RNS Number:6315T
Deuxmil Marine plc
02 May 2008
Under strict embargo to 0730hrs Friday 2nd May 2008
DEUXMIL MARINE PLC
Acquisition of YCO S.A.M.
Proposed Share Consolidation
Proposed change of name to YCO Deuxmil plc
Placing of 16,734,694 New Ordinary Shares at 49p per share
Admission of the Enlarged Share Capital to trading on AIM
and
Notice of General Meeting
Following the announcement on 3 April 2008, the Company announces that it has
conditionally agreed, subject, inter alia, to Shareholder approval at the
General Meeting, to acquire the entire issued share capital of YCO. The
consideration for the Acquisition is to be satisfied by a cash payment of
Eur9,000,000 and the issue of the Consideration Shares.
The Company also announced that it proposes to raise #8,200,000, before
expenses, by means of a placing of 16,734,694 New Ordinary Shares at 49p per
share. The proceeds of the Placing, will be used to fund the cash element of the
consideration payable on Completion and pay costs of the Proposals.
The Company is also proposing the Share Consolidation.
By reason of the size and relative values of YCO in relation to the Company, the
Acquisition will constitute a reverse take-over under the AIM Rules and will,
therefore, require the approval of Shareholders at the General Meeting. To
complete the Acquisition and implement the Placing it will also be necessary to
give the Directors the required powers and authorities to issue and allot the
Placing Shares and Consideration Shares. In addition, if the Acquisition is
approved, the admission of the Existing Ordinary Shares to trading on AIM will
be cancelled and the Company will be obliged to apply for the New Ordinary
Shares to be admitted to trading on AIM.
Background to the Proposals
The strategy of the Directors of the Company following its admission to trading
on AIM on 14 September 2006 has been for it to become a leading supplier of
services to the Super Yacht market.
The Directors believe that the acquisition of YCO will be a major step in
enabling the Company to achieve its strategy as the Enlarged Group will be able
to offer the owners and operators of Super Yachts a full range of services. This
will include managing and supervising the construction of a new Super Yacht
together with the provision of services and brokering of sales.
As part of the Proposals it is also proposed to change the name of the Company
to YCO Deuxmil plc.
Information on the Group
Background
Neil Miller and Laurence Milton set up Deuxmil in 2004 (each owning 50 per cent.
of the issued share capital) as a vehicle to make an acquisition of a business
meeting certain criteria, namely, that the business be long established,
profitable, cash generative and capable of being grown over the medium term. YFS
was deemed to meet these criteria.
YFS was founded by Michael John (who was the sole shareholder) in 1988 as a
supplier of fuel to Super Yachts. In 2003, Michael John decided to retire and
sell the business. Negotiations commenced with Neil Miller and Laurence Milton
in early 2004 and the sale of YFS to Deuxmil was completed in February 2005 for
a total consideration of #2 million in cash.
Following the acquisition of YFS the Company investigated other opportunities
within the Super Yacht sector.
On 26 April 2007, the Company acquired YHG Gibraltar pursuant to the YHG
Gibraltar Acquisition Agreement for a consideration of #100,000 in cash. On the
same date, the Company also acquired YHG Mallorca pursuant to the YHG Mallorca
Acquisition Agreement for a total consideration of #400,000, satisfied by
#100,000 in cash and the issue of 4,137,931 Ordinary Shares. YHG Mallorca was
incorporated in 2003 and YHG Gibraltar was incorporated in 2004. Both companies
provide support services to Super Yachts.
The Company then acquired BAY on 25 May 2007 pursuant to the BAY Acquisition
Agreement for an initial consideration of #300,000 in cash. In addition,
deferred consideration of up to #150,000 to be satisfied by the issue of shares
will become payable depending on the financial performance of BAY. BAY was also
incorporated in 2003.
The Directors believe that the Group's reputation has grown due to the high
standards of service it offers to clients, and a large amount of new business is
being generated by word of mouth. The Group is currently in the process of
redesigning its corporate identity by designing and upgrading its websites with
appropriate links and cross-reference to the Group's range of services. The
Group is also initiating and running advertisements in major industry
publications, with the emphasis on the comprehensive offering that the Group has
available to Super Yachts worldwide.
YFS
The Directors believe that Deuxmil, through its wholly owned subsidiary YFS, is
the world's largest supplier of fuel for Super Yachts and provides a high level
of service and competitive pricing to a demanding client base. In 2007, it
supplied fuel to 303 Super Yachts out of the world fleet totalling approximately
750 Super Yachts. These supplies occurred in 152 ports in 60 countries, as well
as deliveries to other more remote ports around the world. As a result of its
worldwide coverage, YFS has enjoyed an average annual growth (in tonnage) of 10
per cent. per annum over the past five years.
Super Yachts require high specification marine gas or auto gas oil and typically
do not refuel at standard marinas or dockyard bunkering facilities. YFS delivers
only high specification low sulphur marine/auto gas oil, lube oil and some
aviation fuel for helicopters. All fuel oil is flash-point tested and is quality
guaranteed by the physical fuel supplier.
Fuel is ordered by the captain/owner/manager of a Super Yacht who will contact
YFS and provide details of the amount of fuel required, the port to which it
should be delivered and the estimated date and time of arrival of the yacht into
the port. YFS then sources the best available price of the fuel, contacts the
client with written confirmation and, if accepted, arranges for the fuel oil to
be delivered to the designated refuelling point. The fuel oil is off-loaded
directly from the road tanker, pipeline or barge to the Super Yacht. The entire
process is typically supervised on site by YFS personnel or YFS appointed
agents. Invoices are sent by fax and payment is normally due within 21 days of
the date of invoice.
