TIDMDSY
RNS Number : 6241V
DawMed Systems PLC
14 July 2009
For Immediate Release
14 July 2009
Dawmed Systems PLC
Proposed sale of Dawmed International Limited
Proposed adoption of New Investing Policy
Change of Name to Adalta Real PLC
Introduction
As announced on 3 July 2009, the Board has agreed terms and signed a conditional
share purchase agreement with Wassenburg to sell to Wassenburg all the issued
share capital in DIL, the Company's trading subsidiary. The consideration for
the Sale is GBP0.95 million, representing 4.6p per ordinary share, subject to
adjustment depending on the net assets of DIL as at 30 June 2009. Under Rule 15
of the AIM Rules, the Sale is a disposal resulting in a fundamental change of
business and consequently Shareholder consent is required before the Sale can be
completed. The Sale is therefore conditional upon an ordinary resolution being
passed at the First GM.
Whilst the Directors believe that the Second Interim Results were relatively
satisfactory and pointed to an anticipated continuation of growth and
profitability up to the period ended 31 March 2009, the Board considers that
there are fundamental reasons why the present business does not provide a
long-term basis for the Company's future viability as an independent entity.
The Continuing Directors consider that the Company's future lies outside the
current scope of its business as carried on by DIL. Further details of the
Company's proposed New Investing Policy, which is also subject to the approval
of Shareholders at the First GM, are set out below.
A Circular convening the first GM and second GM is being sent to shareholders
today.
The Sale
Under the terms of the Share Purchase Agreement the Company has agreed to sell
all the issued share capital of DIL to Wassenburg for GBP0.95 million in cash,
subject to adjustment depending on the net assets of DIL as at 30 June 2009.
Under such adjustment Wassenburg and the Company will share any shortfall or
excess of such net assets below or above GBP75,000.
The Share Purchase Agreement contains normal warranties and indemnities and
liability in respect of these lasts for 18 months from completion (7 years for
tax related claims). Wassenburg has taken out warranty insurance to secure any
liability in respect of the warranties or tax indemnity subject to an excess of
GBP50,000 and Wassenburg is obliged to claim under such insurance before
claiming against the Company. As further security for Wassenburg GBP35,000 of
the consideration will be placed in an escrow account to cover any warranty or
indemnity liability under the Share Purchase Agreement that is not covered by
the warranty insurance policy.
After related expenses, the net proceeds of the Sale (excluding any excess
of, or shortfall in, net assets if any) are anticipated to be
approximately GBP800,000.
Pursuant to the Share Purchase Agreement the Company is required to change its
name to a name other than "Dawmed". Consequently, a special resolution is
proposed to be put to the Shareholders to change the Company's name to Adalta
Real PLC at the Second GM.
Subject to the approval of the Sale by the Shareholders, John Crispin and Mark
Adamson will cease to be directors of the Company.
Reasons for the Sale
Recent public domain announcements by a number of institutions, government
departments and analysts, have warned that the NHS will be "massively
underfunded" after 2011. The Directors believe that, as in the year ended
September 2007 when massive cuts were made by the NHS following a deficit in its
budget, the NHS will face severe financial challenges in the future.
The Directors believe that the NHS is unlikely to be exempted from reductions of
expenditure in the medium to long term and in this event it is traditional that
the first and easiest area of departmental cost reduction is in capital
equipment purchases, upon which your Company is largely dependent. As outlined
above, recent reports have also forecast severe underfunding of the NHS as a
whole from 2011.
The Company is largely reliant upon its distribution agreement with Wassenburg
for its imported equipment and the vagaries of the Sterling/Euro currency
exchange rates mean that any profit margin on sales can be easily wiped out by a
small change in the exchange rates. Although the prospects are not unreasonable
for the Company's own AERclens and Clinic machines, they have yet to make any
real market impact. Consequently, they do not provide in their own right a sound
basis for the Company's ongoing business in the short or medium term.
All of these matters could be accommodated within the Company's business model
providing it had sufficient confidence in the NHS business for the medium and
long term future, but given the current credit crisis together with the parlous
state of the UK economy, the Company's current ability to raise further funds
(whether as equity or debt) for a business involved in the manufacture and
distribution of capital equipment, is severely limited.
It should also be noted that the Company's rights to sell Wassenburg products in
the UK is on a rolling 12 months' basis, but Wassenburg have indicated that a
sale to a third party would result in these rights being validly terminated
after one month's notice. As a result there is effectively only one viable
purchaser for DIL.
