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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Bow Lane Cap. | LSE:BLC | London | Ordinary Share | GB00B12XK814 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.07 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:0600F Bow Lane Capital PLC 23 June 2006 Bow Lane Capital Plc 23 June 2006 Proposed acquisition of Silverdell (UK) Limited, proposed placing and proposed admission and re-admission to trading on AIM as"Silverdell plc" Bow Lane Capital Plc (the "Company"), admitted to trading on AIM on 21 April 2006 with the purpose of acquiring companies and businesses in sectors which are subject to structural, technological and/or regulatory change and which offer opportunities for consolidation, today announces that it has entered into a conditional agreement to buy the entire issued share capital of Silverdell (UK) Limited ("Silverdell"), a UK asbestos consultancy and remediation contractor for a total consideration of up to #22.2m. The Directors and Proposed Directors (as defined below) believe that Silverdell has the following strengths: *Brand and reputation: which provide a competitive advantage in an industry which is both highly regulated and subject to increasing litigation *Experience and track record: given the fragmented nature of the market, only a few participants have the expertise and infrastructure to take on major projects *Scale and geographic coverage: which enable Silverdell to continue to capture nationwide contracts as well as providing a strong platform for market consolidation *Health and safety record: of critical importance when winning new business and difficult for competitors to replicate *Industry representation: which allows Silverdell to be at the forefront of developments within the industry *Blue chip customer base: underpinning revenue and enabling Silverdell to operate at the higher end of the market with the associated contract premiums. The Company also announces today that it proposes to raise approximately #12 million (approximately #10.5 million net of expenses) by issuing 16,000,000 new ordinary shares in the share capital of the Company ("Ordinary Shares") at 75 pence per share by way of a placing to institutional investors. The proceeds of the placing will be used to part-fund the cash consideration payable under the acquisition, to meet the costs and expenses relating to the acquisition, the placing and re-admission to AIM and also to meet the working capital requirements of the Company and its subsidiaries following completion of the acquisition. David Williams, Chairman of Bow Lane Capital plc, said: "Silverdell is one of the leading asbestos contractors in the UK, with a strong brand, a blue chip customer base and a experienced management team. This acquisition provides a platform for consolidation in the fragmented asbestos services sector, which we believe has witnessed a compound annual growth rate of approximately 25 per cent since 2002 due to increasing legislation and the threat of litigation. We have already identified opportunities for further complementary acquisitions once this acquisition is completed." For further enquiries contact: Bow Lane Capital Plc David Williams, Chairman +44 (0) 20 7248 0802 Mark Watts, Director +44 (0) 20 7248 0802 Finsbury Don Hunter +44 (0) 20 7251 3801 Collins Stewart Limited Simon Atkinson +44 (0) 20 7523 8306 Ellen Francis +44 (0) 20 7523 8317 Introduction The Company announces today that it has entered into a conditional agreement to acquire the entire issued share capital of Silverdell, a UK asbestos consultancy and remediation contractor, together with certain outstanding shareholder loan notes, for a total consideration of up to #22.2 million (the "Acquisition"). The consideration of #16.2 million due at completion of the Acquisition ("Completion") will be satisfied by the payment of approximately #12.6 million in cash, part-funded out of the net proceeds of a placing to institutional investors (the "Placing") of 16,000,000 new Ordinary Shares (the "New Ordinary Shares") in the Company at 75 pence per share (the "Placing Price") and, the issue of 4,801,169 new Ordinary Shares in the Company (the "Consideration Shares") (which at the Placing Price will have a value of approximately #3.6 million). In addition, an earn out of up to #6 million will be payable to certain vendors through the issue of loan notes (the "Loan Notes") and additional new Ordinary Shares, dependent upon the performance of the Silverdell group in the financial years ending 30 September 2007 and 30 September 2008. The Acquisition constitutes a reverse takeover pursuant to the AIM rules and is therefore subject to the approval of the shareholders of the Company (the "Shareholders"), which will be sought at an EGM. An application will be made to the London Stock Exchange for the existing Ordinary Shares and the New