The Directors believe that the benefits to owners and captains of Super Yachts
using the YFS service are:
* pre-arranged high quality fuel and lubricants - these are supplied directly to
the yacht at any of
* the approximately 2,000 ports around the world, offering the captain
flexibility in their choice of refuelling station;
* duty-free prices where applicable - this gives the client an immediate saving
on operating costs;
* credit terms - avoiding the need to carry large sums of cash on board; and
* consultancy - advice and information on bunkering matters, giving a second
opinion when planning long voyages.
The most popular cruising location for Super Yachts is the Mediterranean Sea
(and principally that part off the coast of the South of France) between the
months of March and September. Approximately 60 per cent. of annual tonnage of
fuel provided by the Group to Super Yachts is provided in that area at that time
of the year. The next most popular cruising locations (and the second most
active area for the Group in respect of the supply of fuel) are the West Indies
and the Florida coast of the USA, usually between the months of October and
February.
Planning the season's cruising is a complex task involving many different
elements. YFS caters for the primary requirement of owners, captains and
managers by providing a reliable source of competitively priced, high quality
marine fuel and lubricants wherever they are in the world. In addition, it also
offers a global bunkering and route-planning consultancy service to all clients.
The consultancy service provides a professional opinion when voyages of any
length around the world are planned, ensuring that captains can take advantage
of duty free prices when applicable, and also delivers savings on operating
costs. As well as providing access to top quality fuel YFS provides a 'port
of call' if any problems are experienced during a voyage, enabling the
captain to concentrate on other matters.
YFS sources its fuel from the large oil companies and arranges for its transport
by road tanker, pipeline or barge to the designated refuelling point. YFS has
had longstanding relationships with its principal suppliers, who account for 70
per cent. of the fuel that YFS supplies. The principal suppliers are:
* BP - YFS has had an account with BP for the past 10 years and uses BP products
for its supplies in the South of France.
* Shell - YFS has had an account with Shell for the past 18 years and uses Shell
products around the world, particularly in Gibraltar.
* ExxonMobile - YFS has had an account with Exxon for the past 15 years and uses
Exxon products in the Far East, Pacific Rim, Australia and New Zealand.
* Cepsa - YFS has had an account with Cepsa for the past 10 years and uses
Cepsa products for their supplies in Spain and the Balearic Islands.
YHG
YHG Mallorca operates from offices in Palma and Barcelona and its primary
activity is that of the provision to Super Yachts which are berthed at Spanish
ports of the following services:
* food and drink, including wine, provisions, etc;
* concierge services;
* spare parts; and
* crew recruitment.
YHG is also able to provide berthing facilities.
The Barcelona office of the YHG Mallorca is located in the main Barcelona
shipyard, MB92. The Directors believe that the location of YHG Mallorca office
within this shipyard reflects the reputation that YHG Mallorca has established.
In addition to the services above, YHG Gibraltar owns a port agents licence for
the port of Gibraltar, one of only a few that have been issued, making it a
valuable asset for YHG Gibraltar and the Group as these licences are rarely
issued by the authorities in Gibraltar.
BAY
BAY (also based in Spain) performs the role of a port agent for Super Yachts and
as such offers the following services:
* customs clearances;
* port authority inspection;
* VAT reclaims; and
* advice and assistance on legal and tax issues.
Super Yachts
The number of Super Yachts worldwide currently comprises approximately 750
vessels, the majority of which are owned by some of the world's wealthiest
individuals. The number of Super Yachts is increasing and leading boat yards
report having full order books for the next five years. The Directors believe
that demand is being driven by wealthy individuals in the Middle East and more
recently by new wealthy entrepreneurs from Russia and China.
Market & Competition
The Directors believe that although there are a number of competitors to the
Group, there are none which supply fuel oil to such a large number of Super
Yachts. Of the other fuel suppliers, the Directors believe that Tramp Oil is the
second largest in terms of Super Yacht customers. Of providers of services to
Super Yachts, the largest is Rodriguez Group but it does not supply fuel or
provisions.
The Directors believe that, following the acquisition of YCO, the Enlarged Group
will not only be the largest supplier of fuel oil but will also provide the most
comprehensive range of services to Super Yachts.
Financial information
The unaudited management accounts of Deuxmil for the 12 months ended 31 December
2007 are as follows:
#
Turnover 17,146,456
Cost of sales 15,600,534
Gross Profit 1,546,012
Overheads 1,145,663
Profit before tax 400,449
Information on YCO Group
Background
YCO was founded in 2003 by Gary Wright, John Clark and Charles Birkett as a
Super Yacht management and consultancy firm. It opened its headquarters in
Monaco in 2004. In 2007, YCO opened its second office in Antibes, France. The
company is looking to open additional offices in London and Qatar in 2008, and
New York in 2011, and currently employs around 35 people distributed worldwide.
Since incorporation, the range of services offered by YCO has evolved beyond
management and consultancy, and the company is now focused on the provision of
the following services relating to Super Yachts:
(a) yacht management;
(b) sales & purchases;
(c) charter;
(d) construction & project management;
(e) crew recruitment; and
(f) concierge & travel.
(a) Yacht management
Operations
The management of a Super Yacht is in many ways comparable to that of a large
business. YCO's yacht management operations aim to remove the burden placed on
owners resulting from the ownership of a Super Yacht. It is also generally
considered that efficient management of a Super Yacht is one method of helping
to maintain its value. YCO offers a comprehensive management service, which
includes:
* safety and security (ISM/ ISPS) management;
* technical support;
* financial control and administration;
* crew administration;
* logistical support;
* monthly reporting; and
* online management - YCO LIVE*.
