We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Xsn | LSE:XSN | London | Ordinary Share | GB0006016413 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.05 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
RNS Number : 2022Y
XSN PLC
03 July 2008
Date: Thursday 3 July 2008
Immediate Release
[NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA]
XSN plc
("XSN" or "the Company")
Notice of Extraordinary General Meeting
Proposed acquisition of MarineTrack Limited
("MarineTrack")
* XSN to acquire the entire issued share capital of MarineTrack - this will constitute a reverse takeover and will be subject to
existing Shareholder approval at an EGM to be held on 28 July 2008.
* As an investing company since 2007, XSN has been seeking a reverse acquisition, specifically looking to invest in or acquire a
company which has the following:
* an experienced management team;
* a strong position in an established market or an early mover opportunity in a potentially fast growing market;
* significant prospects and suitability for admission to a regulated market.
* MarineTrack, a telematics business supplying tracking, alert, alarm, monitoring and messaging solutions mainly to the commercial
and recreational maritime markets, has been identified as a business which possesses these characteristics and which is capable of
delivering significant value to Shareholders.
* On re-admission to AIM, XSN intends to change its name to MarineTrack Holdings plc.
* Consideration for the acquisition is £1,475,000, to be satisfied entirely by the issue of 364,745,896 Consideration Shares at a
price of approximately 0.4 pence per share to existing MarineTrack Shareholders.
* As part of a share re-organisation, each XSN shareholder is to receive 3.4 new XSN ordinary shares for each existing XSN ordinary
share. Each new XSN share is expected to have an opening price of approximately 0.4 pence on re-admission to AIM.
* The market capitalisation of the Company on re-admission to AIM is expected to be in the region of £2,562,000.
* The Company's Nominated Adviser is Grant Thornton and its broker is Dowgate Capital Stockbrokers Limited.
Commenting, Stuart Nicholls, Chief Executive of MarineTrack said:
"Our admission to AIM via this reverse takeover will not only enhance our profile, but it will also provide us with enhanced credibility
and access to wider global opportunities within our key target markets.
"Ultimately, this should assist in the future development of MarineTrack as we look to exploit and build further upon our market
position."
Enquiries:
Stuart Nicholls Philip Secrett / Colin Aaronson Katie Dale
MarineTrack Holdings Grant Thornton (Nominated Golley Slater
Adviser)
Tel: 01273 462 001 Tel: 0207 383 5100 Tel: 0121 384 9743
www.marinetrack.com Mobile: 07918 716 754
The following information is extracted from the AIM Admission Document which is today being sent to shareholders of XSN and should be
read in conjunction with the full text of the AIM Admission Document which is available to view at www.xsn-plc.co.uk. References in this
announcement to "this document" shall be taken to mean the AIM Admission Document.
Introduction
The Company has today announced that it has agreed, subject inter alia to Existing Shareholder approval at the EGM, to acquire the
entire issued share capital of MarineTrack. MarineTrack is a privately owned company, registered and based in England and carrying on a
telematics business supplying tracking, alert, alarm, monitoring and messaging solutions mainly to the commercial and recreational maritime
markets. Further information about MarineTrack is set out in Part II of this document.
The consideration for the Acquisition is £1,475,000 which will be satisfied entirely by the issue of 364,745,896 Consideration Shares at
a price of approximately 0.4p per share to the MarineTrack Shareholders.
By reason of the size and value of MarineTrack relative to XSN, the Acquisition will constitute a reverse takeover under the AIM Rules
for Companies and will therefore require the approval of Existing Shareholders at the EGM.
Due to the potential holdings of Ordinary Shares by the Concert Party, following Re-Admission, the Company will seek waivers of the
obligations of the Concert Party under Rule 9 of the City Code to make a general offer for all the shares of the Company. Accordingly,
Existing Shareholders will also be asked at the EGM to consent to the waivers of these obligations.
As part of the Re-organisation each of the Existing Ordinary Shares will be subdivided and reconsolidated into 3.4 New Ordinary Shares
and one Deferred Share each having the rights set out in the proposed new Articles.
The Acquisition is conditional, inter alia, upon the passing of the EGM Resolutions and Re-Admission. If all the conditions of the
Acquisition are satisfied, the Enlarged Share Capital will be admitted to trading on AIM.
David Elstein and Lord Steinberg of Belfast have irrevocably committed to vote in favour of all EGM Resolutions, in respect of their
beneficial interests amounting, in aggregate, to 23,656,412 Ordinary Shares representing 37.17 per cent. of the Existing Ordinary Shares.
If EGM Resolutions 1 to 9 are duly passed, trading in the Existing Ordinary Shares will be cancelled and the Company will apply for
Re-Admission of the Enlarged Share Capital to trading on AIM. It is expected that the Enlarged Share Capital will be admitted to trading on
AIM on 29 July 2008.
Background to and Reasons for the Acquisition
On 1 May 2007, XSN completed the disposal of its subsidiary, Sports Network Limited following which it became an investing company
seeking a reverse acquisition. The Company stated that following its change of strategy, the Directors would seek to invest in or acquire a
company which has the following characteristics:
* an experienced management team;
* a strong position in an established market or an early mover opportunity in a potentially fast growing market; and
* significant prospects and suitability for admission to a regulated market.
Following a review of a number of possible acquisition targets, the Existing Directors have identified MarineTrack as a business which
possesses these characteristics and which they believe is capable of delivering significant value to Shareholders.
On 2 March 2007, the Company stated that if the Company has not made an investment or acquisition within twelve months from completion
of the disposal of Sports Network Limited, being 11 May 2008 (or earlier if the Directors deemed it appropriate), the Directors would
convene an extraordinary general meeting at which proposals would be put to shareholders to liquidate the assets of the Company and
distribute the proceeds, including the remaining cash balance, after payment of its liabilities, to Existing Shareholders. Such liabilities
would include substantial amounts spent in connection with the proposed acquisition of MarineTrack as well as costs incurred in winding up
the Company.
