Strategic Alternatives Process Update

RNS Number : 0058H

Elektron Technology PLC

13 May 2014

 



Not for release, publication or distribution in whole or in part, in or into the United States, Canada, Australia or Japan or any other jurisdiction where to do so would be unlawful

Elektron Technology plc

("Elektron" or the "Company" or the "Group")

Strategic Alternatives Process Update

And

Trading Update

On 7 April 2014, the Board of Elektron announced that it was considering a range of strategic alternatives to enhance shareholder value. Elektron is today providing an update on the strategic alternatives process.

The Company remains in discussions with a number of parties which may or may not lead to a sale of its entire issued share capital. There can be no certainty that any offers will be made as a result of the formal sale process, that any sale will be concluded nor as to the terms on which any offer might be made. The Board reserves the right to alter any aspect of the formal sale process or to terminate it at any time. In such cases it will make an announcement as appropriate. The Board also reserves the right to reject any approach or terminate discussions with any interested party or participant at any time.

In parallel to these discussions the Board is considering a number of other proposals as part of this process.

The Board is pleased to report that trading performance in respect of continuing operations for the first quarter ending 30 April 2014 in the current financial year is in line with its expectations.

The Group has successfully reduced its order backlog from a peak of £3.3m last year to a normalised level of around a £1.0m. As a result of the Group achieving production stability in the second half of last year, Elektron experienced a limited amount of destocking by customers impacting orders received in February for delivery in May.  However, orders received in March and April were in line with expectations.

Unaudited net debt as at 30 April 2014 was £7.6m (unaudited net debt at 31 January 2014: £8.0m). The Group continues to meet its debt repayment obligations under the committed revolving credit facility. As around half of the borrowing facilities are provided via invoice discounting, the destocking mentioned above has led to reduced headroom. In light of the proposals now being considered the Board has a reasonable expectation of a successful outcome from the strategic alternative process. It has therefore reached agreement with its lender in respect of revised covenants based on this assumption.

John Wilson, CEO commented:

"Having identified significant issues, last year, resolute action was taken that has resulted in the recent improved operational performance the Board expected.  The Group has continued its investment in New Product Development that has yielded the launch of new products in the first quarter with further launches planned during the year."

"With the closure of two units in Sandhurst next month following lease expiry, with operations relocated to other Group premises, our three year consolidation and rationalisation strategy will be fully implemented."

For further information, please contact:

Elektron Technology             www.elektron-technology.com
Keith Daley - Executive Chairman	[phone]
John Wilson - CEO
Andy Weatherstone - CFO
finnCap (Nominated Adviser, Financial Adviser and Broker)	[phone]
Ed Frisby/Ben Thompson
Instinctif Partners Adrian Duffield/Kay Larsen	[phone]

finnCap Limited which is regulated in the United Kingdom by The Financial Conduct Authority is acting for the Company in relation to the matters described in this announcement and is not advising any other person, and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to customers of finnCap or for providing advice in relation to the matters described in this announcement.

The directors of Elektron accept responsibility for the information contained in this announcement. To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise. The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. A failure to comply with the restrictions may constitute a violation of the securities laws of any jurisdiction.

Publication on website

A copy of this announcement will be made available (subject to certain restrictions relating to persons resident in restricted jurisdictions) at www.elektron-technology.com by no later than 12 noon (London time) on the business day following the release of this announcement in accordance with Rule 30.4 of the Code. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

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