Ordinary Shares to be respectively readmitted and admitted to trading on AIM ("Admission"). Admission is conditional, inter alia, on the passing of the resolutions (the "Resolutions"), which include a resolution to change the name of the Company to "Silverdell Plc", contained in the admission document and notice of the EGM (the "Notice"), which has been sent to all Shareholders today. About Bow Lane Capital Plc The Company was established to acquire and manage companies and businesses in sectors where there are opportunities for consolidation. The Directors will focus on sectors undergoing structural, technological and/or regulatory change when assessing acquisition opportunities and will consider the environmental services and alternative energy sectors in particular. The Directors have identified the Acquisition as the initial step in the implementation of this strategy. The Company began trading on AIM on 21 April 2006 following an initial #5.7m fundraising through a private institutional placing. Marwyn Neptune Fund LP, a Cayman Islands fund managed by Marwyn Investment Management LLP, subscribed for #4m of the placing and its interest currently represents approximately 70% of Bow Lane Capital's issued share capital. Overview of Silverdell Silverdell was established in 1979 and is a UK asbestos remediation contractor, with offices in London, Bradford, Leicester and Cardiff. Silverdell and its subsidiary undertakings (the "Silverdell Group") perform all three types of surveys under the Methods for Determination of Hazardous Substances no.100 ("MDHS 100") published in July 2001 by the Health and Safety Executive ("HSE") (which range from site inspections through to the testing of samples of a building's fabric and structure), either on a stand alone basis or as part of a larger asbestos remediation programme. This has historically accounted for approximately 10 per cent. of the revenues of the Silverdell Group. The Silverdell Group also undertakes remediation works, being the controlled removal, encapsulation and/or labelling of asbestos and asbestos containing materials ("ACMs"), which has historically accounted for approximately 80 per cent. of the revenue of the Silverdell Group. Remediation work is often provided to customers in conjunction with ancillary services, which include staff training, ventilation decontamination and minor construction work. The Silverdell Group has a business division focussed on the rail sector, is approved to work for Network Rail and has full "Link-up" accreditation (the accreditation required to work within the rail industry). The Silverdell Group also has framework agreements with London Underground service providers. In February 1998 Silverdell moved to the site it currently occupies at Pacific Wharf in Barking, a facility that allowed Silverdell to combine office, stores and workshop facilities under one roof whilst also allowing the opportunity for further expansion. In May 2000 Silverdell opened its first regional office in Leicester, with a staff of six. Bristol was the location of the next regional office; Silverdell had carried out a major contract in the area and became aware of potential business in the South West. This office subsequently moved to Cardiff and has recently relocated to larger premises. Silverdell's Shepherds Bush office is located to serve West London. In 2005, Silverdell opened an office in Bradford to serve the North. The implementation of the Control of Asbestos at Work Regulations, 2002 ("CAWR") was the catalyst for the development of the asbestos surveying and consultancy operations and in August 2002 Silverdell established Silverdell Management Services LLP ("Silverdell LLP"). Initially, Silverdell LLP offered surveying and consultancy services to existing clients of Silverdell but has recently developed its own client base. The Silverdell Group works for FTSE 100 companies as well as central and local government. Corporates are drawn from a broad range of sectors including retail (including Specsavers, J Sainsbury, Boots, WH Smith and the House of Fraser Group), property (including Land Securities Trillium, Laing Construction, Balfour Beatty and AMEC) and utilities (including Severn Trent and Yorkshire Water). Local government clients include the City of Westminster, several London Boroughs and Staffordshire County Council. Approximately one half of Silverdell's revenue is underpinned by framework contracts. Silverdell has also been involved with a number of prestigious projects, such as the refurbishment of the Old Admiralty Building and the ongoing restoration of the Royal Festival Hall. Silverdell has held a full HSE Asbestos Licence (required for the removal and encapsulation of asbestos) continuously since its initial grant in 1984 and in March 2006 this licence was renewed for three years, until 2009. The HSE either awards licences on a one year or a three