Mercom Capital Plc Option scheme, Calvet option and equity issues (2295T)

TIDMMCC

RNS Number : 2295T

Mercom Capital Plc

03 January 2017

 
   3 January 2017 
 

Mercom Capital Plc

("Mercom" or "the Company")

Directors and Senior Management Option Scheme

Calvet Option

Issue of Equity at 40p per share

Change of Registered Office

The Company announces that on 31 December 2016 the Board adopted the Directors and Senior Management Option Scheme. The initial exercise price under the Scheme was set at 35p per share, representing a premium of 19.7 per cent. to the closing middle market price of 29.25p per share on 30 December 2016.

The total number of options which may be granted under the Scheme is 10,000,000 (representing approximately 27 per cent of the Company's issued ordinary shares). On 31 December 2016, the Board approved the following option grants under the scheme:-

 
                                                    Number of 
                                              options granted 
 Jean-Pascal        (Senior Non-executive 
  Tranié        Director)                      2,000,000 
 Felipe Simonsen    (Finance Director)              2,000,000 
 Stuart Davies      (Company Secretary)             1,250,000 
 

These options are exercisable at 35p per share and vest over a three year period with 40 per cent. at the end of the first year, a further 30 per cent. at the end of the second year and the final 30 per cent. at the end of the third year. It is the stated objective of the new Board that their interests will be strongly aligned with shareholders, being well rewarded only in the event of significant shareholder value creation in the medium to long term.

The remaining 4,750,000 options are reserved at strike prices to be determined, in order to provide equity incentive to attract further proven international talent to the Company as it develops.

Calvet Option

The Board also approved on 31 December 2016 the grant of an option to Calvet International Limited ("Calvet") over 2,000,000 ordinary shares, exercisable at 50p per share (representing a premium of 70.9 per cent to the closing middle market price on 30 December 2016) exercisable after six months and for a period of two years (the "Calvet Option"). The Calvet Option was granted as consideration for the proposals which led to the board and senior management changes announced on 23 December 2016 which it is intended will lead to the adoption of a new investing policy.

The Calvet Option is a related party transaction under the AIM Rules for Companies. The Directors, having consulted with Northland Capital Partners Limited, the Company's Nominated Adviser, consider that the terms of the Calvet Option are fair and reasonable so far as the shareholders of the Company are concerned.

Issue of equity at 40p per share in settlement of senior management salaries

Each member of the senior management team is on an annual salary of GBP24,000. In respect of the calendar year 2017, each member has opted to receive his salary in the form of new ordinary shares at an implied price of 40p per share (representing a premium of 35.6 per cent. to the closing middle market price on 30 December 2016) for an aggregate total amount of GBP96,000 or a total number of 240,000 ordinary shares. These shares will be issued to each team member on a pro-rata basis at the end of each quarter with the first such allotment to be made during late March 2017.

Issue of equity at 40p per share in settlement of professional and other costs

Furthermore, the Company has settled GBP330,000 of outstanding professional fees and most of a material non-refundable investment commitment fee through the issue of a total of 825,000 new ordinary shares at an implied price of 40p per share (representing a premium of 35.6 per cent to the closing middle market price). During the transaction period which on 23 December 2016 resulted in the appointment of the new Directors and Company Secretary, Calvet provided an irrevocable professional cost indemnity to the benefit of the Company. As part of the issue of 825,000 new ordinary shares, 310,000 new ordinary shares were issued to Calvet in reimbursement of professional costs settled by Calvet on behalf of the Company such that Calvet's shareholding in the Company has increased to 5,310,000 ordinary shares representing 14.21 per cent. of the Company's enlarged issued ordinary shares. Calvet also holds an assignable Call Option over 1,590,081 existing ordinary shares (as disclosed on 23 December 2016) plus the aforementioned Calvet Option for a further 2,000,000 ordinary shares.

Application will be made for the 825,000 new ordinary shares, which rank pari passu with the Company's existing ordinary shares, to be admitted to trading on AIM ("Admission"). It is anticipated that Admission will be effective on 9 January 2017.

Total voting rights

The Company's share capital consists of 37,401,773 ordinary shares with voting rights. The Company does not hold any ordinary shares in treasury. Therefore, the total number of voting rights in the Company is 37,401,773. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Change of Registered Office

The Company also announces that its registered office has changed with immediate effect to: Cooley Services Limited, Dashwood, 69 Old Broad Street, London EC2M 1QS.

Comment re share price movement

The Board of Mercom notes the recent share price movement and wishes to confirm that, since the appointment of the new Board on 23 December 2016, it continues to intend to convene a General Meeting as soon as possible for shareholders to approve the new investment strategy and the change of name to Monchhichi plc. Further information on the Board's plans will be provided in the General Meeting Circular.

The Board also continues to review its equity funding options including the previously announced potential issue of 10 million new ordinary shares at 30p per share (although there can be no certainty that these options will be finalised and supported by proposed new investors). The Board also notes that at the interim period end of 30 September 2016 the Company had (unaudited) net assets of approximately GBP1.4m.

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

Contact:

Northland Capital Partners Limited

Nominated Adviser and Broker

   Edward Hutton / Matthew Johnson                             [phone] 

Buchanan

   Richard Oldworth                                                      [phone] 

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCLLFESLSIVIID

(END) Dow Jones Newswires

January 03, 2017 10:00 ET (15:00 GMT)