News
Financing Update
02 April 2009
The Company today announces that certain of its directors and Southwind Limited have provided £500,000 to the Company in the form of redeemable, unsecured loan notes (the 'Redeemable Loan Notes') which the holders intend to convert into equity as outlined below.
The Redeemable Loan Notes have been provided by the following parties and in the following amounts:
| Michael Richards | (Chief Executive) | £100,000 |
| Rodger Braidwood | (Non-Executive Director) | £53,000 |
| John Foley | (Non-Executive Director) | £47,000 |
| Southwind Limited | £300,000 |
Southwind Limited is owned by a trust, the principal beneficiary of which is an adult son of Bob Morton (Non-Executive Chairman).
The Redeemable Loan Notes rank pari passu with the notes issued under the terms of a loan note instrument executed by the Company on 4 April 2008 and constituting £1,000,000 variable rate unsecured loan notes (the 'Unsecured Loan Notes') and, unless the Company elects to repay the Redeemable Loan Notes earlier without penalty, they are repayable on 31 March 2010.
The Company and the holders of the Redeemable Loan Notes and the Unsecured Loan Notes intend to agree the conversion of these loan notes into equity at a price of 2 pence per ordinary share once the necessary shareholder approvals have been obtained at a General Meeting of the Company.
Furthermore, the Company and the vendors of WFCA Integrated Limited intend to agree an amendment to the terms of the sale and purchase agreement, dated 14th March 2008, whereby any additional consideration that becomes payable will be payable in equity on the same terms as outlined above. Under the terms of the sale and purchase agreement this additional consideration cannot exceed £ 261,000.
A circular detailing the particulars of the proposed conversions and convening a General Meeting seeking shareholder approval for i) the proposals and ii) a waiver that will be sought from the Panel on Takeovers and Mergers will be sent to shareholders as soon as practible. Subject to receiving the required conditional waiver from the Takeover panel the expected date for the general meeting is 7 May 2009.
Under the AIM Rules, the issue of the Redeemable Loan Notes to the Directors is classified as a related party transaction. However, the independent directors consider, having consulted with Daniel Stewart (the Company's nominated adviser), that the terms of the Redeemable Loan Notes are fair and reasonable insofar as WFCA's shareholders are concerned.
Enquiries:
| WFCA plc | Tel: 01892 511 085 |
| Stephen Latter, Financial Director | |
| Daniel Stewart & Company Plc | Tel: 020 7776 6550 |
| Simon Leathers/Oliver Rigby |
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.