Fundraising and Capital Reorganisation

RNS Number : 5284U

Parallel Media Group PLC

03 December 2013

 



THIS ANNOUNCEMENT IS RESTRICTED AND IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, SOUTH AFRICA, THE REPUBLIC OF IRELAND OR AUSTRALIA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL

3 December 2013

Parallel Media Group plc

("Parallel Media" or the "Company")

Firm Placing of up to 641,026 New Shares and Proposed Placing and Open Offer

of up to 320,684 New Shares at 156 pence per New Ordinary Share,

Capital Reorganisation,

Approval of a waiver of the obligations under Rule 9 of the City Code on Takeover and Mergers

Parallel Media Group plc (AIM:PAA.L), a leading communications agency connecting lifestyle brands to opportunities in its chosen sectors in Asian markets, is pleased to announce that it has raised £1 million (before expenses) by way of a firm placing by Sanlam Securities of 641,026 New Shares at 156p per share.

The Company also announces that it proposes to raise a further £0.5 million (before expenses) by way of an Open Offer of 320,684 New Shares on the basis of 13 Open Offer Share for every 1,992 Existing Ordinary Shares, all of which have either been placed by Sanlam Securities firm or conditionally (subject to clawback to satisfy valid applications under the Open Offer) with a new institutional investors in each case at 156p per share.

In addition, the Company will be effecting a Capital Reorganisation resulting in one New Ordinary Share for every 24 Existing Ordinary Shares.

The Company intends to use the net proceeds of the Fundraising primarily to reduce its outstanding obligations, to refinance a loan from Lloyds TSB Bank plc totalling approximately £500,000 and to provide working capital to enable the Company to pursue the new opportunities described above.

This summary should be read in conjunction with, and is subject to, the accompanying full text of this announcement.  The conditions and certain further terms of the Open Offer are set out in this announcement.

It is expected that the circular to Shareholders and the Application Form will be dispatched today, other than in relation to a Restricted Jurisdiction.

Fundraising statistics
Issue Price per New Share	156p
Equivalent subscription price per Existing Ordinary Share	6.5p
Number of Existing Ordinary Shares	49,140,569
Number of New Ordinary Shares in issue following the Capital Reorganisation but before the issue of the New Shares	2,047,523
Number of Firm Placing Shares(1)	641,026
Basis of the Open Offer	13 Open Offer Shares for every 1,992 Existing Ordinary Shares
Number of Open Offer Shares(2)	320,684
First Firm Placing Shares as percentage of the Enlarged Share Capital	21.30 per cent
Open Offer Shares as percentage of the Enlarged Share Capital	10.66 per cent
Estimated maximum proceeds receivable by the Company under the Fundraising (before expenses)	£1.50million
Enlarged Share Capital(3)	3,009,233
Market capitalisation of the Company on Admission at the Issue Price	£4,69 million
ISIN of the Open Offer Entitlement	GB00BGQYSQ97
ISIN following Admission	GB00BGSGT481

Note:

(1)           Assuming the Firm Placing is fully subscribed.

(2)           The Open Offer Shares  assuming that all of the Open Offer Shares are fully subscribed for, whether under the Open Offer and/or under the Placing.

(3)           Assuming Admission of all of the Firm Placing Shares and all of the Open Offer Shares and that no other New Ordinary Shares are issued between the date of this announcement and Admission.

For further information, please contact:

Parallel Media Group plc
Belinda Laubi	Tel: [phone]
Sanlam Securities UK Limited (Nominated Adviser and Broker)
Virginia Bull / Simon Bennett	Tel: [phone]

Proposed Firm Placing and Placing and Open Offer, Capital Reorganisation, Approval of a waiver of the obligations under Rule 9 of the City Code on Takeover and Mergers and Notice of General Meeting

1.         Introduction

The Company is pleased to announce that it has conditionally raised £1.0 million (before expenses) by way of a firm placing to David Ciclitira and Oryx of 641,026 New Shares at 156p per New Share, following the implementation of the Capital Reorganisation, the terms of which are set out below. The Company also announced that it proposes to raise up to a further £0.5 million (before expenses) by way of an Open Offer of 320,684 New Shares, all of which have either been placed firm as a result of undertakings having been received from certain Qualifying Shareholders not to take up their entitlements under the Open Offer or conditionally placed (subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer), in each case placed with Oryx, at the Issue Price per New Share. Neither the Firm Placing nor the Placing and Open Offer are being underwritten by Sanlam Securities.