year basis; many clients demand a three year licence, possession of which gives the holder an advantage over contractors with little or no proven experience who hold one year licences. In addition, Silverdell holds a waste management licence for the operation of a hazardous waste transfer station, which allows it to store asbestos and ACMs at its Barking site until bulk transfer can be arranged to an appropriate waste disposal site. Silverdell has an excellent health and safety record amongst its industry peers. Adherence by the Silverdell Group to high standards of health and safety are recognised within the industry: a senior employee won the Asbestos Removal Contractors Association ("ARCA") Supervisor of the Year award in 2003 and Silverdell currently holds the ARCA Regional Award for Training (South East). In 2006 Silverdell also received an award from the Royal Association for the Prevention of Accidents ("ROSPA"). ROSPA awards companies who show a commitment to the prevention of accidents within the workplace by the installation of systems and procedures that empower employees to work in a more knowledgeable manner when it comes to health and safety. Silverdell is a prominent member of ARCA and is represented on the Governing Council and Technical Committee. The Directors and the Proposed Directors (which terms are defined under the section entitled, "The Board" later) believe that in a market where clients are heavily focussed on brand and reputation, not only does this enhance the Silverdell Group's credentials, it means that it can actively participate in developments within the industry. Silverdell has also innovated, developing technologies to record and monitor removal works using audiovisual equipment (which the HSE intend to make an industry standard) and introducing on-site self-auditing, a process now adopted as good practice by ARCA. The construction industry recognised Silverdell's pre-eminence by awarding it "Asbestos Removal Specialist of the Year, 2006" at the recent Construction News awards. Silverdell beat industry nominee Rhodar as well as Cuddy Group and demolition specialists Keltbray to win the prestigious award. Silverdell is run by an experienced management team backed by many years of practical experience in the asbestos removal industry. Locations Silverdell's head office is located in leased premises in Barking, East London, where Silverdell also has a licensed waste transfer station. Silverdell's senior management are located at these premises, together with the finance and the sales and marketing functions. Silverdell has also leased small premises in Shepherd's Bush, West London. The Silverdell Group also has a branch network with offices in Leicester, Bradford and Cardiff. In Leicester, there are 6 contracts staff dealing with the estimating and contract management of projects. In Bradford, there are 2 such staff and in Cardiff there are 6. In aggregate, the Silverdell Group employs 173 people, of whom 128 are asbestos operatives. The business's core operations are performed or supervised by directly employed staff with the appropriate health and safety training and certificates. Silverdell is focused on building a branch network throughout the UK in order to allow it to compete for and capture further nationwide corporate and public sector contracts. Market Market opportunity Asbestos was used extensively in buildings and in engineered products in the UK until its complete ban in the UK in 1999 although stockpiles of white asbestos could be used until 2005. Imports of blue and brown asbestos were banned in 1985. As asbestos does not occur naturally in the UK, the volume of imports can be used as a proxy for its use. Imports of asbestos reached their peak during the 1960s. The asbestos services market can be split into consultancy and remediation: (a) consultancy principally involves the performance of the three types of asbestos surveys under MDHS 100; and (b) remediation involves the controlled removal, encapsulation, labelling and on-site management of asbestos and ACMs. It is believed that around 80 per cent. of the UK commercial and industrial property stock have a high risk of containing asbestos, necessitating ongoing asbestos management and potential remediation. Legislation and litigation Since 2002, it is estimated the asbestos consultancy and remediation market has experienced a compound annual growth rate of approximately 25 per cent. The Directors and the Proposed Directors believe that there are two main drivers for the recent growth within the industry: 1. Legislation Although legislation in relation to asbestos was first introduced over 20 years ago, the principal legislation is contained within the CAWR. In particular, Regulation 4 of CAWR introduces the concept of a "duty to manage" asbestos within non-domestic UK premises, creating an obligation to assess and manage the risks from