Integumen PLC Divestment of TSPro GmbH (7467K)

TIDMSKIN

RNS Number : 7467K

Integumen PLC

18 December 2018

18 December 2018

Integumen plc

("Integumen" or "the Company")

Disposal

Divestment of TSPro GmbH to remove cEUR1.34m (GBP1.19m) of short and long term liabilities from Integumen

Today the Company announces the divestment ("Disposal") of TSpro GmbH ("TSPro"), a wholly-owned subsidiary of Integumen plc. The Company has entered into a conditional agreement with MediNova AG ("MediNova"), a company in which former Integumen director Helmut Schlieper is a shareholder and director. The consideration for the Disposal is EUR1. The Disposal will remove from the Group EUR441,000 of current liabilities and a further EUR900,000 of contractual obligations up to December 2020.

Background

As announced on 29 August 2018 in the interim announcement of the (unaudited) results for the six months ended 30 June 2018 ("Interims"), a strategic review has been undertaken of the di erent businesses within the Integumen Group ("Group"). It was announced that the Board sought to divest the Group of under-performing assets or those requiring signi cant funding, which included the TSPro business segment.

Sales in TSpro are significantly down from projections at the time of its acquisition when Integumen completed its IPO in April 2017. In August 2018, subsequent to the new management and Board altering the strategic direction of the Group, it was decided to cease any and all further investment in low and non-performing assets and seek the divestment of such assets.

Financials

In the most recently completed financial year for which audited accounts are available, the year ended 31 December 2017, TSPro incurred a loss of EUR915,947 (GBP802,370) on turnover of EUR212,722 (GBP186,345). As at 31 December 2017 the net liabilities of TSPro were EUR890,948 (GBP791,162) . The value attributable to TSPro's intangible assets was permanently impaired by GBP3.5m to a carrying value of GBP750,000 in Integumen's consolidated accounts for year ended 31 December 2017. Since that time TSPro has posted (unaudited) losses of EUR188,326 (GBP163,996 after currency translation difference) in the 6 months ended 30 June 2018, on (unaudited) turnover of EUR108,304 (GBP95,307), and a further permanent impairment of GBP0.5m was accounted for in the Interims.

Key deal terms

The consideration for the Disposal is EUR1. In return, Medinova accepts full responsibility for and shall assume all obligations of the Company in relation to TSpro from the completion date, which is expected to be no later than Friday 21 December 2018.

Related Party Transaction

As at close of business on 17 December 2018 MediNova had a shareholding of 37,568,440 shares representing 8.26% of the existing share capital of Integumen, however it has held over 10% (and therefore been a substantial shareholder) within the last 12 months. Additionally Helmut Schlieper, who is a major shareholder in, and director of, MediNova, was a director of Integumen plc until 6 August 2018. Both MediNova and Mr Schlieper are regarded as related parties under the AIM Rules for Companies ("AIM Rules"); and therefore the sale of TSpro to MediNova constitutes a related party transaction under the AIM Rules.

All of the current Directors of the Company are regarded as independent directors for the purposes of consideration of this transaction under Rule 13 of the AIM Rules. The Directors, having consulted with SPARK Advisory Partners Limited, the Company's Nominated Adviser, considers that the terms of the Disposal to be fair and reasonable in so far as shareholders are concerned.

Gerard Brandon (Chief Executive Officer) commented:

"Since the Interim announcement there has been a major restructuring of the Group. The new Board has been actively seeking to divest the Group of under-performing assets. TSpro was one of those assets. With the increase in sales across other divisions, we are on track to achieve the new Board's year-end 2018 goals.

The most obvious advantages with this Disposal are that it:

-- Improves the Integumen Group's working capital position by reducing existing debt servicing,

-- Eliminates monthly, current and future contractual liabilities within the Group, amounting to EUR1.34m (GBP1.19m) up to the end of December 2020, and

-- Allows management to focus on the underlying growth areas in Labskin, skin care and the recent commercial agreement with Cellulac for Omega 3 production already mentioned in previous trading updates."

 
 Integumen plc              Gerard Brandon, CEO    [phone] 
 SPARK Advisory Partners 
  Limited                   Neil Baldwin/Andrew 
  (Nominated Adviser)        Emmott                [phone] 
                           ---------------------  --------------------- 
 Hybridan LLP (Broker)      Claire Noyce           [phone] 
                           ---------------------  --------------------- 
 

Notes: Exchange rates used in the Financials section above include : average exchange rate for FY 2017 : EUR1 = GBP0.876; year end 31 December 2017 : EUR1 = GBP0.888: average exchange rate for H1 2018 : EUR1 = GBP0.888.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

DISGGGCWPUPRGMM

(END) Dow Jones Newswires

December 18, 2018 02:00 ET (07:00 GMT)