In addition, the Company announced earlier today that it has entered into the PCM Agreement with PCM, a company ultimately controlled by David Ciclitira. Pursuant to the PCM Agreement, the Company will provide the services of David Ciclitira and certain other services to PCM in consideration for the payment by PCM to the Company of most of the revenue which PCM will receive (whether by way of dividends or otherwise) as a result of PCM being a 45 per cent. shareholder in a joint venture company.  PCM has entered into a joint venture agreement with a major US media conglomerate, pursuant to which the parties have formed a Hong Kong incorporated company to provide live music based marketing solutions for international and local brands across Asia. The effect of this arrangement with PCM is that the Company will receive PCM's economic benefit of the joint venture arrangement. PCM does not own any assets other than its shareholding in the joint venture company. In consideration for the services which David Ciclitira will be providing to PCM and hence to the joint venture company pursuant to the PCM Agreement, David Ciclitira will be granted options to subscribe for up to 320,512 New Ordinary Shares (New Options) which will have an exercise price of the nominal value of the New Ordinary Shares but which will only vest in proportion to the amount of revenue received by the Company from PCM pursuant to the PCM Agreement, unless the Company elects to exercise its option to acquire the PCM shares early.

The Firm Placing and the Placing and Open Offer are conditional, amongst other things, on Shareholders' approval to give the required authorities to allot the New Shares and to disapply statutory pre-emption rights in relation to the allotment of the New Shares. The Issue Price represents a premium of approximately 15.56 per cent. to the price of 5.625 pence per Existing Ordinary Share, being the Closing Price of an Existing Ordinary Share on 2 December 2013 (the latest practicable date prior to the announcement of the Fundraising) and of approximately 13.88 per cent. to the price of 5.708 pence per Existing Ordinary Share, being the average Closing Price for the preceding 20 business days prior to 2 December 2013.

2.         Background to and reasons for the Fundraising and PCM Agreement

Parallel Media, a leading communications agency connecting lifestyle brands to opportunities in its chosen sectors in Asian markets, announced in its half yearly results for the six months ended 30 June 2013 released on 30 September 2013, that the new events which Parallel Media established in the preceding 12 months had been reflected in the Group's turnover which for the six months ended 30 June 2013 had increased by 39 per cent to £7.63 million (2012: £5.48 million) from the same period in the previous year. As a consequence, gross profit increased by 44 per cent to £1.85 million (2012: £1.28 million) and profit before tax increased by 646 per cent to £657,000 (2012: £88,000). In addition, following completion of a fundraising in July and August 2013, the Company has significantly strengthened its balance sheet, capitalising approximately £790,000 of debts owed by the Company.

In addition, the Company announced earlier today the entry into of the PCM Agreement with PCM, a company wholly owned by Luna Trading Limited which is ultimately controlled by David Ciclitira, and whose only assets are the shares which it holds in the joint venture company. Pursuant to the PCM Agreement, the Company will provide, amongst other things, the services of David Ciclitira to PCM in consideration for the payment by PCM to Parallel Media of most of the revenue which PCM will receive (whether by way of dividends or otherwise) as a result of PCM being a 45 per cent. shareholder in a joint venture company. PCM has entered into a joint venture agreement with a major US media conglomerate, pursuant to which the parties have formed a Hong Kong incorporated company to provide live music based marketing solutions for international and local brands across Asia. PCM owns 45 per cent. of the shares in the joint venture company and it is anticipated that profits are expected to be paid out as dividends to shareholders pro rata to their shareholdings.

In accordance with the PCM Agreement, the Company has agreed to provide, amongst other things, the services of David Ciclitira to PCM. In consideration for receipt of the services provided pursuant to the PCM Agreement, PCM will pay any funds earned by it from the joint venture company, subject to the retention of an annual sum of £25,000 to pay for the running costs of PCM and any tax payable by PCM, to Parallel Media up to a maximum aggregate amount of £500,000. The PCM Agreement is conditional upon the passing of the Resolutions and will be for a term commencing on the date of the passing of the Resolutions to the date of termination of the joint venture unless terminated upon the exercise of the Company's option to acquire the shares in PCM or by reason of default. The PCM Agreement can be terminated by either PCM or the Company in certain circumstances. The PCM Agreement does not include a minimum amount to be paid to the Company.

In addition, under the PCM Agreement Luna Trading Limited has granted the Company an exclusive option to purchase Luna Trading Limited's entire shareholding in PCM for the nominal sum of £1 at any time commencing on the PCM Option Date and ending on the six month anniversary of that date.

