Proposed Placing and Notice of General Meeting

 

TIDMWFCA 
 
RNS Number : 5365S 
WFCA PLC 
20 May 2009 
 
20 May 2009 
WFCA plc 
("WFCA" or "the Company") 
Proposed Placing, Redemption, Conversion and Notice of General Meeting 
The Company today announces that it proposes to raise further finance by means 
of a proposed placing of up to 44,100,000 new ordinary shares of 1 penny each 
("Placing Shares") at 2 pence (the "Placing Price") per share (the "Placing"). 
The Placing is expected to raise gross proceeds of GBP882,000 and is 
conditional, inter alia, on the passing of the resolutions set out in the 
Company's notice of general meeting dated 19 May 2009 ("Resolutions").  A 
circular was sent to the Company's shareholders yesterday setting out details of 
the Placing and is available on the Company's website at www.wfca-ir.co.uk. 
In addition, the Company proposes to: (i) redeem GBP500,000 unsecured loan notes 
2010 constituted by a loan note instrument dated 2 April 2009 (the "Loan Notes") 
currently owed by the Company to Michael Richards, Rodger Braidwood, John Foley 
and Southwind Limited (the "Loan Note Holders") to be satisfied by the issue of 
25,000,000 ordinary shares of 1 penny each in the capital of the Company 
("Ordinary Shares") at 2 pence each, in aggregate, to the Loan Note Holders (the 
"Redemption"); (ii) cancel the GBP1,000,000 variable rate unsecured loan notes 
2011 constituted by a loan note instrument dated 1 April 2008 (the "SPA Loan 
Notes") in exchange for the issue of new loan notes to be issued by the Company 
on similar terms as the SPA Loan Notes but including a right to convert each 
new loan note into Ordinary Shares (the "New Loan Notes"); and (iii) convert the 
New Loan Notes into 33,333,333 Ordinary Shares at a price of 3 pence each (the 
"Conversion"). The reasons for the proposed Redemption and Conversion are set 
out below. 
In addition, Rodger Braidwood and Michael Richards have agreed that the Company 
may satisfy the deferred consideration due to them pursuant to the acquisition 
agreement dated 14 March 2008 between the Company and Michael Richards, Rodger 
Braidwood and Andrew Peake relating to the acquisition by the Company of the 
entire issued share capital of WFCA Integrated Limited (the "Acquisition 
Agreement"), by the issue of 8,707,400 Ordinary Shares ("Deferred Consideration 
Shares"). Such Deferred Consideration Shares to be issued at a price of 3 pence 
per Ordinary Share. 
The holders of the SPA Loan Notes and some of the holders of the Loan Notes are 
deemed to be acting in concert with each other (the "Concert Party"). As at the 
date of the circular, the Concert Party is interested in approximately 47.7 per 
cent. of the issued share capital of the Company. Following the Redemption, the 
Conversion, the Placing and the issue of 6,100,000 Deferred Consideration 
Shares, the Concert Party will, assuming no further Ordinary Shares are issued, 
be interested in approximately 45.9 per cent. of the enlarged issued ordinary 
share capital of the Company. 
Michael Richards, Rodger Braidwood and John Foley are each holders of Loan Notes 
and also directors of the Company, whilst Bob Morton, Chairman of the Company, 
has an adult son who is the main beneficiary of a trust, which is the sole 
shareholder of Southwind Limited, which is also a holder of Loan Notes. For 
these reasons the Redemption is classified as a related party transaction under 
the AIM Rules for Companies. 
The Ordinary Shares to be issued pursuant to the Placing, the Redemption and, 
the Conversion and the Deferred Consideration Shares will be issued credited as 
fully paid and will rank pari passu with the Company's existing Ordinary Shares 
(including the right to receive all dividends or other distributions declared, 
made or paid thereon). It is expected that, should the relevant approvals be 
obtained at the Company's general meeting on 4 June 2009, such shares will 
be admitted to trading on AIM on 5 June 2009. In addition, the board of 
directors expects those Deferred Consideration Shares not allotted on Admission 
to be admitted to trading on AIM on 31 March 2010. 
Reasons for the proposed Placing, Conversion and Redemption 
WFCA is a leading regional marketing and advertising company, providing 
effective solutions across all marketing services, including television, radio, 
press, on-line, outdoor and direct mail. 
In accordance with standard industry practice, the Company acts as a financial 
principal in placing substantial media booking orders on behalf of its clients. 
Given current economic conditions and the risk of exposure to tightening 
supplier credit terms, the directors believe it prudent to take this opportunity 
to increase the working capital available to the Company. 
The Company remains profitable and cash generative going forward. It is the 
opinion of the directors that the arrangements set out within the circular, 
taken together with the pre-existing working capital and the banking facilities 
available to the Company, will ensure that the Company has sufficient working 
capital. 
The board of directors will continue to review the Company's financing structure 
and opportunities for profitable growth. 
Details of the proposed Placing 
The Company proposes to raise further finance of GBP882,000 before expenses by 
means of the Placing. The Placing is conditional, inter alia, on the passing of 
the Resolutions. 
The Placing is to be effected on behalf of the Company by Daniel Stewart on the 
terms of a placing agreement between the Company and Daniel Stewart dated 19 May 
2009 (the "Placing Agreement"). Pursuant to the Placing Agreement, Daniel 