* The Directors and Proposed Directors believe that YCO LIVE is the world's
first fully interactive online web portal designed and developed specifically
for yacht management. The concept of YCO LIVE is to enable the shared use of an
online data storage system for information such as ships certificates, yacht
calendars, charter information, operational files and technical data. YCO LIVE
is also fully integrated with the YCO crew database.
Revenue Stream
The management services that are offered by YCO are priced individually,
depending on the size of the vessel involved, and the labour intensive aspect of
the service in question. YCO receives fixed monthly fees according to the
services provided. YCO offers discounted rates to clients who have more than one
Super Yacht under management.
(b) Sales & purchases
Operations
YCO represents existing and new clients in the sale and purchase of new and
previously owned Super Yachts worldwide. The company assumes responsibility for
the negotiation process right through to final sale or purchase.
For Super Yacht owners wishing to dispose of their assets, YCO offers access to
an extensive database of potential buyers and an understanding of current market
trends. YCO undertakes the marketing of the vessel and endeavours to secure a
fast, profitable sale, assisting with:
* yacht valuation;
* mini yacht survey;
* current market analysis;
* marketing plan and promotion;
* negotiations;
* contracts and administration;
* monthly prospect reports; and
* closing, handover and delivery.
For clients wishing to purchase a Super Yacht, YCO aims to find the appropriate
vessel, either new or previously owned, and provides access to maritime legal
and tax advice, as well as knowledge of flag state and regulatory bodies, to
ensure a smooth, tax efficient transaction and an ownership structure which can
support the vessel in the future. YCO also offers advice on financial solutions
for purchases. Purchasing assistance includes:
* database of new and previously owned yachts;
* client representation & negotiation;
* contracts and administration;
* tax planning and legal advice; and
* yacht financing.
YCO is a member of the Mediterranean Yacht Brokers' Association (MYBA) and the
Florida Yacht Brokers' Association (FYBA).
Revenue Stream
Revenue is generated on a commission basis. YCO can broker the sale or purchase
of a Super Yacht as a central sales agent, where there is a signed agreement in
place that the broker will market the Super Yacht to potential clients. The
broker does not charge for this service, but the owner is prohibited with
signing similar agreements with other agencies. Alternatively, YCO can act as an
introductory agent, where the company may market a Super Yacht which has a
central sales agreement in place with another agency. In the event that YCO is
the sole agent involved in the transaction, YCO receives the commission in its
entirety. It is customary that if a secondary broker is involved with a sale or
purchase the introductory broker receives the majority of the commission. The
specifics of this divide are negotiated in advance between the two respective
brokerage houses.
Industry guidelines for sales commissions are as follows:
On a vessel valued up to Eur10 million, the recommended commission is 10 per
cent. For vessels of value between Eur10-20 million, commission should be 10
per cent. on the first 10 million plus 5 per cent. on the balance. For vessels
valued at over Eur20 million, commission should be charged at 10 per cent. on
the first Eur10 million, 5 per cent. on the second Eur10 million and then at
2.5 per cent. thereafter.
(c) Charter
Operations
YCO acts on behalf of owners, selling time on their Super Yachts to third
parties, or on behalf of charter clients, buying time on Super Yachts belonging
to third parties. Chartering represents an excellent opportunity to generate
significant financial returns for owners of Super Yachts, and the YCO charter
management team aims to maximise this return on investment, while minimising the
more time consuming, organisational responsibilities for owners. YCO offers a
service which is tailored to suit the needs of each owner, taking into account
the desired balance of personal use and charter. In addition to coordinating the
timetable and administration for each charter, YCO also uses industry
connections and marketing campaigns to promote a Super Yacht. As the exclusive
central agent for a yacht, YCO will undertake to coordinate:
* marketing and promotion of the yacht;
* managing the yacht's annual calendar;
* all contracts and agreements;
* financial administration;
* reference checks on all prospective charter clients; and
* monthly reports of every enquiry and booked charter.
Each charter client who approaches YCO is appointed a personal charter
representative to coordinate every detail of the charter, selecting the ideal
yacht and destination, arranging travel and transfers and coordinating crew,
menus, reservations and activities on the charter itself. Chartering a yacht
through YCO gives access to:
* a personal charter representative;
* several global databases of luxury yachts;
* detailed itinerary planning;
* first hand knowledge of the world's most exclusive charter destinations;
* crew profiles and reference checks; and
* a concierge service.
To the benefit of both parties, YCO is a member of MYBA Net, which gives access
to every vessel within the MYBA network, providing details of availability,
specifications and other details pertaining to Super Yacht charter.
Revenue Stream
All revenue is commission based. YCO can act as a central charter agent, in
which case YCO is responsible for the marketing of a particular Super Yacht,
whose owner has a contracted agreement with YCO. YCO does not receive a monthly
retainer for this service. YCO can also act as a booking broker, in which case
the Super Yacht has no agreement in place with the company, but YCO has sold a
charter on board the Super Yacht. YCO follows strict guidelines on the
allocation of commission, which are laid out by MYBA. As a central agent,
whenever a charter is sold on the Super Yacht by a third party, YCO will receive
5 per cent. of the total value of the charter as a commission. If YCO sells the
charter, the commission is 15 per cent.. If YCO sells a charter in the capacity
of a booking broker (i.e. for a Super Yacht which is not centrally listed by
YCO), the company receives a 15 per cent. commission.
(d) Construction & project management
Operations
Clients who wish to undertake the design and build of a new Super Yacht will
often employ a project manager to oversee the project and ensure that it runs
smoothly, to budget and on time.