In the event that the Existing Shareholders do not approve the Acquisition pursuant to EGM Resolution No.1, the Directors will not
continue to search for another acquisition opportunity, and the Board unanimously recommends that the Existing Shareholders vote in favour
of EGM Resolution No. 10, the delisting of the Existing Shares from trading on AIM. In due course, and on conclusion of the Tyson
Litigation, which is described in paragraph 17 of Part VI of this document, the Directors would seek the Existing Shareholders' approval for
a members' voluntary winding-up of the Company under section 84 of the Insolvency Act 1986.
Trading in the Company's Shares
Although the Existing Directors have devoted considerable time and effort to identifying and reviewing possible acquisition targets,
they were not able to complete a reverse acquisition by 26 March 2008, being the anniversary of the date on which Shareholders resolved that
the Company should become an investing company and, accordingly, trading in the Existing Ordinary Shares on AIM was suspended with effect
from 27 March 2008. With the publication of this document, the Existing Ordinary Shares are eligible to be restored to trading, with
resumption in trading expected to take place shortly after publication.
Directors and Senior Management
Currently, the Board consists of the following individuals:
David Keith Elstein (aged 63), Non-executive Chairman
David Elstein has spent over forty years in the media industry, including four years as Producer of ITV's "This Week", six years as
Director of Programmes at Thames TV, four years as Head of Programming at BSkyB and four years as CEO of Channel 5, which he launched and
led to a valuation on his departure of over £ 1 billion. As well as chairing the Company, David also chairs DCD Media plc, Screen Digest
Limited, Luther Pendragon Holdings Limited and the Broadcasting Policy Group. He is also a board member of Escaline S..L. (Luxembourg) and
Kingsbridge Capital Advisors Limited. David is a visiting professor at Stirling University, and was previously a visiting professor at
Westminster University and Oxford University.
Adam Nicholas Singer (aged 56), Non-executive Director
Adam Singer was Chairman and Chief Executive of Flextech plc, the largest provider of thematic programming into the UK market, from 1997
to 2000, before becoming Group Chief Executive of Telewest plc for two years. Prior to that, he was Chief Operating Officer of the
international division of TCI Inc. (now Liberty Media Group). He was also a director of Scottish Media Group plc from 1994 to 2000, is a
Fellow of the Royal Television Society and currently sits on the Ofcom Content Board. He took over as Chairman of the British Screen
Advisory Council from David Elstein in April 2008.
It is intended that, conditional on Re-Admission, David Elstein will become a non-executive Director and that Adam Singer will resign in
order to focus on other business commitments and allow the appointment of individuals who are more experienced in the telematics industry
and specifically in the operations of MarineTrack. David Elstein intends to remain a Director for at least one year following Re-Admission.
On Re-Admission, it is intended that the following individuals will join the Board:
James Butterfield (aged 63), Proposed Non-executive Chairman
James Butterfield joined 3i plc in 1969 and over a ten-year period became an area manager and subsequently a local director. Since
leaving 3i plc, he has, for over 25 years, specialised in advising small and medium sized companies on a range of matters including stock
market listings, mergers and acquisitions, fund raising and corporate recovery work. James Butterfield has experience in the marine industry
and was formerly a director of Cetrek Industries Limited, a leading marine instrumentation company. He is a non-executive director of
Essentially Group Limited, an AIM quoted sports management and marketing business.
Stuart Nicholls (aged 36), Proposed Chief Executive
In 1988, Stuart Nicholls joined the British Merchant Navy aged 16 and rose through the ranks to take his first command as Master at the
age of 27. In 2001, he moved to the oil and gas industry as Exploration Rig Master and in 2003 he consolidated his management experience by
setting up Marine Impact Limited, a provider of specialist training and consultancy within the marine sector. In December 2005, he joined
the board of MarineTrack as Sales and Marketing Director and was subsequently appointed Chief Executive of MarineTrack.
Philip Self ACA (aged 43), Proposed Finance Director
Philip Self is a chartered accountant with over 20 years experience in corporate accountancy, audit and tax. He was appointed partner of
Turpin, Barker & Armstrong, a Surrey based accountancy practice in 1997, and in 2003 established his own practice specialising in
accountancy, business and tax advice, for a variety of owner managed businesses. Philip Self joined Wren Homes Group plc as Finance Director
in January 2004, a company now admitted to trading on AIM. Philip is a part-time finance director and will be committing a minimum of four
days per month to the Company.
Andrew Haffenden (aged 28), Proposed Operations Director
After gaining a degree in management with a maritime focus, Andy Haffenden co-founded MarineTrack in 2001 helping to source and secure
first round business development capital from several private investors. After a sabbatical leave between December 2003 and August 2006 he
returned to the business where he is now Operations Director, responsible for development of MarineTrack's technical solutions.
Duncan Lipscombe (aged 59), Proposed Non-executive Director
Following a successful career as an entrepreneur and director of a family owned fast food chain business (established over a 30 year
period), Duncan Lipscombe joined the board of directors of MarineTrack in November 2004. He is also chairman of AIM quoted Zyzygy and a
non-executive director of Nice Tech Limited.
Corporate Structure
On Re-Admission the Enlarged Group will consist solely of the Company and MarineTrack (which will be a wholly-owned subsidiary of the
Company).
The Reorganisation
The nominal value of each Ordinary Share must be decreased to avoid the New Ordinary Shares being issued at a discount. Accordingly, it
is proposed at Resolution 3 that every 1 issued Ordinary Share be sub-divided into 1 Deferred Share and 34 ordinary shares of 0.001 pence
each which are then consolidated into 3.4 New Ordinary Shares and it is proposed at Resolution 4 that each unissued Ordinary Share be
sub-divided into 500 New Ordinary Shares. In order to deal with any fractional entitlements arising out of the Reorganisation, the Directors
intend (pursuant to the powers vested in them by article 11.2 of the Company's Articles adopted following the EGM ) to capitalise 1 penny of
the sum standing to the credit of the Company's share premium account and to apply that sum in paying up and issuing approximately 50 New
Ordinary Shares which will be sold for the benefit of the Company. Only those Shareholders on the register at the date of the EGM will be
entitled to participate in the Capital Reorganisation. As appropriate, new share certificates will be sent to Shareholders in respect of the New Ordinary Shares held by them following the
Reorganisation or their CREST accounts will be amended to reflect the changes made to the Company's share capital as a result of the
Reorganisation.