Stewart has agreed, subject to certain conditions, to use its reasonable 
endeavours to procure subscribers for the Placing Shares. Daniel Stewart has, on 
behalf of the Company, conditionally placed 44,100,000 new Ordinary Shares at 2 
pence per share with certain investors, representing approximately 16.6 per 
cent. of the enlarged issued ordinary share capital. 
John Foley, Stephen Latter and Southwind Limited are participating in the 
Placing and are subscribing for the following number of Ordinary Shares: 
+-----------------------------------------------+----------------------------------------------+ 
| Name                                          |                    Number of Ordinary Shares | 
+-----------------------------------------------+----------------------------------------------+ 
| Southwind Limited                             |                                   11,250,000 | 
+-----------------------------------------------+----------------------------------------------+ 
| John Foley                                    |                                    3,750,000 | 
+-----------------------------------------------+----------------------------------------------+ 
| Stephen Latter                                |                                    2,500,000 | 
+-----------------------------------------------+----------------------------------------------+ 
General Meeting 
A notice convening a general meeting to be held at the Company's offices, 
Heathervale House, Vale Avenue, Tunbridge Wells, Kent TN1 1DJ, at 12.30 p.m. on 
4 June 2009 has been sent to the shareholders of the Company together with a 
form of proxy. 
Recommendation 
The independent directors, who have been so advised by Daniel Stewart, consider 
the Placing, the issue of the Deferred Consideration Shares and the issue of 
Ordinary Shares pursuant to the Redemption and the Conversion to be fair and 
reasonable and in the best interests of the Company and its shareholders as a 
whole. In providing its advice to the independent directors, Daniel Stewart has 
taken into account the independent directors' commercial assessments. 
Accordingly, the independent directors recommend shareholders to vote in favour 
of the Resolutions. 
The Company has received irrevocable commitments to vote in favour of all the 
Resolutions in respect of 113,462,394 Ordinary Shares representing 72 per cent. 
of the issued share capital of the Company. 
Directors' Shareholdings 
The Directors' shareholdings in the Company at Admission and following the issue 
of the remaining Deferred Consideration Shares and assuming all the Resolutions 
are passed are as follows: 
+-----------------------------+----------------+--------------+--------------------+--------------+ 
| Name                        |      Number of |   Percentage | Number of Ordinary |   Percentage | 
|                             |       Ordinary |      Holding |   Shares following |      Holding | 
|                             |      Shares at |              |      Admission and |              | 
|                             |      Admission |              |       issue of the |              | 
|                             |                |              |   maximum Deferred |              | 
|                             |                |              |      Consideration |              | 
+-----------------------------+----------------+--------------+--------------------+--------------+ 
| Southwind Limited*          |     42,916,677 |        16.15 |         42,916,677 |        15.99 | 
+-----------------------------+----------------+--------------+--------------------+--------------+ 
| Michael John Richards       |    108,506,691 |        40.83 |        109,810,391 |        40.91 | 
+-----------------------------+----------------+--------------+--------------------+--------------+ 
| Stephen John Latter         |      2,500,000 |         0.94 |          2,500,000 |         0.93 | 
+-----------------------------+----------------+--------------+--------------------+--------------+ 
| Rodger Gordon Braidwood     |     13,022,370 |         4.90 |         14,326,070 |         5.34 | 
+-----------------------------+----------------+--------------+--------------------+--------------+ 
| John Robert Foley           |     10,266,666 |         3.86 |         10,266,666 |         3.83 | 
+-----------------------------+----------------+--------------+--------------------+--------------+ 
* Southwind Limited's sole shareholder is a trust, the main beneficiary of which 
is an adult 
child of Bob Morton.  Bob Morton does not have a notifiable interest in these 
Ordinary Shares. 
 
 
Further enquiries: 
WFCA plc 
Stephen Latter, Financial Director    Tel: [phone] 
Daniel Stewart & Company plc 
Simon Leathers / Oliver RigbyTel: 020 7776 6550 
 
 
Notes to Editor: 
The Company was established in 1994 to create a full service advertising agency 
specialising in direct response advertising. The business grew rapidly and was 
listed on AIM in January 2006. 
Significant growth was gained in April 2008 with the acquisition of WFCA 
Integrated Limited, a Tunbridge Wells based full service agency originally 
founded in 1996. With the Company's aim of building the business and 
accelerating growth this resulted in the achievement of gaining 28th place in 
the UK agency rankings published by Neilsen in February 2009, together with 
other significant achievements within the industry. 
The Company has a broad client list featuring household names and is able to 
provide a full advertising and marketing service. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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