SEC Newgate S.p.A. - Euro 2.5m Convertible Bond and Notice of EGM
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.
SEC Newgate S.p.A.
("SEC Newgate", the "Group" or the "Company")
Notice of Extraordinary Shareholders' Meeting
SEC Newgate (AIM: SECG), the international communications, advocacy and research group, is pleased to announce that it has signed a
The Bonds have a maturity of 7 years from issuance, with interest payable quarterly at 3.50%. The Bonds, which are to be issued as up to 25 bonds with a nominal value of
The transaction is subject to the approval of the Company's Extraordinary Shareholders' Meeting ("ESM") that will resolve upon the issuance of bonds 3.5% 2020-2027 convertible into SEC Newgate ordinary shares for a maximum total amount of
Subject to shareholder approval and filing of the ESM resolution with the
"This convertible loan is a further important element in our Strategic Plan. We have already secured a replacement
"We are investing in our teams, technology and office footprint to ensure we are able to seize the opportunities that change brings. For example, by investing in innovative Artificial Intelligence (AI) solutions, which are currently being soft-launched in
As announced on
"We are delighted to finance truly innovative companies such as SEC Newgate, which apply AI solutions to deliver leading and pioneering solutions to its global client base on the PR industry, a growing market due the greater importance of corporate communications nowadays. We back companies that want to be leaders in their industries and SEC Newgate is clearly executing well on that path. The implicit conversion price represents a 30% premium to the 90-day VWAP and is a reflection of the value creation potential we see in the company's business plans."
An extract from the Circular detailing out the background to, and principal terms of, the Bond is set out below.
REPORT OF THE BOARD OF DIRECTORS PREPARED IN ACCORDANCE WITH ART. 2441, PARAGRAPHS 5 AND 6 OF THE ITALIAN CIVIL CODE
in connection with
THE ISSUE OF A BOND CONVERTIBLE INTO SHARES OF SEC NEWSGATE S.P.A. FOR A MAXIMUM AMOUNT OF
This explanatory report, prepared pursuant to and for the purposes of Article 2441, paragraphs 5 and 6, of the Italian Civil Code ("Report"), approved during the meeting of the Board of Directors of SEC Newgate S.p.A., with registered office in Via Ferrante Aporti 8,
1 - REASONS FOR ISSUING THE BOND AND ALLOCATION OF FUNDS
The issue of the Bond will provide external funding resources to finance the Company's global growth plans, support working capital requirements and implement the Group's Strategic Plan.
The issue of the Bond allows the Company to benefit from the raising of non-bank capital and long-term financial resources at favorable conditions, also ensuring a wider diversification of financial resources.
2 - DETAILS OF THE CAPITAL INCREASE TO SERVICE THE BOND
The proposed resolution to be passed at the extraordinary Shareholders' meeting provides for a share capital increase of up to
The aforementioned Capital Increase shall be divisible pursuant to Article 2439, paragraph 2, of the Italian Civil Code.
The provisions of the Terms and Conditions (as defined below) apply to the issuance of the aforementioned convertible bonds.
3 - KEY FEATURES OF THE BOND
The Bond will have the characteristics specified in the terms and conditions ("Terms and Conditions"), attached to this Report and to which reference should be made.
3.1 - Nature, amount, bonds and issue price
The Bond is named "Bonds 3.5% 2020-2027 convertible into SEC Newgate S.p.A. shares" and provides for a maximum value of
The Bonds are convertible at the request of the subscribers, in the ratio of a maximum of 152,855 conversion shares with regular dividend entitlement and the same characteristics as the shares of the Company outstanding for each Bond.
The Bonds are issued at the same price net of an issue discount equal to 0.50% of the nominal value of the Bond and will be represented by certificates issued in the name and on behalf of each bondholder; they will be transferable in accordance with Articles from 2021 to 2023 of the Italian Civil Code, by means of registration on the bond certificate and in the relevant register, without the need to obtain any prior consent from the Company and on condition that the transferee qualifies as a "Qualified Investor" (within the meaning of Regulation (EU) 2017/1129 of the
3.2 - Placement, term and effective time
The term of the Bond is 7 (seven) years except in the event that the effective time (i.e. godimento) of the securities ceases before the Expiry Date, due to early redemption in the event of a so-called change of control or in the event of conversion, as well as in the event of further events provided for in the Terms and Conditions, to which reference should be made.
The Bonds will become effective from the Issue Date.