Employee Information
In addition to its executive directors, the current staffing for MarineTrack comprises nine full time and three part time employees. Of
these, two are administrative staff and the remaining ten are members of the production and sales team.
Current Trading and Future Prospects
Annualised unit sales for MarineTrack's tracker unit have increased to over 900 in the six month period since 30 November 2007 and the
associated airtime revenues from these sales (recognised over the next 12 months) are an important feature of the financial dynamics of
MarineTrack.
In the Directors' opinion, MarineTrack's growth to date has been restricted due to the lack of cash resources. The Directors believe
that the cash resources of XSN, the existing banking facilities and the Loans, together with the added credibility of a public company
should allow MarineTrack to benefit from the legislative changes coming into effect on 31 December 2008 for all applicable commercial
vessels and enable it to accelerate the development of its business, resulting in increased unit sales and associated airtime revenues.
Financial information
Financial information about XSN covering the year ended 31 December 2007 has been announced and is being sent to shareholders today.
A summary of recent trading by MarineTrack is set out below.
Year ended 11 months ended Year ended Year ended
31 January 31 January
2006 2005
31 December 31 December
2007 2006
£ £ £ £
Revenue 393,134 290,777 146,052 157,842
Cost of sales (181,338) (122,935) (54,402) (106,275)
Gross profit 211,796 167,842 91,650 51,567
Administrative expenses - (584,408) (450,068) (346,240) (173,301)
normal
Administrative (108,544) - - -
expenses - exceptional
Loss from operations (481,156) (282,226) (254,590) (121,734)
Finance costs (8,473) (6,867) (9,531) (12,046)
Investment income 296 - 107 -
Loss before tax (489,333) (289,093) (264,014) (133,780)
Taxation - - - -
Loss for the period (489,333) (289,093) (264,014) (133,780)
Principal Terms of the Acquisition
The Company has conditionally agreed to acquire the entire issued share capital of MarineTrack from the MarineTrack Shareholders. The
acquisition price of £1,475,000 is to be satisfied entirely by the allotment and issue of the Consideration Shares.
Completion is conditional on, amongst other things:
a) the passing of the EGM Resolutions;
b) Re-Admission taking place on or before 31 August 2008.
Personal guarantees
In view of the historical lack of working capital within MarineTrack (which the Acquisition is intended to address) guarantees have been
provided by Peter Hoskins and Duncan Lipscombe personally to MarineTrack's bankers and by Zyzygy to Skywave. Further details of these
guarantees are given in paragraph 13 of Part VI of this document.
These guarantees are to remain in place after the Acquisition and Re-Admission. MarineTrack has agreed in the Acquisition Agreement to
use all reasonable endeavours to procure the release of the guarantees following Re-Admission.
Additional Financing Arrangements
Jemima Hoskins and certain other MarineTrack Shareholders have agreed to provide a continuing loan of £330,440 in aggregate to
MarineTrack. In addition, Billam has agreed to make available up to £200,000 by way of a working capital facility on the terms set out in
paragraph 11.4 of Part VI of this document.
Reason for the Acquisition and Re-Admission
The Directors believe that the marine telematics and telematics markets generally are fragmented and that there are opportunities to
acquire complementary businesses in the same sector. The Directors believe that having its shares traded on AIM will enable the Company to
offer its securities as partial consideration for such acquisitions and to raise cash to fund such acquisitions through placings of Ordinary
Shares.
The Directors believe that Re-Admission will raise the international profile of the Enlarged Group, promoting further awareness of
MarineTrack's business. Furthermore, the Directors believe that Re-Admission will provide liquidity for the Ordinary Shares and a value for
the Company which, in conjunction with the Company's share incentive arrangements, will help the Company attract, motivate and retain high
calibre employees.
Dividend Policy
The funding requirements of the Company may restrict the Company in terms of the time when it is able to pay dividends. Subject to the
above and the terms of any third party debt facilities into which the Company may enter from time to time, the Directors intend to
distribute dividends to Shareholders after the Company has profits available for distribution, a positive cashflow and when the Directors
believe it is commercially prudent to do so.
Share Option Scheme
The Company has adopted a share option scheme for employees and others. The principal provisions of the Scheme are summarised in
paragraph 3.20 of Part VI of the AIM admission document.
Details of the initial grants of option under the Scheme to be made at the time of Re-Admission as follows:
Percentage Options over
of Enlarged Ordinary
Share Shares
Capital
under option
James Butterfield 0.750% 4,803,717
Stuart Nicholls 2.000% 12,809,912
Philip Self 1.250% 8,006,195
Andrew Haffenden 1.500% 9,607,434
Duncan Lipscombe 0.500% 3,202,478
Lock-in Agreements
David Elstein, Lord Steinberg of Belfast and the members of the Concert Party will, following Re-Admission, in aggregate, have an
interest in 68.60 per cent. of the Enlarged Share Capital and have given undertakings to Grant Thornton and to Dowgate not to sell, charge
or grant any interests over any Ordinary Shares held by them (subject to certain exemptions) during the 12 month period commencing on
Re-Admission except in certain specified circumstances. In addition, they have undertaken to Grant Thornton and to Dowgate not to dispose of
any interest in Ordinary Shares for a further 12 month period unless they consult with the Company's broker prior to any disposal and to
make any such disposal through the Company's broker in order to maintain an orderly market in the Ordinary Shares.
City Code on Takeovers and Mergers and Waiver Resolution
The terms of the Acquisition give rise to certain considerations under the City Code. Brief details on the Panel, the City Code and the
protections they afford are described below.
The City Code is issued and administered by the Panel. The City Code applies to all takeovers and merger transactions, however effected,
where the offeree company is, inter alia, a listed or unlisted public company resident in the United Kingdom and to certain categories of
private companies. The Company is such a public company and its shareholders are entitled to the protections afforded by the City Code.