The YCO project management team advises on all aspects of building a Super
Yacht, from the initial concept and design, through to final delivery. YCO is
able to benefit from long standing relationships with several of the industry's
most established designers and naval architects, and has managed high profile
projects with most of the world's major shipyards. The company offers a thorough
knowledge of budgeting and scheduling and provides regular and accurate
reporting throughout the project. YCO will coordinate and oversee:
* concept and design development;
* specification analysis;
* shipyard tender and selection;
* contract negotiation;
* onsite project coordination;
* budget and timeline management;
* appointment of certified surveyors;
* classification and flag state compliance;
* outfitting; and
* warranties.
Revenue Stream
In the event that YCO is the introductory broker for a new construction project,
the company will be paid a commission by the shipyard, typically between 3 and 5
per cent. of the total contract price. The company can also earn revenue in the
form of a monthly management fee paid by the client, which is negotiated to
apply for the duration of the project. In certain cases where the company was
the introductory broker, YCO will undertake to manage the project for its
duration without charging a monthly fee, and will take only the commission paid
by the shipyard.
(e) Crew recruitment
Operations
YCO Crew has a database with 2,200 members of yacht crew worldwide, and
facilitates all levels of personnel recruitment for Super Yachts, from basic
yacht-trained personnel to fully qualified industry professionals. All
candidates are comprehensively reference checked and YCO can provide employment
contracts, non-disclosure agreements, crew salary guidelines and safe manning
requirements for vessels of all sizes. YCO Crew also aids crew on their
database.
In addition YCO Crew can:
* monitor the certification of all crew;
* co-ordinate the training for necessary operational certificates and licences;
and
* arrange travel bookings and documentation, including visa requirements for
all joining or repatriating crew.
Revenue Stream
Revenue is earned on a commission based structure, with YCO Crew charging Super
Yacht owners one month's salary per crew member placed. Salaries for junior
members of crew are typically around EUR 2,000 per month. For senior positions,
such as Captains and Chief Engineers, the monthly salary is usually in the
region of EUR 8,000 to EUR 10,000 per month. In the event that YCO is the yacht
manager for the vessel, there is a discretionary discount offered to the client.
(f) Concierge & travel
Operations
YCO offers a concierge service, comparable to a traditional hotel concierge
service, to all clients who have chartered a Super Yacht or booked a trip
through YCO. This includes arranging event tickets, restaurant bookings, travel
to and from the Super Yacht, as well as other services.
The YCO travel team arranges bespoke luxury travel packages which are not
limited to Super Yacht charter. The service is comprehensive, and includes
flights, airport transfers, accommodation, and tours. Clients using YCO's travel
services also benefit from YCO concierge. YCO travel and concierge services
include:
* a bespoke travel consultancy service;
* first class transportation by land, sea and air;
* luxury accommodation;
* arrangement of all visas and insurance;
* global local knowledge and connections; and
* full concierge service.
Revenue Stream
During office hours, (Monday to Friday, 9am to 6pm) the YCO concierge service is
complimentary to clients on a YCO Super Yacht charter or YCO travel break.
Outside the stated hours, concierge activity is charged at various hourly rates,
subject to a minimum charge.
Flights arranged through YCO travel incur a service charge according to class
and destination. YCO also charges a management fee for all trips which
represents a percentage of the total booking cost (excluding flight booking
fees).
Clients
With over 60 years of experience between them, the three founding partners of
YCO have built up an extensive network of contacts within the yachting industry,
including several high net worth individuals with whom and for whom they have
worked throughout their careers, and who have subsequently become YCO clients.
As well as representing clients in the Middle East and Russia, YCO manages over
forty yachts, including the private yachts of several prominent US billionaires,
whose fortunes were made in the Pacific Northwest and California's Silicon
Valley. In Europe, management clients include an assortment of hedge fund
managers and bankers, Formula 1 drivers and Greek shipping magnates. The YCO
charter database contains over 3,000 high net worth individuals, and the
company's client base includes A-list directors and movie stars, supermodels and
sportsmen, as well as some of the world's most successful art dealers,
financiers and property tycoons. The YCO new construction department is
currently managing the design, build and delivery of what will be two of the
largest yachts in the world when complete. The first will take her place as a
State Yacht in the Gulf, while the second will be one of the most
comprehensively equipped vessels afloat, coming complete with her own submarine.
Markets and competition
The Proposed Directors believe that the nearest quoted rival is Rodriguez Group,
which is listed in France and owns Camper & Nicholsons (purchased in 2004) which
is a sales, charter and management company. In addition, there are a number of
other private companies that offer a similar range of services as YCO.
The Proposed Directors believe that from Admission, the Enlarged Group will
offer the most comprehensive range of services to Super Yachts.
Financial information
The unaudited management accounts of YCO, for the 12 months ended 31 December
2007 based on an exchange rate of 1.30 euros to the pound are as follows:
#
Turnover 6,103,620
Gross Profit 4,178,170
Profit before tax 1,884,341
Rationale for the Acquisition
Deuxmil is looking to acquire YCO to create a group that provides a full service
offering to Super
Yacht owners and captains. The Enlarged Group is aiming to provide a 'one-stop'
solution to all of their yachting needs.
The Directors believe that there is considerable scope for growth in the market
for the following reasons:
* there are currently more than 700 yachts over 45 metres worldwide
* yacht builders' order books are full for the next five years
* new 'Supermarinas' are under construction around the world
* 35 metre yachts are now available 'off the shelf'
* mooring sales are at record levels
* less than 1 per cent. of those who can afford a Super Yacht actually own one
* new markets like Russia and China are generating vast new wealth
* the charter business is increasing as builders struggle to meet demand
* custom built yachts are increasing in size every year
* the growth potential in all areas of supply is enormous
* due to the individual wealth of the potential clients any recession is
anticipated by the Directors to have a limited impact
In view of the above, the Directors believe that the acquisition of YCO will
enable the Enlarged Group to increase its client base, increase access to
European, US and Middle Eastern markets, and strengthen links to the emerging
markets of Russia and China.
