Hotel Corp Share Discussion Threads

[alynch] 26/2/2016 20:47

Well, Thank you, Hedgehog! Much appreciated!

[hedgehog 100] 26/2/2016 20:26

Alynch,

Your wish is my command!

One new thread just created:

"Specialist Investment Properties PLC: Niche Property Company (SIPP)"



P.S. A nice rise yesterday, the first day of admission of the new shares: up from 16.5p to 19.25p, a rise of 16.66%.

[alynch] 19/2/2016 11:37

Can't see the new board...too many 'SIPP's on the BBs!

[hedgehog 100] 05/2/2016 15:58

From "THE INVESTORS CHRONICLE", 22 January 2016:

"A CONTRARIAN'S CONUNDRUM
David Stevenson ponders what to do with the resources exposure in his Sipp

... What has struck me about the market mayhem is that many defensive assets, such as infrastructure funds, have largely been unaffected - if anything some have actually increased slightly in price. This makes me think that we're in what I'd call a narrow market panic. This gives me some comfort as it suggests that we're not anywhere approaching a repeat of the global financial crisis in 2008 when everything sold off as one.

... Over the past year (from 6 January 2015) I'm down 2 per cent, which is hugely disappointing.

... The problem is to work out what the alternative to these losses might be. Increasing your exposure to bonds is the traditional answer, but these fixed-income securities have gone precisely nowhere over the past year and, with US interest rates almost certain to keep rising, I can't see any value in virtually any part of the fixed-income credit spectrum. Gold has also edged lower and let's not mention the wider commodities complex for fear of scaring the horses. Cash pays almost nothing. What's left? I suppose the answer is to work harder by researching specific opportunities, stick to your contrarian instincts and look for genuine alternatives, assuming you can find any.

... the outlook for 2016
... I suppose the 'consensus' choice is to stick with the developed world markets with the best (or should we say least bad) economic fundamentals moving forward, namely the Eurozone and Japan. ... But I also think you need to buy local assets selectively.
... One early bet on this trend is the investment in the Schroder European Reit (SERE).
... I'm also tempted to take the plunge this year and invest in Taliesin Property Fund (TPF). ... "

[hedgehog 100] 05/2/2016 13:20

Hedgehog 100 30 Jan'16 - 19:19 - 1039 of 1055 0 0 edit
"... RJ,
Barcelo was managing the hotels during the share price collapse from 2007 - 2012, not Puma: ... "

Hedgehog 100 30 Jan'16 - 19:34 - 1040 of 1055 0 0 edit
"Also, RJ, note the division of responsibility here.
Puma will be responsible for executing the investment strategy and investment decisions made by the board, as distinct from actually determining the strategy itself: ... "


EDF,

RJ Allen and myself were talking about Puma, not Shore Capital.
Please refer to the following two post extracts above.

Puma is just a subsidiary of Shore Capital.

For SIP (the renamed HCP), SIP's board sets the strategy, and Puma will manage its implementation.
So Shore Capital itself won't be directly involved in those aspects.
They should be involved in fundraising, but that's different.

In any case, most of your material in post 1053 above is either about Puma, or about Shore Capital fundraising for HCP.
There's nothing explicitly about Shore Capital itself setting the strategy.

But even if there was, and even if Shore Capital was setting the new strategy for SIP, that doesn't mean that the new SIP strategy would be wrong.
The new strategy should be judged on its merits, and it looks very good to me.

Also note that HCP's strategy was initially very successful for the first two and a half years, when the share price more than trebled, before being derailed by the credit crunch.

SIP certainly looks to have that sort of upside potential to me, and without the downside of many speculative technology and resource plays.

In HCP's past the wrong strategy for the coming credit crunch was perfectly executed.
So if Puma can now perfectly execute the RIGHT (or REIT) strategy, then SIP should be a sustained success.

[hedgehog 100] 04/2/2016 17:24

Evil_doctor_facilier 3 Feb'16 - 17:16 - 1053 of 1054 5 0
"You said
'The very generous open offer allowance was a courtesy for those investors who did wish to take advantage of such a good opportunity."
Surely 'anyone' (rights holder or not) could just buy in the open market cheaper? So anyone who has not already lost 99% of their capital ,can buy in cheaper! Some generous and courteous gesture that is? ..."


