Issue of 4% Convertible Unsecured Loan Notes

 

TIDMMRM 
 
RNS Number : 4577S 
Metrodome Group PLC 
10 September 2010 
 

                              Metrodome Group plc 
                  ("Metrodome", the "Company" or "the Group") 
 
                Issue of 4% Convertible Unsecured Loan Notes 2012 
                           Notice of General Meeting 
 
The Board of Metrodome announces that it has posted a Circular to Shareholders 
with details of a conditional offer to Qualifying Shareholders, constituting an 
invitation to apply to subscribe for Loan Notes on the terms and subject to the 
conditions set out in the Circular and the accompanying Application Form. In 
addition, the Company is convening a General Meeting, to be held on 27 September 
2010 at 11.00 a.m., to seek Shareholder authority to allot Ordinary Shares or 
rights to convert into Ordinary Shares and the disapplication of statutory 
pre-emption rights. Below is a summary of the back ground to and reasons for the 
Proposals. 
 
Acquisition of Target Entertainment 
 
As announced on 16 August, the Company has acquired the entire issued share 
capital of Target Entertainment for cash consideration of GBP800,000. As stated 
in the announcement, the Acquisition was financed by GBP400,000 of available 
cash resources held by the Company and by a further GBP400,000 which was raised 
by an issue of GBP400,000 of Loan Notes to Mark Webster, the Chairman and Chief 
Executive of the Company. 
 
The Acquisition was made from the administrators of the parent company of Target 
Entertainment and led to the immediate cancellation of all of Target 
Entertainment's banking facilities. The Company therefore needed to move rapidly 
to provide working capital to Target Entertainment post acquisition. An initial 
amount of GBP700,000 was provided on 16 August, with the funds being raised 
through a further issue of GBP700,000 of Loan Notes again to Mark Webster. The 
Board has now had the opportunity to review Target Entertainment's working 
capital requirements and those of the Enlarged Group and has concluded that 
further funding of GBP860,000 is required for the operations of the Enlarged 
Group. 
 
The Company is proposing to raise the further GBP860,000 by the issue of 
additional Loan Notes. There are sufficient Loan Notes available under the terms 
of the Instrument to cover this additional issue, but shareholder approval is 
required by way of the grant of additional authority to the Directors to allot 
and issue shares, or rights to convert into shares, and additional power to 
disapply the statutory pre-emption rights, since the authority granted at the 
2010 AGM has been almost fully utilised in making the allotment of GBP1,100,000 
of Loan Notes to Mark Webster referred to above. The General Meeting is 
therefore being convened to obtain the requisite shareholder approvals. 
 
Issue of additional Loan Notes 
 
The Company has received applications to subscribe for the full amount of the 
GBP860,000 of additional Loan Notes, conditional upon the passing of the 
Resolutions, from the following applicants: 
 
+---------------------------------+---------------------------------+ 
| Name                            | Amount of Loan Stock applied    | 
|                                 | for                             | 
+---------------------------------+---------------------------------+ 
| Metrodome BV                    | GBP750,000                      | 
+---------------------------------+---------------------------------+ 
| Sabretooth Investments Limited  | GBP50,000                       | 
+---------------------------------+---------------------------------+ 
| Robert Pfeiffer                 | GBP60,000                       | 
+---------------------------------+---------------------------------+ 
 
Metrodome BV is a company owned by Adrian Sarbu, who owns approximately 90 per 
cent. of Alerria Management Company SA, the Company's major shareholder, which 
holds approximately 52.75 per cent. of the issued Ordinary Shares. Sabretooth 
Investments Limited is an existing Shareholder beneficially owned by Charles 
Peel who holds in aggregate approximately 12.56 per cent. of the issued Ordinary 
Shares. Robert Pfeiffer is an executive of Compass Advisers Limited, which has 
been providing corporate advice to the Company, most recently in relation to the 
Acquisition. Full subscription of the GBP860,000 of Loan Notes which the Company 
is seeking to raise is therefore assured. However, the Board believes that it 
would be appropriate to offer an opportunity to other Shareholders to apply for 
Loan Notes if they wish to do so. 
 
Offer to Qualifying Shareholders 
 
Having considered the options available and taken advice, the Board has 
concluded that the expense and delay involved in making an open offer to all 
Qualifying Shareholders to subscribe for allocations of Loan Notes calculated in 
proportion to their existing shareholdings would not be justified, particularly 
as this would involve the preparation of a full prospectus. The Board also 
recognises that the Loan Notes, which will not be admitted to trading on any 
market, may well not be a suitable investment for many Shareholders. 
Accordingly the Offer which is being extended to Qualifying Shareholders is to 
apply to subscribe for Loan Notes at a price of GBP1 for each GBP1 Loan Note, 
subject to the requirement that each application must be for a minimum of 
GBP50,000 of Loan Notes.  The maximum amount of Loan Notes available for 
subscription by Qualifying Shareholders on this basis under the Offer is 
GBP750,000. To the extent that applications are received from Qualifying 
Shareholders the application made by Metrodome BV will be scaled back to 
accommodate the applications from Qualifying Shareholders. 
In the event that applications are received from Qualifying Shareholders for 
more than the GBP750,000 of Loan Notes available under the Offer the Directors 
reserve the right to reject any application(s) and/or to scale back applications 
on such basis as they may decide (which might result in applicants receiving 
less than the indicated minimum holding of GBP50,000 of Loan Notes). 
The Offer is conditional upon the passing of the Resolutions by no later than 25 
October 2010. If that condition is not satisfied the Offer will not proceed and 
any monies paid by applicants will be returned to them without interest. 
The Loan Notes 
 