Directors, Proposed Directors and senior management
The executive and non-executive directors are:
Laurence Joseph Milton (Aged 57), Executive Chairman
Laurence Milton trained as an accountant, spending 11 years in the profession
before joining Olivetti as a salesman, selling computer products to accounting
firms. In 1983 he set up Management Information Centre Limited ('MICL') to
service the IT needs of accountants, subsequently securing funding from 3i and
growing the business to a client base of some 1500 firms. MICL was sold to an
Australian competitor for #6.75 million in 2000.
Laurence was appointed Executive Chairman of Deuxmil on 30 August 2006.
Neil Miller (Aged 49), Chief Executive Officer
Neil Miller instigated and developed the Wendy Restaurant franchise in the UK
and Europe. He then moved into financial services and emerging markets bond
trading, becoming one of the largest independent traders specialising in African
debt. From 1995 to the present day he has acted as a consultant to smaller
companies seeking a quotation on public markets.
Neil was appointed Chief Executive Officer of Deuxmil on 30 August 2006.
Charles Alan Smith, ACA (Aged 53), Finance Director
Charles Smith qualified as a chartered accountant and then joined the firm of
Scodie Deyong, becoming a full partner in 1981. In 1995 he left to become group
financial director and then international financial director of Holiday Autos
Group ('HAG'), a car rental broking business, where turnover grew from #29
million to #200 million in 2004. He stepped down from this position in 2000,
changing his role to that of financial consultant to HAG. In this consultancy
role he was primarily responsible for the preparation of HAG for sale in April
2003 to Lastminute.com plc for #40 million.
Charles was appointed Finance Director of Deuxmil on 30 August 2006.
Peter Jay (Aged 63), Non-Executive Director
Peter Jay is a solicitor and a consultant to Beachcroft LLP. He specialises in
corporate finance and acts for a number of AIM companies. He has extensive
experience of advising both public and private companies and has held a number
of directorships including Sportingbet Plc (where he was a founding director)
and Top Ten Holdings Plc.
Peter was appointed Non-Executive Director of Deuxmil on 30 August 2006.
Peter Daniel Shea (Aged 55), Non-Executive Director
Peter Shea is currently chairman and one of the founding members of Daniel
Stewart & Company, which he set up in 1989. Previously, he was a director at
Bear Stearns International (from 1986 to1989), where he was responsible for
establishing Bear Stearns' London corporate finance and capital markets
divisions. Prior to Bear Stearns, he was a vice president at Midland Bank, where
his primary responsibilities were co-ordinating the corporate and merchant
banking services to US corporations in Europe. He also spent 10 years at Chase
Manhattan Bank where he was responsible for, amongst other things, developing
country loans and both the chemical and aerospace sectors at various times.
Peter was appointed Non-Executive Director of Deuxmil on 17 January 2008.
The Proposed Directors are:
Gary Wright (Aged 49), proposed Executive Director
Gary Wright has a strong maritime background stretching back well over 25 years.
His experience includes that of master, project co-ordinator and project manager
on a number of Super Yachts. In 2001, Gary was appointed chief executive officer
for the 31st Americas Cup, with overall responsibility for every aspect of the
US/Seattle based challenge over the following three years until the race in
2003.
Charles Nicholas Keith Birkett (Aged 32), proposed Executive Director
Charles Birkett has crewed, captained, purchased, sold and managed Super Yachts
for the past fifteen years. He first captained a yacht in 1992, cruising the
west coast of America and has since been involved in a range of aspects
associated with Super Yachts ranging from tender design and
construction to shoreside logistics. Before joining YCO, Charles was involved in
fleet, yacht, berth and new project management with a Monaco based Yacht
management company.
Senior management of YCO
John Clark
John Clark has been involved in the maritime industry since 1971. He began his
career in the merchant navy, where he spent 10 years before moving into luxury
yachting. John has extensive experience working on some of the largest and most
exclusive Super Yachts in the world, including acting as both captain and
project manager of new construction projects for S.Y. Athena and M.Y. Talitha G.
He cofounded YCO with partners Gary Wright and Charlie Birkett in 2003. John
leads the new construction department at YCO, as well as yacht management
operations.
Share Consolidation
Subject to the approval of Shareholders at the General Meeting, the Directors
propose to consolidate every seven Ordinary Shares into one New Ordinary Share.
On the Share Consolidation, where the number of Ordinary Shares held by a
Shareholder is not divisible by seven, that Shareholder would become entitled to
a fraction of a New Ordinary Share. However, fractional entitlements will not be
issued, so it is proposed that all residual holdings of less than seven Ordinary
Shares held by a shareholder shall not be consolidated as aforesaid but shall be
reclassified as (and the rights attaching to them shall be varied such that they
are) Deferred Shares having all of the rights attaching to the Deferred Shares
as set out in the Articles such rights being described in Resolution 6 in the
Notice.
Details of the Placing
The Company is proposing to raise approximately #8,200,000 (before expenses) by
the issue of the Placing Shares at the Placing Price pursuant to the Placing.
The Placing Shares will represent approximately 34.9 per cent. of the Enlarged
Share Capital.
The Placing is not underwritten. The Placing Shares will, when issued, rank pari
passu in all respects with the other New Ordinary Shares in issue, including the
right to receive all dividends and other distributions thereafter declared, made
or paid on the New Ordinary Shares.
The Placing is conditional on, inter alia, the satisfaction of the following
conditions on or before 8.00 a.m. on 28 May 2008 or such later time and date
(being not later than 5.00 p.m. on 30 June 2008) as WH Ireland, Hichens,
Harrison and the Company may agree:
(a) the passing of the Resolutions at the General Meeting;
(b) the completion of the Acquisition;
(c) WH Ireland and/or Hichens, Harrison not having exercised its rights in
certain circumstances to terminate the Placing Agreement prior to Admission; and
(d) Admission having occurred.
