RNS Number:9721R
Atia Group Limited
09 April 2008
Translation from the Hebrew Original
ATIA GROUP LTD.
(Hereinafter: "The Company")
Amended Immediate Report on a Substantial Private Placement, in accordance with
the Securities Regulations (Private Placement of Securities in a Listed
Company), 2000 ("The Regulations")
1. Preface
1.1 In January 2008, the Company entered into an agreement with the
international investment fund Trafalgar Capital Specialized Investment Fund
("Trafalgar") by way of a Committed Equity Facility Agreement ("Investment
Agreement"), whereby Trafalgar committed to invest in the Company's equity a sum
of up to NIS 45,685 thousand(1) over a period of 3 years, in consideration of an
allotment of ordinary shares of the Company. For further details about the
Investment Agreement - see the Company's Immediate Report of 4 February 2008
whose contents are included in this Report by reference.
1.2 Pursuant to the Investment Agreement, in consideration of its commitment to
invest in the Company, as aforesaid, Trafalgar is entitled to an allotment of
shares valued at up to USD 1,500 thousand, and such shares will be allotted to
it over a period, based on the price of the shares on the stock exchange on the
due dates specified in the Investment Agreement ("Consideration Shares"). Part
of the "Consideration Shares" will be allotted to the company ATW Holdings Ltd.
("ATW") that was an intermediary in the transaction between the Company and
Trafalgar.
1.3 To the best knowledge of the Company, Trafalgar is an investment fund
registered in Luxembourg, which raised money from various investors, and manages
today more than US$ 150 million. Trafalgar is managed by a management company,
which is ultimately controlled, through different companies, by Messrs Robert
Press and Andrew Garai who, to the best knowledge of the Company, reside in
London.
ATW acted as an introducing agent on the transaction between the Company and
Trafalgar. To the best knowledge of the Company, Mr. Isaac Levy, a California
resident, controls ATW.
To the best knowledge of the Company, Trafalgar and ATW have no connection to
the Company or to its controlling shareholders.
1.4 Out of the "Consideration Shares", 69,375,000 shares are offered pursuant
to this report, based on the price of the Company's shares on the stock exchange
at the time of signing the Investment Agreement ("The Offered Shares"). The
value of the Offered Shares constitutes between 45% and 55% of the total value
of the Consideration Shares Trafalgar is entitled to be issued. Of the Offered
Shares, up to 50,454,546 shares will be allotted to Trafalgar, and 18,920,454
shares will be allotted to ATW, subject to obtaining the required approvals, on
the dates specified below.
1.5 The balance of the "Consideration Shares" shall be allotted to the offerees
in the proportions prescribed in the Investment Agreement, in installments,
according to a timetable and subject to the terms specified in the Investment
Agreement, as detailed herein below. The Company will publish an Immediate
Report on every allotment of shares to Trafalgar and/or to ATW, that will be
allotted on account of the "Consideration Shares", as aforesaid.
As aforesaid, according to the Investment Agreement, Trafalgar and ATW will be
allotted the Consideration Shares as a fee valued at up to US$ 1,500,000 (the
"Fee"), according to the following timetable and prices:
1.5.1 15% of such fee (US$ 225,000) to ATW, at a price based on the volume
weighted average price of the Ordinary Shares on TASE ("VWAP") on the signature
date of the Investment Agreement - NIS 0.04 per share.
1.5.2 20% of such fee to Trafalgar (US$ 300 thousand), at a price based on
the VWAP of the Ordinary Shares on the signature date of the Investment
Agreement (NIS 0.04 per share), as soon as practicable. Such Shares are expected
to be sold to Emvelco pursuant to the agreement between Trafalgar and Emvelco
described in Section 1.7 below.