Under Rule 9 of the City Code, any person who acquires, whether by a series of transactions over a period of time or not, an interest in
shares which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the
voting rights of a company which is subject to the City Code, is normally required by the Panel to make a general offer in cash to all other
shareholders of that company to acquire the balance of the equity share capital of the company.
Rule 9 of the City Code also provides, inter alia, that where any person, together with persons acting in concert with him, is
interested in shares carrying not less than 30 per cent. but does not hold shares carrying more than 50 per cent. of that company's voting
rights and such person, or any person acting in concert with him, acquires an interest in any additional shares which increases the
percentage of the shares carrying voting rights in that company in which he is interested, such person is normally required to make a
general offer in cash to all other shareholders of that company to acquire the balance of the equity share capital of the company.
An offer under Rule 9 must be in cash and at the highest price paid within the 12 months prior to the announcement of the offer for the
shares in the company by the person required to make the offer or any person acting in concert with him.
Under the City Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or
informal) co-operate to obtain or consolidate control of that company. Control means an interest, or interests in shares carrying 30 per
cent. or more of the voting rights of a company, irrespective of whether such interest or interests give de facto control.
The following persons are deemed to be acting in concert for the purposes of the City Code: Zyzygy, Billam, Peter and Jemima Hoskins,
Duncan Lipscombe, Andrew Lipscombe, Peter Hire, James Butterfield, Stuart Nicholls, Philip Self and Andrew Haffenden. Further information
about the Concert Party is set out in Part IV of this document.
Assuming that the Reorganisation takes place and that the issue and allotment of all of the Consideration Shares and all of the
Settlement Shares takes place following Completion and assuming exercise in full of options by the Concert Party and that the Concert Party
has not disposed of any Ordinary Shares in the meantime and that the Company has not issued and allotted any further Ordinary Shares in the
period between Re-Admission and such date, the Concert Party will own 397,346,886 Ordinary Shares representing approximately 58.53 per cent.
of the Company's issued ordinary share capital following issue and allotment of the Consideration Shares, the Option Shares and the
Settlement Shares.
The Panel has agreed, subject to the Waivers Resolutions being passed on a poll at the EGM, to waive the obligation under Rule 9 of the
City Code, which would otherwise require the Concert Party to make a general offer for the entire issued share capital of the Company as a
result of the Concert Party being allotted and issued 358,917,151 Consideration Shares under the terms of the Acquisition and up to
38,429,735 Option Shares.
Following Completion, the Concert Party will, in aggregate, assuming exercise in full of the options held by members of the Concert
Party, hold Ordinary Shares carrying more than 50 per cent. of the Company's voting share capital, and will be able to acquire interests in
further shares without incurring any further obligation under Rule 9 to make a general offer, although individual members of the Concert
Party will not be able to increase their percentage interests in Ordinary Shares through or between a Rule 9 threshold without Panel
consent.
Should the members of the Concert Party between them come to be interested in shares carrying 30 per cent. or more of the Company's
voting share capital but not hold shares carrying more than 50 per cent. of such voting rights then (for so long as they continue to be
treated to be acting in concert) any further increase in that aggregate interest in shares by any member of the Concert Party (other than
through the allotment and issue of Option Shares) would be subject to the provisions of Rule 9.
Save for the Loan Agreement, the Facility Agreement, the Commission Agreement, the Lock-in Agreements and the Relationship Agreement,
there are no agreements, arrangements or understandings (including compensation arrangements) between MarineTrack or any other member of the
Concert Party and any of the Directors, Existing Shareholders or recent Shareholders connected with or dependent upon the Acquisition. There
are no agreements, arrangements or understandings whereby any securities to be received by the Concert Party pursuant to the Acquisition are
to be transferred to any other person.
Save for the Loans, there are no financing arrangements in place where the payment of interest on, repayment of or security for any
liability (contingent or otherwise) will depend to any significant extent on the business of the Company.
The Company currently does not trade and if eligible Existing Shareholders vote in favour of the Acquisition, its primary business will
become that of MarineTrack. As substantial Shareholders, the Concert Party's current intentions following Completion are to continue
MarineTrack's existing business activities and, other than in respect of Director's service agreements, to make no further changes to the
Company's business or to redeploy its fixed assets. Its primary place of business will become that of MarineTrack. The Concert Party agrees
with the rationale for the Acquisition set out in this Part I.
The current service agreements of Stuart Nicholls and Andrew Haffenden with MarineTrack are to be replaced upon Completion with new
service agreements with the Company, details of which are summarised in paragraph 10 of Part VI of this document. The Company presently has
no employees.
No member of the Concert Party has acquired any Ordinary Shares in the 12 months immediately preceding the date of this document.
Details of the Ordinary Shares in which the members of the Concert Party will have an interest are disclosed in the table in Part IV of this
document. The Waiver will be invalidated if any member of the Concert Party acquires any interest in any Ordinary Shares between the date of
this document and the EGM.
Extraordinary General Meeting
Set out at the end of the AIM admission document is a notice convening the Extraordinary General Meeting to be held at the offices of
Halliwells LLP, 1 Threadneedle Street, London EC2R 8AY at 10.00 am on 28 July 2008. The terms of the EGM Resolutions which are described
below are set out in that notice. Each EGM Resolution will only be effective if all of the EGM Resolutions are passed.
EGM Resolution No. 1 - Acquisition
As the Acquisition would constitute a "reverse takeover" of the Company in accordance with the AIM Rules for Companies, it cannot be
completed until the Company's Existing Shareholders have approved it. Accordingly, EGM Resolution No. 1, which is an ordinary resolution and
is conditional on the Waiver Resolution and EGM Resolutions 3, 4 and 5 being passed, seeks Existing Shareholders' approval of the
Acquisition. A summary of the principal terms of the Acquisition Agreement can be found in paragraph 11 of Part VI of this document.
EGM Resolution No. 2 - Waiver Resolution
EGM Resolution No. 2, which is an ordinary resolution, seeks Existing Shareholders' approval of the waiver of the obligation that would
otherwise arise on the Concert Party to make a general offer for the Company as a result of the issue to the Concert Party of the
Consideration Shares and the Option Shares. As noted above the Panel has agreed to waive this obligation subject to the passing of EGM
Resolution No. 2 by the Existing Shareholders. EGM Resolution 2 must be passed on a poll.