EDF,

It wouldn't be possible to buy large amounts at under 1p, given the very small pre-new-money market capitalisation: which is well under half a million pounds at the current mid price of 0.825p.

The spread is 0.75p - 0.9p, as it was yesterday too, when the last market buy occurred:
Time/Date Price Volume Trade value Type
14:35:53 0.76 69,542 528.52 O
08:37:23 02-Feb-16 0.88 20,000 176.70 O


I.e. 0.88p, nearly the full offer price, for under £200 of shares.

Throw in dealing costs, and the effective price per share paid for 20,000 would probably be about 0.95p.
The exchange market size here is 50,000, so that's the maximum that you can guarantee to buy for the market offer price, and even then not necessarily online.

In addition, the new shares come with warrants attached: one for every three new shares subscribed for, and with a decent timeframe and exercise price: i.e. three years, and priced at the market price just prior to admission.

All of this clearly makes subscription a much more attractive alternative for large buys.

This was a facility there for shareholders who wished to take advantage of it: some will, some won't.

But on average existing shareholders have increased their holdings by over a quarter in the first round of the open offer, and their upside equity exposure by over a third including the warrants, and there is still the second round to come.

If there had been no open offer, and just the placing, you would probably be complaining about retail shareholders being shut out of a cushy deal for insiders, which is often the case on AIM.

[evil_doctor_facilier] 03/2/2016 17:25

Thankfully it looks like once bitten for shareholders here, well done the 94 odd % who decided not to get involved with this fiasco.
Overwhelming thumbs down to what seems like Shores Capitals on the fly Requisition blocking business idea. Looks like the normal minded holder said thanks but no thanks.

I wonder if any of the bod are going to match Marcus Yeoman's offer and work for a reduce annul salary?

[evil_doctor_facilier] 03/2/2016 17:16

You said
'The very generous open offer allowance was a courtesy for those investors who did wish to take advantage of such a good opportunity."

Surely 'anyone' (rights holder or not) could just buy in the open market cheaper? So anyone who has not already lost 99% of their capital ,can buy in cheaper! Some generous and courteous gesture that is?



Hedgehog, Shore Capital was responsible for HCP from conception to demise.
I am totality at a loss to understand how or why you seem to make Shore Capital blameless for the loss to shareholders here.

For anyone not understanding the full picture here ,i have put together a list of events that clearly show Shore capital's role in HCP from the very start in forming HCP to therm farming out the management of the hotels to barcelo.


The Hotel Corp PLC (“HCP”) was formed by Shore capital and Dawney shores Hotels (“DSH”) with an objective of being an investment company to invest directly into “DSH” acquisition of the Paramount chain of hotels (“Paramount221;) from Alchemy Partners

“DSH” was also a vehicle established by Shore Capital and “DHS” with a stated objective of acquiring a substantial chain of four star British regional hotels.

Shore Capital managed “DSH” in partnership with Dawnay, Day Hotels Limited ("DDHL") charging management fees for this service.

The consideration for the acquisition of “ParamountR21; was £215m, financed through private equity raised by Shore Capital and senior debt provided by Anglo Irish Bank.

“HCP” was listed on AIM July 2004.
Shore Capital and Corporate Limited acted as The Hotel Corporation plc's nominated adviser and broker.

Shore Capital raised £22m through the placing of 22 million ordinary shares at £1 per “HCP”
share
“HCP” then subscribed £21.7 million towards the acquisition of “ParamountR21; by “DHS”.

“HCP” through Shore Capital raised an additional £13.25 million through the placing of 13.5 million ordinary shares at £1 per “HCP2” share in in December 2014.
“HCP” also subscribed for further investment in “DSH” in December February 2005 respectively, bringing “HCP” investment in “DSH” to £33,670,000.