In spite of the Board's stated anticipation of a return to profitability in the
third half year ended 31 March 2009, a small DIL loss was sustained in that
period due entirely to the continued deterioration of the GBP against the Euro.
In the full 18 months period to 31 March 2009, DIL reported a loss on ordinary
activities before taxation of GBP473,410 (year ended 30 September 2007:
GBP571,508) on a turnover of GBP12,209,849 (year ended 30 September 2007:
GBP4,976,158) and had at that date net assets of GBP83,870 (30 September 2007
net liabilities: GBP1,627,220). The cost of the Company's investment in 100
percent of DIL is GBP2,651,860. For the purposes of the financial statements
for the 18 months ended 31 March 2009, the carrying value of the investment in
DIL will be adjusted to net realisable value less costs to sell. The net
proceeds of the Sale as described above of approximately GBP800,000 will result
in a profit of around GBP655,000 for the Group.
These factors have led the Directors to the conclusion that, rather than attempt
to trade predominantly as a capital equipment supplier to the NHS, it would be
wiser to realise as much value within the current business as possible.
The Company's share capital was admitted to trading on AIM on 14 October 2002
following a placing at 25p per Share. The middle market price of Shares has
fallen steadily over a long period prior to the announcement of the Second
Interim Results on 26 February 2009. Since then the Share Price rose on the back
of approaches to the Company received from third parties. Following the
withdrawal of those approaches due to the prohibitive clause in the Wassenburg
distribution agreement, the Share price has fallen back to 2.75p, the closing
price as at the 6 July 2009 being the first business day following the date of
the Announcement.
The consideration for DIL represents a value per share of 4.6p, which is a
premium to the closing position as at the 6 July 2009 being the first business
day following the date of the Announcement.
The immediate financial effects of the Sale will be net cash on the Company's
balance sheet from which the expenses of the Sale will be paid and the
remainder, expected to be in the order of GBP800,000, will be used initially to
set up the new arrangements including, but not limited to a redesigned web site,
change of name, various registrations, overheads and funding for property agency
and transactions.
Set out below is the unaudited balance sheet as at 30 September 2008 and a pro
forma balance sheet showing the potential effects of the Sale of DIL:
+----------------------------------+------------+------------+--------------+
| | Unaudited | Disposal | Net assets |
| | 30 | of DIL | following |
| | September | | disposal |
| | 2008 | | |
+----------------------------------+------------+------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+------------+------------+--------------+
| Non-current assets | | | |
+----------------------------------+------------+------------+--------------+
| Intangible assets | 40 | (40) | - |
+----------------------------------+------------+------------+--------------+
| Property, plant and equipment | 100 | (100) | - |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| | 140 | (140) | - |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| Current assets | | | |
+----------------------------------+------------+------------+--------------+
| Inventories | 938 | (938) | - |
+----------------------------------+------------+------------+--------------+
| Trade and other receivables | 1,778 | (1,708) | 70 |
+----------------------------------+------------+------------+--------------+
| Cash and cash equivalents | 62 | 703 | 765 |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| Total assets | 2,918 | (2,083) | 835 |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| Current liabilities | | | |
+----------------------------------+------------+------------+--------------+
| Trade and other payables | (2,169) | 2,134 | (35) |
+----------------------------------+------------+------------+--------------+
| Financial liabilities | (571) | 571 | - |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| | (2,740) | 2,705 | (35) |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| Net assets | 178 | 622 | 800 |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| Called up share capital | 1,031 | - | 1,031 |
+----------------------------------+------------+------------+--------------+
| Share premium account | 1,878 | (320) | 1,558 |
+----------------------------------+------------+------------+--------------+
| Merger reserve | (350) | 350 | - |
+----------------------------------+------------+------------+--------------+
| Profit and loss account | (2,381) | 592 | (1,789) |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
| Total equity | 178 | 622 | 800 |
+----------------------------------+------------+------------+--------------+
| | | | |
+----------------------------------+------------+------------+--------------+
Liquidation Option
Subject to the approval of the Sale by Shareholders, the Company could be wound
up and its assets (ie. the net proceeds from the Sale) distributed to
Shareholders.The costs of implementing such a strategy would be substantial and
would include, inter alia, Insolvency Practitioner costs and significant
compensation costs under existing consultancy contracts.