1.5.3 20% of such fee to Trafalgar (US$ 300 thousand), at a price based on
the VWAP of the Ordinary Shares on the signature date of this Agreement (NIS
0.04 per share), which shares shall be deliverable upon the Company receiving an
approval for the publication of a shelf prospectus. If such approval is not
obtained, Trafalgar will be allotted in the beginning of May 2008, half of the
quantity of shares due to it under this Section 1.5.3 (i.e., shares in a value
of US$ 150 thousand), which will be sold to Emvelco pursuant to the agreement
between Trafalgar and Emvelco described in Section 1.7 below. The balance of
such shares will be allotted immediately after the publication of a shelf
prospectus.
1.5.4 10% of such Fee shares (US$ 150 thousand) shall be issued to
Trafalgar six (6) months from either: (i) the signature date of this Agreement
or (ii) the publication date of a shelf prospectus, whichever is later, and will
be calculated based on the average VWAP of the Ordinary Shares on the week
preceding date of issue. If the approval for the shelf prospectus is not
obtained, Trafalgar will be allotted in the beginning of August 2008, half of
the quantity of such shares (that is shares in a value of US$ 75 thousand),
which will be sold to Emvelco pursuant to the agreement between Trafalgar and
Emvelco described in Section 1.7 below. The balance of such shares will be
allotted immediately after the publication of a shelf prospectus.
1.5.5 10% of such Fee (US$ 150 thousand) shall be issued to Trafalgar ten
(10) months from either: (i) the signature date of this Agreement or (ii) the
date of the publication of a shelf prospectus, whichever is later, and will be
calculated based on a price using the average VWAP of the Ordinary Shares on the
week preceding date of issue. If the shelf prospectus is not published,
Trafalgar will be allotted in the beginning of August 2008, half of the quantity
of such shares (that is shares in a value of US$ 75 thousand), which will be
sold to Emvelco pursuant to the agreement between Trafalgar and Emvelco
described in Section 1.7 below. The balance of such shares will be allotted
immediately after the publication of a shelf prospectus.
1.5.6 25% of such Fee (US$ 375 thousand), shall be issued to ATW ratably
over a ten month period on the last business day of each month following the
date of the closing of the Investment Agreement and will be calculated based on
a price calculated using the VWAP of the Ordinary Shares on the week preceding
date of issue within four (4) business days from the month end date. However, if
by May 2008 the approval of a shelf prospectus is not obtained, ATW will be
allotted over the said period, half of the quantity of such shares (that is
shares in a value of US$ 187.5 thousand), which will be sold to Emvelco pursuant
to the agreement between Trafalgar and Emvelco described in Section 1.7 below.
The balance of such shares will be allotted immediately after the publication of
a shelf prospectus.
1.6 According to the aforesaid, the Company intends to allot to Trafalgar and
ATW up to 69,375,000 ordinary shares, which terms are detailed herein below.
This quantity of shares represents the shares as aforesaid in clauses
1.5.1-1.5.3 above, and which can be calculated on the date of this report, as
their amount is calculated based on a known share price. The balance of the
"Consideration Shares" shall be determined in accordance with a future share
price and therefore cannot be calculated to the date of this report.
1.7 The Company committed to cause the publication of a shelf prospectus,
whereby Trafalgar will be allowed to sell shares that were allotted to it under
the Agreement, including the "Consideration Shares", in the course of trading on
the stock exchange. As of the date of this report, the Company intends to cause
the publication of a shelf prospectus, as aforesaid, based on its financial
statements as at 31.12.07. Trafalgar also entered into an agreement with Emvelco
Corp., one of the holders of control in the Company, whereby if the Company will
not be able to publish a shelf prospectus, as aforesaid, then Emvelco will sell
to Trafalgar shares out of the shares that are free for trading, that will be
held by Emvelco (when its shares will be released from the restrictions applying
to them under section 15-c of The Securities Law), in a quantity equal to the
quantity of shares issued to Trafalgar, and this against the shares that will be
issued to Trafalgar, as aforesaid, that will be transferred to the ownership of
Emvelco. It is clarified that the agreement entered into with Emvelco apply only
to the Offered Shares which will be allotted to Trafalgar, and will not apply to
the Offered Shared allotted to ATW according to this report.