EGM Resolution No. 3
To facilitate the Acquisition, the Company intends to sub-divide each issued Existing Ordinary Share into 34 Ordinary Shares of 0.001
pence each and one Deferred Share and then for every 10 Ordinary Shares of 0.001 pence each to be consolidated into one New Ordinary Share,
each class having the rights and restrictions attached thereto as set out in the New Articles proposed to be adopted by EGM Resolution 6
below. EGM Resolution No. 3 is an ordinary resolution and is conditional upon the passing of EGM Resolutions 4 and 6 by the Existing
Shareholders.
EGM Resolution No. 4
To facilitate the Acquisition, the Company intends to sub-divide each unissued Existing Ordinary Share into five hundred New Ordinary
Shares and having the rights and restrictions attached thereto as set out in the New Articles proposed to be adopted by EGM Resolution 6.
EGM Resolution No. 4 is an ordinary resolution and is conditional upon the passing of EGM Resolutions 3 and 6 by the Existing Shareholders.
EGM Resolution No. 5
To facilitate the Acquisition, the Company intends to authorise the Directors to allot the New Ordinary Shares including the New Shares.
Resolution No. 5 is an ordinary resolution and is conditional upon the passing of EGM Resolutions 1, 3, 4 and 6 by the Existing
Shareholders.
EGM Resolution No. 6
As a result of the Acquisition, the Company intends to adopt new Articles in substitution for and to the exclusion of the existing
Articles. As a special resolution, EGM Resolution No. 6 will require a majority of not less than 75 per cent. of those voting in person or,
on a poll, by proxy in favour of it.
EGM Resolution No. 7
To facilitate the Acquisition, the Company intends to dis-apply the Shareholders rights of pre-emption over the Shares. EGM Resolution
No. 7 is conditional upon the passing of EGM Resolutions 1, 3, 4, and 5 and, as a special resolution, it will require a majority of not less
than 75 per cent. of those voting in person or, on a poll, by proxy in favour of it.
EGM Resolution No. 8
As a result of the Acquisition the Company intends to change its name to MarineTrack Holdings plc. EGM Resolution No. 8, which is a
special resolution and is conditional on the Waiver Resolution and EGM Resolution No. 1 being passed, seeks Existing Shareholders' approval
to this change of name. As a special resolution, EGM Resolution No. 8 will require a majority of not less than 75 per cent. of those voting
in person or, on a poll, by proxy in favour of it.
EGM Resolution No. 9
As a result of the Acquisition, the Company intends to alter its Memorandum of Association. EGM Resolution no. 9 is conditional upon the
passing of EGM Resolutions 1, 3 and 6 and as a special resolution, it will require a majority of not less than 75 per cent. of those voting
in person or, on a poll, by proxy in favour of it.
EGM Resolution No. 10
If the Existing Shareholders do not consent to the passing of EGM Resolution No.1, the Existing Shareholders will be asked to approve
EGM Resolution No. 10 which is a special resolution seeking the delisting of the Existing Shares from trading on AIM.
Irrevocable undertakings
David Elstein and Lord Steinberg of Belfast have irrevocably undertaken to vote, or to procure the votes of Existing Shares held, in
favour of those EGM Resolutions on which they are entitled to vote (as described above), including, where appropriate, the Waiver Resolution
and to approve the Acquisition. Such irrevocable undertakings have been given in respect of the following Existing Shareholders and those of
their immediate families and connected persons (within the meaning of section 346 of the Act).
Name Number of Percentage
Ordinary
Shares
David Elstein 13,698,412 21.52%
Lord Steinberg of Belfast 9,958,000 15.65%
The total number of shares irrevocably committed to vote in favour of the EGM Resolutions is 23,656,412 Ordinary Shares representing
37.17 per cent. of the Existing Ordinary Shares.
INFORMATION ABOUT MARINETRACK
1. Introduction
MarineTrack is a telematics business supplying tracking, alert, alarm, monitoring and messaging solutions mainly to the commercial and
recreational maritime markets. These solutions, which integrate hardware and software, utilise global positioning systems ("GPS") to
identify the location and movements of marine vessels, as well as monitoring their operational status against pre-determined parameters.
This information is communicated via the INMARSAT satellite network and presented to users via a web-based interface.
MarineTrack buys satellite transceiver modems with a built in GPS receiver from third party suppliers, principally Skywave. MarineTrack
programmes the transceivers to communicate with a web interface via the INMARSAT D+ satellite network. Information is communicated to users
through a web-based interface that MarineTrack has constructed. In addition, MarineTrack assembles and incorporates additional functionality
such as intruder alerts, security alerts and performance monitoring, using hardware supplied by third parties and integrated with
transceiver modems. MarineTrack sells these onboard units under the trade name "Track 200D".
MarineTrack has two revenue streams, being revenues from sales of hardware and airtime. To date MarineTrack has supplied over 1,000
hardware units, with over 750 having attached airtime subscription agreements, producing a growing and recurring revenue base. Other
customers have prepurchased airtime credits rather than entering into airtime subscription agreements.
MarineTrack was incorporated in 2001 to develop telematic solutions within the commercial and recreational maritime sectors, which had
evolved from an earlier research and development programme in the 1990's.
2. MarineTrack's Solution
The illustration below shows how Track200D receives GPS signals carrying information about a vessel's location and operational status
and transmits this data, via the INMARSAT communication satellite consellation, to a shore-based control station. These data transmissions
are converted into near real time visual location and status reports which can be tailored to a customer's requirements. The customer
accesses these reports through a secure web-based interface on a variety of devices.
Click on the link below to view the diagram:
http://www.rns-pdf.londonstockexchange.com/rns/2022Y_1-2008-7-2.pdf
INMARSAT plc, an international telecommunications company, operates a constellation of ten satellites, providing telephony and data
services to operators worldwide. This provides a two way communication channel between each Track200D equipped vessel and MarineTrack's
shore-based control station via Skywave's land earth station. Automatic transmission reports (from the vessel to the shore based control
station) can be programmed to be sent as frequently as every three minutes, or as often as specified.
