Proposed Scheme of Arrangement

 

TIDMGGA 
 
RNS Number : 5778O 
Georgica PLC 
10 March 2009 
 
 
 
Not for release, publication or distribution, in whole or in part, in or into or 
from Australia, Canada, Japan, South Africa or the United States or any other 
jurisdiction where to do so would constitute a violation of the relevant laws or 
regulations of such jurisdiction 
10 March 2009 
PROPOSED SCHEME OF ARRANGEMENT 
 to establish 
GEORGICA PUBLIC LIMITED 
COMPANY ("GEORGICA") 
as a wholly owned subsidiary of 
ESSENDEN PUBLIC LIMITED 
COMPANY ("ESSENDEN") 
               to be effected by means of a scheme of arrangement 
                    under part 26 of the Companies Act 2006 
and 
PROPOSED ADMISSION TO TRADING ON AIM OF THE ENTIRE ISSUED SHARE CAPITAL OF 
ESSENDEN 
                                      and 
 PROPOSED ADMISSION TO TRADING ON PLUS-QUOTED OF THE LOAN NOTES TO BE ISSUED BY 
                                    ESSENDEN 
 
 
Introduction 
The Georgica Board is pleased to announce a proposed re-organisation of 
Georgica in order to facilitate the return of cash to shareholders. 
No satisfactory offer has been received for Georgica and accordingly the 
Georgica Board has decided that excess cash generated by Georgica will, in 
future, be returned to shareholders. 
To facilitate this, the Georgica Board is proposing to change the corporate 
structure of the Group by establishing Georgica as a wholly-owned subsidiary of 
a newly incorporated parent company, named Essenden Public Limited Company, by 
means of a scheme of arrangement under Part 26 of the Companies Act 2006 (the 
"Scheme"). This will result in shareholders of Georgica receiving new ordinary 
shares in Essenden and loan notes to be issued by Essenden (the "Essenden 
Notes"), in exchange for their existing ordinary shares in Georgica.  It is also 
proposed that, immediately following the Scheme becoming effective, there will 
be a consolidation of the new ordinary shares in Essenden on a 5-for-1 basis 
(post-consolidation, the "Essenden Shares").   The principal purpose of the 
proposals is to facilitate the return of cash to shareholders. It is envisaged 
that, at the discretion of the Essenden Board, cash will in due course be 
returned to shareholders through the redemption or repurchase in the market by 
Essenden of the Essenden Notes or the Essenden Shares. 
Essenden will be permitted under the terms of the Group's banking facility 
agreement, as amended in connection with the proposals, to spend up to 
GBP500,000 initially, on the purchase of Essenden Shares and Essenden Notes. It 
is intended that Essenden will seek to amend the facility agreement to permit 
the return of further capital to shareholders or will repay the debt outstanding 
under the facility agreement. 
Summary of the proposal 
Under the terms of the proposals, which will be subject to the terms and 
conditions to be set out in the circular addressed to shareholders providing 
details of the Scheme and the proposals (the "Scheme Document"), holders 
of ordinary shares in Georgica at the relevant record time for the Scheme will 
be entitled to receive (post-consolidation): 
for each 5 Georgica Ordinary  Shares    1  Essenden Share and GBP1 principal 
value 
 
        of Essenden Notes 
The Georgica Board considers that issuing the Essenden Notes will make it easier 
to return cash through the redemption or purchase in the market by Essenden of 
the Essenden Notes. The Essenden Notes will be GBP1 principal amount, zero 
coupon, perpetual notes ranking pari passu amongst themselves and pari passu 
with all other unsecured and unsubordinated obligations of Essenden.  The 
Essenden Notes will be fully repayable at par on the occurrence of certain 
specified events, including a change of control, an insolvency event or a change 
in operating activity. The Essenden Noteholders will have the power to agree to 
certain amendments to the terms of the Essenden Notes including the terms of 
repayment on the occurrence of specified events, by passing a resolution at a 
duly convened meeting. 
Upon the Scheme becoming effective the existing ordinary shares in Georgica will 
be cancelled and exchanged for Essenden Shares and Essenden Notes, the 
consolidation of Essenden's share capital will be effected and Georgica will be 
re-registered as a private limited company.  Application will be made, in due 
course, for the Essenden Shares to be admitted to trading on AIM and for the 
Essenden Notes to be admitted to trading on PLUS-quoted and accordingly Georgica 
will prepare and publish an admission document (the "Admission Document"). 
The Scheme requires, and will be conditional upon, the approval of holders of 
ordinary shares in Georgica by the passing of a resolution at a meeting convened 
by the Court (the "Court Meeting"). This resolution must be approved by a 
majority in number of the holders of ordinary shares in Georgica present and 
voting, either in person or by proxy, representing not less than three-fourths 
in value of the ordinary shares in Georgica held by such holders. The Scheme and 
the associated reduction of capital also require to be, and will be conditional 
upon being, sanctioned by the Court at a Court hearing. All holders of ordinary 
shares in Georgica (including those who also hold convertible shares in 
Georgica) are entitled to attend the Court Meeting in person or through counsel 
to support or oppose the sanctioning of the Scheme and the associated reduction 
of capital. The Scheme also requires, and will be conditional upon, certain 
additional resolutions being passed by the requisite majorities at a general 
meeting of Georgica (the "General Meeting") at which holders of ordinary shares 
in Georgica and holders of convertible shares in Georgica are entitled to attend 
and vote. Further details of the Court Meeting and the General Meeting, will be 
set out in the Scheme Document. 
 