As a result of these subscription, the Company held 49.9 per cent of the issued share capital of Shore Capital’s managed and part owned “DSH” investment vehicle.
All of the “HCP” capital invested in “DHS ” was raised by Shore Capital.

“DSH” announced in December 2006 that it was undertake a strategic review aimed at maximising shareholder value”.
In August 2007 upon the completion of the strategic review, “DSH” entered into a lease and management agreement with regards Paramount Hotels, with with Barcelo Group ("Barcelo")
“DHS” announced that it “planned to unlock value by increasing gearing and returning capital to investors”

Howard Shore, Shore Capital's chairman and a DSH director, commented on the deal said:

"We are delighted to have concluded this value enhancing transaction after a careful review of all the options. As a result, shareholders will be able to crystallise the benefits of their investment whilst continuing to benefit from significant real estate potential."

July 2008, “DHS” informs “HCP” that the management of “DHS” has today terminated the engagement of "DDHL" under the Portfolio Management Agreement and had engaged Shore Capital Limited to provide the services
Howard Shore of shore capital was appointed chairman of ”DHS”

In September 2008 HCP announced a NAV of 239p per “HCP” share in it’s interim results along with the announcement that “DSH” had changed its name to Puma Hotels PLC. (“Puma”)

May 2009, “Puma” announced that Anglo Irish bank had reduced “Puma” senior debt facility by £20 million from £350 milion to £330 million and senior debt at “Puma” stood at £347.2 million.

June 2009 “HCP” raised £12.6 million disapplying share holders pre-emptive rights by placing 15. 2 million new “HCP” shares facilitated by Shore Capital stockbrokers Ltd, primarily to invest into Pumas £20 million equity raising to repay Anglo Irish bank.



November 2011. The board of “Puma” including Mr Howard shore inform “HCP” that ("Barcelo") are proposing revised rental and other terms for the hotels. Moreover, that unless a revision to the leases is agreed between the parties, BCE is intending to withdraw financial support from its UK hotels business, Barcelo UK.

April 2012 the directors of Puma Hotels informed “HCP” that “Puma” has signed a business transfer agreement providing for the early termination of leases with “Barcelo”;
JULY 13 "Puma" announces that it has successfully completed the extension of its GBP323 million senior debt facility with Irish Bank Resolution Corporation in Special Liquidation ("IBRC").
Following the debt purchase, “Puma” re branded itself as UK Group of Hotels plc

Aug 2014 as joint administrators appointed of UK Group of Hotels plc (formerly Puma Hotels plc),The Company's investment in UK Group of Hotels plc was fully written down to GBPNil in the accounts of the Company as at 31 December 2013.

[hedgehog 100] 03/2/2016 16:10

Personally I see it as a positive that the placing is likely to be provided in full, rather than being scaled back by open offer subscriptions.

Because the placing shares are likely to be in firmer hands, which makes for a firmer aftermarket going forward.

It's likely that the available stock after the fundraising will be very small indeed, which means that few shares will be available as news of the new "Specialist Investment Properties plc" gets out.

Having said that, if the open offer had only given shareholders the opportunity to increase their holdings by a fifth (which would be more normal), applications of £129,935 would be over-subscription, so it has actually been quite popular.

[hedgehog 100] 03/2/2016 15:48

Nick,

The £2M. placing funds are guaranteed, subject to enough shares being left after the open offer.

Round one of the open offer has received 5.2% take up (£129,935), which means that a minimum of £2,129,925 has been raised so far.
If the same is raised in round 2, then £2,259,870 gross will have been raised from the placing / open offer, over 90% of the maximum subscription.

The open offer round one allowed shareholders to increase their holdings by six-fold, and few people will want to increase their holdings so markedly, however good the investment.
Hence the structure of this fundraising, with the large placing element likely.
The very generous open offer allowance was a courtesy for those investors who did wish to take advantage of such a good opportunity.


03/02/2016 09:00 UKREG Hotel Corp (The) PLC Result of Round 1 of the Open Offer

"Further to the Company's announcement on 15 January 2016, HCP is pleased to announce the result of Round 1 of the Open Offer. The Company has received valid acceptances for 649,675 Open Offer Shares from Qualifying Shareholders, representing approximately 5.2 per cent. of the Open Offer Shares available.

