Admission to AIM and First Day of Dealings

RNS Number : 9029K

Litigation Capital Management Ltd

19 December 2018

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM, THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE OR ACQUIRE ANY SECURITIES IN THE UNITED STATES, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA (UNLESS AN EXEMPTION UNDER THE RELEVANT SECURITIES LAWS IS AVAILABLE) OR IN ANY OTHER JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

19 December 2018

Litigation Capital Management Limited
("LCM" or the "Company")

Admission to AIM and First Day of Dealings

Litigation Capital Management Limited (AIM:LIT), a leading international provider of litigation financing solutions, is pleased to announce that admission of the Company's fully paid ordinary shares ("Ordinary Shares") to trading on AIM, a market operated by London Stock Exchange plc, ("Admission") will take place at 8.00 a.m. (GMT) today.

The Company has successfully raised approximately £20 million pursuant to the placing of 38,461,540 new Ordinary Shares at 52 pence per share (the "Placing Price"), resulting in a market capitalisation on Admission of approximately £56.5 million.

Dealings on AIM will commence under the ticker "LIT" and the ISIN AU000000LCA6 (SEDOL BD2PHW4). Canaccord Genuity Limited is acting as Nominated Adviser, Financial Adviser and Sole Broker to the Company.

Admission highlights:

§ Based on the Placing Price, the market capitalisation of the Company on Admission is approximately £56.5 million.

§ Gross proceeds of approximately £20 million have been raised for the Company which will be used, inter alia, to fund the existing portfolio of Litigation Projects and for the deployment of further capital into new pipeline opportunities.

§ At Admission, the Company will have an enlarged share capital of 108,687,929 Ordinary Shares in issue.

§ In connection with Admission, the Company expects to de-list from the ASX on 21 December 2018.

§ From Admission LCM's Board comprises Patrick Moloney, Nick Rowles-Davies and Stephen Conrad as executive directors, together with the following non-executive directors: Dr. David King, Steve McLean and Jonathan Moulds.

§ Canaccord is acting as Nominated Adviser, Financial Adviser and Sole Broker to the Company.

Company highlights:

§ Established business - Founded in 1998, LCM is recognised as an established and experienced specialist litigation financier with the capability and network to originate, select and actively manage projects to a profitable outcome.

§ Litigation project track record - LCM has experienced significant growth in recent years, generating a cumulative return on invested capital of 138% over the last seven years to 30 June 2018. Over the same period, approximately 95% of Litigation Projects have achieved settlement with 88% of those being profitable and an average time to complete of 27 months. This is driven by highly effective project selection; active project management; and robust risk management.

§ Profitable and cash generative - LCM delivered its strongest returns of the last 3 financial years, with a profit before tax of A$12 million and return on equity of 41% in the year ended 30 June 2018.  Portfolio IRR over the last 7 years was 83%.

§ Diversified portfolio of litigation projects - The diversification of Litigation Projects by type and the range of investments within the portfolio at any one time presents opportunities for investors to benefit from a diversified exposure across claim type and geography, mitigating concentration risks in one part of the portfolio. This is further supported by LCM's active project management approach to projects. 

§ Experienced and proven team - LCM is staffed by pioneers of the litigation funding industry and a team of industry-leading commercial litigation lawyers with competencies across a range of claim types and geographies. LCM's Chief Executive Officer, Patrick Moloney, has 23 years' experience in commercial litigation and has spent 15 years in litigation funding. Nick Rowles-Davies, who has joined the board at Admission, is an industry veteran and brings with him to LCM an experienced UK team.

§ Litigation Project selection and active management - When considering new Litigation Projects LCM applies a rigorous selection criteria, referred to as LCM's five pillars. Once a Litigation Project has passed this initial selection criteria, LCM then applies an established process to actively manage and mitigate the risks associated with its Litigation Projects.

§ International presence - To maximise opportunities within the global litigation finance industry, LCM has taken a considered approach to international expansion during 2018. The Company launched its EMEA operations by opening an office in London, led by Executive Director Nick Rowles-Davies, as well as an office in Singapore in November 2018, which will cover the Singapore and Hong Kong markets. The opening of both offices has provided LCM with a strong and immediate presence across several markets with high growth potential.  In relation to the UK and Asian expansion, all risk management for the portfolio and treasury functions for LCM will remain with Head office in Australia.

§ Clear growth trajectory - LCM has an attractive project pipeline of approximately 49 pipeline projects with estimated investment value of approximately A$365 million¹, which is diversified across both geography and litigation project type. The Company believes it is imminently scalable through a team that can take on a substantial number of additional projects without significantly increasing corporate overheads.

§ Industry growth - Increasing utilisation of litigation finance by institutions, in-house corporate legal departments and law firms is anticipated.

The Company's move to AIM provides access to additional capital in a larger and more mature market to complement its business expansion in the UK, while at the same time aligning LCM, as a growing company with a growth platform.

Patrick Moloney, CEO of LCM, said:

"Today is a significant milestone for LCM with the completion of our successful listing on the AIM market. We will now look to enter the next phase of the Company's development and being a London listed company positions us to fund an attractive, qualified pipeline of future projects and grow the business through the access to capital and a broadening of our shareholder base.

We are delighted to welcome Nick Rowles-Davies to the team at LCM. Nick will head up our newly-launched London office, where we see significant opportunities across the EMEA region. Nick is a true industry pioneer and someone I have a long-standing working relationship with. We are looking forward to having Nick as part of the team as the Company moves to the next stage of its development.

Litigation financing is a growing alternative asset class uncorrelated with economic cycles, and we believe that we are now well-positioned to take advantage of the increasing number of opportunities across the sector globally."

Nick Rowles-Davies, Executive Vice-Chairman of LCM, said:

"The opportunity to join LCM is one that I could not miss. We have a unique proposition which combines one of the oldest litigation funding businesses in the world, with an unparalleled track record in the Southern hemisphere, together with our innovative approach to sourcing funding opportunities in the Northern hemisphere. This combination will create a global litigation finance business.

The transition within litigation financing to funding of corporate clients and those corporate clients seeing disputes as assets which can be financed, is fuelling growth for LCM. This focus on establishing a new corporate finance proposition for clients is an approach that will create new market share for LCM."

David King, Non-Executive Chairman of LCM, said:

"Last year, LCM reported its strongest financial performance and the Company has established a clear foundation for future growth for all our stakeholders. We have entered new markets where we see growth potential, including the UK, the Middle East and Asia. I thank all our shareholders that have supported our journey so far and look forward to seeing LCM fulfil its potential as an AIM listed company."

¹ As at 13 November 2018

-ENDS-

CONTACTS

Litigation Capital Management

Patrick Moloney, Chief Executive Officer                            

Nick Rowles-Davies, Executive Director

Canaccord (Nomad and Broker)                                                Tel: [phone]

Sunil Duggal / Emma Gabriel / Michael Reynolds

Hawthorn Advisors                                                                      [e-mail]

Lorna Cobbett / Zinka MacHale                                                 Tel: [phone]

NOTES TO EDITORS

About LCM:

Litigation Capital Management ("LCM") is a leading international provider of litigation financing solutions. This includes single-case and portfolio; across class actions, commercial claims, claims arising out of insolvency and international arbitration. LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management. Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.

www.lcmfinance.com 

 

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