TSEG Tse Grp.

TIDMTSEG

RNS Number : 6398W

TSE Group PLC

23 November 2010

TSE Group plc

Refocus of Strategy, Change of Name, Board Changes, Amendment to the Articles of Association and a Placing to raise GBP2.75 million

The Board is pleased to announce:

-- A refocusing of the Company's strategy to one of building an international communications and marketing business;

-- The appointment of a new Chief Executive Office;

-- A placing to raise GBP2.75 million gross;

-- Change of name to Porta Communications plc;

-- The potential disposal of the entire issued share capital of TSE Consulting SA; and

-- The resignation of Lars Haue-Pederson and the proposed retirement of Robin Courage.

It is intended that a General Meeting will be held on Friday 17th December and that Admission and commencement of dealings will take place on Monday 20th December.

Adam Reynolds, Chairman, commenting on the proposals stated:

"Upon Admission, David Wright will be appointed to the Board as CEO and through his experience, expertise and contact base, we intend to build an international communications and marketing business. David has substantial knowledge of this sector as he was the founder of Citigate and subsequently became the CEO of Incepta Plc. Porta Communications plc will act as a holding company with individual divisions within which it is intended that the following services will be provided: Public Relations (initially financial, corporate and public affairs); advertising and related services (including media buying and media bartering); and market research."

For further information please contact:

TSE Group plc Tel: +44(0)207 2451100

Adam Reynolds

Paul Foulger

Zeus Capital Tel: +44(0)161 8311512

Ross Andrews

Below are extracts from the Circular which is being sent to shareholders today. The full Circular is available on the Company's website: www.tsegroupplc.com

Definitions used in this announcement are those used in the Circular to Shareholders.

Introduction

On 29 September 2010, the Board announced that it was reviewing the trading position of the Company and reiterated that it was continuing to talk to a number of sports related businesses which might acquire or merge with TSE Consulting SA, its sole trading subsidiary.

As a result of this review the Board today announces a refocusing of the Company's strategy from that of an international sports consultancy business, to one of building an international communications and marketing business and the proposed appointment of David Wright as Chief Executive Officer, upon Admission.

Further, the Board announces a placing to raise approximately GBP2.75 million, before expenses, by means of the issue of 2,750,000,000 Ordinary Shares at 0.1 p per share. The net proceeds of the Placing will be used to facilitate the Company's proposed refocus of strategy and for working capital.

The Board remains in discussions to dispose of the entire issued share capital of TSE Consulting SA, its sole trading subsidiary and will keep Shareholders notified of discussions. Under the AIM Rules, the proposed disposal of TSE Consulting SA would represent a fundamental change to the business of the Company and would be subject to the prior approval of Shareholders. However, there is no guarantee that such discussions will lead to s sale.

To reflect this refocus in strategy the Board are also proposing to change the Company's name to Porta Communications plc.

Lars Haue-Pedersen resigned from the Board on 22 November 2010, but remains as managing director of TSE Consulting and upon Admission, Robin Courage will retire as a Director.

Refocus of Strategy

The Directors and Proposed Director believe that there is an opportunity by using the expertise and contact base of David Wright and the other Directors, to build an international communications and marketing business where there is clear synergy between the services offered, with the objective of maximising Shareholder value.

David Wright was the founder of Citigate, one of the leading public relations companies within the UK and in 1997 reversed Citigate into Incepta Plc, becoming Chief Executive and subsequently Chairman. In 2005 Incepta Plc merged with Huntsworth Plc, creating a group with an aggregated market capitalisation of GBP195m.

The Company will act as a holding company with individual divisions within which it is intended that the following services will be provided: public relations (initially financial, corporate and public affairs); advertising and related services (including media buying and media bartering); and market research.

