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High Road Capital plc - First Day of Dealings
HIGH ROAD CAPITAL PLC
FIRST DAY OF DEALINGS ON PLUS
The Ordinary Shares of High Road Capital plc commenced trading on PLUS today.
The Company was formed to be an investment vehicle on the PLUS Market. An
offer for subscription, which raised GBP 418,150 before expenses, has been
The Company has been established to take advantage of opportunities to invest
in or acquire a company or companies, or businesses or assets. The Directors
preferred structure would involve the acquisition by the Company of another
company or business in exchange for the issue of Ordinary Shares in a single
transaction (a "reverse takeover"). The Directors main investment criteria are
the renewable energy sector worldwide, the financial sector in the UK,
businesses with developed products which require funding to grow, businesses
with achievable business plans but which may involve some considerable risk
reaching forecast turnover and which require funding to do so, businesses whose
growth prospects, if achieved, will be earnings enhancing for shareholders and
maximising the value of the cash within the Company which the Directors believe
is a valuable asset for emerging companies for whom conventional fundraising
opportunities are not always available.
However, these criteria are not intended to be exhaustive and the Directors may
make an investment which does not fulfil any or all of the investment criteria
if they believe it is in the interests of shareholders as a whole to proceed
with such an investment. Any acquisition of a company would be put to the
shareholders for their approval at the appropriate time.
Both Directors have been involved in the flotation of many companies in a
variety of sectors as founders, investors, or advisers. In addition, the
Directors receive many approaches from companies wishing to raise capital. The
Board believes that its collective experience and potential dealflow will
enable suitable targets to be identified and evaluated. Once the Offer is
complete, the Directors intend to identify a suitable target as quickly as
At present the Directors are seeking suitable investment or acquisition targets
and have not, at this stage, carried out any due diligence and no commitments
have been entered into. Initial due diligence will be carried out by the
Directors who may, in addition, commission third party due diligence as
appropriate. Any such third parties will be carefully chosen based on their
relevant experience. Once terms have been negotiated and finalised for any
possible investment or acquisition, shareholders approval will be sought if the
transaction constitutes a reverse takeover.
The Company will keep overheads to a minimum and the Directors will not be
remunerated until such time as a substantial investment or acquisition has been
made. Furthermore, the Directors may recruit additional board members in due
course, who would also not be remunerated until such time as a transaction has
THE BOARD CURRENTLY COMPRISES TWO DIRECTORS AS FOLLOWS:
ADAM WILSON, aged 37, Non-Executive Chairman
Adam graduated from Essex University in 1992 with a BA (Hons) in Accounting and
Financial Management. He qualified as a barrister before joining NM Rothschild
in 1994 as a graduate trainee. He subsequently moved to LCF Rothschild,
specialising in equity derivative and structured product sales. In 1997 he
joined Teather & Greenwood where he became Head of Derivatives before joining
Hichens, Harrison & Co. plc in 2003. He was appointed Managing Director of
Hichens, Harrison & Co. plc in October 2004. Adam is a member of the Securities
Institute as well as being a certified FFAS financial analyst.
GAVIN JOHN BURNELL, aged 29, Non-Executive Director
Gavin Burnell has specialised in the small-cap market for the last six years.
He joined Ruegg & Co, an AIM Nominated Adviser and PLUS Corporate Adviser, in
2001 and is now responsible for equity sales and maintaining client
relationships with a number of AIM and PLUS corporate clients. Gavin is a Non-
Executive Director of Iceni Oil and Gas Limited, a private company with
interests in North Sea oil exploration projects. He served as a Non-Executive
director of Agricola Resources plc, a PLUS-traded company, between October 2003
and October 2005 and of Stratex International plc until January 2007. Gavin is
also a founder and Non-Executive director of Israeli Acquisitor I plc and
Fairholt Resource Investments plc, again PLUS-traded companies. Gavin holds a
degree in Accounting and Finance.
ADDITIONAL INFORMATION ON THE DIRECTORS
The directorships of the Directors currently held and held over the 5 years
preceding the date of this document (other than of the Company) are as follows:
CURRENT DIRECTORSHIPS PAST DIRECTORSHIPS
Adam Wilson Hichens, Harrison & Co. plc 9999plc
Hichens Harrison (Asia) Limited Teather & Greenwood
Hichens, Harrison (Middle East) Limited limited
Hichens Harrison (South America) Limited Hitlines UK Limited
Hichens, Harrison (Africa) Limited
Hichens Investment Management Limited
Hichens, Harrison (Ventures) Limited
Blomfield Street Securities Limited
Asian Independent Power limited
African Wireless Limited
South American Wireless Telecommunications
Asian Biofuels Limited
African Biofuels Limited
Student Accommodation Company (India)
London Wall Nominees Limited
London Wall Capital Limited
London Wall Capital Investment Management
Ethical Investments Limited
Medserve (me) Limited
Gavin John Woodland Capital Limited NCI Vehicle Rescue
Fairholt Resources Investments plc Leveraged Finance
Israeli Acquisitor I plc Loan Solutions
Iceni Oil and Gas Ltd Axia Capital Limited
Lizzy Bet Limited Agricola Resources
REASONS FOR THE OFFER
The net proceeds of the Offer will be utilised to fund review of, and due
diligence on, potential acquisitions, to provide working capital, to redeem the
redeemable shares of 1p each and if applicable be applied towards the funding
of acquisitions or investments.
