Castleton Technology PLC Exercise of Option & Amendment to Options (4583F)

TIDMCTP

RNS Number : 4583F

Castleton Technology PLC

21 February 2018

Castleton Technology PLC

("Castleton", the "Company" or the "Group")

Exercise of MXC Option and Amendment to Terms of Directors' Options

Castleton Technology plc (AIM: CTP), the software and managed services provider to the public and not-for-profit sectors, announces the exercise of the evergreen options held by MXC Guernsey Limited, a wholly owned subsidiary of MXC Capital Limited (together, "MXC"), and an amendment to the terms of existing evergreen options held by certain directors of the Company.

Exercise of MXC Option

Further to the Company's announcement of 21 July 2015, MXC was issued with B shares in Castleton Technology Intermediate Holding Company Limited ("CTIHCL") which entitle MXC to 5% of shareholder value created (the "MXC Scheme"), which is defined as the growth in the market capitalisation of the Company from 1 April 2015, as adjusted for the issue of new ordinary shares of 2 pence each in the capital of the Company ("Ordinary Shares") after that date.

Under the MXC Scheme, MXC can issue a notice to CTIHCL requiring that CTIHCL purchase its B shares (a "Put Notice") as from 1 April 2018 (the "Vesting Date"). The price for such purchase can be satisfied in either cash or Ordinary Shares at the Company's discretion.

In order to facilitate the grant of new options to key employees prior to the year end, the Company have requested and MXC have agreed to sign a Deed of Amendment to the MXC Scheme whereby the Vesting Date has been amended to 20 February 2018. Accordingly, MXC has issued a Put Notice in respect of all of its B shares and Castleton has resolved to purchase the B shares for GBP1.66 million in cash, based on a price per Ordinary Share of 68 pence, which will be paid to MXC on 1 April 2018. MXC no longer holds any B shares in CTIHCL or other options over Ordinary Shares in the Company. MXC's total beneficial interest in Castleton remains unchanged at 20,021,211 Ordinary Shares, representing approximately 25.4% of the Company's issued share capital.

Amendment to Terms of Directors' Options

Under various Company option schemes, Haywood Chapman, Dean Dickinson*, David Payne and Phil Kelly (the "Directors") hold options over 2%, 2.4%, 0.4% and 0.2% of the fully diluted share capital of the Company respectively. All of these options are evergreen, meaning that the percentage of the fully diluted issued share capital held under option will remain constant, notwithstanding any further issues of Ordinary Shares.

The Directors have agreed that the evergreen nature of these options will cease, meaning that any future issues of Ordinary Shares by the Company will not result in new options being issued to the Directors.

* as announced on 20 July 2017, Dean Dickinson also holds nil cost options which are not evergreen

David Payne, Non-Executive Chairman of Castleton said:

"We are very pleased to have completed this exercise to remove all evergreen options from the Company's balance sheet. The Company continues to trade well and in line with market expectations with strong cash generation; as a result we have elected to pay cash from the Company's existing resources for the MXC B shares rather than issuing new equity, resulting in an accretive outcome for shareholders.

We believe that the removal of the evergreen nature of all options should increase the appeal of Castleton to investors."

Related Party Transaction

The amendment to the Vesting Date in the MXC Scheme (the "Amendment") constitutes a related party transaction under the AIM Rules for Companies. Accordingly, the independent directors, for these purposes being Dean Dickinson, Haywood Chapman, David Payne and Phil Kelly, consider, having consulted with finnCap, the Company's nominated adviser, that the terms of the Amendment is fair and reasonable so far as the Company's shareholders are concerned.

 
 
   Enquiries: Castleton Technology plc           Tel. +44 (0)845 
     Dean Dickinson, Chief Executive    241 0220 
     Officer 
     Haywood Chapman, Chief 
     Financial Officer 
    finnCap Ltd                        Tel. [phone] 
     Jonny Franklin-Adams /             0500 
     Simon Hicks 
     MXC Capital Markets LLP            Tel. [phone] 
     Marc Young / Charlotte             1849 
     Stranner 
    Alma PR                            Tel. [phone] 
     Rebecca Sanders-Hewett/            901979 
     Helena Bogle/ Josh Royston 
 

About Castleton Technology plc

Castleton Technology plc is a leading supplier of complementary software and managed services to the public and not-for-profit sectors. The Group is a 'one stop shop', providing integrated housing systems via the Cloud, working in partnership with its customers and resellers to help drive efficiencies whilst improving controls and customer service. www.castletonplc.com

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

This information is provided by RNS

The company news service from the London Stock Exchange

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February 21, 2018 02:00 ET (07:00 GMT)