asbestos and ACMs within relevant premises. Broadly speaking, non-domestic premises are defined as commercial and industrial buildings as well as the common parts of public and social housing. In practice, this necessitates the identification of asbestos and ACMs through the conduct of surveys, the introduction of asbestos management plans and regular audits to assess the stability of asbestos and its remediation as appropriate e.g. prior to demolition or major refurbishment work. In late 2005/early 2006 the HSE published a consultation document that sought views on draft Regulations and an Approved Code of Practice to implement amendments to the EU Asbestos Worker Protection Directive 83/477/EEC and other changes to the existing asbestos regulatory framework. The HSE proposes to repeal the CAWR, the Asbestos (Licensing) Regulations 1983 and the Asbestos (Prohibitions) Regulations 1992 and to replace them with a single set of regulations. One of the legislative changes proposed in the consultation document is to adopt a risk-based approach to defining work with asbestos or ACMs which will be exempt from the requirement to obtain a licence from the HSE. The HSE believes that for most work with asbestos this will maintain the status quo; however, the HSE is proposing to consult further on whether work with asbestos-containing textured coatings should be removed from the licensing regime altogether. If that were to happen, licensed contractors such as Silverdell could be exposed to competition from unlicensed contractors for such work. 2. Litigation As the incidences of asbestosis (scarring of the lung) and mesothelioma (cancer of the lung lining) have gradually risen so have the number of asbestos-related claims. Asbestos accounts for over 3,500 deaths each year and is the UK's biggest single cause of work-related deaths. In 2005, the insurance industry paid out #205 million in asbestos-related claims and the actuarial profession has warned that the cost of asbestos claims in the UK could reach #20 billion in the next 30 years. The Directors and proposed Directors believe that rising claim volumes are likely to encourage employers in particular to manage asbestos appropriately. The current mortality rate from asbestos-related diseases is expected to rise until around 2011-2015. There is also an appeal before the House of Lords in respect of a number of cases in which the claimants are seeking damages for pleural plaques (benign scarring of the lung tissue caused by exposure to asbestos fibres). The Court of Appeal ruled that pleural plaques do not constitute an injury and therefore do not attract compensation. If the House of Lords reverses the Court of Appeal's decision and rules that compensation should be paid for pleural plaques this may increase employers' concerns to manage their asbestos risks appropriately. Market size Estimations of the overall size of the asbestos consultancy and remediation market contain significant uncertainty and differ depending on which methodologies are applied. The HSE estimate of the market size (based on an estimation of the compliance costs for the market) is between #1.2-1.7 billion. The general view within the industry however is that this estimate is conservative. For example, the Director General of the Asbestos Information Centre is of the belief that the actual cost may be up to 10 times this amount. Uncertainty also surrounds the longevity of the market, although expectations are that asbestos removal will peak around 2020, with 85 per cent. of all asbestos having been removed by 2050. The industry The Directors and Proposed Directors believe that industry participants can broadly be divided into three categories: (a) a significant number of regional providers who principally service small and medium sized enterprises and who have revenues of less than #2m and employ less than 15 individuals; (b) specialist, professional providers, such as Silverdell, with multiple operational bases within the UK (who therefore also compete for larger, nationwide contracts and one-off projects) and who have revenues of between #5 and #30 million; and (c) multi-service providers (e.g. health and safety, compliance and demolition service providers) for whom asbestos accounts for less than 25 per cent. of business and who have revenues between #20 and #50 million. The Directors and Proposed Directors believe that the industry is highly fragmented, particularly as regards the regional providers, which presents a significant opportunity for industry consolidation on a nationwide basis. The Directors and Proposed Directors estimate that the Silverdell Group had approximately 5 per cent. market share in 2005 based on its turnover when compared to estimates of the market size. In addition, the Directors and Proposed Directors believe that there are strong barriers to entry to the industry, in particular: (a) a customer