The Directors estimate that the net proceeds available for distribution on a
winding up would be approximately GBP450,000 representing circa. 2.2p per share.
Proposed New Investing Policy
Following completion of the Sale the Continuing Directors propose that, instead
of winding up the Company, the Company's share capital should remain admitted to
trading on AIM and that the Company's New Investing Policy should be based
predominantly upon property agency, the acquisition and development of and/or
investment in commercial property, the acquisition of land and development of
high end residential property, together with potential corporate acquisitions,
the latter mainly in the property sector.
There have been recent and
significant falls in the value of commercial and residential property as well as
associated land in the UK and many companies in the property sector are
suffering in the downturn. The Continuing Directors believe therefore that there
are opportunities to acquire development land, built property and/or property
companies, with the potential for significant uplifts from the current low
levels of property values and for ongoing generation of profit over the medium
and long term.
The proposed New Investing Policy is intended to be split between commercial
agency, development property and investment property and this overall split will
be subject to available opportunities from time to time as well as the Company's
ability to make such investments in as tax efficient manner as possible, for
example through compliance with current HMRC Tax Exemption Rules following the
Sale.
The Company will be an active investor. Such investments may result in the
Company acquiring the whole or part of a company or project. The Company's
investments may take the form of equity, joint venture debt, convertible
instruments, licence rights, or other financial instruments as the Continuing
Directors deem appropriate.
The Continuing Directors propose that the New Investing Policy should enable it
to pursue and exploit the following opportunities in the UK:-
* commercial and industrial agency services;
* commercial development (including acquisition and refurbishment
opportunities) subject to pre-lets to prime covenant tenants;
* sales of such completed and let developments as profit generators;
* acquisition of existing individual residential property with expansion and/or
refurbishment potential for early profit;
* acquisition of high end value individual residential land and development for
the generation of later and greater profit;
* future retention of its own completed and let commercial developments as held
investments for medium and/or long term quality revenue generation;
* subject to tenant covenant status, future acquisition of existing completed and
let property as an active investor for long term quality revenue generation;
* future acquisition of a compatible property company for potential expansion; and
* future corporate investment for passive or active gain.
If the New Investing Policy is approved, there is no limit on the number of
projects in which the Company may invest. The Continuing Directors are currently
reviewing potential investment and acquisition opportunities in line with the
Company's New Investing Policy. The Company intends to be both a short-term and
a long-term investor and the Continuing Directors will place no minimum or
maximum limit on the length of time that any investment may be held.
At the same time the Company would maintain low office and personnel overheads
to achieve significantly reduced fixed annual costs compared with previous
levels. Admission to AIM would be retained to facilitate future fund raising
options whilst maintaining an exit route for shareholders.
The Continuing Directors intend that commercial property endeavours will be
related to high grade tenant covenant. Residential endeavours will be active
developments for short-term gain from sales of completed properties prior to
certified habitation.Commercial investments will be a mixture of short term
sales of pre-let property with high grade tenant covenant and long term pre-let
investment potential according to magnitude and funding. It is envisaged that
initially there will be a relatively small number of development investments
due, inter alia, to financial limitations, but over time the intention will be
to broaden the scope and to increase the volume. Whilst the Company is expected
to enjoy early revenue from the property agency business it will be exposed to
some extent in the short-term to the success or otherwise of one or two
initial development projects.
Subject to the availability of advantageous bank or other sources of funding,
the Continuing Directors propose that the Company be geared up to 75% ie.
borrowings will not normally exceed three times its equity investment depending
on the type of property and the covenant status of the tenant in the case of
commercial property.
Shareholders should note that the consideration for any acquisition or
investment, including any debt element of the consideration, will be subject to
compliance with the AIM Rules. Should any of the provisions of AIM Rule 14 be
met, then this may result in the Company having to treat the transaction as a
reverse take-over necessitating shareholder approval and a re-application to
trading on AIM.
As an investing company, the Company will be required to implement its
Investment Policy within 12 months of the First GM, or otherwise make an
acquisition or acquisitions which constitute a reverse takeover under the AIM
Rules, failing which the Company's Shares would then be suspended from trading
on AIM. If the Company's Investing Policy has not been implemented on or before
30 January 2011, the admission to trading on AIM of the Company's Shares would
be cancelled and the Continuing Directors would convene a General Meeting of the
Shareholders to consider whether to continue seeking investment opportunities or
to wind up the Company and distribute any surplus cash back to Shareholders. In
making the assessment of whether or not an investing company has substantially
implemented its investing policy, this is normally considered to mean that the
investing company has invested a substantial portion (usually at least 50 per
cent) of all funds available to it, including funds available through agreed
debt facilities, in accordance with its investing policy.