The terms of the Loan Notes are set out in the Instrument and can be briefly 
summarised as follows: 
·    The Loan Notes are unsecured and carry interest at 4 per cent. per annum 
payable in half yearly instalments on 30 June and 31 December in each year; 
·    All of the Loan Notes to be issued as specified in the circular will rank 
pari passu in all respects as unsecured obligations of the Company as from their 
date of issue with the Loan Notes already issued to Mark Webster as mentioned in 
paragraph 1; 
·     The Loan Notes have a maturity date of 31 August 2012 and are convertible 
(at the option of the Loan Noteholder) at any time prior to the maturity date 
into Ordinary Shares on the basis of 50 Ordinary Shares for each GBP1 of Loan 
Notes, giving an effective conversion price of 2p per share; 
·      If not converted, the Loan Notes are to be repaid at the maturity date of 
31 August 2012; 
·      The Loan Notes are transferable, but will not be admitted to trading on 
any market. 
The Instrument contains other normal provisions typically associated with 
convertible loan notes, in particular as regards adjustment of the conversion 
rate in the event of any sub-division or consolidation of the Ordinary Shares; 
covenants by the Company to protect the conversion rights attaching to the Loan 
Notes; provisions for accelerated payment in the event of insolvency and 
provision for meetings of Loan Noteholders. 
A copy of the Instrument, which contains the full terms of the Loan Notes, will 
be available for inspection at the offices of Bircham Dyson Bell LLP, 50 
Broadway, London SW1H 0BL during normal business hours on any weekday (Saturdays 
and public holidays excluded) up to and including the time of the General 
Meeting and at the General Meeting itself, or alternatively may be viewed on the 
Company's website at http://www.investors.metrodomegroup.com/aim. 
 
The General Meeting 
 
The General Meeting is to be held at the offices of Bircham Dyson Bell LLP at 50 
Broadway, Westminster, London SW1H 0BL on 27 September 2010 at 11.00 a.m. At the 
General Meeting resolutions will be proposed as follows: 
 
Resolution 1 - Authority to allot shares 
 
This ordinary resolution gives the Directors the general authority to allot 
ordinary shares and/or to grant rights to subscribe for or to convert any 
security into ordinary shares in the Company up to a maximum nominal amount of 
GBP980,000 (representing a maximum number of 98,000,000 ordinary shares of 1p 
each) being approximately 53.3 per cent. of the current issued share capital. 
This general authority is in addition to that obtained at the 2010 AGM and will 
run concurrently with it.  As in the case of the authority granted at the 2010 
AGM, this authority is stated to expire on 30 June 2011 or, if earlier at the 
conclusion of the Annual General Meeting in 2011. 
 
Resolution 2 - Disapplication of statutory pre-emption rights 
 
This special resolution gives the Directors the power to allot a limited number 
of equity securities (such as ordinary shares) for cash without the statutory 
pre-emption rights requiring them to be offered first to existing shareholders. 
The power is limited to the allotment (otherwise than by way of a rights or 
similar issue) of equity securities of a maximum nominal amount of GBP980,000 
pursuant to the exercise of the conversion rights attaching to the Loan Notes. 
This power is also in addition to that obtained at the 2010 AGM and will run 
concurrently with it.  The power is stated to expire on the earlier of 30 June 
2011 and the conclusion of the 2011 Annual General Meeting. 
 
The effect of the Resolutions will be to give the Directors sufficient authority 
and power to cover the allotment and issue of the full GBP1,960,000 of Loan 
Notes which have been issued and are intended to be issued as referred to in the 
Circular and the 98,000,000 additional Ordinary Shares that would be allotted on 
conversion of all of those Loan Notes, while preserving authority and power in 
the amounts granted at the 2010 AGM which will continue to be available for 
other purposes. 
 
Recommendation 
 
The Directors consider that all the proposals to be considered at the General 
Meeting are in the best interests of the Company and its members as a whole. 
Accordingly, the Directors unanimously recommend that you vote in favour of the 
Resolutions as the Directors intend to do or request to be done in respect of 
their own beneficial holdings which total in aggregate 25,138,458 Ordinary 
Shares representing approximately 13.61 per cent. of the current issued Ordinary 
Shares. 
 
