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DJ Ace Liberty & Stone PLC Open offer for Convertible Notes and Warrants

TIDMALSP

RNS Number : 5087A

Ace Liberty & Stone PLC

28 December 2017

 
    28 December 2017 
 

Ace Liberty and Stone Plc

("Ace" or "the Company")

Open offer to subscribe for up to GBP4,850,000 Convertible Notes and Warrants

The directors of Ace Liberty and Stone Plc (NEX: ALSP), the active property investment company, capitalising on commercial property investment opportunities across the UK, are delighted to announce that it will raise up to GBP4,850,000 (before fees and expenses) through an Open Offer by way of the issue of convertible loan notes (Convertible Notes) and warrants (Warrants) on the terms and conditions set out in a shareholder letter which has been posted today and is available on our website at http://acelibertyandstone.com/Announcements/.

The Convertible Notes shall convert into and the Warrants shall be exercisable over ordinary shares of GBP0.25 each in the capital of the Company (Ordinary Shares).

The Open Offer is subject to subscription of a minimum of GBP2million Convertible Notes. This has been achieved by commitments by major shareholders of GBP3.01million on or before the date of this announcement.

In the event that Open Offer is not fully subscribed, each Qualifying Shareholder will be entitled to apply for additional Convertible Notes under the Excess Application Facility. The number of Excess Convertible Notes for which Qualifying Shareholders may apply is limited to the number that represents the same number of Convertible Notes as those within the Open Offer Entitlement. The entitlement to Excess Notes is subject to the total number of Convertible Notes for which applications are received during the Offer Period not being greater than the maximum of GBP4,850,000 Convertible Notes, in which case the Excess Convertible Notes for which Qualifying Shareholders have applied will be scaled back in proportion to the respective numbers of Convertible Notes of those who have applied for Excess Convertible Notes.

The shareholder letter sets out the background to and reasons for the Open Offer. The funding will be used to allow the Company to start implementing the strategy to acquire additional properties. The proposals allow Qualifying Shareholders to participate in the fundraising in order for the implementation of this strategy in a cost-effective manner.

Background to and reasons for the Open Offer

The Company has enjoyed substantial growth during the last five years. New equity investment has increased the Company's resources and enabled the purchase of properties with the support of secured loan finance. With the purchase of New Majestic Bingo Hall, Middlesbrough in November 2017, these funds became fully invested. The annual results announced on 2(nd) October 2017 for the year ended 30 April 2017 show the ongoing level of rental income generated by the portfolio of properties that has been acquired by the Company.

The Company is in a strong position with a good level of rental income and a portfolio of properties which has potential for a further increase in capital value.

The directors continue to seek out further property purchase opportunities which would be to the Company's advantage if they can be realised. These are now to be found in a higher price range than the existing properties and additional funding by way of equity investment will enable the Company to move into that price bracket.

The directors are conscious of the support provided by shareholders and believe it is right and fair to offer the opportunity to participate at the present time on advantageous terms before further equity investment is sought.

The Board acknowledges the importance of the continuing support of shareholders. The Open Offer also enables all Qualifying Shareholders to participate in the fundraising on a pro rata basis and with the ability to apply for Convertible Notes in addition to their proportionate entitlement.

Accordingly, the Directors believe that an Open Offer is in the best interests of the Company and Shareholders as the funds raised should enable the Company to progress with its strategy to grow the value of the portfolio of investment properties.

Current trading and outlook

The Company has published its results for the year ended 30 April 2017 on 2(nd) October 2017, which show a steady increase in all KPIs monitored by the Directors. It is noteworthy that revenue has increased by 29% and profit by 270% compared to the equivalent results in the previous year. During the year the Company's property holdings have increased from GBP29,488,428 to GBP38,979,308, an increase of 32%.

A number of property acquisitions have been announced, notably in Barnstaple, Margate and Middlesbrough. Further property transactions are currently being negotiated which will enhance the portfolio and annual rental income.

The issue of Convertible Notes is to be completed before release of interim results announcement. This is estimated to be 29 January 2018.