Accordingly, 11,805,090 of the Open Offer Shares will be available under the Excess Application Facility as Excess Shares under Round 2 of the Open Offer. Only Qualifying Shareholders who have taken up their Open Offer Entitlements in full under Round 1 of the Open Offer are entitled to participate in Round 2 of the Open Offer.

Details of Round 2 of the Open Offer, including its terms and conditions are set out in the Circular (defined below). Qualifying non-CREST Shareholders who are entitled to participate in Round 2 of the Open Offer can apply for Excess Shares by using the Round 2 Application Form which is expected to be posted to such entitled persons later today. For Qualifying CREST Shareholders who are entitled to participate in Round 2 of the Open Offer, Excess CREST Open Offer Entitlements are expected to be credited to stock accounts in CREST at 8.00 a.m. on 4 February 2016.

The timetable of expected events for the Proposals is set out below.

Capitalised terms used but not defined in this announcement bear the meanings ascribed to them in the circular dated 15 January 2016 (the "Circular"). The Circular is available on the Company's website at www.thehotelcorporation.co.im. ..."

[nick rubens] 03/2/2016 12:45

only 5% take up??

[nick rubens] 03/2/2016 09:08

RNS out on the placing.

[hedgehog 100] 02/2/2016 17:52

The mainstream care home sector has seen strong institutional investor interest recently, and HCP-SIP's more specialised focus looks to be ahead of the curve.
With good scope to build a sizeable property portfolio in this area relatively cheaply, before institutions start bidding prices up.

Moreover, unlike the shares bought by an investment trust, HCP-SIP's investments will not be buyable elsewhere.

And to buy similar investments directly would be financially onerous for most retail investors, and without the liquidity of owning shares in a listed company.

Shares are often temporarily weak at the time of a fundraising, as with HCP at 0.825p, but that can often present a good buying opportunity, as in this case.

[hedgehog 100] 02/2/2016 17:25

It's also important to note that HCP-SIP will be undertaking an element of actual property development (with its increased scope for value-creation), as opposed to just buying 'completed' facilities for its purposes:

"Initial Programme
... Two of the properties are already in operation as care facilities for children and available as sale-and-leaseback opportunities while the two other properties would be open market purchases of standard homes for conversion. The adaptation work required is modest with a subsequent local authority compliance check prior to receipt of a designated change of use."

I.e. HCP-SIP will be more of an active business than an investment trust is.


And HCP-SIP's investing policy focus has shades of how Duncan Bannatyne built a large part of his initial fortune:
"The initial and primary focus is to make investments in purpose-built homes for adults with learning difficulties requiring support from carers (for example adults with autism), purpose-built care homes for the elderly and infirm and converted dwellings accommodating young adults/late teens requiring extensive support from social services."

Duncan Bannatyne:
"Net worth £175 million"
"He eventually sold the business for £28,000, founding a nursing home business called Quality Care Homes which he then sold for £26 million[7] in 1997 and children's nursery chain Just Learning for £12 million.[9]"

[hedgehog 100] 01/2/2016 21:14

HCP (currently 0.825p mid) looks to have attractive potential in both the short, medium, and longer terms:

1. SHORT TERM.

• Currently looks to be returning back up the the fundraising price of 1p, and a slight premium to post-fundraising cash of circa 0.9p per share.

• Active positive February newsflow: 20:1 share price consolidation and name change to Specialist Investment Properties (both 8 February), and news re. completion of the fundraising.

2. SHORT/MEDIUM TERM.

• Strong positive newsflow as the company executes its initial property investment programme during March - June.

• Follow-up company development: larger fundraising(s), and further acquisitions.

• Dividend policy: "The Company is targeting a dividend yield of seven per cent. per annum, and your Board expects to pay the first dividend in Q1 2017."

3. MEDIUM/LONGER TERM.

• Growth in dividends.

• Capital growth: " ... these properties can offer attractive returns on equity and the prospect of medium term capital growth as the chosen specific property category grows and becomes better appreciated by mainstream property investors."