Pursuant to Article 1353 of the Italian Civil Code, ancillary documentations such as the purchase agreement, terms and conditions of the Bond, shall be conditional upon resolution of the Extraordinary Shareholders Meeting that will resolve on the approval of the main terms and conditions of the financing transaction by means of the issuance of the Bonds, including the exclusion of the option rights and pre-emption rights upon issuance and allotment of new SEC Newgate shares upon exercise of the conversion right by each Bondholder and the resolution will be duly recorded by an Italian notary as a public act and it will be registered, with the Companies Registry of
3.3 - Interest
The Bonds bear interest at a nominal annual rate of 3.50% ("Interest Rate in Cash") gross of any withholding tax or charges. The Company will pay the Interest Rate in Cash to each bondholder for each bond issued each three months in advance on the last working day of each three-month period (i.e. in March, June, September and December), unless otherwise provided for in the Terms and Conditions, to which reference should be made.
3.4 - Conversion Right
Each bondholder may, during the conversion period commencing on the 4th (fourth) year after the Issue Date and up to the 14th (fourteenth) day prior to the Expiry Date, exercise his right of conversion by requesting the Company to convert all or part of the Bonds held into conversion shares.
The Bonds will be convertible into the ratio of 152,855 shares for each bond submitted for conversion ("Conversion Ratio").
The Terms and Conditions also provide, in the event that the bondholders will not exercise, in whole or in part, their conversion rights, a premium for non-conversion ("Premium for non-conversion") equal to 19.0598% of the nominal value of the bonds during the 7-year term of the Bond, gross of any withholding or charge, payable in cash together with the Interest Rate in Cash, on the Expiry Date and subject to gross-up clause.
The Terms and Conditions, to which reference should be made, provide for certain events that entails the adjustment of the Conversion Ratio. It is also provided that no adjustment to the aforesaid ratio will be made if the relevant change (calculated as set out in the Terms and Conditions) leads to a change of less than 1% in the Conversion Ratio.
The Terms and Conditions, to which reference should be made, also provides for certain events leading to the early termination of the Bond with consequent obligation of early repayment by the Company, as well as specific obligations not to do (so-called Negative pledge) and information obligations (so-called Information Undertakings), to which reference should be made.
3.5 - Conversion Period
Each Bond may be converted into
(i) at any time, starting on the 3rd (third) anniversary of the Issue Date and up to the 14th (fourteenth) business day before the Expiry Date (both included) or
(ii) during the period of 30 working days following the date on which a change of control of the Issuer occurs
(iii) in case of a public tender offer on the Issuer's ordinary shares.
3.6 - Redemption of bonds at maturity
On the Maturity Date, the non-converted bonds will be redeemed at their nominal value, together with the interest accrued and not paid for each bond, without any charges and/or fees, together with the above-mentioned premium for non-conversion (equal to 19.0598% of the nominal value of the Bond).
The Terms and Conditions also provide that in the event of a so-called change of control following a public tender offer, each bondholder will have the right to request the Company to redeem all of its Bonds at the price that the bondholder would have received if he had converted his Bonds into ordinary shares at the Conversion Ratio applicable on the settlement date of the public tender offer, having accepted the tender offer at the offer price.
The terms and conditions for the exercise of this right are better specified in the Terms and Conditions, to which reference shall be made.
3.7 - Other Provisions
The financing granted in consideration of the issue of the Bond to the Company will be supported by the InnovFin SME Guarantee with the financial support of the
Furthermore, the issuer of the Bond will be guaranteed through a first request guarantee both by the Company and jointly and severally by each subsidiary qualifying as guarantor under the Terms and Conditions. The obligations of each guarantor will constitute direct, unconditional, unsecured and unsubordinated obligations and will rank at least equal to all present and future unsecured and unsubordinated obligations of such guarantor (with the exception of the obligation mandatorily privileged by law), so-called pari passu.
4 - CRITERIA USED TO DETERMINE THE CONVERSION RATIO INTO NEWLY ISSUED SHARES
It is underlined that Terms and Conditions provides for a Conversion Ratio equal to 152,855 ordinary shares of the Company for each Bond for which the conversion is demanded, equal therefore to a price per share of
Article 2441, paragraph 6, of the Italian Civil Code states, in fact, that the issue price of shares shall be determined on the basis of the net equity value. According to established scholarship, this provision shall be interpreted as meaning that the issue price of the shares shall not be calculated on the basis of the book value of the net equity value, since its determination shall be made by looking rather at the "economic" value of the Company, also in light of the overall context in which the Transaction takes place.
To this end, the market value of
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Nctm, with a team led by
For further information please contact:
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Telephone: +39 335 6008858
CEO Newgate Communications
Telephone: +44 (0) 20 3757 6860
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Telephone: +44 (0) 20 7680 6500
Arden Partners (Nominated Adviser and Broker)
Telephone: +44 207 614 5900
Notes to Editors about SEC Newgate
· Further information is available at www.secnewgate.com
· The Group's principal brands are: ACH SEC Global (
Note to Editors about Inveready
· Further information is available at www.inveready.com
· Inveready Convertible Finance is a closed-end fund operating in
This information is provided by RNS, the news service of the
Quick facts: SEC Newgate S.p.A
Market Cap: £8.61 m
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