Worldsec Ld Open Offer and Publication of Prospectus (6019H)

TIDMWSL

RNS Number : 6019H

Worldsec Ld

13 March 2018

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

This announcement is not an offer of securities for sale, or an offer to buy or subscribe for, directly or indirectly, securities to any person in the United States of America or any other jurisdiction, including in or into Australia, New Zealand, Canada, the Republic of South Africa and Japan or any other jurisdiction in which such offer or solicitation is unlawful. This announcement is an advertisement and not a prospectus (or prospectus equivalent document). A prospectus in connection with the open offer and subsequent placings ( together, the "Issues") and the admission of the new ordinary shares of US$0.001 each in the Company ("New Ordinary Shares") to be issued pursuant to the Issues to listing on the premium listing segment of the Official List of the Financial Conduct Authority ("FCA") and to trading on the Main Market for listed securities of London Stock Exchange plc (together, "Admission") has been published by Worldsec Limited ("Worldsec" or the "Company" and, together with its subsidiaries, the "Group"). A copy of the Prospectus will shortly be available on the Company's website (www.Worldsec.com) and be available for viewing at the National Storage Mechanism at https://www.morningstar.co.uk/uk/NSM.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

13 March 2018

Worldsec Limited

("Worldsec" or "the Company")

Underwritten Open Offer to raise US$4.2 million at a price of US$0.15 per New Ordinary Share

Worldsec announces an open offer to raise gross proceeds of US$4.2 million at a price of US$0.15 per Open Offer Share. All Qualifying Shareholders will be given the opportunity to subscribe for an aggregate of 28,367,290 Open Offer Shares on the basis of 1 Open Offer Share for every 2 Existing Shares held at the Record Date.

All of the Directors who currently hold Ordinary Shares have undertaken to take up in full their entitlements under the Open Offer in respect of a total of 9,950,801 Ordinary Shares and the balance of 18,416,489 Open Offer Shares being offered pursuant to the Open Offer is being underwritten by Henry Cheong (Deputy Chairman of the Company) in his personal capacity.

Highlights

-- Open Offer to raise gross proceeds of US$4.2 million at a price of US$0.15 per Open Offer Share.

-- Qualifying Shareholders have the opportunity to apply for 28,367,290 Open Offer Shares at the Open Offer Price under their Open Offer Entitlements on the basis of 1 Open Offer Share for every 2 Existing Shares held by them.

-- The net proceeds of the Open Offer will strengthen the Company's capital base in order to better position the Group to further the development and expansion of its investment portfolio.

-- Subsequent Placings of up to 100,000,000 additional Subsequent Placing Shares within the next 12 months. The Company may issue Subsequent Placing Shares as all or part consideration on the acquisition of shares in investee companies.

-- Admission of the Open Offer Shares to the Official List and to trading on the London Stock Exchange's main market is expected to take place on 4 April 2018.

 
 For further information, 
  please contact: 
 
 Worldsec Limited 
 Henry Cheong, Deputy Chairman   Hong Kong Tel: +852 
                                  2868 9217 
 
 Smith & Williamson Corporate 
  Finance Limited 
  ("Smith & Williamson") 
 Azhic Basirov, David Jones      UK Tel: [phone] 
                                  4000 
 

Background to and reasons for the Open Offer

In 2013, the Board determined that the future direction of the Group lay in investing in small and medium sized businesses based mainly in Greater China and South East Asia and raised approximately US$4.3 million of new equity capital in order to facilitate the creation of the new business.

Since that time, the Company has invested most of the funds raised in 2013. Given the persistently low interest rate environment in recent years that has been conducive to asset price appreciation, the Company has continued to face challenges in identifying quality deals that would provide attractive returns while meeting its investment criteria. The relatively small size of the Company, which in turn limits the amount of funds available for each investment, further narrows the availability of investment opportunities for the Group.

In this challenging environment, the Company has therefore decided to raise fresh capital to strengthen its capital base in order to better position the Group to further the development and expansion of its investment portfolio. Accordingly the Company has decided to offer existing Shareholders the opportunity to invest via the Open Offer, which has been underwritten by Henry Cheong, and is being made to Qualifying Shareholders pro rata to their existing holdings.

Structure of the Issues

The New Shares, when issued and fully paid, will rank pari passu in all respects with the existing Ordinary Shares in issue at the relevant date, including the right to receive dividends or distributions made, paid or declared after the date of their issue.