Monies received from placees in respect of the Placing Shares will be held in
accordance with the terms of the placing letters issued to such placees by
Hichens, Harrison until such time as the Placing Agreement becomes unconditional
in all respects. If the Placing Agreement does not become unconditional in all
respects by 8.00 a.m. on 28 May 2008, or such later date as the Company,
WH Ireland and Hichens, Harrison may agree, being no later than 30 June 2008,
monies received from placees will be returned to placees at the relevant
placee's sole risk without interest.
Following Admission, share certificates representing the New Ordinary Shares to
be issued pursuant to the Placing are expected to be despatched by post to
placees who do not wish to receive shares in uncertificated form, by no later
than 4 June 2008, at the relevant placee's sole risk. No temporary documents of
title will be issued in connection with the Placing. Pending the despatch of
definitive share certificates, instruments of transfer will be certified against
the register of members of the Company.
The CREST accounts of placees who have duly elected to receive their New
Ordinary Shares in uncertificated form are expected to be credited to the
designated CREST account on 28 May 2008.
Admission and dealings
Application will be made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on AIM. It is expected that Admission will
become effective and dealings, for normal settlement, will commence on 28 May
2008.
If the Resolutions are not passed or the Acquisition is not completed, the
Existing Ordinary Shares will continue to be traded on AIM.
Lock-in and orderly market agreements
On 2 May 2008 a lock-in agreement was entered into between (1) WH Ireland, (2)
Hichens, Harrison, (3) each of the Restricted Shareholders and (4) the Company
pursuant to which each of the Restricted Shareholders have agreed that they will
not during the 12 months immediately following Admission dispose of (either
directly or indirectly), or agree to dispose of, any New Ordinary Shares held by
them, or any interest in such New Ordinary Shares.
Further, the Restricted Shareholders have each undertaken that in the following
12 months they will not dispose of any New Ordinary Shares they hold (or any
interest therein) other than following consultation with WH Ireland, who may
withhold consent if they reasonably consider such a disposal would adversely
affect the maintenance of an orderly market in such New Ordinary Shares.
None of these restrictions will apply in the following circumstances:
* in the event of a takeover offer
* where applicable, by the personal representative of a Restricted Shareholder
* in the event of an intervening court order
* a transfer made by way of gift to a member of the family of the Restricted
Shareholder concerned, meaning the spouse, parent, widow or adult
child (including a child by adoption of the Restricted Shareholder concerned)
to any person(s) acting in the capacity of trustee(s) of a trust created by
the Restricted Shareholder concerned
* a transfer made upon any change of trustees of a trust so created, to
the new trustees or trustee, provided that there are no persons beneficially
interested under the above described trust other than the Restricted
Shareholder concerned and/or members of their family or by the trustee or
trustees of such a trust to any person beneficially interested under that
trust
* a transfer made by one nominee holder to another nominee holder for the same
beneficial owner
Service contracts:
Directors
Neil Miller
On 2 May 2008 Neil Miller entered into a service agreement with the Company
pursuant to which, conditional upon Admission, his appointment as Chief
Executive of the Company was confirmed. The service agreement, which takes
effect on Admission, is for a fixed term of 12 months and terminable thereafter
on not less than 12 months' written notice given by either party to the other.
The service agreement contains provisions for early termination, inter alia, in
the event of a breach by the employee. The basic annual salary payable to Neil
Miller is #240,000 per annum. This is to be reviewed annually without any
obligation to increase the same. He is also entitled to private health insurance
for himself and his immediate family. The service agreement contains restrictive
covenants for a period of 12 months following termination of his employment. The
agreement supersedes any previous agreement entered into by Neil Miller with the
Company.
Laurence Joseph Milton
On 2 May 2008 Laurence Milton entered into a service agreement with the Company
pursuant to which, conditional upon Admission, his appointment as Chairman of
the Company was confirmed. The service agreement, which takes effect on
Admission, is for a fixed term of 12 months and terminable thereafter on not
less than 12 months' written notice given by either party to the other. The
service agreement contains provisions for early termination, inter alia, in the
event of a breach by the employee. The basic annual salary payable to Laurence
Milton is #240,000 per annum. This is to be reviewed annually without any
obligation to increase the same. He is also entitled to private health insurance
for himself and his immediate family. The service agreement contains restrictive
covenants for a period of 12 months following termination of his employment. The
agreement supersedes any previous agreement entered into by Laurence Milton with
the Company.
Charles Alan Smith
On 2 May 2008 Charles Smith entered into a service agreement with the Company
pursuant to which, conditional upon Admission, his appointment as Finance
Director of the Company was confirmed. The service agreement, which takes effect
on Admission, is for a fixed term of 12 months and terminable thereafter on not
less than 12 months' written notice given by either party to the other. The
service agreement contains provisions for early termination, inter alia, in the
event of a breach by the employee. The basic annual salary payable to Charles
Smith is #48,000 per annum. This is to be reviewed annually without any
obligation to increase the same. The service agreement contains restrictive
covenants for a period of 12 months following termination of his employment. The
agreement supersedes any previous agreement entered into by Charles Smith with
the Company.
Peter Harry Jay
On 2 May 2008 Peter Jay entered into a non-executive letter of appointment with
the Company pursuant to which his appointment as Non-executive Director of the
Company was confirmed. His appointment is for a fixed term of 12 months
terminable thereafter by and at the discretion of either party upon six months'
written notice. On or before the expiry of the fixed term, Peter Jay's
appointment is open to renewal by mutual agreement. The fee payable to Peter Jay
is #25,000 per annum. His removal, cessation or retirement in accordance with
the Company's articles of association will not give him any rights to
compensation or damages and no fee is payable to him for any period after such
removal, cessation or retirement. The agreement supersedes any previous
agreement entered into by Peter Jay with the Company.