It is proposed that this will be undertaken through the recruitment of:

(a) a team of proven, key public relations executives from within the industry (who are committed to the Board's and Proposed Director's vision) over the next 6 to 12 months;

(b) key executives to build the advertising and market research divisions following the initial move into public relations; and

(c) an acquisition programme focussed on companies where there is clear synergy and a shared energy to build a fast growing international group.

Board Changes and Appointment of Consultant

Board Changes

Upon Admission, David Wright will join the Board of TSE plc as Chief Executive Officer. At the same time Robin Courage will retire from the Board; Lars Haue-Pedersen resigned from the Board on 22 November 2010, but remains managing director of TSE Consulting SA.

David Wright

David's service agreement with the Company is conditional upon Admission and is terminable on 12 months' notice by either party. David will be appointed Chief Executive Officer and will receive an annual salary of GBP100,000 and will be entitled to annual performance-related discretionary bonus to be determined by the remuneration committee. Separately, David will also be issued with 150,000,000 Ordinary shares, in settlement of fees due under a consultancy arrangement, shortly after Admission at the Placing Price. These Ordinary Shares will be held in an escrow account and will revert back to the Company if David's service contract is terminated within 24 months of its commencement date.

David began his career as a journalist and left the Financial Times in 1978 to start a new career in Financial Public Relations. He became Chief Executive of Streets Financial Strategy from 1986 to 1988, before establishing Citigate in late 1988. In 1997, Citigate reversed into Incepta Plc and David became Chief Executive of the enlarged group, later becoming Chairman. In October 2003 David left Incepta Plc to become a Non-Executive Director of Bartercard. In March 2005, Incepta Plc was merged with Huntsworth Plc in a transaction worth GBP195 million with Incepta shareholders holding approximately 67 per cent. of the enlarged business.

Further details in relation to David Wright, as required by the AIM Rules, are set out below: David Ernest Wright, aged 66, has held the following directorships within the last five years: Current

Battersea Ironsides Sports Club Limited Matham Investments Limited Falcon Sales Limited

Former

Bartercard Exchange Limited Universal Storage Logistics Limited

Platinum Pet Products Limited Bartercard Limited

Bartercard UK Limited BWP Consultants Limited

David Wright was a Director of Molecob Limited when it was placed into creditors' voluntary liquidation on 8 June 2010.

There are no further disclosures to be made in accordance with schedule 2(g) of the AIM Rules.

Richard Feigen, Consultant

Richard, between 1999 and earlier this year, was the managing director of Seymour Pierce Limited. Under his leadership the company became one of the leading nominated advisors and brokers on AIM. Richard achieved number 1 position in Growth Company Investor Magazine's list of Movers and Shakers in December 2009. He is an experienced corporate financier in the small and mid company market and has advised many media businesses throughout his career. Richard is a partner of Hub Capital Partners Limited, through which he will, in the new year, be advising the Board on identifying and formulating the refocusing of the Company's plans and growth going forward.

Change of Name

To reflect the refocus in strategy it is proposed to change the name of the Company to Porta Communications plc following the General Meeting. Following the change of name the Company will issue new share certificates to those Shareholders not holding shares in uncertificated form. Following the issue of the new share certificates, share certificates in respect of existing Ordinary Shares will no longer be valid. Shareholders will still be able to trade in Ordinary Shares during the period between the passing of the Resolutions and the date on which Shareholders receive new share certificates

Placing and use of the Placing proceeds

The Company is proposing to raise approximately GBP2.75 million, before expenses, through the placing of 2.75 billion Ordinary Shares at the Placing Price. The Placing Shares will represent approximately 77.26 per cent. of the enlarged issued share capital immediately after Admission. The net proceeds of the Placing will be used to fund the refocused strategy of the Company and working capital.

The Company has procured placees for the Placing and the Placing has not been underwritten. Zeus Capital will not receive any commissions on the proceeds of the Placing but will receive a corporate finance advisory fee.

At the close of business on 22 November 2010, being the latest practicable date prior to the publication of this document, the middle market price of an Ordinary Share was 0.14p per share.