The Issues will involve the following:

Open Offer

Subject to the conditions to the Open Offer being satisfied, Qualifying Shareholders will be offered the

opportunity to subscribe for Open Offer Shares at a price of US$0.15 per Open Offer Share on the basis of:

1 Open Offer Share for every 2 Existing Shares held.

All of the Directors who currently hold Ordinary Shares, Henry Cheong, Alastair Gunn-Forbes and Ernest She, have undertaken to take up in full their entitlements under the Open Offer in respect of a total of 9,950,801 Ordinary Shares and the balance of 18,416,489 New Shares being offered pursuant to the Open Offer is being underwritten by Henry Cheong in his personal capacity. In addition, Henry Cheong has undertaken to the Company that, following the completion of the Open Offer, if necessary he will sell sufficient Ordinary Shares to ensure that the percentage of Ordinary Shares in public hands does not fall below 25 per cent. (or such lower percentage as the FCA may permit) as a result of the Open Offer.

Subsequent Placings

Where there is sufficient investor demand and the Directors believe that it is in the best interests of the Company and Shareholders, the Company intends to carry out Subsequent Placings. The Subsequent Placings comprise up to 100 million Subsequent Placing Shares (representing 118 per cent. of the Company's issued ordinary share capital following the completion of the Open Offer). The Subsequent Placing Shares will be issued at a price to be determined by reference to the mid-market price at the time of agreeing the placing of the Subsequent Placing Shares. The Subsequent Placings Price will not be at a discount greater than 10 per cent. of that mid-market price.

In the context of Subsequent Placings, the Company has been in recent discussions with a potential corporate investor about participating in a placing of around 50 million Ordinary Shares at the Open Offer Price. There can be no certainty or assurance as to whether such an investment may or may not occur nor, if it were to occur, as to its timing, quantum or terms.

Use of proceeds

The Directors will invest the net proceeds of the Open Offer, estimated to amount to approximately US$3.6 million, in accordance with the Investment Policy. The Prospectus is valid for a period of up to 12 months from its date of publication. During this period, the Company may, at the discretion of the Directors and subject to appropriate Shareholder authority being in place, issue up to 100 million new Ordinary Shares in one or more tranches under the Subsequent Placings in addition to the Open Offer Shares, (i) otherwise than for cash, as all or part consideration on the acquisition of shares in investee companies and/or (ii) for cash to be invested in accordance with the Investment Policy.

Current investment portfolio

ayondo Holding AG

In 2015 the Group acquired 3,300 shares in ayondo Holding AG ("Ayondo") for a cash consideration of CHF320,100 and in 2016 the Group acquired an additional 1,650 shares for a cash consideration of CHF160,050 (the Group's total equity interest in Ayondo is less than one per cent.). Ayondo is the holding company of a financial technology group and is incorporated in Switzerland with subsidiaries authorised and regulated by the FCA and the Federal Financial Supervisory Authority ("BaFin") in Germany specialising in social trading in contracts-for-differences and spread betting. The Ayondo group has recently secured a portfolio management licence under BaFin enabling its clients to tailor social trading activities with their overall investment strategies. Ayondo is seeking a listing through an initial public offering on Catalist, the sponsor-supervised board of the Singapore Stock Exchange.

Velocity Mobile Limited

In 2016 the Group acquired 195,991 shares in Velocity Mobile Limited ("Velocity") for a total cash consideration of GBP337,120 (the Group's total equity interest in Velocity is less than one per cent.). Velocity is a company incorporated in England and Wales. The Velocity group and offers a mobile application to consumers to discover and make real-time reservations and settle bills at premier restaurants. In addition, a product of the Velocity group launched in 2016, 'Velocity Black', is a one-stop chat-based conversational commerce engine targeted at high value consumers for the mobile-to-offline lifestyle applications with special emphasis in the areas of restaurant, travel, and hotel bookings and payment. The Velocity group is also in the process of launching another new product, a globally connected customer relationship management system for its restaurant partners, and plans to expand its geographic coverage to include a number of Asian and Middle East cities.