Peter Daniel Shea
On 2 May 2008 Peter Shea entered into a non-executive letter of appointment with
the Company pursuant to which his appointment as Non-executive Director of the
Company was confirmed. His appointment is for a fixed term of 12 months
terminable thereafter by and at the discretion of either party upon six months'
written notice. On or before the expiry of the fixed term, Peter Shea's
appointment is open to renewal by mutual agreement. The fee payable to Peter
Shea is #25,000 per annum. His removal, cessation or retirement in accordance
with the Company's articles of association will not give him any rights to
compensation or damages and no fee is payable to him for any period after such
removal, cessation or retirement. The agreement supersedes any previous
agreement entered into by Peter Shea with the Company.
Proposed Directors
Gary Wright
On 2 May 2008 Gary Wright entered into a service agreement with the Company,
pursuant to which, conditional upon Admission, his appointment as Director of
the Company was confirmed.
The service agreement, which takes effect on Admission, is for a fixed term of
12 months and terminable thereafter on not less than 12 months' written notice
given by either party to the other. The service agreement contains provisions
for early termination, inter alia, in the event of a breach by the employee.
Gary Wright is not entitled to a salary for his directorship of the Company. He
is however entitled to reimbursement of expenses incurred in the course of his
duties and private health insurance for himself and his immediate family. The
service agreement contains restrictive covenants for a period of 12 months
following termination of his employment.
On 2 May 2008, conditional upon Admission, Gary Wright was appointed a director
of YCO. Under the terms of his appointment, Gary Wright is entitled to a basic
annual salary of Eur240,000.
Charles Birkett
On 2 May 2008 Charles Birkett entered into a service agreement with the Company,
pursuant to which, conditional upon Admission, his appointment as Director of
the Company was confirmed. The service agreement, which takes effect on
Admission, is for a fixed term of 12 months and terminable thereafter on not
less than 12 months' written notice given by either party to the other. the
service agreement contains provisions for early termination, inter alia, in the
event of a breach by the employee. Charles Birkett is not entitled to a salary
for his directorship of the Company. He is however entitled to reimbursement of
expenses incurred in the course of his duties and private health insurance for
himself and his immediate family. The service agreement contains restrictive
covenants for a period of 12 months following termination of his employment.
On 2 May 2008, conditional upon Admission, Charles Birkett was appointed a
director of YCO. Under the terms of his appointment, Charles Birkett is entitled
to a basic annual salary of Eur240,000.
General Meeting
A General Meeting to be held at the offices of Beachcroft LLP, 100 Fetter Lane,
London EC4A 1BN on 27 May 2008 at 10.00 a.m. has been convened at which the
following resolutions will be proposed:
1. to consolidate the issued ordinary share capital of the Company
2. to consolidate the unissued ordinary share capital of the Company
3. to approve the Acquisition
4. to authorise the Directors to allot relevant securities pursuant to section
80 of the Act
5. to approve the allotment of equity securities as section 89(1) of the Act did
not apply to such allotment
6. to approve the amendments of the Company's Articles
7. to disapply article 41 of the Company's Articles
8. to change the name of the Company to YCO Deuxmil plc
Resolutions 1, 2, 3 and 4 will be proposed as ordinary resolutions and
Resolutions 5, 6, 7 and 8 will be proposed as special resolutions. In respect of
Resolutions 4 and 5, the Board has no current intention of allotting New
Ordinary Shares over which they are seeking authority save pursuant to the
Proposals and as otherwise set out in the admission document.
Recommendation
The Directors consider that the Proposals are in the best interests of the
Company and its Shareholders as a whole. Accordingly, the Directors unanimously
recommend that all Shareholders vote in favour of the Resolutions as they have
undertaken to do in respect of their own beneficial holdings of, in aggregate,
95,000,000 Ordinary Shares, representing approximately 63.0 per cent. of the
Existing Ordinary Shares.
A copy of the admission document that has been dispatched to Shareholders can be
found on the Company's website, www.deuxmilmarine.com.