requirement for reputation and credibility, which offsets low start-up costs; (b) scale and a full service capability - critical if a provider is to have full access to the market; (c) a track record - a pre-requisite for cost effective insurance cover, among other things; and (d) the hazardous nature of asbestos and litigation risk. Trading record of Silverdell The financial information relating to Silverdell and the Silverdell Group set out below has been extracted from the financial information set out in the Notice and the pro forma consolidated unaudited financial information for Silverdell and Silverdell LLP has also been extracted from the financial information set out in the Notice. +--------------+--------------------------------------------+--------------+ | | Silverdell only |Silverdell and| | | |Silverdell LLP| | | | Pro Forma | | | | | +--------------+--------------+--------------+--------------+--------------+ | For year end | Audited 2003 | Audited 2004 | Audited 2005 |Unaudited 2005| | 30 September | #'000 | #'000 | #'000 | #'000 | | | | | | | | | | | | | +--------------+--------------+--------------+--------------+--------------+ | Turnover | 11,311 | 11,538 | 18,464 | 19,521 | | | | | | | | | | | | | +--------------+--------------+--------------+--------------+--------------+ | Gross profit | 3,291 | 3,833 | 5,193 | 6,738 | | | | | | | | | | | | | +--------------+--------------+--------------+--------------+--------------+ | Profit before| 715 | 238 | 778 | 1,844 | | taxation | | | | | | | | | | | | | | | | | +--------------+--------------+--------------+--------------+--------------+ The pro forma profit on ordinary activities for year end 30 September 2005 before taxation of #1.8 million include the following items, each of which are stated in the Historical Financial Information on Silverdell which is set out in the Notice: (1) directors' discretionary bonuses, benefits in kind and pension contributions totalling #1.1 million; (2) basic salary of the highest paid Director, Daniel J Spicer who is not continuing within the business post-transaction totaling #0.2 million; (3) salaries paid to the wives of the directors totalling #0.1 million; and (4) other exceptional non-recurring items totalling #0.1 million. Excluding those items the adjusted pro forma profit on ordinary activities before taxation for the year end 30 September 2005 is #3.3 million. Current trading and prospects for the Enlarged Group The Silverdell Group has continued to grow its core business of small and medium sized contract work by securing a number of preferred supplier relationships and framework contracts with county councils, utilities and insurance firms and by increasing the volume of work performed under certain existing client contracts. In addition, the Silverdell Group also secured two long term contracts towards the end of 2005, which are anticipated to contribute a significant amount of revenue in 2006. Following completion of the Acquisition, the Directors and Proposed Directors believe that the Company, together with its subsidiaries following the Acquisition, (the "Enlarged Group") will be well positioned to take advantage of the perceived consolidation opportunities within the industry. Opportunities to make further complementary acquisitions have already been identified by the Directors and Proposed Directors and following completion of the Acquisition the Directors and Proposed Directors will seek to progress these opportunities. The Directors and Proposed Directors also believe that, whether through the completion of further acquisitions or through organic growth, the Enlarged Group will be well positioned to benefit from increased scale and increased sector and/or geographic coverage. Principal terms of the Acquisition Under the terms of a conditional sale and purchase agreement ("the Acquisition Agreement") between the Company and the selling shareholders of Silverdell (the "Vendors"), the Company has conditionally agreed (subject inter alia to the passing of the Resolutions and Admission) to acquire the entire issued share capital of Silverdell from the Vendors (together with certain outstanding shareholder loan notes and loans from certain directors of Silverdell) for an aggregate consideration of up to #22.2 million. The consideration of #16.2 million due at Completion will be satisfied by the payment of approximately #12.6 million in cash (part-funded out of the net proceeds of the Placing), the issue of the Consideration Shares (which at the Placing Price will have a value of approximately #3.6 million). In addition, an earn out of up to #6 million will be payable by the issue of the Loan Notes and additional Ordinary Shares dependent upon the performance of the Silverdell Group in the financial years ending 30 September 2007 and 30 September 2008. The maximum earn out will be payable if the earnings before interest