Proposed Placing and Notice of General Meeting

 

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RNS Number : 8294I 
Mavinwood PLC 
19 March 2010 
 

                                  Mavinwood plc 
 
                         ("Mavinwood" or the "Company") 
 
      Proposed Placing of New Ordinary Shares and Notice of General Meeting 
 
The Board of Mavinwood announces a proposal to raise GBP8 million (before 
expenses of GBP40,000) to strengthen the Company's balance sheet by a 
conditional placing (the "Placing") of 1,066,666,666 ordinary shares of 0.1 
pence each in the Company ("New Ordinary Shares") at a price of 0.75p per share 
(the "Placing Price"). The Placing Price represents a premium of approximately 
57.9 per cent. to the closing price of 0.475p on 18 March 2010. The placing has 
been underwritten by Geraldton Services Inc ("Geraldton"). It is expected that 
Geraldton will subscribe for the entire Placing. The proceeds of the Placing 
will be used to pay down debt due to Geraldton. 
 
A circular has today been sent to Mavinwood shareholders to convene a General 
Meeting at 5.00pm on 12 April 2010 at Marble Arch Tower, 55 Bryanston Street, 
London W1H 7AA, to seek, amongst other things, the approval of Shareholders to 
allot the New Ordinary Shares. Application will be made for the New Ordinary 
Shares to be admitted to trading on AIM, which is expected to commence on 13 
April 2010. The New Ordinary Shares will, upon issue, rank pari passu in all 
respects with the existing issued Ordinary Shares. 
 
At the General Meeting, Resolutions are also being proposed to give the 
Directors authority to issue further Ordinary Shares and to disapply pre-emption 
rights in line with common market practice. Resolutions are also being proposed 
to make minor amendments to Mavinwood's constitution to take advantage of some 
of the provisions of the new Companies Act. 
 
Background to the Placing and use of Proceeds 
 
As at the date of this announcement, the Company owes to Geraldton a total of 
approximately GBP10.3 million consisting of GBP9.1 million of drawn down loans, 
GBP261,780 of interest and GBP900,000 of fees (the "Debt"). The proceeds of the 
Placing will be used to pay down the Debt.  After such payment the Company will 
owe Geraldton approximately GBP2.3 million. 
 
The Board remains keen to obtain investment in the Company from any other 
parties who may be interested in future. 
 
Following completion of the Placing, the issued share capital of the Company 
will comprise 1,532,937,811 Ordinary Shares, of which Geraldton will own up to 
1,333,102,919 Ordinary Shares representing 86.96 per cent. of the issued share 
capital. 
 
 
Related Party Transaction 
 
Geraldton is a substantial holder of the Ordinary Shares under the AIM Rules 
and, that being the case, the Placing constitutes a related party transaction 
for the purposes of Rule 13 of the AIM Rules. The Directors consider, having 
consulted with Cenkos, that the terms of the transaction are fair and reasonable 
insofar as the Shareholders are concerned. 
 
Trading Statement 
 
For the year ended 31st December 2009, trading was weaker than management 
forecasts. Restore and Wansdyke, our document storage businesses, continued to 
trade robustly in line with expectations. However DCS, our document scanning 
business, continued to experience delays in orders which adversely impacted the 
outturn for the year with sales approximately 35% lower than in 2008. Peter Cox, 
the timber treatment and damp proofing specialist, had a weaker than expected 
finish to the year. Head Office costs were below budget. 
 
Performance in document storage in the current year has been broadly in line 
with budget. DCS has traded slightly better than in the second half of last year 
although volumes are still below historic levels. Peter Cox was adversely 
affected by the weather conditions at the start of the year but is now trading 
in line with expectations. 
 
Major cost reductions have been made particularly in the financial reporting 
costs of the company. This, together with the restructuring required since the 
appointment of a wholly new board to the company last year, means that the 
company's full year results will be announced in June. 
 
For further information, please contact: 
 
+----------------------------------------+--------------------+ 
| Mavinwood                              |                    | 
+----------------------------------------+--------------------+ 
| Charles Skinner, Chief Executive       | Tel: [phone] | 
+----------------------------------------+--------------------+ 
|                                        |                    | 
| Cenkos Securities                      |                    | 
+----------------------------------------+--------------------+ 
| Nicholas Wells / Beth McKiernan        | Tel: [phone] | 
+----------------------------------------+--------------------+ 
|                                        |                    | 
| Threadneedle Communications            |                    | 
+----------------------------------------+--------------------+ 
| John Coles                             | Tel: [phone] | 
+----------------------------------------+--------------------+ 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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