The Continuing Directors have already received a satisfactory initial "Letter of
Intent" from a major UK Bank for a secured debt funding facility of up to the
initial planned level of GBP2 million. This is subject to reasonable financial
and other normal terms such as, inter alia, the agreed viability of each
property project.
It is the intention of the Continuing Directors to target the restoration of
share value in the medium and long term to a level which properly represents the
potential value of the Company. Once the financial market conditions are more
favourable, the Company will contemplate raising further equity funding from the
capital .markets whether through a rights issue, placing of shares, or
otherwise.
The Directors consider that the adoption of the New Investing Policy would be
more beneficial to the Shareholders (and in their best interests) than
liquidation on the grounds that:
* the value of the net proceeds available to the Shareholders would be heavily
compromised by the costs referred to above;
* if the New Investing Policy is successful the net asset value of the Company
will increase and there should be a potential uplift in value of the shares
which the Continuing Directors believe is reasonably likely to be substantial
over time and ongoing; and
* for those Shareholders who prefer to sell their shareholdings immediately or at
any time, an exit route for Shareholders will be maintained on AIM for the
foreseeable future.
Director Information
Kevin Michael Gilmore FRICS, Executive Chairman
Kevin Gilmore has wide corporate experience, not only as a successful
businessman in general and in a broad range of different companies, but also a
particular qualification, expertise and experience in the real estate
sector.
Kevin began his career as a Chartered Quantity Surveyor, set up in private
practice at age 25 and remained as Senior Partner for some 30 years, having
expanded the practice with offices in Birmingham, Liverpool, Chichester and
later in London.
In the middle 1960s he personally founded, chaired and managed the first of a
new type of Housing Association in the UK under the 1962 Housing Act. He also
founded, recruited a chairman and members of each Board, and spearheaded as a
Board member and driving force a further four similar Housing Associations
spread across England.
In the 1970s he was appointed by Barclays Bank PLC as a Law of Property Act
Receiver to manage a number of failing property development projects that had
been initiated with bank funding by a number of builder developers. His
appointment resulted in the successful completion of all of the developments and
sales of the completed properties to the Bank's financial satisfaction by
recovering 100% of their lending, including all interest charges, as well as
generating credit balances which were paid to the failed companies' receivers or
liquidators over a period of circa. 3 years.
During and since the period of 26 years between 1964 and 1990, he also founded,
chaired and managed a number of property development and investment companies,
some of which were joint ventures with other larger companies, operating in the
residential, retail, commercial and industrial sectors countrywide.
Gordon Arbib BSc (First Class Hons), Non-Executive Director
Gordon is an experienced businessman who began his career at Multicore Solders
Ltd obtaining knowledge of all facets of the company before being promoted to
Managing Director in 1974 and later to the position of Chairman. He built
'Multicore' from being a British Manufacturer of an outdated product to being a
global leader in the electronic assembly materials market.
In 1991 he was appointed Chief Executive of Kelsey Industries Plc, a public
company quoted on the London Stock Exchange. 1999 sales totalled GBP77 million.
He was also CEO of its largest subsidiary Multicore Solders Ltd and continued to
spend most of his time concentrating on the development of the Multicore Solders
Group globally.
He later led the successful sale of Kelsey Industries Plc for GBP53.2 million to
Henkel KGaA, the international chemicals group based in Dusseldorf, which was
primarily interested in acquiring 'Multicore'. During the process he was dealing
with Merchant Banks and Lawyers in the City, thereby gaining valuable
experience.
Nicholas Trigg, Non-Executive Director
Nick Trigg is currently head of Innovation Management of the Science and
Technology Facilities Council (STFC)and is responsible for forming spin-outs
from the intellectual property the STFC. This involves forming early stage
companies based on technology developed by the research council including the
raising of finance.
Previously in his career he has been Chief Operating Officer of a pan-European
division providing repair and maintenance services for capital goods. He has
also held positions in Venture Capital investment management, multi-national
engineering M&A and has been an oilfield service engineer for Schlumberger
Wireline Services in west and north Africa.
He has an engineering degree from Oxford University and a MBA from INSEAD,
France. He also has a Certified Diploma in Accounting and Finance.