3. Product
Track200D has been designed to be installed simply and directly onto a vessel with a single power connection. Track200D provides
information about a vessel's position, course and speed as well as geofencing security. Geo-fencing security enables a virtual secure
perimeter fence to be set around a vessel and an alert is sent if the vessel moves outside the perimeter, for example if it enters a danger
zone such as a maritime boundary or a coral reef.
Track200D provides connectivity for MarineTrack's additional plug and play alarm, alert, monitoring and messaging solutions:
* Alarm - an intruder alarm module which will automatically transmit an alarm, displayed on-line via MarineTrack's interface,
directly to a designated mobile telephone and the appropriate authorities if an intruder has entered the vessel;
* Alert - a security alerting module which acts as a covert alert system allowing notification of a vessel's location to be
transmitted to a designated shore-based contact and the appropriate authorities if its security has been compromised. This information can
also be viewed via MarineTrack's interface;
* Monitor - onboard sensors trigger an alarm transmission which is sent direct to a user's system interface and mobile telephone if
the vessel is in breach of normal operational parameters (for example, fire, the build up of gases, excess water levels, a loss of power or
if an intruder has entered the vessel);
* Messenger - this allows for a range of pre-recorded text messages to be transmitted via an onboard touch screen to and from a
shore-based third party's mobile telephone when the vessel is outside normal mobile phone communication coverage.
4. Maritime sectors
MarineTrack's telematic solutions product is sold into three distinct maritime sectors: commercial, recreational and marine projects.
MarineTrack, following IMO, considers the international marine commercial sector to include any vessel over 300 gross registered tonnes
that is required to comply with the SOLAS regulations. IMO estimates that there are currently around 45,000 vessels in commercial operation
worldwide. The marine recreational sector includes any vessel under 300 gross registered tonnes which is not used in commercial activities.
There are an estimated 23 million vessels within this category worldwide.
(a) Marine commercial sector
MarineTrack has supplied its ship security alert systems to commercial vessel operators including Royal Caribbean Cruises Limited,
Arklow Shipping Limited, SeaLion Shipping Limited and Hueng-A Shipping Company Limited. As these commercial customers expand their fleets
the Directors anticipate that they will purchase additional Track200D alert solutions.
On 1 January 2008, new SOLAS requirements for long range identification and tracking ("LRIT") of vessels came into force. These require
the transmission of four automated daily reports from each vessel to the flag state authority where the vessel is registered. Further
information on this new legislation is contained in the paragraph below entitled "Markets and Competition".
(b) Marine recreational sector
MarineTrack promotes and supplies its tracking products into the recreational sector in three different markets:
Target Market Functionality Customers/Events
race/regatta organisers provides automated Clipper Round the
location, World 2007/08,
performance and Esmeralda Maxi Rolex
status reports of Cup 2007, Bladerun
regatta entrants. It 2007 and Round
offers the event Britain Power Race
organisers the 2008.
opportunity to
increase audience
viewing through
MarineTrack's real
time graphical
display of the race
via the World Wide
Web.
holiday charter boat operators provides vessel Horizon Yacht Co.
asset management by Limited and Virgin
delivering real time Traders Limited.
vessel location,
course and speed
reports. In
addition, it
provides on board
status reports
including fuel/power
consumption and
notification if a
vessel sails outside
predetermined
operating areas.
individual vessel MarineTrack's full
owners/operators/ plug and play alarm,
manufacturers alert, monitor and
messaging solutions
to protect expensive
marine assets or
assets belonging to
very high net worth
individuals.
(c) Marine projects
Whilst the focus of MarineTrack's sales team is on generating sales in the commercial and recreational sectors, MarineTrack's senior
management has been committed to sourcing marine telematic projects through the UK Government's Trade Investment Overseas Market
Introduction Service Program. Telematic projects garnered from this source include those which generate revenues from bespoke solutions that
are a departure from MarineTrack's listed products and which may require engineering input. For example, MarineTrack has undertaken projects
for two major oil companies. One of these required the tracking of its oil field marine supply vessels and staff land transport vehicles to
co-ordinate staff rotation changes and decrease down time. Additionally, it required MarineTrack to integrate its own bespoke prepared
cartography so it could view the logistic movement of its vessels and land transport vehicles super-imposed over its oil operations.
MarineTrack has for some time, been involved in discussions with a government authority in the Asia region to provide solutions for
tracking fishing vessels. MarineTrack has agreed to pay sales commission equal to 49 per cent. of the gross margin obtained on sales to this
potential customer to certain Shareholders in recognition of their commercial contribution. Further details of this Commission Agreement are
set out in paragraph 13 of Part VI of this document. Whilst there is no guarantee of orders being placed by this potential customer, the
Directors believe that MarineTrack is well positioned to secure this opportunity and other similar opportunities, if and when they present
themselves.
5. Financial Dynamics of the Business
MarineTrack generates revenues from hardware sales and from entering into renewable annual airtime subscription agreements, which
produce recurring revenue, and from its customers pre-purchasing airtime credits. Approximately 67 per cent. of sales are from overseas
customers.
Where a customer enters into an airtime subscription agreement, airtime is typically invoiced in advance whilst income is recognised in
the accounts of MarineTrack over the 12 month period of the airtime agreement. MarineTrack offers a number of different airtime subscription
packages based on predetermined daily transmissions. Packages range from one report every 24 hours to hourly reporting. Fees for these
service packages typically range from £150 to £250 per annum.
MarineTrack has historically experienced a greater than 95 per cent. airtime subscription agreement renewal rate. To date MarineTrack
has supplied over 1,000 tracking units and has entered into over 750 airtime subscription agreements. If that pattern continues, the
Directors believe this should lead to MarineTrack developing a growing and recurring revenue base.