 
For further information: 
+------------------------------------------------+----------------+ 
| Mark Webster, Chairman & CEO, Metrodome Group  |  020 7766 8600 | 
| plc                                            |                | 
+------------------------------------------------+----------------+ 
| Dugald J. Carlean / Carl Holmes, Charles       |  020 7149 6000 | 
| Stanley Securities                             |                | 
+------------------------------------------------+----------------+ 
| John West / Lydia Eades, Tavistock             |  020 7920 3150 | 
| Communications                                 |                | 
+------------------------------------------------+----------------+ 
 
 
 
 
 
 
                          EXPECTED TIMETABLE OF EVENTS 
 
+--------------+-----------+ 
| Record       |      5.00 | 
| Time         |      p.m. | 
|              |     on 23 | 
|              | September | 
|              |      2010 | 
|              |           | 
+--------------+-----------+ 
| Latest       |  11.00    | 
| time         |   a.m.    | 
| for          |  on 23    | 
| receipt      |September  | 
| of           |   2010    | 
| Forms        |           | 
| of           |           | 
| Proxy        |           | 
+--------------+-----------+ 
| Latest       |     11.00 | 
| time         |      a.m. | 
| for          |     on 23 | 
| receipt      | September | 
| of           |      2010 | 
| completed    |           | 
| Application  |           | 
| Forms and    |           | 
| payment in   |           | 
| full         |           | 
+--------------+-----------+ 
| General      |  11.00    | 
| Meeting      |   a.m.    | 
|              |  on 27    | 
|              |September  | 
|              |   2010    | 
|              |           | 
+--------------+-----------+ 
| Dispatch     |     By 11 | 
| of Loan      |   October | 
| Note         |      2010 | 
| Certificates |           | 
| (where       |           | 
| applicable)  |           | 
+--------------+-----------+ 
 
 
 
                                  DEFINITIONS 
 
The following definitions apply throughout this announcement, unless the context 
requires otherwise: 
 
+---------------------+--------------------------------------------+ 
| "2006 Act"          | the Companies Act 2006                     | 
+---------------------+--------------------------------------------+ 
| "2010 AGM"          | the annual general meeting of the Company  | 
|                     | held on 3 June 2010                        | 
+---------------------+--------------------------------------------+ 
| "Acquisition"       | the acquisition by the Company of the      | 
|                     | entire issued share capital of Target      | 
|                     | Entertainment                              | 
+---------------------+--------------------------------------------+ 
| "Application Form"  | the application form accompanying the      | 
|                     | Circular on which Shareholders may apply   | 
|                     | for Loan Notes                             | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "Board" or          | the directors of the Company               | 
| "Directors"         |                                            | 
+---------------------+--------------------------------------------+ 
| "Circular"          | the circular to Shareholders dated 9       | 
|                     | September 2010                             | 
+---------------------+--------------------------------------------+ 
| "City Code"         | the City Code on Takeovers and Mergers     | 
+---------------------+--------------------------------------------+ 
| "Company"           | Metrodome Group plc                        | 
+---------------------+--------------------------------------------+ 
| "Enlarged Group"    | the Company and its subsidiaries following | 
|                     | the acquisition of the Target Group        | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "General Meeting"   | the General Meeting of the Company         | 
|                     | convened by the Notice contained in the    | 
|                     | Circular                                   | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "Loan Notes"        | the 4% convertible unsecured loan notes    | 
|                     | 2012 created by the Company pursuant to    | 
|                     | the Instrument                             | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "Loan Noteholder"   | a holder of Loan Notes                     | 
+---------------------+--------------------------------------------+ 
| "Offer"             | the conditional offer to Shareholders,     | 
|                     | constituting an invitation to apply to     | 
|                     | subscribe for Loan Notes on the terms and  | 
|                     | subject to the conditions set out in the   | 
|                     | Circular and in the Application Form       | 
+---------------------+--------------------------------------------+ 
| "Ordinary Shares"   | ordinary shares of 1p each in the capital  | 
|                     | of the Company                             | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "Proposals"         | the proposals described in this            | 
|                     | announcement and the Circular              | 
+---------------------+--------------------------------------------+ 
| "Qualifying         | Shareholders on the register of members of | 
| Shareholders"       | the Company at the Record Time             | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "Record Time"       | 5.00 p.m. on 23 September 2010             | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "Resolutions"       | Resolutions 1 and 2 to be proposed at the  | 
|                     | General Meeting                            | 
+---------------------+--------------------------------------------+ 
| "Shareholders"      | persons registered as the holders of       | 
|                     | Ordinary Shares                            | 
+---------------------+--------------------------------------------+ 
| "Target             | Target Entertainment Limited               | 
| Entertainment"      |                                            | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "Target Group"      | Target Entertainment and its subsidiaries  | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
| "UK"                | the United Kingdom of Great Britain and    | 
|                     | Northern Ireland                           | 
|                     |                                            | 
+---------------------+--------------------------------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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