On February 14, 2008, the Israeli Securities Authority ("ISA") notified the
Company that its position is that the Company is not entitled to publish a shelf
prospectus for the Company does not meet the conditions of regulation 1(1)(a) to
the Securities Regulation (conditions to an Offer in accordance with a shelf
prospectus), 2005. According to such regulation, a company may not offer
securities under a shelf prospectus in the event that within 36 months, which
preceded the submission of the request for approval to the publication of a
shelf prospectus, the ISA found that the Company's reporting obligations, all or
any of them have not been fulfilled. The Company believes that the scope and
type of deficiencies raised by the ISA do not justify the ruling barring the
Company from publishing a shelf prospectus, and the Company intends to attempt
to change it's the ISA's position, so that it will be permitted to publish a
shelf prospectus.
The Israel Securities Authority also notified the Company of its position, that
the transaction contemplated by the agreement between Emvelco and Trafalgar as
described in Section 1.7 hereinabove, according to which a controlling
shareholder exchanges shares of its own which are free from the limitations
according to clause 15c to the Securities Law, 1968 ("Free Shares") with an
Offerree which shares are restricted under said Clause 15c, is a transaction
that is against the spirit and the purposes of such clause, which in fact
circumvents the purposes of the law and as such, is a transaction against the
Securities Law.
To the best knowledge of the Company, Emvelco and Trafalgar believe that the
ISA's position is erroneous and that there is not interdiction in the law to
perform a transaction such as the one proposed between Emvelco and Trafalgar.
It is clarified that the Company is not a party to the agreement entered into by
Emvelco and Trafalgar, and therefore is not able to promote or prevent the sale
of the Offered Shares by Trafalgar to Emvelco. Moreover, the Company has a
contractual commitment under the Investment Agreement to allot the shares as
described in this report, whether or not Trafalgar will succeed in receiving in
exchanging such shares for Free Shares, because the Offered Shares are allotted
as part of the Consideration Shares, to which Trafalgar and ATW are entitled
pursuant to the Investment Agreement. Nevertheless, according to the Investment
Agreement, until a way is found for Trafalgar to receive Free Shares, Trafalgar
is not obliged to invest in the Company. In the event the position of the ISA
will be accepted and Emvelco and Trafalgar will accept to act in accordance
therewith, the Company may find itself in the situation that it allotted all the
Consideration Shares in accordance to its undertakings, and Trafalgar did not
receive in exchange thereof Free Shares and therefore did not invest any funds
in the Company.
The Company notified Emvelco's and Trafalgar's representatives of the ISA's
position as aforesaid. Beyond the economic exposure to the Company in a
situation where it allotted shares to Trafalgar and ATW and Trafalgar did not
invest in the Company, the management of the Company does not believe that the
Company itself has any substantial legal exposure as a result of the completion
of the transaction, even in the event that the ISA's position will be accepted.
The Company's management believes that even though the allotment of shares to
Trafalgar is the reason for the sale of shares to Emvelco, the Company is under
the contractual obligation to perform such allotment, the Company did not demand
from Emvelco to enter into such agreement with Trafalgar, it does not compel the
purchase of the shares offered to Trafalgar and therefore it does not bear any
responsibility for the consequences of such purchase.
2. The Offerees
2.1 The Offerees are Trafalgar and ATW.
2.2 To the best of the Company's knowledge, neither one of the Offerees holds
any shares of the Company, immediately before the allotment, is not an officer
thereof, nor an interested party thereof, as defined in section 270(5) of the
Companies Law, 1999.
3. The Terms of the Offered Securities
3.1 The Offerees are offered up to 69,375,000 Ordinary Shares of no par value
each, of the Company ("The Offered Shares"), that will constitute - after their
allotment - some 5.22% of the equity rights and of the voting rights in the
Company, immediately after the allotment, as well as after full dilution.