The Directors believe that once over 3,000 units have been installed more than 50 per cent. of overheads should be covered by recurring
airtime revenue alone, based on current average airtime rates. This is expected to take place by 2010. Over 1,100 units are targeted to be
supplied before the end of 2008. If all these targeted sales are achieved this should bring the business to a monthly operational break-even
position in the first quarter of 2009.
6. Marketing Strategy
To date MarineTrack's initial strategy of promotional product placement associated with marine events has proved successful in lead
generation, resulting in client gains and repeat business. Securing a contract with trans-oceanic rowing race organisers, Woodvale
Challenges Limited ("Woodvale"), is an example of the success of MarineTrack's product placement with 25 units sold to Woodvale for the
2007/2008 transatlantic event and proposals under discussion for MarineTrack to develop and sell a bespoke unit to Woodvale for their events
over the next five years.
Following Re-Admission, the Directors marketing strategy will be expanded to include:
* developing and establishing relationships with international resellers of MarineTrack's products into the commercial sector; and
* expanding direct sales into the recreational market.
7. Markets and Competition
MarineTrack is focused upon the commercial and recreational sectors of the marine telematics market. In the commercial sector, new LRIT
requirements have been introduced into the SOLAS regulations requiring the transmission of four automated daily reports to flag state
authorities. Each report must contain the vessel's name, call sign, latitude and longitude, course and speed. This legislation will be
phased in for vessels constructed before 31 December 2008 but is mandatory for vessels constructed after that date. These reports will be
promulgated through an international data exchange to assist with coastal state surveillance. It is estimated by the IMO that there are
45,000 commercial vessels which will need to comply with the LRIT legislation by 31 December 2008.
The Directors' believe that MarineTrack will benefit from ship operators moving to comply with these new regulations and believe
MarineTrack's standard Track200D will provide a solution to their requirements.
The new requirements outlined above may lead to some countries changing their own legislative requirements for the tracking of marine
vessels outside the commercial sector. The Directors believe that if such changes occur, it is likely to lead to an increased demand for
vessel tracking systems on recreational vessels.
Within its market, the Directors believe that there are about twenty companies that offer similar products and services to MarineTrack.
Of these, they consider that Purplefinder* by UK based Pole Star Space Applications Limited is the nearest competitor by reference to
product type and range of solutions. Although PurplefinderTM has supplied the recreational market, the Directors believe that its main focus
is on the commercial market. A number of other companies could provide competition but focus on specific markets.
Barriers to entry are low in the marine telematics sector in which MarineTrack operates. However, in view of the high level of capital
expenditure incurred by MarineTrack in technological and product development and the key relationships which it has built with large
international companies over a number of years, the Directors believe that MarineTrack currently enjoys a number of advantages over
potential new entrants
Definitions
Defined terms have the same meaning as in the AIM admission document that is being published today and which are reproduced below:
"Acquisition" the proposed acquisition by the Company
of the entire issued share capital of
MarineTrack pursuant to the Acquisition
Agreement
"Acquisition Agreement" the agreement relating to the
Acquisition dated ~ 2008 made between
XSN and the MarineTrack Shareholders as
described in paragraph 11.1 of Part VI
of this document
"Acts" together the Companies Act 1985, as
amended and the Companies Act 2006
"AIM" the market of that name operated by the
London Stock Exchange
"AIM Rules for Companies" the AIM Rules for Companies published
by the London Stock Exchange from time
to time (including, without limitation,
any guidance notes or statements of
practice) which govern the rules and
responsibilities of companies whose
shares are admitted to trading on AIM,
as amended from time to time
"AIM Rules for Nominated the AIM Rules for Nominated Advisers
Advisers" published by the London Stock Exchange
from time to time (including, without
limitation, any guidance notes or
statements of practice) which govern,
inter alia, the eligibility, approval
and continuing obligations of Nominated
Advisers (as defined in the AIM Rules
for Companies), as amended from time to
time
"Articles" the articles of association of the
Company, as amended from time to time
"Billam AG" a company incorporated in Switzerland
with registered number
CH-035.3.026.595-1 and having its
registered office at West Strasse,
Muri, Ch 3074, Switzerland
"Board" the board of directors of the Company,
being the Existing Directors and/or the
Proposed Directors as the context
requires
"Business Day" a day on which banks are open for
business in the City of London
"City Code" the City Code on Takeovers and Mergers
(as published by the Panel)
"Combined Code" the Combined Code on Corporate
Governance issued by the Financial
Reporting Council, as amended from time
to time
"Company" or "XSN" XSN plc, a company incorporated under
the laws of England and Wales with
registered no. 03891345
"Company's Registrars" or Share Registers Limited, a limited
"Registrars" liability company whose registered
office is at Craren House, West Street,
Farnham, Surrey GU9 7EN
"Completion" completion of the Acquisition in
accordance with the Acquisition
Agreement
"Concert Party" the concert party comprising:
Zyzygy
Billam
Jemima Hoskins
Peter Hoskins
Peter Hire
Duncan Lipscombe
Andrew Lipscombe
Stuart Nicholls
Andrew Haffenden
Philip Self
James Butterfield
"Consideration Shares" the 364,745,896 New Ordinary Shares to
be allotted and issued to the
MarineTrack Shareholders pursuant to
the Acquisition Agreement
"Corporate Governance Corporate Governance Guidelines for AIM
Guidelines of the Quoted Companies as published by the Quoted
Companies Alliance" Companies Alliance from time to time
"CREST" the computerised settlement system used
to facilitate the transfer of title to
or interests in securities in
uncertificated form, operated by
Euroclear UK & Ireland Limited
"CREST Regulations" the Uncertified Securities Regulations
2001, as amended
"Daily Official List" the Official List of the UKLA
"Deferred Shares" the non-voting deferred shares of