Proposed Director
The Company has also identified an MRICS qualified Chartered Surveyor and Estate
Agent who holds a BSc (Hons) degree and has extensive experience in the
commercial property sector who the Company intends, subject to the Sale being
completed, to appoint as a Director of the Company. The Company further intends
that the appointee will, inter alia, establish and run a commercial property
agency department within the Company.
This individual has been responsible for establishing a new commercial property
agency department for his current employer, of whom he is currently a Director,
and has dealt with sales, lettings, acquisitions, rent reviews and lease
renewals in Industrial, Office and Retail property throughout the UK for over
eight years.
For the latter five years he has acted for, and still acts for a major
supermarket in a land acquisition and development consultancy capacity
throughout the West Midlands which includes all the acquisitions of land and
existing buildings for large new store developments and existing store
extensions, involving but not limited to day to day negotiations with
neighbouring land or building owners and the sale of investments in surplus
properties.
For reasons of confidentiality it is not possible to name this individual as the
handing in of his notice to his current employer depends on Shareholders
approving the Sale and the New Investing Policy and the Sale being completed. A
further announcement in compliance with the AIM Rules will be made when
appropriate.
The Continuing Directors believe that, following the completion of the Sale and
the recruitment of the individual referred to above, the Board will have
sufficient experience and human resources within the Company to implement the
New Investing Policy.
The current remuneration for each of Kevin Gilmore, Gordon Arbib and Nick Trigg
will be altered with effect from the completion of the Sale. At that point, in
recognition of the Company's needs to conserve cash, the Continuing Directors
have agreed that the annual amount that the Company pays to executive chairman
Kevin Gilmore in fees and to Imseco Holdings Limited for the provision of his
management services under its service contract will be reduced by 15% to a total
of GBP89,250 per annum and Gordon Arbib's and Nick Trigg's annual fees as
non-executive directors will each be reduced by 10% to GBP13,500 per annum.
Taxation
Following consultation with the Company's tax advisors, the Continuing Directors
have been advised in writing that, after the completion of the Sale and the
implementation of the New Investing Policy, the Company would be eligible to
benefit from the Substantial Shareholding Exemption ("SSE") of taxation on any
financial gain to the Company arising from the Sale, subject to compliance with
HMRC conditions applicable thereto. The tax advisors have further advised in
writing that implementation of the New Investing Policy as soon as possible
after the Sale, whether directly by the Company or indirectly via a newly formed
subsidiary, would comply with HMRC conditions and thus enjoy the benefit of SSE,
ie. exemption from taxation on any financial gain, if any.
Risk Factors
GENERAL
The Company's objectives may not be fulfilled
The value of an investment in the Company is dependent upon the Company
achieving the aims set out in this Document. There can be no guarantee that the
Company will achieve the level of success that the Board expects.
Suitability of Shares as an investment
The Shares may not be a suitable investment for all recipients of this Document.
Before making a decision, investors are advised to consult an appropriate
independent investment adviser authorised through FSMA who specialises in
advising on investments of this nature. The value of Shares can go down as well
as up and investors may get back less than their original investment.
Attraction and retention of key employees
The Company's success will depend on its current and future executive management
team. The loss of the services of certain employees could have a materially
adverse effect upon the Company's business and future.
Requirement for further funds
The existing resources of the Company may not be sufficient for the future
working capital requirements of the Company or allow the Company to exploit new
opportunities. It may therefore be necessary for the Company to raise further
funds in the future, which may be by way of issue of further Shares on a non
pre-emptive basis. Although it is the Company's intention to issue Shares to
satisfy all or part of any consideration payable on an acquisition, vendors of
suitable companies or businesses may not be prepared to accept Shares at the
quoted market price.
Market information and nature of Shares
The market price of the Shares may not reflect the underlying value of the
Company's net assets. Potential investors should be aware that the value of
shares can rise or fall and that there may not be proper information available
for determining the market value of an investment in the Company at all times.
An investment in a share which is traded on AIM, such as the Shares, may be
difficult to realise and carries a high degree of risk. The ability of an
investor to sell Shares will depend on there being a willing buyer for them at
an acceptable price. Consequently, it might be difficult for an investor to
realise his/her investment in the Company and he/she may lose all of his/her
investment.