 
The Scheme is also conditional on Georgica not having received any indication 
from AIM or PLUS-quoted of there being any circumstances which would prevent the 
Essenden Shares or the Essenden Notes from being admitted to trading on AIM or 
PLUS-quoted respectively ("Admission"). 
Following completion of the proposals, including conversion of the Georgica 
convertible shares, Essenden is expected to have 21,515,000 Essenden Shares and 
21,515,000 Essenden Notes in issue, excluding the impact of fractions. 
Background and reasons for the proposals 
During the last two years Rileys, Georgica's cue sports business, has been sold 
and the freehold and long leasehold bowling outlets have been sold and leased 
back, at 17.4 times annual rent (an initial yield of 5.7 per cent.). Net debt 
has been reduced from a peak of approximately GBP100 million to approximately 
GBP4 million as at 28 December 2008. Substantially all of those bowling centres 
that would benefit from refurbishment have been refurbished, four new sites are 
in operation, three sites have been sold and two sites have been closed. The 
portfolio now comprises high quality, prime location destinations, all in 
satisfactory condition, which support Tenpin Limited's position as the leading 
bowling operator in the UK market, with 38 sites compared to 33 for the next 
largest operator. The Group is now focussed on operating the existing portfolio 
of bowling centres. Although revenue has fallen in the last few months, it has 
been possible to reduce costs, with such cost savings amounting to up to 
approximately GBP3.5 million per annum. 
In the future, the Georgica Board expect the Group to generate substantial 
surplus cash. As previously announced, the Georgica Board intends to use this 
cash to make bank debt repayments and return this cash to shareholders.  The 
proposals described in this announcement are the means by which the Georgica 
Board intends to do so. 
Irrevocable undertakings 
Georgica has received irrevocable undertakings from North Atlantic Value LLP, 
Trefick Limited and all of the holders of convertible shares in Georgica (the 
"Georgica Convertible Shareholders") to vote in favour of the Scheme at the 
Court Meeting (in the case of the Georgica Convertible Shareholders, in respect 
of the ordinary shares in Georgica held by them at the relevant record time for 
voting) and in favour of the resolutions at the General Meeting. None of, North 
Atlantic Value LLP, Trefick Limited or the Georgica Convertible 
Shareholders  will continue to be bound by the terms of their respective 
irrevocable undertakings in the event that an offer is made for the whole of the 
capital of Georgica that has been duly recommended by a majority of the Georgica 
Board voting in accordance with its usual procedures, provided that such 
recommendation is not subsequently withdrawn, modified or varied. 
North Atlantic Value LLP and Trefick Limited hold 27,057,520 and 20,777,138 
ordinary shares in Georgica respectively representing approximately 27.8 and 
21.3 per cent. of the issued ordinary share capital of Georgica. 
The Georgica Convertible Shareholders hold in aggregate 539,000 ordinary shares 
in Georgica and 2,538,075 convertible shares in Georgica, representing 
respectively, in aggregate, approximately 0.6 per cent. of the issued ordinary 
share capital of Georgica and 100 per cent. of the issued Georgica Convertible 
Shares. 
The Georgica Board unanimously intends to recommend that all holders of ordinary 
shares in Georgica vote in favour of the Scheme at the Court Meeting and that 
all holders of ordinary shares and/or convertible shares in Georgica vote in 
favour of the resolutions at the General Meeting as each of the Directors of 
Georgica intend to do in respect of their holdings  in Georgica amounting, in 
aggregate, to 1,791,243 ordinary shares in Georgica, representing approximately 
1.84 per cent. of the existing issued ordinary share capital of Georgica. 
The Scheme Document containing the formal terms and conditions of the Scheme and 
the Admission Document relating to the applications for the Essenden Shares to 
be admitted to trading on AIM and for the Essenden Notes to be admitted to 
trading on PLUS-quoted will be posted to Georgica shareholders in due course. 
The Scheme and the proposals described in this announcement are not subject to 
the City Code on Takeovers and Mergers. 
+-----------------------------------------------+------------------------------+ 
| Enquiries:                                    |                              | 
+-----------------------------------------------+------------------------------+ 
| Cenkos                                        | Tel: [phone]           | 
| Nomad to Georgica plc                         |                              | 
| Nicholas Wells                                |                              | 
|                                               |                              | 
+-----------------------------------------------+------------------------------+ 
| Georgica plc                                  | Tel: [phone]           | 
| Nicholas Oppenheim                            |                              | 
+-----------------------------------------------+------------------------------+ 
 
