Litebulb Group Limited Disposal Update (8302V)

TIDMLBB

RNS Number : 8302V

Litebulb Group Limited

20 April 2016

20 April 2016

LITEBULB GROUP LIMITED

("LiteBulb" the "Company" or the "Group")

Corporate Update

LiteBulb (AIM: LBB), the branded product developer, provides an update on corporate activity relating to its disposal strategy, as announced on 3 March 2016.

Following the appointment of BDO LLP on 3 March 2016, four parties, unconnected to the Company, indicated their interest in acquiring the business of Concept Merchandise Ltd ("Concept"). Three parties moved swiftly to the due diligence phase, which resulted in a formal offer being received from one of the parties. However after 3 weeks of further consideration, unfortunately this offer was withdrawn, leaving the directors will no option but to place the Concept into administration on 1 April 2016. Following Concept being put into administration, BDO LLP reverted to those parties who had previously expressed interest in Concept as a going concern. However, with the third party warehouse owed circa GBP150,000 and exercising its lien, interest was limited (including that of the buyer above) to paying nominal value for stocks.

At this point Woodvale Studios Limited ("Woodvale"), a company of which Howard Partington and Guy Pettigrew are directors and minority shareholders, made an offer for the business and assets of Concept in order to preserve the jobs of the Concept team.

As a consequence of the proposed sale to connected parties, BDO LLP recommended to Woodvale to refer the proposed transaction to the Pre-Pack Pool Limited - an independent panel set up to scrutinise sales conducted to connected parties at the outset of an Administration. On 14 April 2016, a duly appointed representative of Pre-Pack Pool Limited reverted to the application of the Buyer as follows:

"Based on my review, I have not found anything to suggest that the grounds for the proposed pre-packaged sale outlined in the application are unreasonable."

On 15 April 2016, the business and assets of Concept Merchandise Limited (in administration) were sold to Woodvale. Woodvale paid a net consideration of GBP169,000, which was paid in full upon completion of the transaction, with no further balance outstanding or deferred consideration.

Furthermore, given that the debtor book was retained by the Joint Administrators, with Woodvale entering a collection agency agreement for the latter as part of the sale of business contract, it is likely that the resurrection of the business under Woodvale ownership will produce a significantly enhanced outcome than if the sale had not taken place and realisations were made piecemeal without continuity of trade.

The Board cannot give guidance on the timeframe for, or likelihood of, realisations at this stage although the Directors believe that there will be no return to shareholders.

For further information, please contact:

 
 LiteBulb Group Limited         www.litebulbgroup.com 
 Howard Partington, Interim        Tel: [phone] 
  Chief Executive 
 Guy Pettigrew, Group Finance 
  Director 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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April 20, 2016 10:57 ET (14:57 GMT)