For further information contact:
GTH Communications
Toby Hall +44 (0) 207 153 8039
Christian Pickel +44 (0) 207 153 8036
Deuxmil Marine plc
Neil Miller, CEO +44 (0) 870 608 2124
WH Ireland Limited
David Youngman / Adrian Kirk +44 (0)161 832 2174
DEFINITIONS
The following definitions apply throughout this announcement, unless the
context otherwise requires:
"Act" the applicable provisions of the Companies
Act 1985 and the Companies Act 2006 from time
to time and as they are supplemented and
amended
"Acquisition" the acquisition by the Company of the entire
issued share capital of YCO pursuant to the
Acquisition Agreement
"Acquisition the conditional agreement dated 3 April 2008
Agreement" between (1) the Vendors and (2) the Company
relating to the Acquisition
"Admission" the admission of the New Ordinary Shares to
trading on AIM becoming effective in
accordance with Rule 6 of the AIM Rules
"AIM" a market operated by the London Stock
Exchange
"AIM Rules" the AIM Rules for Companies governing the
admission to and operation of AIM published
by the London Stock Exchange from time to
time
"Articles" the articles of association of the Company as
amended from time to time
"BAY" BA Yachts Assistance S.L., a wholly owned
subsidiary of the Company incorporated in
Spain
"BAY Acquisition the agreement dated 24 May 2007 for the
Agreement" acquisition of BAY entered into between (1)
Beatriz Alonso Iglesias and (2) the Company
"the Board" or the directors of the Company
"the Directors"
"Combined Code" the Combined Code on corporate governance and
the code of best practice issued by the
Financial Reporting Council in June 2006
"Company" or Deuxmil Marine plc, a company registered in
"Deuxmil" England and Wales with company number
05011189
"Completion" completion of the Acquisition on the terms
set out in the Acquisition Agreement
"Consideration 9,641,652 New Ordinary Shares to be issued on
Shares" Completion, all of which have been created in
accordance with the Act and will have the
rights and be subject to the restrictions
contained in the Articles
"CREST" the computer based system and procedures
which enable title to securities to be
evidenced and transferred without written
instrument and which is operated by Crestco
Limited
"Deferred Shares" the deferred shares of 0.05p each in the
capital of the Company following the
consolidation of Ordinary Shares
"Directors' Options the options over, in aggregate, 1,536,605 New
ordinary Shares to be granted by the Company
to each of Neil Miller, Laurence Milton and
Charles Smith
"Enlarged Group" the Company and its subsidiaries and
subsidiary undertakings following Completion
"Enlarged Share the issued ordinary share capital of the
Capital" Company immediately following Admission
including the Placing Shares and the
Consideration Shares
"Existing Ordinary 150,895,806 Ordinary Shares in issue as at
Shares" the date of this document
"Existing Options" the existing share options over 4,333,333
Ordinary Shares in issue
"FSMA" the Financial Services and Markets Act 2000
(as amended)
"General Meeting" the general meeting of the Company, convened
for 10.00 a.m. on 27 May 2008, and any
adjournment,
"Group" the Company and its subsidiaries and
subsidiary undertakings at the date of this
document
"Hichens, Harrison" Hichens, Harrison & Co. plc, a company
registered in England and Wales with company
number 02368530
Hichens Options the transferable options to be granted by the
Company to Hichens, Harrison to subscribe for
479,328 New ordinary Shares constituted as to
239,664 by the first option deed and 239,664
by the second option deed
"London Stock London Stock Exchange plc
Exchange"
"New Ordinary Shares" ordinary shares of 0.35p each in the capital
of the Company in issue following the Share
Consolidation
"Notice" the notice of General Meeting
"Official List" the official list of the UKLA
"Hichens Option" the transferable options to be granted by the
Company to Hichens, Harrison to subscribe for
479,328 New ordinary Shares constituted as to
239,664 by the first option deed and 239,664
by the second option deed
"Ordinary Shares" ordinary shares of 0.05p each in the capital
of the Company in issue following the Share
Consolidation
"Panel" the Panel on Takeovers and Mergers
"Placing" the conditional placing by Hichens, Harrison
of the Placing Shares at the Placing Price,
pursuant to the provisions of the Placing
Agreement
"Placing Agreement" the conditional agreement dated 2 May 2008
between (1) the Company (2) WH Ireland (3)
Hichens, Harrison and (4) the Directors and
the Proposed Directors relating to the
Placing
"Placing Price" 49p per Placing Share
"Placing Shares" the 16,734,694 New Ordinary Shares to be
issued pursuant to the Placing
"Proposals" the Acquisition, Share Consolidation, change
of name, Placing and Admission
"Proposed Directors" Gary Wright and Charles Birkett
"Prospective Directive 2003/71/EC of the European
Directive" Parliament and the Council of 4 November 2003
on the prospectus to be published when
securities are offered to the public or
admitted to trading
"Prospectus Rules" the rules made by the Financial Services
Authority pursuant to sections 73A(1) and (4)
of FSMA
"Resolutions" the resolutions set out in the Notice
"Restricted the Directors, the Proposed Directors and the
Shareholders" Vendors
"Share Consolidation" the consolidation of seven Ordinary Shares
into one New Ordinary Share, subject to the
approval of Shareholders at the General
Meeting
"Shareholders" holders of Existing Ordinary Shares
"Super Yacht" a large, luxurious ocean-going cruise vessel,
40 metres or more in length
"Takeover Code" the City Code on Takeovers and Mergers
"UK" the United Kingdom of Great Britain and
Northern Ireland
"UKLA" the Financial Services Authority acting in
its capacity as the competent authority for
the purposes of Part VI of FSMA
"Vendors" John Clark, Geminico Limited B.V.I and
Trafalgar Group Holdings Limited
"Warrants" the transferable warrants to be granted by
the Company to WH Ireland to subscribe for
479,328 New ordinary Shares constituted as to
239,664 by the first option deed and 239,664
by the second option deed
"WH Ireland" WH Ireland Limited, a company registered in
England and Wales with company number 2002044
"YCO" YCO S.A.M. a company incorporated in the
principality of Monaco
"YCO Group" YCO S.A.M and its subsidiary undertakings
"YFS" Yacht Fuel Services Limited, a wholly owned
subsidiary of the Company incorporated in
England and Wales
"YHG" YHG Gibraltar and YHG Mallorca collectively
"YHG Gibraltar" Yacht Help Group Gibraltar, a wholly owned
subsidiary of the Company incorporated in
Gibraltar
"YHG Gibraltar Acquisition the agreement dated 26 April 2007 for the
Agreement" acquisition of YHG Gibraltar entered into
between (1) the YHG Gibraltar vendors and (2)
the Company
"YHG Mallorca" Yacht Help Group Mallorca, a wholly owned
subsidiary of the Company incorporated in
Spain
"YHG Mallorca Acquisition the agreement dated 26 April 2007 for the
Agreement" acquisition of YHG Mallorca entered into
between (1) the YHG Mallorca vendors and (2)
the Company
This information is provided by RNS
The company news service from the London Stock Exchange
END
STRDBGDULXGGGIB
Yco Deuxmil (LSE:DML)
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