3.2 The Offered Shares will be offered in installments, as follows:
3.2.1 18,920,454 shares will be allotted to ATW immediately after obtaining the
approval of the Stock Exchange for listing the offered shares for trading.
3.2.2 25,227,273 shares will be allotted to Trafalgar, immediately after
obtaining the approval of the Stock Exchange for listing the offered shares for
trading. These shares will be sold to Emvelco at such time as will be agreed
upon between the parties, as of the beginning of May 2008, against the
acquisition an equal quantity of shares held by Emvelco.
3.2.3 the balance of the offered shares - a quantity of 25,227,272 shares will
be allotted to Trafalgar immediately after obtaining the approval of the
Securities Authority for the publication of a shelf prospectus. Yet, in the
event that the Israel Securities Authority does not approve the publication of a
shelf prospectus by the beginning of May 2008, Trafalgar shall be allotted at
the above mentioned time only 12,613,636 shares. This reduced quantity of shares
shall also be sold to Emvelco in consideration of an equal quantity held at that
time by Emvelco as aforesaid.
Upon obtaining the approval of the Securities Authority for a shelf prospectus,
an allotment shall be made of the balance of the 12,613,636 shares that was not
allotted as aforesaid in this sub-section.
3.3 The Offered Shares shall rank pari passu, in all respects with the existing
ordinary shares of the Company's share capital, and shall confer upon their
holders full participation in the distribution of any dividend or any other
distribution, the record date for determining entitlement to which falls on or
after the date of allotment.
3.4 The allotted shares will be listed for trading on The Tel Aviv Stock
Exchange Ltd. immediately after their allotment.
4. The Company's Share Capital
4.1 The Company's Authorized Share Capital is NIS 5,000,000,000 divided
into 5,000,000,000 ordinary shares of no par value.
4.2 The Company's issued and paid up share capital immediately prior to the
resolution on the Private Placement is NIS 1,259,166,770, divided into
1,259,166,770 ordinary shares of no par value.
4.3 After having allotted all the offered shares, the Company's issued and
paid up share capital shall be NIS 1,328,541,770 divided into 1,328,541,770
ordinary shares of no par value.
4.4 To the best of the Company's knowledge the distribution of the shares
therein, held by its interested parties, the offeree and the other holders of
the issued and paid up share capital, and in the voting rights in the Company
before and after1) the allocation are as follows.
SHAREHOLDERS PRIOR TO PRIVATE PLACEMENT AFTER PRIVATE PLACEMENT
No. Of % In % In No. Of % In % In
Shares Equity Voting Shares Equity Voting
Emvelco Corp. 734,060,505 58.3 58.3 734,060,505 55.25 55.25
AP Holdings Ltd. 173,873,997 13.81 13.81 173,873,997 13.09 13.09
Yaron Yeini 235,379,350 18.69 18.69 235,379,350 17.72 17.72
Trafalgar - - - 50,454,546 3.80 3.80
Public 115,852,918 9.2 9.2 134,773,372 10.14 10.14
TOTAL 1,259,166,770 100.00 100.00 1,328,541,770 100.00 100.00
4.5 To the best of the Company's knowledge, there exist no agreements,
ties, understandings, or consents, of any type whatsoever, in writing or orally,
directly or implicitly, between shareholders in the Company with respect to
their acquisitions and/or their holdings of the Company's shares, except for the
above mentioned agreement between Trafalgar and Emvelco, whereby if the Company
will not succeed to publish a shelf prospectus, as aforesaid, then Emvelco will
sell to Trafalgar shares out of the shares free for trading, that will be held
by Emvelco, at a quantity identical to the quantity of shares that will be
allotted to Trafalgar, and this against the shares that will be allotted to
Trafalgar as aforesaid that will be transferred to the ownership of Emvelco.