The Directors believe that the benefits of the Offer and Admission include:
* the ability to enter into negotiations with vendors of businesses or
companies, to whom the issue of publicly traded shares as consideration is
potentially more attractive than the issue of shares in an equivalent private
company for which no market exists;
* the ability to raise further funds in the future, either to enable a proposed
acquisition or investment to be completed and/or to raise additional working
capital or development capital for the Company once the acquisition or
investment has been completed; and
* the ability to attract and incentivise high calibre directors and employees
by offering share options. The Directors consider that the ability to grant
options over publicly traded shares is potentially more attractive to directors
and employees than the grant of options over unquoted shares.
The Directors believe that the profile of the Company will be significantly
enhanced by its position as a company whose shares are traded on PLUS.
Save for the Offer, there has been no significant change in the financial
condition or business performance of the Company since 25 January 2007, the
date of the Company's admission document.
The Corporate Adviser to High Road Capital plc is Ruegg & Co Limited.
ORDINARY SHARES AND WARRANTS
High Road Capital plc raised GBP418,150 (before expenses) via an Offer for
Subscription of 41,815,000 new Ordinary Shares, at the Offer price of 1p per
share, representing 58.23 per cent of the enlarged issued share capital of
the Company at Admission. There are now 71,815,000 Ordinary Shares in issue.
In consideration for agreeing to subscribe for up to 12,500,000 Ordinary Shares
in the Offer the Company has granted 4,000,000 Warrants to Sunvest Corporation
In addition, the Company has granted 3,590,750 Warrants to each of Hichens,
Harrison (Ventures) Limited and Gavin Burnell. Each Warrant entitles the holder
to subscribe for one new Ordinary Share at 1p per share at any time
until the fifth anniversary of Admission.
The shareholders holding three per cent. or more of the issued share capital at
NUMBER OF PERCENTAGE OF
SHARES SHARE CAPITAL
Sunvest Corporation Limited(1) 21,500,000 29.94%
Hichens, Harrison (Ventures) Limited (2) 17,000,000 23.67%
Gavin Burnell(3) 3,000,000 4.17%
Ruegg & Co Limited (4) 6,000,000 8.35%
Axia Capital Limited 4,000,000 5.57%
Michael Lee 4,000,000 5.57%
WS Nominees Limited 2,500,000 3.48%
Pershing Keen Nominees Limited a/c HHCLT(5) 9,200,000 12.81%
(1) Sunvest Corporation Limited is an Australian company listed on the ASX
ultimately controlled by Bruce Rowan
(2) Hichens, Harrison (Ventures) Limited is a company wholly owned by
Hichens, Harrison & Co. plc. Adam Wilson is Managing Director
of Hichens,Harrison & Co. plc
(3) Gavin Burnell also has an interest of 11.5 per cent in the issued share
capital of Ruegg & Co Limited which is interested in 6,000,000 Ordinary
Shares representing 8.35 per cent of the issued share capital of the
Company upon Admission.
(4) Brett Miller owns 42 per cent of Ruegg & Co Limited. Joseph Marffy owns
39.5 per cent of Ruegg & Co Limited.
(5) Chesterford Equities Limited, a company controlled by Steve Best, is
interested in 7,700,000 Ordinary Shares representing 10.72 per cent of
the issued share capital of the company.
The attention of potential investors is drawn to the fact that the purchase of
Ordinary Shares in the Company involves a variety of risks. Investors should be
aware of the risks associated with an investment in a business in the early
stages of development. All potential investors should carefully consider the
entire contents of this document including, but not limited to, the factors
described below before deciding whether or not to invest in the Company. The
information below does not purport to be an exhaustive list or summary of the
risks affecting the Company and are not set out in any particular order of
priority. There may be additional risks of which the Directors are not aware.
Investors should consider carefully these risks before making a decision to
invest in the Company.