and taxation of the Silverdell Group are #5 million in the year ending 30 September 2007 and #6 million in the year ending 30 September 2008 (subject always that the Silverdell Group achieves year-on-year revenue growth of 15 per cent.). Under the terms of the Acquisition Agreement and a tax deed between the Company and certain Vendors (the "Tax Deed"), certain of the Vendors have given warranties and indemnities in respect of certain business, taxation and other matters subject to agreed limitations on liability. The Acquisition Agreement is conditional inter alia upon the placing agreement between the Company and Collins Stewart Limited (the "Placing Agreement") becoming unconditional and not being terminated prior to Admission. The anticipated date for Completion is the date of Admission. Financing of the Acquisition and use of funds The Company proposes to raise approximately #12 million (#10.5 million net of expenses) by issuing 16,000,000 new Ordinary Shares, representing approximately 50% per cent. of the enlarged share capital. The new Ordinary Shares to be issued as part of the Placing have been conditionally placed by Collins Stewart, as agent for the Company, with institutional and other investors in accordance with the terms of the Placing Agreement. The Placing, which is being underwritten by Collins Stewart, is conditional, inter alia on Admission and the passing of the Resolutions. The total net proceeds of the Placing will be utilised by the Company to fund the initial cash consideration payable under the Acquisition, to meet the costs and the expenses relating to the Acquisitions, Placing and Admission and to meet the working capital requirements of the Enlarged Group. In order to maintain an orderly market in the Ordinary Shares, the Proposed Directors and certain of the Vendors have undertaken to the Company and Collins Stewart that they shall not (and, in the case of persons connected with them, they shall use their best endeavours to procure that those connected persons shall not) dispose of any interest in Ordinary Shares or enter into any derivative-type transaction in relation to Ordinary Shares for the period of 24 months from Admission (the "Initial Period") and for the further period of 6 months from the Initial Period they shall not dispose of Ordinary Shares without first offering the disposal through Collins Stewart. These arrangements relate to 3,220,117 new Ordinary Shares representing 10 per cent. of the enlarged issued ordinary share capital. The Board The Board currently comprises David Williams, Mark Watts, James Corsellis and Benjamin Shaw (the "Directors"). On completion of the Acquisition, James Corsellis and Benjamin Shaw will resign as executive director and non-executive director respectively and Mark Watts will become a non-executive director. On completion of the Acquisition, Daniel Spicer and Sean Nutley (the "Proposed Directors") will join the Board as Chief Executive Officer and Chief Operating Officer respectively. The new Board intends to appoint a finance director prior to the next material acquisition. An interim chief financial officer, Simon Gunn, who is not a director of Silverdell or the Company, has been appointed to manage the finances of the Silverdell Group. The new Board also intends to appoint additional independent non-executive directors in due course. Following completion of the Acquisition, the Board will comprise: David Williams, Non-Executive Chairman (53) David has 35 years experience in the investment market. He has served as Chairman in both executive and non-executive capacities for a number of companies, both public and private. He has overseen the development of these companies through both organic and acquisitive growth as well as dealing with turnaround situations. For example, in 1994 David, as chairman, worked with the executive team to float Waste Recycling Group plc at an initial value of #8 million. During his seven years as chairman at that company, its value grew to #550 million. David was also chairman of RAL (S&G) Limited, on its management buy out in 1996 from Rank Group plc (a position from which he resigned in 2000). David is currently Chairman of Augean Plc, Talarius Plc, Marwyn Value Investors Limited, Concateno plc, Zetar Plc and Aldgate Capital Plc as well as Marwyn Investments Group and its subsidiary companies. Mark Watts, Non-Executive Director (32) Mark has a BA (Hons) from London University and since 1998 he has advised the boards of quoted UK small and mid-cap companies. Over the past 18 months, Mark has undertaken 15 transactions raising an amount in excess of #450 million in acquisition funding for Marwyn backed management teams and special purpose acquisition vehicles. Previously, Mark worked as a management consultant completing international strategic development projects for clients including Ford Motor Company (US), Cummins (Japan) and 