• Move to increased rating as the company grows, develops a track-record in its new sub-sector, and becomes more widely-appreciated by the market.

[hedgehog 100] 01/2/2016 20:42

Compare HCP to another former shell, PPG (Plutus Powergen):



PPG has been popular with retail investors, and quadrupled in a year.

But PPG looks to have significantly bigger risks than HCP, while having just comparable upside.

[hedgehog 100] 01/2/2016 18:40

EDF,

There's a difference between advising on the technical aspects of a strategy that you are asked to execute, as opposed to determining that strategy itself.

And in any case, hindsight is a wonderful thing, and many people did not see the credit crunch coming.

But the new, defensive strategy suggests that insiders here have learnt that the previous strategy was too risky. I'm glad that that lesson has already been learnt, as it decreases the chances of a similar mistake being made in the future.

With regard to the level of cash after the current fundraising (£2.3 - £2.8M. depending upon the level of subscription, but probably at or close to £2.8M.), this is just the start.

From page 15 of the Circular (section 2.3):

"2.3 Initial Programme

The Property Investment Adviser has initially identified four properties for the Company to look to acquire. ...

The Property Investment Adviser has additionally identified a pipeline of similar transactions which it will introduce to the Company for the Company to seek to execute within two to three months of the close of the Capital Raising. The Property Investment Adviser would then aim to identify further acquisitions which would be part financed through raising further equity in a larger fundraising or raisings."



Shore Capital has raised hundreds of millions of pounds, so they're well-place to deliver the desired funds here.

Especially with the resources and tech sectors being avoided by many investors at present due to global market concerns, and people seeking safer, domestic plays.

The aim will doubtless be to 'get bigger fast', to reduce the percentage of fixed costs.

And in the meantime, Puma is waiving some of its fees for 2016 (see section 2.10 of the Circular), and there will be strong positive newsflow.


Similar costs concerns were raised with respect to FFWD, but that has addressed them by 'getting bigger fast' over the last few months, and its share price performance has been strong.

Indeed FFWD's placing last week was at a premium to the market price, as is HCP's current fundraising (including from the time it was announced), which is comparatively rare for AIM.


There's an ideal size from which a company like this can become a multi-bagger: too small, and fixed costs become too burdensome; whereas too big, and there can be insufficient quality opportunities in a chosen niche.

£10 - £15M. is probably the ideal early-stage starting point, and with more fundraising HCP-SIP looks well-placed to approach or even reach that very quickly.

[evil_doctor_facilier] 01/2/2016 17:11

Hedgehog ;- Who do think advised on the deal with hcp and Barcelo in 2007?
Is it not the case that it was shore capital's formed Dawney shores hotels who arranged the lease and management deal with for Barceleo?
Dawney shores was a vehicle formed by Shore Capital.

This from Howard shore, shore capitals chairman at the time of the transaction with Barceleo...... "We are delighted to have concluded this value enhancing transaction after a careful review of all the options"

Also Shore capital directly had control and responsibility for the portfolio management agreement from July 2008.

If you are trying to somehow suggest Shore capital had nothing to do with the decisions and actions that gave way to total destruction of over 45 million pounds that was invested into HCP then i would very much beg to differ.

Still in anyone want to yet again pay them to have a second chance after the first diabolical attempt then that's their prerogative.
bases on the performance of the last attempt . Personally i would not trust them to run a car boot stall.


How is this new investment strategy ever going to make shareholders any cash? it is so small scale that surely once you have yet again paid the fee's to Shore the wages to the two board members and then the plc running costs what rate of return would be needed to have a crumb left over for shareholders?
40-50%??? who are theses guys warren buffet on drugs?


Lets looks at last years admin costs alone of 144k that right there is 7.5% of any gain of the properties investment gone before you start. That is before the fee's paid to Shore for managing the properties.

Its a stone cold avoid at all costs, the business will never generate enough % to cover all the above costs with just 2 million to invest in property.