In consideration for David Ciclitira providing his services to PCM pursuant to the PCM Agreement he will be granted New Options over up to 320,512 New Ordinary Shares which will have an exercise price of the nominal value of a New Ordinary Share but which will only vest in proportion to the revenues received by the Company from PCM under the PCM Agreement, that is, for every £39 of revenue received by the Company from PCM, options over 25 New Ordinary Shares will vest subject to a maximum of options vesting over 320,512 New Ordinary Shares provided that if the Company elects under the PCM Agreement to exercise its option prior to £500,000 being received by it under the agreement these restrictions shall cease and David Ciclitira will be entitled to exercise any remaining New Options up to the maximum aggregate of 320,512 New Ordinary Shares.

The PCM joint venture arrangement is an example of the opportunities currently being presented to Parallel Media which the Company is unable to act upon. This is due, in part, to the size of the Company and the fact that it has historically made substantial trading losses. The Board wishes to take further advantage of such opportunities and is therefore proposing to raise up to £1.5 million (before expenses) pursuant to the Firm Placing and Placing and Open Offer. Existing Shareholders in Parallel Media are being offered the opportunity to participate in the Fundraising as described in more detail below.

3.         Use of proceeds of the Fundraising

The Company intends to use the net proceeds of the Fundraising primarily to reduce its outstanding obligations, to refinance a loan from Lloyds TSB Bank plc totalling approximately £500,000 and to provide working capital to enable the Company to pursue the new opportunities described above.

4.         Capital Reorganisation

The Capital Reorganisation is being proposed because the Board believes that it will help to increase liquidity when trading in the New Ordinary Shares commences. As a consequence, the Board has decided that the Capital Reorganisation will be effected by way of the following steps:

(a)        the Existing Ordinary Shares will be consolidated on the basis of one ordinary share of 52.8p for every 24 Existing Ordinary Shares of 2.2p; and

(b)        immediately following such consolidation, each ordinary share of 52.8p will be subdivided and converted into one New Ordinary Share of 1p and one New Deferred Share of 51.8p each.

Holders of fewer than 24 Existing Ordinary Shares will not be entitled to receive a New Ordinary Share following the Capital Reorganisation. Shareholders with a holding in excess of 24 Existing Ordinary Shares, but which is not exactly divisible by 24, will have their holding of New Ordinary Shares rounded down to the nearest whole number of New Ordinary Shares following the Capital Reorganisation. Fractional entitlements, whether arising from holdings of fewer or more than 24 Existing Ordinary Shares, will be sold in the market and the proceeds will be retained for the benefit of the Company.

The Existing Ordinary Shares have been admitted to CREST. Application will be made for Enlarged Share Capital to be admitted to CREST, all of which New Ordinary Shares may then be held and transferred by means of CREST. It is expected that the New Ordinary Shares arising as a result of the Capital Reorganisation in respect of Existing Ordinary Shares held in uncertificated form, i.e. in CREST, will be credited to the relevant CREST accounts on 30 December 2013 and that definitive share certificates in respect of the New Ordinary Shares arising as a result of the Capital Reorganisation from Existing Ordinary Shares held in certificated form will be dispatched to relevant Shareholders by 6 January 2013. No temporary documents of title will be issued. Share certificates in respect of Existing Ordinary Shares will remain valid until superseded by certificates issued in respect of New Ordinary Shares and, pending delivery of share transfers in respect of New Ordinary Shares, will be certified against the register. The record date of the Capital Reorganisation is 27 December 2013.

As a consequence of the Capital Reorganisation, each Shareholder's holding of New Ordinary Shares (ignoring fractional entitlements) immediately following the Capital Reorganisation becoming effective (and excluding for these purposes the issue of New Shares pursuant to the Fundraising) will be 1/24^th of the number of Existing Ordinary Shares held by them on the record date of the Capital Reorganisation. However, each Shareholder's proportionate interests in the Company's issued ordinary share capital prior to the implementation of the Fundraising will remain unchanged purely as a result of the Capital Reorganisation but Shareholders proportionate shareholdings in the Company will change as a result of the Firm Placing and Placing and Open Offer.

The rights attaching to the New Ordinary Shares will be identical in all respects to those of the Existing Ordinary Shares.

The last day of trading on AIM of the Existing Ordinary Shares is expected to be 27 December 2013.

5.         Terms of the Firm Placing

The Company has conditionally placed 641,026 Firm Placing Shares at 156 pence per New Share with David Ciclitira and Oryx to raise £1.0 million (before expenses for the benefit of the Company). Under the terms of the Placing Agreement, Sanlam Securities has agreed, as agent for the Company, to use reasonable endeavours to procure Placees for the Firm Placing Shares at the Issue Price. The Firm Placing is not being underwritten by Sanlam Securities or by any other person.

Application has been made to the London Stock Exchange for the Firm Placing Shares to be admitted to trading on AIM. It is expected that such Admission will become effective and that dealings will commence at 8.00 a.m. on 30 December 2013.