AIM
There can be no assurance that an active trading market for the Shares will be
maintained. AIM is a market for emerging or smaller growing companies and may
not provide the liquidity normally associated with the Official List or other
exchanges. The future success of AIM and liquidity in the market for the Shares
cannot be guaranteed. In particular, the market for the Shares may be, or may
become, relatively illiquid and therefore the Shares may be or may become
difficult to sell.
SPECIFIC
Lack of Opportunities
The Company's business plan is dependant on the Company's ability to source
property transactions and investments in the UK. There can be no guarantee that
such deals, at this level and level of gearing, will be available and acceptable
to the Board.
Availability of Finance
The Company's business plan is dependant on the availability of securing
additional debt finance to leverage the acquisitions and investments. Although
the Company has received an initial indication that this may be available there
is no guarantee that this will be secured and whether further funding may be
available. Any restriction in the level of debt funding would restrain the
Company's ability to make acquisitions and investments.
UK Property Market
Any future downturn in the UK property market could materially adversely affect
the value of properties acquired by the Company.
The market value for properties are generally affected by overall conditions in
the local economy, such as growth in gross domestic product, employment trends,
inflation and changes in interest rates. Changes in gross domestic product may
also impact employment levels, which in turn may impact the demand for premises.
Conditions within the property market, changes in landlord and tenant law,
changes in planning law or changes to rates or treatment of Stamp Duty Land Tax
could affect the performance of the properly portfolio the Board are intending
to acquire.
Tenant and Guarantor Risk
Where properties are acquired by the Company with subsisting tenants in the
event of tenant default, there may be a rental income shortfall. This may affect
investment returns and could lead to an event of default in any bank facilities
or other funding arrangements that the Group has at the time.
Both rental income and properly values may also be affected by other factors,
such as the perceptions of prospective tenants, the inability to collect rents
because of the bankruptcy or insolvency of tenants or otherwise, the ensuing
need to renovate, repair and re-lease space and the costs thereof, the costs of
maintenance and insurance, and increased operating costs. In addition, certain
significant expenditures, including operating expenses, must be met by the Group
even when a unit is vacant.
If any of the tenants in properties to be acquired by the Company were to assign
their lease, such a tenant could be required to guarantee the performance of the
assignee's obligations under that lease. However, if the assignee were
subsequently to assign that lease to another party, the original tenant would
then cease to be liable in respect of its covenants under that lease. The
relevant company within the Company would usually be required to consent to any
sub assignment but such consent could not normally be unreasonably withheld.
Development of properties
Any development of properties, prior to onward sale, may not be completed within
envisaged time scales or at all or may be subject to significant cost overruns.
This could therefore input on the profit made on such properties and therefore
the value of the Company's business as a whole.
Economic, political, judicial, administrative, taxation or other regulatory
matters
The Group may be adversely affected by changes in economic, political, judicial,
administrative, taxation or other regulatory factors, as well as other
unforeseen matters.
Market information
The market price of the Shares may not reflect the underlying value of the
Group's net assets.
Rising Interest costs
Investors should be aware the Company's investing policy is based on current
interest rates. Should these materially increase above this maximum then the
Company may need to re-evaluate their business plan.
Future Capital requirements
There can be no assurances that future capital and lending requirements can be
obtained on favourable terms.
General Meetings
The First General Meeting will held at 12.00 noon on 30 July 2009 at the Ibis
Hotel Rotherham, Moorhead Way, Bramley, Rotherham, S66 1YY, at which ordinary
resolutions will be proposed to authorise and approve the Sale and to approve
the New Investing Policy.
The Second General Meeting is scheduled at 12.00 noon on 6 August 2009 at the
same location at which a special resolution to change the Company's name to
"Adalta Real Plc" will be proposed.
Recommendation
The Sale and the New Investing Policy cannot proceed unless they are first
approved by Shareholders at the First GM.
For the reasons set out above, the Directors unanimously recommend that
shareholders vote in favour of the resolutions to be proposed at the First GM
regarding respectively the approval of the Sale and the New Investing Policy and
at the Second GM regarding the change of the Company's name. All of the
Directors have irrevocably committed themselves to vote in favour of the
approval of the Sale and the New Investing Policy at the First GM and the change
of the Company's name at the Second GM in respect of their beneficial holdings
amounting to 10,632,347 Shares (representing 51.58% of the Company's current
issued share capital).