Use of Proceeds

The Company is seeking up to GBP4,850,000 to continue to build its portfolio of properties with good rental income, sound covenants and potential for capital value increases. The directors are in continuous touch with the commercial property market and constantly receive approaches for purchase and sale transactions. These are evaluated and pursued depending on the quality of the opportunity and available funds. It is not possible to specify which properties are to be purchased once the additional funding is available. The amount that is raised by way of the Open Offer will allow the Directors to identify those opportunities that are most attractive. Future purchases will be consistent with the existing successful strategy; all property transactions are announced on the NEX Exchange Growth Market.

Information on the Open Offer

Fundraising Structure

The Directors have given careful consideration to the structure of the proposed fundraising and have concluded that the Open Offer is the most suitable option available to the Company and its Shareholders at this time having regard to the importance of pre-emption rights to Shareholders, the composition of the Shareholders, the current share price and the objective of achieving a cost effective and efficient fundraising.

Under the Open Offer, the Company will offer the opportunity to subscribe for up to GBP4,850,000 of Convertible Notes with a conversion price of GBP1.00. If the Offer is fully subscribed and all these loan notes are converted into Ordinary Shares, this would result in the holders of the Convertible Notes acquiring 4,850,000 Ordinary Shares in the Company in respect of the principal amount and an additional 485,000 Ordinary Shares in respect of interest on the principal and an additional 145,500 Ordinary Shares in respect of arrangement fees.

Under the Open Offer, the Company will issue warrants to each shareholder who subscribes for offer Convertible Notes to acquire Ordinary Shares at an exercise price of GBP0.80 per Ordinary Share. The warrants will be issued in identical amounts as the offer Convertible Notes. If the Offer is fully subscribed and all the warrants are exercised, this would result in the holders of the warrants acquiring 4,850,000 Ordinary Shares in the Company.

In the event that all Convertible Notes were converted into Ordinary Shares and all Warrants were exercised, the New Ordinary Shares will represent approximately 20 per cent. of the Enlarged Share Capital.

This would result in a dilution of approximately 20.49 per cent. in aggregate for holders of Existing Ordinary Shares, save to the extent that they subscribe for their Open Offer Entitlement and Excess Open Offer Entitlement.

The latest date and time for acceptance and payment in full under the Open Offer is 11 a.m. on 22 January 2018. Any applications received after this time will not be accepted. Full details of the terms and conditions of the Open Offer and how to apply are set out in the letter sent to shareholders, a copy of which is included on our website at the following address http://acelibertyandstone.com/Announcements/

The Directors accept responsibility for this announcement.

- Ends -

For further information, please contact:

 
 Ace Liberty & Stone Plc 
 Ivan Minter, Financial Director            Tel: +44 (0) 20 7201 
                                                            8340 
                                   http://acelibertyandstone.com 
 Alfred Henry Corporate Finance 
  Ltd, NEX Exchange Corporate 
  Adviser 
 Jon Isaacs / Nick Michaels                 Tel: +44 (0) 20 7251 
                                                            3762 
                                             www.alfredhenry.com 
 Hybridan LLP, Corporate 
  Broker 
 Claire Noyce                                Tel: +44 (0)203 764 
                                                            2341 
                                                www.hybridan.com 
 

Notes to Editors

Ace Liberty & Stone Plc is a London-based property investment company with a diverse portfolio of properties located across the UK, currently including Leeds, Sunderland, Plymouth, Dudley, Gateshead, Barnstaple, and London. The Company locates commercial and residential properties which have the potential for an increase in value through creative asset management activity, such as change of tenancy, change of use or new lease negotiation. Ace has maintained a track record of generating strong profits at disposal of properties and achieving better-than average returns on capital. With strong support from shareholders and mortgage lenders, the Company is currently seeking further investment opportunities in the UK to create value for existing and new investors.

Ace is run by a board with extensive property experience, an excellent network of contacts and relevant professional qualifications. This sector expertise has allowed the Board to identify opportunities and act promptly to secure investments.

For more information on the Company please visit www.acelibertyandstone.com

(MORE TO FOLLOW) Dow Jones Newswires

December 28, 2017 11:55 ET (16:55 GMT)

DJ Ace Liberty & Stone PLC Open offer for -2-

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(END) Dow Jones Newswires

December 28, 2017 11:55 ET (16:55 GMT)