IF ANY OF THE EVENTS DESCRIBED IN THE FOLLOWING RISKS ACTUALLY OCCUR, THE
COMPANY'S BUSINESS, FINANCIAL CONDITIONS, RESULTS OR FUTURE OPERATIONS COULD BE
ADVERSELY AFFECTED. IN SUCH A CASE, THE PRICE OF THE ORDINARY SHARES COULD
DECLINE AND INVESTORS MAY LOSE ALL OR PART OF THEIR INVESTMENT. ADDITIONAL
RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO THE DIRECTORS, OR WHICH THE
DIRECTORS CURRENTLY DEEM IMMATERIAL, MAY ALSO HAVE AN ADVERSE EFFECT UPON THE
The success of the Company depends largely upon the expertise of the current
Directors and their ability to find suitable investments or acquisitions for
the Company. The loss of one or other of the Directors or their inability to
find suitable investments or acquisitions for the Company would have an adverse
effect on the Company and its viability.
The Company's future success will also depend, inter alia, on its future
directors and management team. The recruitment of suitably skilled directors
and retention of their services or the services of any future management team
cannot be guaranteed.
The Ordinary Shares are not listed or traded on any stock exchange.
Notwithstanding the fact that an application will be made for the Ordinary
Shares to be traded on the PLUS Market this should not be taken as implying
that there will be a "liquid" market in the Ordinary Shares. An investment in
the Ordinary Shares may thus be difficult to realise. The value of the Ordinary
Shares may go down as well as up. Investors may therefore realise less than
their original investment, or sustain a total loss of their investment.
Continued membership of the PLUS Market is entirely at the discretion of PLUS.
The PLUS Market is not AIM or the Official List. Consequently, it may be more
difficult for an investor to sell his or her Ordinary Shares and he or she may
receive less than the amount paid. The market price of the Ordinary Shares may
not reflect the underlying value of the Company's net assets or operations.
The share prices of public companies are often subject to significant
fluctuations. In particular, the market for shares in smaller public companies
is less liquid than for larger public companies. Consequently, the Company's
share price may be subject to greater fluctuation and the Ordinary Shares may
be difficult to sell.
It is likely that the Company will need to raise further funds in the future,
either to complete a proposed acquisition or investment or to raise further
working or development capital for such an acquisition or investment. There is
no guarantee that the then prevailing market conditions will allow for such a
fundraising or that new investors will be prepared to subscribe for Ordinary
Shares at the same price as the Offer Price, or higher. Shareholders may be
materially diluted by any further issue of Ordinary Shares by the Company.
If the Company has not undertaken an acquisition or significant investment or
otherwise commenced trading within 12 months of Admission, there is no
guarantee that the Company can maintain a PLUS trading facility.
The Ordinary Shares are intended for capital growth and therefore may not be
suitable as a short-term investment. Investors may therefore not realise their
original investment at all, or within the time-frame they had originally
Any changes to the regulatory environment, in particular the PLUS Rules
regarding companies such as the Company, could for example, affect the ability
of the Company to maintain a trading facility on the PLUS Market.
RISKS RELATING TO THE COMPANY AND ITS BUSINESS
The Company will initially be dependent upon the ability of the Directors to
identify suitable investment or acquisition opportunities and implement the
Company's strategy. During this identification process resources may be
expended fruitlessly on investigative work and due diligence.
The Company's ability to raise further funds will depend on the success of
their investment strategy and acquired operations. The Company may not be
successful in procuring the requisite funds on terms which are acceptable to it
(or at all) and, if such funding is unavailable, the Company may be required to
reduce the scope of its investments or anticipated expansion.
The Company may invest in operations that may be subject to environmental and
safety regulation (including regular environmental impact assessments and
permitting). This will include a wide variety of matters, such as prevention of
waste, pollution and protection of the environment, labour regulations and
worker safety. The regulations may change in a manner that may require stricter
or additional standards than those currently in effect, a heightened degree of
responsibility for companies and their directors and employees and more
stringent enforcement of existing laws and regulations.
The Company may face competition from other entities for the same investments
or acquisitions, many of which may have significantly greater financial
resources than the Company.
Investors should note that neither of the Directors is in any way limited
(other than by their normal duties as company directors) by way of their
involvement with the Company, from acting in the management or conduct of the
affairs of any other company. Should any conflicts of interest be identified,
they will be declared and dealt with appropriately.
ECONOMIC, POLITICAL, JUDICIAL, ADMINISTRATIVE, TAXATION OR OTHER REGULATORY
The Company may be adversely affected by changes in economic, political,
judicial, administrative, taxation or other regulatory factors, as well as
other unforeseen matters.
INITIAL OPERATING RISKS
The Company does not have an established track record. The Company is not
currently producing cash flow and its ultimate success will depend on its
ability to generate cash flow from its investments in the future.
DUE DILIGENCE COSTS
The Company may incur costs in conducting due diligence into potential
opportunities that may not result in an acquisition being made.
INTEGRATION OF ACQUISITIONS
There is no guarantee that, following any acquisition, the Company will be able
to successfully integrate and manage such newly acquired business.
The management of targeted companies may not always welcome pro-active
involvement and may be resistant to change.
High Road Capital plc
Gavin Burnell Tel: 020 7584 3663
Ruegg & Co Limited
Brett Miller Tel: 020 7584 3663