Disposal and Potential Reverse Takeover

 

TIDMMOLE 
 
RNS Number : 5995E 
Molectra Group Ltd 
23 December 2009 
 

 
 
23 December 2009 
 
 
Molectra Group Ltd 
("Molectra" or "the Company") 
 
 
Disposal of Molectra Australia and Discussions Regarding a Potential Reverse 
Takeover 
 
 
 
Molectra today announces that it has conditionally agreed to dispose of the 
business and assets of its operating subsidiary, Molectra Australia Pty Ltd. 
("Molectra Australia"), ("the Disposal"). 
 
 
The business of Molectra Australia is to sell crumb rubber, manufacture value 
added products made of rebonded crumb rubber and to seek to license its 
technology to third parties. In the nine months to 30 September 2009, Molectra 
Australia made an unaudited loss before tax of A$8.6 million. 
 
 
The strategic review of the Company's options by management and the Company's 
advisers that was announced on 29 September 2009 has now been completed, with 
the conclusion that, given current resources and commercial prospects, Molectra 
Australia's business did not have sufficient prospects of success to warrant the 
Company's continuing investment. 
 
 
The Directors of Molectra have conditionally agreed to sell the business and 
assets of Molectra Australia back to parties related to Mr John Dobozy, the 
original owner of the Molectra Australia business, in return for 26,924,213 
Molectra ordinary shares of no par value ("the Ordinary Shares"), which will be 
immediately cancelled. Based on yesterday's mid market closing share price of 
0.625p per share, the proposed Disposal values the Molectra Australia business 
at GBP168,276. Of the c.27 million Ordinary Shares above, approximately 16 
million Ordinary Shares will be acquired from Molectra Holdings Ltd and 
approximately 11 million Ordinary Shares will be acquired from Molectra 
Technologies Pty Ltd. 
 
 
It is proposed that the corporate entity of Molectra Australia itself will be 
retained and the Company will attempt to sell Molectra Australia to a third 
party for the potential tax losses in that company. If this does not prove 
possible, it is intended that Molectra Australia will be liquidated. 
 
 
The Disposal will require shareholder consent, in accordance with the AIM Rules 
and Jersey law, to be given in a general meeting. If the Disposal is approved by 
shareholders, Molectra will become an investing company as defined in the AIM 
Rules. 
 
 
It is intended that the Company's investing policy going forward will be to 
acquire a company or business 
 in the consumer retail and/or manufacturing 
sector. The Company is currently in discussions, which may or may not lead to an 
acquisition in accordance with this policy. Any such transaction is likely to 
require the approval of shareholders and to be considered a reverse takeover 
under the AIM Rules. A further announcement will be made in due course. 
 
 
As agreed with the London Stock Exchange and in accordance with the AIM rules, 
trading in the Molectra Ordinary Shares will be suspended from 7.30 a.m. this 
morning. 
 
 
It is expected that a circular, seeking shareholder approval for the Disposal 
and for the proposed investing policy will be posted to shareholders shortly. A 
further announcement will be made in due course. 
 
 
Related Party Transaction 
The Disposal, being a transaction with companies connected to Mr John Dobozy, 
who was a director of the Company in the last 12 month and indirectly is 
interested in approximately 15.4 per cent. of Molectra's existing share capital, 
is classified as a transaction with related parties for the purposes of the AIM 
Rules. In accordance, therefore, with the AIM Rules, the Directors of the 
Company, having consulted with the Company's nominated adviser, Arbuthnot 
Securities Limited, consider that the terms of the transaction are fair and 
reasonable insofar as the shareholders are concerned. 
 
 
Rodger Sargent, Chief Financial Officer of Molectra, said: 
"Our thorough strategic review clearly indicated that continuing to focus on the 
Australian business would not be in the best interests of our shareholders. We 
believe the Company, with its cash resources and AIM quote, retains considerable 
value which the Directors will seek to maximise." 
 
 
For further information please contact: 
 
+-------------------------------------+-------------------------------------+ 
| Molectra Group Limited              |                                     | 
| Paul Gazzard                        | 01725 510 383                       | 
| Rodger Sargent                      | 020 7355 7662                       | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
| Arbuthnot Securities Limited        | 020 7012 2000                       | 
| Antonio Bossi                       |                                     | 
| Ed Groome                           |                                     | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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