ICBC Specialised Ship Leasing Investment Fund

In 2014 the Group acquired an 8 per cent. interest in the non-voting participating share capital of ICBC Specialised Ship Leasing Investment Fund (the "ICBC Shipping Fund") for a total cash consideration of US$800,000. The ICBC Shipping Fund is incorporated in the Cayman Islands with the objective of achieving stable return from investing primarily in marine vessels. The Group's investment in the ICBC Shipping Fund continued to provide a stable return through monthly dividends generating an unaudited revenue of US$48,000 in the first half of 2017.

Oasis Education Group Limited

In 2014 the Group acquired a 50 per cent. equity interest in Oasis Education Group Limited ("Oasis") for a capital contribution of HK$2 million and a shareholder loan of HK$2 million. Oasis is an early-stage company incorporated in Hong Kong and is principally engaged, through a wholly-owned subsidiary in Shenzhen, in the provision of education consulting and support services to kindergartens in China. The first such kindergarten serviced by the Oasis group is located in Huizhou City of Guangdong Province (the "Huizhou Kindergarten"). The service agreement between the Oasis group and the Huizhou Kindergarten, which has facilities designed to cater for 300 pupils and which commenced classes in 2015, will run until the end of 2033. Under the consulting and support services provided by the Oasis group, the Huizhou Kindergarten reached a milestone in July 2017 with its first graduation of 34 pupils. For the academic term which commenced in September 2017, 59 new pupils enrolled bringing the total number of enrolment to 191. The Oasis group aims in the longer term to develop and expand the education consulting and supporting services to cover a network of kindergartens in China.

Current trading and prospects

With the differing pace of the advanced economies in moving towards monetary policy normalisation, the uncertainty surrounding Britain's negotiations to exit the European Union, the uncertainty surrounding the policies of President Trump in the United States, the ongoing structural reforms in China, and the geopolitical tension in Asia and the Middle East, the investment climate around the world has been uncertain. But under an era of persistently low interest rates, stock markets have mostly been buoyant and asset valuations are considered by many to be inflated. This has made the investment environment challenging for private equity investment. Nonetheless, to better position the Group for long term growth, the Company has been actively exploring various alternatives with a view to raising fresh capital in order to strengthen its capital base to meet future opportunities: this has led to the Open Offer.

Prospectus

The Prospectus is expected to be posted to Qualifying Shareholders shortly.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
                                                                                          Date 2018 
 Record Date for entitlement under the                                                    6.00 p.m. 
  Open Offer                                                                            on 12 March 
 Announcement of the Open Offer                                                            13 March 
 Publication and posting of Prospectus                                                     13 March 
  and Application Form 
 Ex-Entitlement date for the Open Offer                                                    14 March 
 Open Offer Entitlements credited to                                                       15 March 
  CREST stock accounts of Qualifying 
  CREST Shareholders 
 Recommended latest time for requesting                                                   4.30 p.m. 
  withdrawal of Open Offer Entitlements                                                 on 23 March 
  from CREST 
 Latest time for depositing Open Offer                                                    3.00 p.m. 
  Entitlements into CREST                                                               on 26 March 
 Latest time and date for splitting                                                       3.00 p.m. 
  Application Forms (to satisfy bona                                                    on 27 March 
  fide market claims only) 
 Latest time for receipt of completed                                                    11.00 a.m. 
  Application Forms and payment in full                                                 on 29 March 
  under the Open Offer or settlement 
  of relevant CREST instructions (as 
  appropriate) 
 Results of the Open Offer announced                                                        3 April 
  through a Regulatory Information Service 
 Admission and commencement of dealings                                                     4 April 
  in Open Offer Shares, fully paid, on 
  the London Stock Exchange 
 CREST accounts credited with uncertificated                                                4 April 
  Ordinary Shares 
 Where applicable, definitive share                                                         9 April 
  certificates despatched by post in 
  the week commencing 
 
 (1)                                           Each of the times and dates set out in the 
                                                above timetable of principal events and mentioned 
                                                elsewhere in this announcement may be adjusted 
                                                by the Company with the agreement of Smith 
                                                & Williamson Corporate Finance Limited and 
                                                Dickson Minto W.S., in which event details 
                                                of the new times and dates will be notified 
                                                to the FCA, the London Stock Exchange and, 
                                                where appropriate, Qualifying Shareholders. 
 (2)                                           All references to times in this timetable 
                                                are to London times unless otherwise stated. 
 
