a total claim in the region of GBP1.2 million. No 
settlement has been reached to date, hence the Company's intention to start 
legal procedures as soon as practical. 
 
The outcome of the two aforementioned claims is not guaranteed and, even if the 
legal action is successful, there is no guarantee that the defendants will have 
funds to meet the financial demands which will follow. 
 
The Company advises that there are further potential claims relating to other 
Italian investments, in particular ORH S.p.A. (trading as Ora Hotel Group), 
which remains under investigation. 
 
Eufingest SA 
 
Clear Leisure's largest shareholder, Eufingest SA ("Eufingest"), which has been 
the dominant provider of financial support to the Company during the 
challenging last few years, has confirmed to the Company its continued support 
for the Board and its intention to maintain its shareholding in the Company at 
just below 30%, by converting into shares part of its EUR2.4 million convertible 
loan each time a new share issue takes place. 
 
Eufingest, as the largest shareholder, remains fully supportive of the Board's 
efforts to realise value from its investments. 
 
Loan Facility 
 
The Board is pleased to announce that the Company has entered into an unsecured 
convertible loan facility agreement (the Facility") with Eufingest. 
 
Under the Facility, Eufingest provides EUR50,000 at an interest rate of 2.5 per 
cent per annum.  The Facility is repayable on 31 December 2017 and the proceeds 
will be used for working capital purposes. 
 
The Company may repay the Facility early at any time without penalty. At any 
time before 31 December 2017, Eufingest may convert the outstanding balance of 
the Facility into Shares at the rate of 1 pence per Share. 
 
Eufingest is the beneficial holder of more than 10 per cent of the ordinary 
share capital of the Company.  Eufingest is therefore a "related party" for the 
purposes of the AIM Rules. 
 
The Directors of the Company (each of whom is independent from Eufingest), 
having consulted with the Company's Nomad, consider the terms of the 
transaction to be fair and reasonable insofar as shareholders are concerned. 
 
Future Funding 
 
Notwithstanding the possibility of generating funds from asset disposals or 
successful debt recovery, the Company remains reliant on debt and equity 
placements in order to sustain its day to day activities, including acquisition 
of subsidiary debt at discount, funding of litigations and development of 
existing investments. 
 
Francesco Gardin, CEO and Executive Chairman of Clear Leisure, commented, 
 
"Since mid-May, following the winding up demand on Mediapolis by the Ivrea 
Court Prosecutor and more recently the loss of the licence by our former Nomad, 
with the urgent need to select and appoint a new Nomad, the Company's Board has 
been forced to focus on a number of unexpected events. While this has 
inevitably consumed substantial time allocation and prioritisation on these 

matters, all other business has been carried out in parallel. 
 
"We wish to thank our shareholders for their continuing patience and look 
forward to reporting further, positive results in 2018." 
 
                                    -ends- 
 
For further information please contact: 
 
Clear Leisure Plc 
                   [phone] 
Francesco Gardin, CEO and Executive Chairman 
 
SP Angel Corporate Finance (Nominated Adviser & Joint Broker)         +44 (0)20 
3407 0470 
Jeff Keating / John Mackay/ Charlie Bouverat 
 
 
Peterhouse Corporate Finance (Joint Broker) 
[phone] 
Lucy Williams / Heena Karani 
 
Leander (Financial PR) 
                 [phone] 
Christian Taylor-Wilkinson 
 
About Clear Leisure Plc 
 
Clear Leisure plc (AIM: CLP) is an AIM listed investment company with a 
portfolio of companies primarily encompassing the leisure and real estate 
sectors mainly in Italy. The focus of management is to pursue the monetisation 
of all of the Company's existing assets, through selected realisations, 
court-led recoveries of misappropriated assets and substantial debt-recovery 
processes. For further information, please visit, www.clearleisure.co.uk 
 
 
 
END 
 

(END) Dow Jones Newswires

December 07, 2017 02:00 ET (07:00 GMT)