3M (Europe) and financial analysis and modelling for Barclays Bank, Shell and BP in the UK. Mark is a director of Marwyn Investments Group and Aldgate Capital Plc, a partner in Marwyn Capital and Marwyn Investment Management as well as a director in Zetar Plc, Inspicio plc and Talarius Plc. Daniel T Spicer, Chief Executive Officer (43) Son of Silverdell's founder, Danny has worked for Silverdell for over 26 years, initially as an insulation engineer; he took a management role 12 years ago. Since 2000, he has been Managing Director and has been responsible for growth, direction and strategy. Danny was also a founder partner in Silverdell LLP which was sold to Silverdell in December 2005. Sean Nutley, Chief Operating Officer (35) Sean joined Silverdell in 1992 as an asbestos removal operative and became part of the management team 12 years ago as an estimator. He became director for special contracts in 2000. Sean is responsible for company growth, direction, new business opportunities and client relations, as well as technical input and co-ordination on large and difficult contracts. Sean was also a founder partner of Silverdell LLP. Key employees The Board will be assisted by the following key employees: Mark Roberts (46), Marketing Director (since 1994) Mark joined Silverdell in 1992 as a Sales Manager; is a member of ARCA Governing Council and obtained an ISO accreditation for Silverdell in 1995. His main responsibilities include seeking new business opportunities and securing pre-qualification on customer approved lists. Wayne Farmer (41), Construction Director, Operations (since 2000) Wayne has 12 years experience in the management team and joined Silverdell as an asbestos removal operative. He is responsible for the day-to-day running of the Silverdell Group's business operations, the contracts department, the accounts department and site contracts. Ashley Griffiths (33), Contracts Director (since 2005) Ashley joined Silverdell as Regional Manager in 2001. His responsibilities include pricing and processing of new business enquiries. Dave Rhodes (34), Regional Director, Midlands/North (since 2005) Dave joined Silverdell as a Regional Manager in 2000. His responsibilities include pricing of new enquiries and the day-to-day running of the regional business operations, contracts department and site contracts. Relationship with Marwyn David Williams and Mark Watts are directors of Marwyn Investments Group Limited and partners in Marwyn Capital LLP and Marwyn Investment Management LLP. The Company has a corporate finance agreement with Marwyn Capital and an office support agreement with Marwyn Partners Limited (a wholly owned subsidiary of Marwyn Investments Group Limited). Marwyn Neptune Fund LP, a shareholder in the Company, is managed on an arms' length basis by Marwyn Investment Management LLP. Marwyn Neptune Fund LP currently holds 8,000,000 Ordinary Shares. Subject to Admission, the Company has also agreed to grant a warrant (the "Marwyn Warrant") to subscribe for shares in the Company to the Marwyn Neptune Fund LP. The Marwyn Warrant will entitle the Marwyn Neptune Fund LP to subscribe for 3,220,117 Ordinary Shares which will represent 10 per cent. of the enlarged issued Ordinary Share capital on Admission, including the New Ordinary Shares and the Consideration Shares (calculated upon the assumption that all Ordinary Shares which are under option at Admission are not in issue). The Marwyn Warrant is exercisable at the Placing Price and subject to the following criteria: (a) as to 50 per cent. at any time from Admission up to the seventh anniversary of Admission provided that at any time after Admission and prior to the expiry of the option, the mid-market price of an Ordinary Share is greater than 133 per cent. of the Placing Price; and (b) as to 50 per cent. at any time from Admission up to the seventh anniversary of Admission provided that at any time after Admission and prior to the expiry of the option, the mid-market price of an Ordinary Share is greater than 150 per cent. of the Placing Price. The Company has also entered into a further corporate finance advisory agreement (the "Second Corporate Finance Advisory Agreement") with Marwyn Capital LLP, pursuant to which Marwyn Capital LLP will provide the Company with ongoing corporate finance advice. The Directors and Proposed Directors consider, having consulted with Collins Stewart, that the terms of the Marwyn Warrant and the Second Corporate Finance Advisory Agreement are fair and reasonable insofar as Shareholders are concerned. Corporate governance The Directors and Proposed Directors recognise the importance of sound corporate governance and intend that the Company, where practicable for a company of its size, will comply with the Combined Code. The Company has therefore established an audit committee which will, on Admission, comprise David Williams and Mark Watts. The