 

Cautionary note regarding forward-looking statements

This Announcement contains certain forward-looking statements which may include reference to one or more of the following: the Company's financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditure, competitive positions, plans and objectives of management and other matters. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "annualised", "goal", "target", "aim", "may", "will", "would", "could" or "should" or (in each case, their negative or other variations or comparable terminology). Statements in this announcement that are not historical facts are hereby identified as "forward-looking statements". Such forward-looking statements, including, without limitation, those relating to future business prospects, revenue, capital needs, expected cost savings, interest costs and income, in each case relating to the Company, wherever they occur in this announcement, are not necessarily based on assumptions reflecting the views of Worldsec and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Such forward-looking statements should, therefore, be considered in the light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation: economic and business cycles, the terms and conditions of Worldsec's financing arrangements, including fluctuations in interest rates, foreign currency rate fluctuations, competition in Worldsec's and its investee companies' principal markets, acquisitions or disposals of businesses or assets by Worldsec and trends in Worldsec's and its investee companies' principal industries and markets.

These forward-looking statements are not intended to give any assurances in respect of the future performance of Worldsec. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules and any law, Worldsec does not have any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, further events or otherwise. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, FSMA or any law, Worldsec expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Worldsec's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this announcement might not occur.

Important Notice

This Announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, or subscribe for, the New Shares or any other securities to any person in Australia, Canada, Japan or South Africa, or the United States or in any jurisdiction to whom or in which such offer or solicitation is unlawful. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada, Japan or South Africa or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan or South Africa. The offer and sale of the securities referred to herein has not been and will not be registered under the US Securities Act or under the applicable securities laws of Australia, Canada, Japan or South Africa. The availability of the Open Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any application requirements.

The New Shares have not been and will not be registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States or under any securities laws of Australia, Canada, Japan or South Africa or any other jurisdiction where to do so would be unlawful and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States, or within any of Australia, Canada, Japan or South Africa or any other jurisdiction where to do so would be unlawful. There will be no public offer of the New Shares in the United States.

The distribution of this Announcement and the offering of the New Shares in jurisdictions other than the United Kingdom may be restricted by law. No action has been taken by the Company or Smith & Williamson that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Smith & Williamson to inform themselves about, and to observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This Announcement is for information only and does not constitute or form part of any offer or invitation to issue, acquire or dispose of any securities or investment advice in any jurisdiction.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied is, or will be made as to, or in relation to, and no responsibility or liability is, or will be, accepted by Smith & Williamson or by any of their affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Smith & Williamson Corporate Finance Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, has been appointed to act as financial adviser to the Company in connection with the Issues. Dickson Minto W.S., which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, has been appointed to act as sponsor and UK solicitor to the Company in connection with the Issues. Persons viewing this announcement should note that, in connection with the Issues, Smith & Williamson Corporate Finance Limited and Dickson Minto W.S. are acting exclusively for the Company and no one else. Apart from the responsibilities and liabilities, if any, which may be imposed on Smith & Williamson Corporate Finance Limited and/or Dickson Minto W.S. by FSMA, Smith & Williamson Corporate Finance Limited and/or Dickson Minto W.S. will not be responsible to anyone other than the Company for providing the protections afforded to clients of Smith & Williamson Corporate Finance Limited and Dickson Minto W.S. or for advising any other person on the transactions and arrangements described in this announcement. No representation or warranty, express or implied, is made by Smith & Williamson Corporate Finance Limited and/or Dickson Minto W.S. as to any of the contents of this announcement for which the Company and the Directors are solely responsible. Neither Smith & Williamson Corporate Finance Limited nor Dickson Minto W.S. has authorised the contents of, or any part of, this announcement and (without limiting the statutory rights of any person to whom this announcement is issued) no liability whatsoever is accepted by Smith & Williamson Corporate Finance Limited and/or Dickson Minto W.S. for the accuracy of any information or opinions contained in this announcement or for the omission of any material information, for which the Company and the Directors are solely responsible. Accordingly, Smith & Williamson Corporate Finance Limited and Dickson Minto W.S. disclaim (to the extent permitted by law) any liability which they might otherwise have in respect of any of the information or opinions contained in this announcement, whether arising in tort, contract or otherwise.

Capitalised terms used and not otherwise defined in this announcement have the meaning given to them in the Prospectus.

This information is provided by RNS

The company news service from the London Stock Exchange

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March 13, 2018 10:58 ET (14:58 GMT)