Update re suspension of trading (6762A)

TIDMROM

RNS Number : 6762A

Romag Holdings PLC

04 February 2011

Romag Holdings PLC

("Romag" or the "Company")

Update re: Suspension of Trading,

Revised Governance Arrangements, Banking

and Current Trading

Background

On 31 January 2011, the Board of Directors of Romag were informed by John Kennair, Chairman of the Company, that, during the second half of the year ended 30 September 2010, he paid GBP3.97 million into the Company's operating subsidiary, Romag Limited, to avoid a write down of outstanding trade receivables, which at the time he believed was in the best interests of the Company. Unfortunately these payments were made without being disclosed to the Board. John Kennair has informed the Board that he has no connection with these trade parties and that no debt or other obligation is outstanding to him from the Company or its subsidiary.

Suspension of trading

Following this disclosure on Monday 31 January 2011, the Board informed their nominated advisor, who on their behalf requested the immediate suspension of trading in the Company's shares.

Independent review

The Company's non-executive directors are now in the process of commissioning a full investigation into the transactions undertaken along with an independent review of the Company's accounts, which will include the Company's corporate governance procedures and any non compliance with relevant rules and regulations. This investigation will be undertaken by a major accountancy firm.

Future corporate governance arrangements

John Kennair has stepped down as Chairman with immediate effect but, with the full backing of the Board, remains Chief Executive responsible for the day to day running of the Company and a main board director.

Non-executive director, David Gray, a chartered accountant with considerable listed company experience, has been appointed as Chairman of the Company and will be supported by the senior independent non-executive director, Peter Allan, who also becomes Deputy Chairman.

The Board will now commence the recruitment of a Group Chief Executive, a main board appointment, and John Kennair has agreed to remain with the Company in an operational capacity to ensure a smooth handover.

The Board is confident that David Banks, Finance Director, was unaware of the transactions now to be investigated and has full confidence in his actions. It is the Board's intention to further strengthen the reporting function of the Company with the appointment of a new financial controller.

The Board also intends to appoint a further independent non-executive director to strengthen the Company's corporate governance, systems and controls.

Banking arrangements

On 28 January 2011, the Company announced that it was in negotiations with its lender, Lloyds Banking Group ("LBG") to provide amended banking facilities and had received a conditional offer of new debt facilities from LBG. This conditional offer is the subject of ongoing negotiation between the Company and LBG who remain actively engaged in an open and constructive dialogue with the Company.

Current trading

Romag is a specialist manufacturer of transparent composites to the security, renewable energy, architectural and specialist transport markets. The Company is currently experiencing significant demand for its products, particularly in the high growth area of solar panels, supported as they are by the UK's highly beneficial renewable energy feed-in-tariff ("FiT") regime. Romag's market positioning is resulting in high levels of customer enquiries and a significant forward order book.

Further announcements

The Board will make a further announcement as soon as possible.

Enquiries:

 
 Romag Holdings PLC                                  Tel: [phone] 
  David Gray, Chairman                                500 000 
  Peter Allan, Deputy Chairman 
  David Banks, Finance Director 
 
 Altium                                              Tel: +44 (0) 845 
 Adrian Reed, Andrew Clarke, Corporate Finance        505 4343 
  David Cunningham, Alternative Energy & Cleantech    Tel: +44 (0) 207 
  Analyst                                             484 4160 
 
 Kreab Gavin Anderson                                Tel: +44 (0) 20 
  Ken Cronin                                          7074 1800 
  Michael Turner 
  Natalie Biasin 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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