[hedgehog 100] 30/1/2016 19:44

And the icing on the cake is the company's tax losses of £13M.:

26/03/2015 16:23 UK Regulatory (RNS & others) Hotel Corp (The) PLC Final Results and Notice of AGM

" ... As at 31 December 2014 ...

GBP'000 ...

Retained losses (13,022) ..."




As far as I'm aware these will be eligible for offsetting against future profits, as the sector is the same (i.e. property), and in any case there has not been a reverse takeover here.

[hedgehog 100] 30/1/2016 19:34

Also, RJ, note the division of responsibility here.

Puma will be responsible for executing the investment strategy and investment decisions made by the board, as distinct from actually determining the strategy itself:

15/01/2016 07:00 UKREG Hotel Corp (The) PLC Placing & Open Offer and Notice of EGM

"2.5 Property Investment and Management

The Company intends to adopt a conventional offshore real estate investment trust REIT like structure. The Board will be responsible for approving the investment strategy, making investments, monitoring performance, determining dividends, organising accounting, company administration and reporting to Shareholders. The sourcing, evaluating, structuring and negotiation of the investments will be delegated to the Property Investment Adviser under a property investment advisory agreement. The Property Investment Adviser will also be responsible for monitoring of the investments, organising property administration and rent collection."




So if the strategy is wrong (e.g. being heavily indebted in a cyclical sub-sector at the top of the market), then that is not Puma's responsibility, and there's no reason to believe that Puma are not very efficient and effective in their area of operation.


In terms of the new strategy, it looks to be bang on the money: a defensive niche, undervalued, with excellent growth potential.
And with a sensible level of gearing (70%) to increase returns.

My opinion is that shareholders have come up trumps here, and that an investment in HCP could now be an absolute cracker: especially from the current depressed level of 0.75p.

[hedgehog 100] 30/1/2016 19:19

RJ Allen 19 Jan'16 - 22:22 - 1033 of 1038 1 0
"Open Offer.Massive dilution for existing shareholders. Believe it or not they have given the management contract to, guess who, Puma, the very same outfit that screwed up on the hotels. Not that this is actually mentioned in the circular to shareholders .Indeed they say-'Puma Investments, has a long and successful track record of investing in property and property-related schemes, dating back to the launch of Puma Property in 2002'"


RJ,

Barcelo was managing the hotels during the share price collapse from 2007 - 2012, not Puma:

"Puma Hotels rebrands to The Hotel Collection

Written by: Janet Harmer, Tuesday, June 10th 2014, 16:21

Puma Hotels – the portfolio of 21 regional four-star hotels – has been rebranded to The Hotel Collection, with immediate effect.

The move follows a turbulent time for the group which resumed management of the hotels in April 2012 after Barcelo pulled out of a 45-year lease – five years after signing it in 2007 – to operate the properties. Although the Spanish group agreed to pay a penalty fee of £20.25m for breaking the contract, Puma lost annual rent of £30m from Barcelo. ... "

[hedgehog 100] 28/1/2016 21:14

From HCP's 15th. January 2016 circular:

"2.3 Initial Programme

The Property Investment Adviser has initially identified four properties for the Company to look to acquire. The acquisitions would comprise a combined investment of around £1.3 million, of which it is expected that around 70 per cent. can be financed by debt. The Company would seek to raise the debt initially from Heritage Square a specialist property lender advised by Puma Investments as the Company believes this offers faster execution at competitive pricing. As the Company acquires more properties and builds up a portfolio of income producing properties, it will look to refinance this initial debt with a longer term facility. Two of the properties are already in operation as care facilities for children and available as sale-and-leaseback opportunities while the two other properties would be open market purchases of standard homes for conversion. The adaptation work required is modest with a subsequent local authority compliance check prior to receipt of a designated change of use.