 
Cenkos, which is authorised and regulated in the United Kingdom by the Financial 
Services Authority, is acting exclusively for Georgica and no one else in 
connection with the Scheme and is acting as Nomad to Essenden in relation to the 
proposed admission of the Essenden Shares to trading on AIM and Corporate 
Advisor to Essenden in relation to the proposed admission of the Essenden Notes 
to trading on PLUS-quoted and is not acting for any other persons and will not 
be responsible to anyone other than Georgica and Essenden for providing the 
protections afforded to customer of Cenkos or advising them on the Scheme or 
Admission. 
Distribution of announcement and other matters 
The information contained in this announcement may not be the same as that 
required under the laws of jurisdictions outside England and Wales. The 
distribution of this announcement in jurisdictions other than England and Wales 
may be restricted by law and therefore persons into whose possession this 
announcement comes should inform themselves about and observe such restrictions. 
Any failure to comply with the restrictions may constitute a violation of the 
securities laws of any such jurisdiction. 
This announcement does not constitute an offer to sell or issue, or the 
solicitation of an offer to buy or subscribe for, securities in any jurisdiction 
in which such offer or solicitation is unlawful. 
Securities may not be offered or sold in the United States unless they are 
registered under the US Securities Act or are exempt from such registration. The 
Essenden Shares will not be registered under the US Securities Act, and will be 
issued in the United States pursuant to the Scheme or Admission in reliance on 
the exemption from registration provided by Section 3(a)(10) of that Act. In 
addition, the Essenden Shares have not been and will not be registered under the 
securities laws of any state of the United States, and will be issued in the 
United States pursuant to the Scheme or Admission in reliance on available 
exemptions from such state law registration requirements. Neither the SEC nor 
any US state securities commission has reviewed or approved this document, 
Admission, the Scheme, or the issue of the Essenden Shares or the Essenden 
Notes, and any representation to the contrary is a criminal offence in the 
United States. 
Georgica shareholders (whether or not US persons) who are affiliates (as defined 
in the US Securities Act) of Essenden or Georgica prior to, and/or become 
affiliates of Essenden or Georgica on or after, the implementation of the Scheme 
or Admission of the Essenden Shares or the Essenden Notes will be subject to 
certain US transfer restrictions relating to the Essenden Shares and the 
Essenden. 
The Essenden Notes that may be issued pursuant to the Scheme have not been and 
will not be registered under the US Securities Act or under the relevant 
securities laws of any state or territory or other jurisdiction of the United 
States. Accordingly, Essenden Notes may not be offered or sold in the United 
States, except in a transaction not subject to, or in reliance on an exemption 
from, the registration requirements of the Securities Act and such state 
securities laws. 
Any Essenden Notes which may be issued pursuant to the Scheme have not been and 
will not be registered under the relevant securities laws of Japan and any 
relevant clearances and registrations have not been, and will not be, obtained 
from the securities commission of any province or territory of Canada. No 
prospectus in relation to the Essenden Notes has been, or will be, lodged with, 
or registered with, the Australian Securities and Investments Commission, the 
Japanese Ministry of Finance or the Companies and Intellectual Property 
Registration Office of South Africa. Accordingly, unless otherwise determined by 
Essenden and permitted by applicable law and regulation, the Essenden Notes may 
not be, offered, sold, resold, transferred, delivered or distributed, directly 
or indirectly in or into Canada, Australia, Japan, South Africa or any other 
jurisdiction where to do so would violate the laws of that jurisdiction or would 
require registration thereof in such jurisdiction. 
The statements contained herein are made as at the date of this announcement, 
unless some other time is specified in relation to them, and the issue of this 
announcement shall not give rise to any implication that there has been no 
change in the facts set forth herein since that date.  Nothing contained herein 
shall be deemed to be a forecast, projection or estimate of the future financial 
performances of Georgica or Essenden, except where otherwise stated. 
No person has been authorised to make any representations on behalf of Georgica 
or Essenden concerning the Scheme which are inconsistent with the statements 
contained herein and any such representations, if made, may not be relied upon 
as having been so authorised. 
This announcement does not constitute a prospectus or prospectus equivalent 
document. 
No person should construe the contents of this document as legal, financial or 
tax advice and should consult their own advisers in connection with the matters 
contained herein. 
Forward looking statements 
This announcement contains statements with respect to the financial condition, 
results of operations and business of Georgica and certain plans and objectives 
of the Boards of Directors of Georgica and Essenden that are or may be 
forward-looking statements. These forward-looking statements can be identified 
by the fact that they do not relate only to historical or current facts. 
Forward-looking statements often use words such as "anticipate", "target", " 
expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", 
"should", "would", "could" or other words of similar meaning. These statements 
are based on assumptions and assessments made by the Boards of Directors of 
Georgica and Essenden in light of their experience and their perception of 
historical trends, current conditions, expected future developments and other 
factors they believe appropriate. By their nature, forward-looking statements 
involve risk and uncertainty, and the factors described in the context of such 
forward-looking statements in this document could cause actual results and 
developments to differ materially from those expressed in or implied by such 
forward-looking statements. 
Should one or more of these risks or uncertainties materialise, or should 
underlying assumptions prove incorrect, actual results may vary materially from 
those described in this document. Georgica and Essenden assume no obligation to 
update or correct the information contained in this announcement. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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