£0.049 each in the capital of the
Company
"Directors" the Existing Directors and/or the
Proposed Directors as the context
requires
"Dowgate" or "Broker" Dowgate Capital Stockbrokers Limited, a
company incorporated under the laws of
England and Wales with registered
number 02474423
"EGM Resolutions" the resolutions set out in the notice
of Extraordinary General Meeting set
out in Part VIII of this document
"Enlarged Group" the corporate group which, following
Completion, will comprise the Company
and MarineTrack
"Enlarged Share Capital" the ordinary share capital of the
Company immediately following
Re-Admission, as reorganised by the
Reorganisation and as enlarged by the
issue of the Consideration Shares and
the Settlement Shares
"Existing Directors" the existing directors of the Company
whose names are set out on page 3 of
this document
"Existing Ordinary Shares" the 63,639,613 ordinary shares of £0.05
in the capital of the Company in
existence prior to the Reorganisation
"Existing Shareholders" the holders of Existing Ordinary Shares
"Extraordinary General the extraordinary general meeting of
Meeting" or "EGM" the Company to be held on 28 July 2008,
and any adjournment thereof, notice of
which is set out in Part VIII of this
document
"Facility Agreement" a facility agreement between (1) the
Company and (2) Billam dated 3 July
2008
"Financial Services Authority" the Financial Services Authority
or "FSA"
"Form of Proxy" the form of proxy which accompanies
this document for use by Existing
Shareholders in connection with the EGM
"FSMA" the Financial Services and Markets Act
2000 (as amended from time to time)
"GPS" Navstar GPS, the global positioning
system satellite network operated by
the United States Air Force
"Grant Thornton" or "Nomad" the corporate finance division of Grant
Thornton UK LLP which is authorised and
regulated by the Financial Services
Authority to carry on investment
business
"Grant Thornton UK LLP" a limited liability partnership
registered in England and Wales whose
principal place of business is Grant
Thornton House, Melton Street, Euston
Square, London NW 1 2EP and which is
the UK member firm of Grant Thornton
International
"IFRS" the International Financial Reporting
Standards as adopted by the
International Accounting Standards
Board from time to time
"IMO" International Maritime Organisation
"Littlejohn" Littlejohn, a partnership of 1
Westferry Circus, Canary Wharf, London
E 14 4HD
"Loans" such sums as are borrowed by
MarineTrack in accordance with the Loan
Agreement and the Facility Agreement
"Loan Agreement" a loan agreement between (1)
MarineTrack (2) Jemina Hoskins and (3)
others dated 3 July 2008
"Lock-in Agreements" the lock-in and orderly marketing
agreements between certain Shareholders
and proposed Shareholders, the Company,
Grant Thornton and Dowgate dated 3
2008
"London Stock Exchange" London Stock Exchange plc
"MarineTrack" MarineTrack Limited, a company
incorporated in England and Wales on 30
November 2001 as a private limited
company under the Act, with registered
number 4332313
"MarineTrack Shareholders" The holders of the issued share capital
of MarineTrack
"New Ordinary Shares" ordinary shares of 0.01 pence each in
the capital of the Company the
Consideration Shares and the Settlement
Shares
"New Shares" the Consideration Shares and the
Settlement Shares original equipment
manufacturer
"OEM" original equipment manufacturer
"Official List" the official list of the UK Listing
Authority
"Options" the options granted by the Company to
each of James Butterfield, Stuart
Nicholls, Andrew Haffenden, Philip Self
and Duncan Lipscombe pursuant to the
Scheme Rules
"Option Shares" the New Ordinary Shares the subject of
the Options
"Ordinary Shares" the Existing Ordinary Shares or the New
Ordinary Shares as the context so
requires
"Panel" the Panel on Takeovers and Mergers
"Pound Sterling" or "£" the lawful currency of the United
Kingdom
"Proposals" the Acquisition, the Reorganisation,
and Re-Admission
"Proposed Directors" the proposed directors of the Company
whose names are set out on page 3 of
this document
"Prospectus Rules" the prospectus rules published by the
FSA from time to time pursuant to
sections 73A(1) and (4) of FSMA
"Prospectus Directive" European Parliament and Council
Directive 2003/71/EC
"Re-Admission" the admission of the Enlarged Share
Capital in issue to trading on AIM
becoming effective in accordance with
Rule 6 of the AIM Rules for Companies
"Relationship Agreement" the relationship between the
Relationship Parties and the Company
details of which are set out in
paragraph 11.7 of Part VI of this
document
"Relationship Parties" Zyzygy, Billam, Peter and Jemima
Hoskins
"Reorganisation" the subdivision of each of the Existing
Ordinary Shares into New Ordinary
Shares and one Deferred Share
"Scheme" the Unapproved & EMI Share Option
Scheme adopted by the Company on 3 July
2008
"Scheme Rules" the rules of the Scheme
"Settlement Shares" the 59,375,000 New Ordinary Shares to
be allotted by the Company in
satisfaction of certain professional
fees
"Shares" the Existing Ordinary Shares, the New
Ordinary Shares and the Deferred Shares
(as the case may be)
"Shareholders" the persons who are registered as
holders of Ordinary Shares and/or
Deferred Shares as the context so
requires from time to time
"Skywave" Skywave Mobile Communications, Inc.
"SOLAS" The International Convention for the
Safety of Life at Sea, originally
adopted in 1974 by the IMO
"S Shares" S shares of 5p each in the capital of
the Company
"Tyson litigation" the litigation in which the Company is
involved with the U.S. estate in
bankruptcy of Michael Tyson, the
details of which are set out in
paragraph 17.2 of Part VI of this
document
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"UK Listing Authority" or the Financial Services Authority,
"UKLA" acting in its capacity as the competent
authority for the purposes of Part VI
of FSMA
"UK Trade Investment Overseas the Overseas Market Introduction
Market Introduction Service Service operated by UK Trade &
Program" Investment
"US", "USA" or "United States" the United States of America
"Waiver" the waiver to be granted by the Panel
subject to the passing of the Waiver
Resolution of the obligation of the
Concert Party to make a mandatory offer
for the entire issued share capital of
the Company that would otherwise apply
on Completion to the Concert Party
under Rule 9 of the City Code
"Waiver Resolution" the EGM Resolution No. 2 in the form
set out in the notice of EGM at the end
of this document to approve the Waiver
"Zyzygy" Zyzygy plc, a company incorporated in
England and Wales with registered
number 04045179
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQKGGGNVZNGRZM
1 Year Xsn Chart |
1 Month Xsn Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
