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DJ Milamber Ventures Plc Update on Essential Learning

 
TIDMMLVP 
 
27 February 2019 
 
                             Milamber Ventures Plc 
 
                                 ("Milamber") 
 
                 Update on Essential Learning Company Limited 
 
Milamber Ventures plc (NEX: MLVP) announces that after significant consultation 
over several months with the Education Skills Funding Agency ("ESFA"), 
Essential Learning Company Limited ("Essential") has been put into liquidation 
and Mark Supperstone and Ben Woodthorpe of ReSolve Advisory Limited have been 
appointed as liquidators. 
 
The main reasons behind this decision relate to various historic issues 
identified during due diligence, including historic data relating for the 
periods prior to Essential's acquisition by Milamber, which cannot be resolved 
to the ESFA and Milamber's satisfaction. Therefore, various contracts held 
between the Essential and the ESFA have been terminated. 
 
Since taking an equity stake in April 2017, Milamber has invested a total of GBP 
227,672 in cash and expenses into Essential, whilst GBP100,000 in Milamber new 
ordinary shares was paid to Goldvista Properties Limited ("Goldvista" - a 
minority shareholder in Essential at point of acquisition), and GBP269,864 was 
provided in services to Essential by the Milamber team over the past 21 months. 
 
It should be noted that during the same period, Goldvista invested into 
Milamber a total of GBP310,000 in cash as a loan and is currently under 
discussion to convert into equity as to be agreed price per share, as well as GBP 
6,000 into Essential during 2018 as loan, which is being written off due to the 
liquidation of Essential. 
 
Furthermore, no "Deferred Payment or Consideration" (other than GBP100,000 of new 
shares to Goldvista) was paid to the majority shareholder and vendor of 
Essential, Gravity Investment Group Limited, under the terms of the Share 
Purchase Agreement. 
 
In addition, the original shares (406,250 Milamber shares) paid by Milamber in 
consideration of acquiring the 15% equity stake in Essential in April and May 
2017 from Gravity Investment Group Limited have been cancelled due to multiple 
breaches of the Share Purchase Agreement. 
 
It is expected that Milamber's consolidated balance sheet at the Group level 
will show positive net assets at the next accounting date (30 September 2018, 
consolidated net liabilities being GBP528,077), and prior year losses associated 
with Essential will be shown as discontinued. 
 
Andy Hasoon, Executive Chairman of Milamber, commented, "When we originally 
entered into the acquisition and the subsequent restructuring process of 
Essential, we were careful to mitigate ourselves from any potential risk, 
knowing the high failure rate of businesses, such as this one, and the various 
issues we identified that would need to be addressed. As Milamber's "Buy and 
Build" strategy involves making multiple acquisitions of regulated training 
companies we need to understand what can and cannot be fixed. 
 
After significant consultation and a lengthy audit to verify what we had 
declared to the ESFA it was agreed that we could not go back and "fix history". 
Thus, the ESFA had no choice but to terminate Essential's contracts and as 
such, we have decided to place the company into liquidation, which has the 
agreement of the original stakeholders. 
 
As part of our risk mitigation process we were able to ensure that none of the 
"Deferred Payment or Consideration" to acquire the company would be paid to the 
vendors unless these issues, picked up during the due diligence process, were 
rectified, which has not been the case. 
 
Finally, Milamber, through the services it invested, has built significant 
knowledge as how to improve the systems, processes and effectiveness of 
Apprenticeship Levy companies and we will be applying this knowledge to our 
other Portfolio Companies, in particular the recently acquired Astara Training 
Limited, which means that in the longer-term we should be able to create value 
for our shareholders". 
 
                                    -ends- 
 
ENQUIRIES: 
 
Milamber Ventures Plc 
Andy Hasoon 
T: 07768 875 681 
E: andy.hasoon@milamber.co.uk 
www.milamber.co.uk 
 
Leander (Financial PR) 
Christian Taylor-Wilkinson 
T: 07795 168 157 
E: ctw@leanderPR.com 
 
 
 
END 
 

(END) Dow Jones Newswires

February 27, 2019 06:24 ET (11:24 GMT)