audit committee invites the executive directors to attend as necessary to conduct its business. The Company's auditors attend all audit committee meetings and have direct access to its chairman. The audit committee will meet with the external auditors at least twice a year, following a review of the interim results and on completion of the audit process but prior to the Directors approving the financial statements of the Company. It will also consider the Enlarged Group's financial and accounting policies together with management reports on accounting and internal controls and will review reports presented by the auditors of the Company and consider any other matters raised by the auditors. The Company has also established a remuneration committee which will, on Admission, comprise David Williams and Mark Watts. The remuneration committee implements the policy for the remuneration of the executive directors, reviews the remuneration of the senior management of the Company and nominates potential members of the Board. The remuneration of non-executive Directors is considered by the board as a whole. The remuneration committee (consisting of Mark Watts and David Williams) has recommended to the Board that employee share incentive schemes should be introduced. Accordingly, the Board has adopted a share option scheme (the "Share Option Scheme") which allows awards to be made to executive Directors of the Company and to other employees in the Enlarged Group. Awards will be at the discretion of the Board's remuneration committee. The remuneration committee will also administer the Share Option Scheme and be responsible for setting any performance targets in relation to the exercise of options granted under the Share Option Scheme. The Company has not established a nominations committee. All appointments to the Board will be considered by the Board as a whole. The Board has adopted a model code for directors' dealings in securities of the Company which is appropriate for a company quoted on AIM. The Board will comply with Rule 19 of the AIM rules relating to directors dealings and will take all reasonable steps to ensure compliance by the Company's "applicable employees"(as defined in the AIM Rules). Dividend policy The Board intends, subject to the availability of distributable reserves, that dividends will be paid to Shareholders. However, the initial focus for the Company will be on delivering capital growth for Shareholders and therefore the Board will only commence the payment of dividends as and when it is appropriate and practicable. Dealing arrangements Application will be made for the New Ordinary Shares issued pursuant to the Placing to be admitted to trading on AIM and for the existing Ordinary Shares to be re-admitted to AIM. It is expected that Admission will become effective and that dealings in the existing Ordinary Shares and the New Ordinary Shares will commence on 19 July 2006. If the Acquisition and the Placing are not completed, the Ordinary Shares will continue to be traded on AIM and the Proposed Directors will not be appointed to the Board. The New Ordinary Shares will be issued credited as fully paid and will, on issue, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on the issued ordinary share capital after Admission. No temporary documents of title will be issued. Pending the dispatch of definitive share certificates (as applicable), instruments of transfer will be certified against the register. All documents or remittances sent by or to a place, or as he may direct, will be sent through the post at his risk. Extraordinary General Meeting In view of its size, the Acquisition is conditional upon, inter alia, the approval of Shareholders in general meeting. This approval will be sought at the Extraordinary General Meeting of the Company to be held at 10 a.m. on Monday, 17 July 2006 at the offices of Norton Rose at Kempson House, Camomile Street, London EC2V 7AN. Recommendation and voting intentions The Directors believe that the Acquisition, Placing and Admission are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors have unanimously recommended that the Shareholders vote in favour of the Resolutions as they have irrevocably undertaken to do in respect of their own beneficial shareholdings of Existing Ordinary Shares which amount to, in aggregate, 1,080,000 existing Ordinary Shares representing approximately 9.47 per cent. of the current issued ordinary share capital of the Company. The Company has also received irrevocable commitments to vote in favour of the Resolutions in respect of a total of 10,870,850 existing Ordinary Shares from Shareholders, representing approximately 92.73 of the current issued share capital of the Company. -ends- This information is provided by RNS The company news service from the London Stock Exchange END ACQPUUPPQUPQUQW
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