Enquiries:
+-------------------------------------+-------------------------------------+
| DawMed Systems Plc | Tel: 01608 682244 |
| Kevin M Gilmore, Executive Chairman | Mob: 07785 396666 |
+-------------------------------------+-------------------------------------+
| | |
+-------------------------------------+-------------------------------------+
| Beaumont Cornish Limited | Tel: 020 7628 3396 |
| Roland Cornish | |
+-------------------------------------+-------------------------------------+
| | |
+-------------------------------------+-------------------------------------+
| Bishopsgate Communications Limited | Tel: 020 7562 3350 |
| Maxine Barnes | |
+-------------------------------------+-------------------------------------+
| | |
+-------------------------------------+-------------------------------------+
| For further information about the Company's business please visit |
| www.dawmed.com |
| |
+-------------------------------------+-------------------------------------+
Note: A copy of the Circular and this announcement will be available on the
Company's website: www.dawmedsystems .co.uk
Following the passing of the resolution to change the name of the Company and
this becoming effective, the Company's website will be www.adaltareal.com and
the stock exchange ticker will be ADA..
DEFINITIONS
The following definitions apply throughout the announcement unless the context
otherwise requires:
+----------------------------+------------------------------------------------------------+
| "Act" | the Companies Act 2006 and the Companies Act 1985 (as |
| | amended) to the extent that each is in force |
| | |
+----------------------------+------------------------------------------------------------+
| "AIM" | AIM, the market regulated by the London Stock Exchange plc |
| | |
+----------------------------+------------------------------------------------------------+
| "AIM Rules" | the rules applicable to AIM, published by the London Stock |
| | Exchange plc from time to time |
| | |
+----------------------------+------------------------------------------------------------+
| "Announcement" | the announcement made by the Company on RNS on 3 July 2009 |
| | in respect of the Sale |
| | |
+----------------------------+------------------------------------------------------------+
| "Board" or "Directors" | the directors of Dawmed |
| | |
+----------------------------+------------------------------------------------------------+
| "Continuing Directors" | the Directors other than John Crispin and Mark Adamson |
| | |
+----------------------------+------------------------------------------------------------+
| "Dawmed" or "the Company" | Dawmed Systems PLC |
| | |
+----------------------------+------------------------------------------------------------+
| "DIL" | Dawmed International Limited, the Company's subsidiary |
| | |
+----------------------------+------------------------------------------------------------+
| "CREST" | the relevant system (as defined in the Uncertificated |
| | Securities Regulations 2001 (SI 2001 No. 3755) in respect |
| | of which CRESTCo Limited is the operator in accordance |
| | with which securities may be held and transferred in |
| | uncertificated form |
| | |
+----------------------------+------------------------------------------------------------+
| "CRESTCo" | CRESTCo Limited |
| | |
+----------------------------+------------------------------------------------------------+
| "First GM" | the general meeting of Dawmed convened for 30 July 2009 |
| "New Investing Policy" | the new investing policy of the Company proposed to be |
| | adopted following completion of the Sale as referred to in |
| | this document |
| | |
+----------------------------+------------------------------------------------------------+
| "Overseas Shareholders" | Shareholders who are resident in, or citizens of, |
| | countries other than the UK |
+----------------------------+------------------------------------------------------------+
| "Resolutions" | the ordinary and special resolutions proposed to be voted |
| | on at the First GM and the Second GM |
| | |
+----------------------------+------------------------------------------------------------+
| "Sale" | the proposed sale of all the issued share capital in DIL |
| "Second Interim Results" | to Wassenburg |
| "Second GM" | the interim results of the Company for the 12 month period |
| | ended 30 September 2008 |
| | the general meeting of Dawmed convened for 6 August 2009 |
+----------------------------+------------------------------------------------------------+
| "Shareholders" | holders of Shares |
| | |
+----------------------------+------------------------------------------------------------+
| "Shares" | ordinary shares of 5p each in the capital of the Company |
| "Share Purchase Agreement" | the conditional agreement dated 3 July 2009 between (1) |
| | the Company (2) Wassenburg and (3) Kevin Gilmore and John |
| | Crispin |
| | |
+----------------------------+------------------------------------------------------------+
| "SME" | small and medium enterprise |
+----------------------------+------------------------------------------------------------+
| | |
+----------------------------+------------------------------------------------------------+
| "Wassenburg" | Wassenburg & Co. B.V. |
| | |
| | |
+----------------------------+------------------------------------------------------------+
| | |
+----------------------------+------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Dawmed Systems (LSE:DSY)
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Dawmed Systems (LSE:DSY)
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