5. The Consideration for the Allotted Securities
5.1 The Consideration
Under the Investment Agreement, Trafalgar is entitled to the
allotment of "Consideration Shares" for its commitment to invest in the Company,
under the Investment Agreement. Trafalgar will not pay any consideration in
respect of the offered shares, since they are allotted to it for its commitments
in the Investment Agreement, as aforesaid. It is clarified that in the event
Trafalgar will invest in the Company pursuant to the Investment Agreement, as
described in the immediate report of the Company dated February 4, 2008,
Trafalgar will be entitled to an additional allotment of shares according to
such agreement.
5.2 The Way that the Consideration was Determined
The parties by way of negotiation determined the consideration.
5.3 Personal Interest in the Consideration of Shareholders or Officers of
the Company
To the best of the Company's knowledge, no one of the shareholders or the
officers of the Company has any personal interest in the consideration.
_______________________
1) The Company did not issue convertible securities; therefore there is no
difference between the parties' holdings in shares and their holdings after full
dilution.
6. The Price of the Share on the Stock Exchange
The price of the share on 25.3.08 (immediately prior to the Board of Directors'
resolution to effect the allotment) was 4 Agorot per share.
7. The Approvals Required for Effecting the Allotment
The implementation of the private placement to the offeree is contingent on
obtaining the approval of the TASE for the listing for trading of the allotted
shares.
8. Agreements between the Offeree and Shareholders in the Company and/or
Others with
Respect to the Acquisition or Sale of the Company's Securities or Voting Rights
therein.
To the best of the Company's knowledge, there are no agreements, either orally
or in writing, between the offeree and holders of shares in the Company and/or
others, with respect to the acquisition or sale of the Company's securities or
voting rights therein, except for the agreement with Emvelco, whereby if the
Company will not succeed to publish a shelf prospectus, as aforesaid, then
Emvelco will sell to Trafalgar shares out of the shares free for trading, that
will be held by Emvelco at a quantity identical to the quantity of shares that
will be allotted to Trafalgar, and this against the shares that will be allotted
to Trafalgar, as aforesaid, that will be transferred to the ownership of
Emvelco.
9. Restrictions on Sales of the Offered Securities
Under section 15-c of the Securities Law, 5728-1968 and the Securities
Regulations (Details in the Matter of Sections 15-a until 15-c of the Law),
5760-2000, the following restrictions shall apply to the offered shares with
respect to the re-sale of the allotted shares:
9.1 The offered shares may not be offered in the course of trading on the
Exchange during a period of six months from the date of their allotment,
otherwise than under a prospectus whose publication was approved by the
Securities Authority.
9.2 During a period of six consecutive quarters, from the end of the
periods mentioned in sub-section 9.1 above, the offered shares may not be
offered in the course of trading on the Exchange, otherwise than under a
prospectus whose publication was approved by the Securities Authority, except as
detailed below:
(1) On every day of trading on the Exchange, a quantity will be offered for
sale that does not exceed the daily average of the trading turnover on the
Exchange of the Company's ordinary shares, during a period of eight weeks that
preceded the day of offering;
(2) In every quarter, in the course of trading on the Exchange, a quantity of
ordinary shares may be offered, which is equal to 1% of the Company's issued and
paid up capital on the day of offering, or a smaller quantity than that.
For the purpose of this sub-section "quarter" shall mean a period of three
months, and the beginning of the first quarter shall be at the end of the period
specified in sub-section 9.1 above.
10. Details about the Company's Representatives, who attend to this Report
The Company's Representatives who attend to this Immediate Report are:
Attorneys Gal Chet and Nathalie Raccah of the Chet, Sarid, Gruber,
Sapir-Hen Law Firm, of Azrilei Center, Tel-Aviv, 67135 Tel.: 03-4448806 - Fax:
03-5548806.
ATIA GROUP LTD.
--------------------------
(1) In the former immediate reports it was mistakenly written that the
commitment sum Trafalgar committed to invest was up to NIS 46,685 thousand.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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