The Company would endeavour to acquire each home with an existing lease in place and with an established care operator. In relation to the two open market purchases, leases would be entered into with the care operator on acquisition which would be subject only to approval of the change of use. The Company will target such leases to be for a minimum term of 20 years (25 years on properties initially identified) on full repair and insuring (FRI) basis, with annual rent increases linked to the consumer price index (CPI). The care operator for the four properties has recently secured a substantial, term care placement contract with Birmingham City Council and needs additional space. This contract will support the care provider’s ability to meet the lease payments. The care provider is a well-established operator with over 10 years’ experience, already operates a network of 19 residential care units, one specialist school and has 36 young people in its care. It is a substantial enterprise with 250 staff based within five local authorities and also undertakes ad hoc work nationwide.

The Property Investment Adviser has additionally identified a pipeline of similar transactions which it will introduce to the Company for the Company to seek to execute within two to three months of the close of the Capital Raising. The Property Investment Adviser would then aim to identify further acquisitions which would be part financed through raising further equity in a larger fundraising or raisings."

[hedgehog 100] 28/1/2016 18:27

15/01/2016 07:00 UKREG Hotel Corp (The) PLC Placing & Open Offer and Notice of EGM

"... Placing and Open Offer of 12,454,765 New Ordinary Shares at 20 pence per share and issue of up to 4,151,485 Warrants

Proposed change of name to Specialist Investment Properties plc

... The Company currently holds approximately GBP300,000 in cash. In order to increase the cash resources available to the Board, the Company is proposing to issue new equity through an Open Offer to Shareholders to seek to raise up to GBP2.5 million. Under the Open Offer the Company will offer up to 5 of the New Ordinary Shares to Qualifying Shareholders for every 20 Existing Ordinary Shares held on the Record Date at the Issue Price.

In light of the fact that the Open Offer represents a significant multiple of capital relative to the existing market capitalisation of the Company, the Company has conditionally placed an aggregate of 10,000,000 New Ordinary Shares with Placees at the Issue Price, thereby providing assurance that the Capital Raising will provide minimum gross proceeds of approximately GBP2.0 million for the Company. To the extent that the Open Offer is subscribed by Qualifying Shareholders by amounts in excess of the difference between the Open Offer amount (GBP2.5 million) and the Placing (GBP2.0 million) the Placing will be reduced accordingly. ...

the Board has decided to implement a share reorganisation so that:
each holding of every 20 or more Existing Ordinary Shares will be consolidated into 1 New Share and one Deferred Share. ...

As a consequence of the Capital Reorganisation, each Shareholder's holding of New Shares will (ignoring fractional entitlements) immediately following the Capital Reorganisation becoming effective be one twentieth of the number of Existing Ordinary Shares held by them on the Capital Reorganisation Record Date. However, each Shareholder's proportionate interest in the Company's issued ordinary share capital will remain unchanged as a result of the Capital Reorganisation. ...

The Issue Price represents an 8.1 per cent. premium to the adjusted closing middle market price of 18.5 pence per Existing Ordinary Share on 14 January 2016 (being the last Business Day before the announcement of the Capital Raising), after taking into account the proposed Capital Reorganisation. ... "




Post the fundraising and capital reorganisation:

Circa £300,000 pre-existing cash

2,490,952 pre-fundraising shares post-consolidation

+ Up to 12,454,765 fundraising shares issued for up to circa £2.4M. net cash

= Up to 14,945,717 shares in issue, and up to circa £2.7M. cash after fundraising costs

= Circa 18.065p per share cash assuming full subscription (equating to about 0.903p per share cash pre-consolidation equivalent)

If the open offer is not fully subscribed then the cash pre share will still be very similar, due to the fewer number of shares in issue.


HCP is currently trading at 0.75p mid (0.7 - 0.8p spread).

[hedgehog 100] 28/1/2016 15:13

Price (GBX) 0.75 Last close 0.75 on 27-Jan-2016
Bid 0.70 Offer 0.80

Last 5 trades
Time/Date Price Volume Trade value Type
09:34:28 0.78 6,115 48.00 O
12:49:06 27-Jan-16 0.77 38,152 292.05 O
12:10:00 27-Jan-16 0.72 250,000 1,787.50 O
08:58:14 27-Jan-16 0.70 250,000 1,750.00 O
09:51:32 26-Jan-16 0.68 98,039 664.21 O

Exchange market size 50,000