PLC News 2010
05 August 2010
Issue of Perpetual Convertible Loan Instrument to expand activities
Westhouse Holdings plc (AIM: WHL), the integrated corporate finance and broking house, announces today that it is raising £3.5 million by way of a subscription for a perpetual convertible loan instrument provided by Bermuda Commercial Bank Limited ("BCB"). The proceeds of the subscription will be used to facilitate further growth of the Company, in particular, continued expansion of its recently launched investment funds activities and market making operations, as well as its established areas of business, enabling Westhouse to expand its corporate finance, equity sales and research business into new industry sectors.
It is intended that Westhouse and BCB may syndicate up to £900,000 of the instrument with a small number of other investors.
Principal terms of the Perpetual Convertible Loan ("PCL")
On 4 August 2010, Westhouse entered into a perpetual convertible loan agreement with BCB for the amount of £3.5 million. The PCL has no fixed repayment date and carries a coupon of 5% to 30 September 2015 and 8% thereafter. The Company has the right to defer payment of the interest which is payable quarterly in arrears. The holders of the PCL will have the right to convert the principal amount of the loan outstanding into ordinary shares of Westhouse ("Ordinary Shares"). This conversion right is for a period of five years from 4 August 2010 (the "Conversion Period"). The price per share for the conversion will be the lower of 60 pence per share and a 10% premium to the most recently published interim or final statement of shareholders' funds on a per share basis, subject to a minimum of 50 pence per share. Within the Conversion Period, Westhouse can require exercise of the conversion right, on the conversion terms stated above, if the mean average mid-market price for the Ordinary Shares at the close of business on 90 consecutive trading days exceeds 90 pence per share.
Until conversion the instrument will constitute Upper Tier 2 capital and after conversion the resulting equity will constitute Tier 1 capital for regulatory purposes.
On conversion the new equity would constitute between 34% and 38% of Westhouse's enlarged equity capital. Conversion of the PCL is conditional on any necessary consent being received from the Financial Services Authority (or any successor authority) pursuant to sections 178 to 191 of the Financial Services and Markets Act 2000 and may not result in BCB holding more than 30 per cent of the voting rights of the Company unless the Takeover Panel has first granted a dispensation from Rule 9 of the Takeover Code.
Commenting on the PCL, Bill Staple, Chief Executive of Westhouse, said: "This investment allows us to build mutually beneficial commercial links with Bermuda Commercial Bank. It also permits the Company to accelerate its expansion into investment funds, to develop further our market making operations in order to provide an increased level of service to both our institutional and corporate clients, and to widen our focus into new industry sectors. We look forward to a long-term relationship with BCB."
J. Michael Collier, Chairman and Managing Director of BCB, said: "We are extremely pleased that our investment in Westhouse will enable them to accelerate their current growth plans. As we continue with the development of BCB's banking and financial services business, we are looking to build robust commercial relationships with advisory and broking houses in the major global financial centres. This strategic investment into Westhouse will enable us to forge strong relationships in London and should enhance both businesses going forward."
Trading update
Trading conditions in the first half of the year have been difficult. In common with most of the Company's competitors its corporate finance and primary market business, in spite of optimism earlier in the year, has not achieved the levels of activity anticipated. However, the Company has started to witness some improvement in the business pipeline, particularly in its M&A advisory business, and Westhouse is currently involved in a number of announced and planned public takeover situations. The Company's new market-making desk opened for business in April and has had a successful start comfortably ahead of the Board's expectations. The Company will continue to manage the market making book prudently and is budgeting conservatively for the rest of the year in current market conditions. Commission income from secondary trading, while considerably greater than last year, continues to be unpredictable.
The Board has continued its policy outlined in April of realising the non-core investment portfolio to take advantage of its appreciation.
As at 31 July the Company had cash balances of £1.7 million.
A further trading update will be provided at the time of the interim results, which are expected to be announced towards the end of September.
For further information:
| Westhouse Holdings plc | |
| Bill Staple, Chief Executive | Tel: +44 (0) 20 7601 6100 |
| bill.staple@westhousesecurities.com | www.westhousesecurities.com |
Nominated Adviser Smith & Williamson Corporate Finance Limited |
|
| Azhic Basirov | Tel: +44 (0) 20 7131 4000 |
| corpfinance@smith.williamson.co.uk | www.smith.williamson.co.uk |
Broker |
|
| Westhouse Securities Limited | |
| Tom Price, Chief Operating Officer | Tel: +44 (0) 20 7601 6100 |
| Tim Metcalfe | |
| tom.price@westhousesecurities.com | |
| tim.metcalfe@westhousesecurities.com | www.westhousesecurities.com |
Media enquiries:
| Abchurch Communications Limited | |
| Henry Harrison-Topham / Quincy Allan | Tel: +44 (0) 20 7398 7702 |
| henry.ht@abchurch-group.com | www.abchurch-group.com |
Notes to editors
Westhouse Holdings plc is an integrated corporate finance and broking house offering corporate advisory, broking, trading and M&A services to small and mid-cap companies. It specialises in servicing fast-growing companies, and has particular expertise in the natural resources sector, emerging market businesses, clean energy and a growing number of other industry sectors. Its operating subsidiary, Westhouse Securities Limited, is authorised and regulated by the FSA, is a member of the London Stock Exchange, and is a registered AIM Nominated Adviser and Broker.
Westhouse Securities has a team of highly accomplished corporate finance, broking and research specialists with strong and diverse track record in the small and mid-cap sector. The team is further supported by an Advisory Panel whose members' experience in growing advisory businesses is well recognised throughout the corporate broking industry.
Westhouse Securities is headquartered in London, has an office in Leeds, and employs more than 40 people. The Company continues to exploit opportunities in overseas markets through its strategic alliance with Agile Partners, based in Beijing, and through close working relationships with a number of other advisory businesses worldwide.For further information, please visit www.westhousesecurities.com
Bermuda Commercial Bank Limited ("BCB")
BCB is one of Bermuda's four licensed banks, established in 1969 and listed on the Bermuda Stock Exchange (BCB BH). BCB is a corporate and private wealth bank, offering a range of services through its subsidiaries BCB Fund Services Limited, BCB Trust Company Limited, Bercom Nominees Limited and BCB (Mauritius) Limited. BCB takes pride in ensuring clients' assets are safely and professionally managed.
BCB's total assets at 31 March 2010 were US$370.31 million, consisting predominantly of cash and other short term investments. BCB's shareholder equity was US$75.27 million at 31 March 2010.
For more information on the Bank please visit its website www.bcb.bm