Although the Placing Price represents a discount of 28.57 per cent. to the middle market price per Ordinary Share the Board, after careful consideration, decided not to offer the Placing to all Shareholders but make it on a non pre-emptive basis. The main reasons were that the time and costs associated with a pre-emptive offer resulting from the introduction of the EU Prospectus Rules (which came into force on 1 July 2005) are considered by the Directors to be excessive. The making of a pre-emptive offer would require the production of a prospectus which would have to comply with the Prospectus Rules and be pre-vetted and approved by the FSA.

Adam Reynolds and Paul Foulger are interested in 58,441,296 Ordinary Shares (representing 1.64 per cent. of the Enlarged Issued Share Capital) and 58,461,295 Ordinary Shares (representing 1.64 per cent. of the Enlarged Issued Share Capital) respectively.

Adam Reynolds and Paul Foulger, both Directors, are also each interested in 50 per cent. of the issued share capital of Wilton International Marketing Limited ("Wilton"). Wilton is subscribing for 200 million Placing Shares at the Placing Price. After the Placing, Wilton will be interested in 200 million Ordinary Shares, representing approximately 5.62 per cent. of the Enlarged Issued Share Capital.

Brian Blasdale is subscribing for 50 million Ordinary Shares at the Placing Price. After the Placing he will be interested in 58,333,333 Ordinary Shares representing 1.63 per cent. of the Enlarged Issued Share Capital.

The participation of Adam Reynolds, Paul Foulger and Brian Blasdale in the Pacing is deemed under the AIM Rules to constitute a related party transaction. The independent Director of the Company, Robin Courage considers, having consulted with Zeus Capital, the Company's Nominated Adviser, that the terms of the transaction are fair and reasonable insofar as Shareholders are concerned.

The Placing is conditional on, inter alia, Admission of the Placing Shares to trading on AIM. The Placing Shares will, upon allotment, rank pari passu in all respects with the Ordinary Shares.

Amendment to Articles

The Articles refer to the authorised share capital iof teh Company. Pursuant to the Act, a company is no longer required to have an authorised share capital and it is proposed to remove this limit.

General Meeting

At the General Meeting which will be held at 10.00 a.m. on 17 December 2010 resolutions will be proposed to:

(i) approve the refocus of strategy;

(ii) authorise the Directors to allot (or grant rights over) the Placing Shares and up to GBP500,000 nominal value of Ordinary Shares pursuant to section 551 of the Act;

(iii) disapply the statutory pre-emption provisions contained in section 561 of the Act to enable the Directors in certain circumstances to allot Ordinary Shares for cash other than pro rata to Shareholders;

(iv) approve the proposed Change of Name; and

(v) amend the Articles of Association.

KEY STATISTICS

Existing Issued Share Capital

Current number of Ordinary Shares in issue 809,600,000

Current number of deferred shares of 0.9p each in issue 72,000,000

Deferred Consideration Shares 16,000,000

Placing

Number of Placing Shares 2,750,000,000

Gross proceeds of the Placing GBP2.75 million

Enlarged Issued Share Capital

Number of Ordinary Shares in issue immediately following Admission* 3 575,600,000

Number of deferred shares of 0.9p each in issue immediately following Admission 72,000,000

Market capitalisation of the Group at the Placing Price immediately

following Admission* GBP3.56 million

*This does not include 150 million Ordinary Shares to be issued to David Wright in lieu of fees under the terms of a Consultancy Agreement referred to above.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

2010

Dispatch of this document 23 November

Latest date and time for receipt of Forms of Proxy 10.00 a.m. on 15 December

General Meeting 10.00 a.m. on 17 December

Change of Name becoming effective 20 December

Admission and commencement of dealings in the Placing Shares 8.00 a.m. on 20 December

End

This information is provided by RNS

The company news service from the London Stock Exchange

END

IOELIFEELALVFII