The Firm Placing is required in order to give Placees certainty as to the size of their shareholding in the Company following the Fundraising.  The Firm Placing Shares are not subject to clawback and are not part of the Placing and Open Offer.

6.         Details of the Placing and Open Offer

Alongside the Firm Placing, the Company is proposing to raise a further amount of approximately £0.5 million (before expenses) pursuant to the Placing and Open Offer. The proposed Issue Price of 156 pence per New Share under the Placing and Open Offer is the same price as the price at which all other New Shares are being issued under the Firm Placing. Under the terms of the Placing Agreement, Sanlam Securities has agreed, as agent for the Company, to use reasonable endeavours to procure Placees for the Open Offer Shares, subject to clawback to satisfy any valid applications by Qualifying Shareholders under the Open Offer.  The Placing and Open Offer is not being underwritten by Sanlam Securities or by any other person.

The Open Offer is being made on a pre-emptive basis, allowing all Qualifying Shareholders the opportunity to participate. Certain Qualifying Shareholders, comprising David Ciclitira and his associated parties which form the Concert Party, and Christopher Mills (a director and the Investment Manager of Oryx), have undertaken not to take up their entitlements under the Open Offer comprising in aggregate 142,272 New Shares, and these 142,272 New Shares have been placed by Sanlam Securities with Oryx and will raise approximately £222,000 of the £0.5 million (before expenses) referred to above and the Placing of these New Shares is not being underwritten by Sanlam Securities or by any other person.

The Open Offer Shares have been conditionally placed by Sanlam Securities (under the Placing) with Oryx at the Issue Price subject to clawback to satisfy valid applications under the Open Offer (save in the case of those Open Offer Shares referred to above in respect of which irrevocable undertakings not to take up entitlements have been received and as such there is therefore no possibility of clawback). The Open Offer Shares that are placed subject to clawback will raise approximately £278,000 million of the £0.5 million (before expenses) referred to above.

Prior to the proposed Capital Reorganisation, and subject to the fulfilment of the conditions set out below and in the circular which will be posted to Shareholders today, Qualifying Shareholders are being given the opportunity to subscribe for Open Offer Shares at the Issue Price payable in full on application and free of expenses, pro rata to their holdings of Existing Ordinary Shares as at the Record Date, on the following basis:

13 Open Offer Shares for every 1,992 Existing Ordinary Shares

and so in proportion for any other number of Existing Ordinary Shares then held. Entitlements to apply to acquire Open Offer Shares will be rounded down to the nearest whole number and any fractional entitlement to Open Offer Shares will be disregarded in calculating Open Offer Entitlements but will be aggregated and sold for the benefit of the Company under the Placing. The Open Offer is not conditional upon the level of applications made to subscribe under the Open Offer.

The Placing and Open Offer are subject to, amongst other things, Admission of the Open Offer Shares becoming effective by 8.00 a.m. on 30 December 2013 (or such later time and/or date as the Company and Sanlam Securities may agree, being no later than 5.30 p.m. on 31 January 2014).

The New Shares will, when issued, be fully paid, rank pari passu in all respects with the New Ordinary Shares in issue at that time (following the Capital Reorganisation), including the right to receive all dividends and other distributions declared, made or paid after the date of Admission of them.

If you have sold or otherwise transferred all of your Existing Ordinary Shares before the Ex-entitlement Date, you are not entitled to participate in the Open Offer.

Qualifying Shareholders should note that the Open Offer is not a "rights issue". Invitations to apply under the Open Offer are not transferable unless to satisfy bona fide market claims. Qualifying non-CREST Shareholders should be aware that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should also be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market nor will they be placed for the benefit of Qualifying Shareholders who do not apply for Open Offer Shares under the Open Offer, but will be issued to placees under the Placing with the proceeds to be retained for the benefit of the Company.

Conditionality

The Fundraising is conditional upon, amongst other things, the following:

·      the passing of the Resolutions to be proposed at the General Meeting to be held on 27 December 2013;

·      the Placing Agreement becoming unconditional in all respects and not being terminated prior to Admission; and

·      Admission of the New Ordinary Shares becoming effective by not later than 8.00 a.m. on 30 December 2013 (or such later date as the Company and Sanlam Securities may determine, being not later than 31 January 2014).

If the conditions to the Placing Agreement are not fulfilled (or if applicable waived) by 8.00 a.m. on 30 December 2013 (or such later time and/or date as Sanlam Securities may determine, not being later than 31 January 2014), or if the Placing Agreement is terminated, the Fundraising will lapse and will not proceed and any applications made by Qualifying Shareholders under the Open Offer will be rejected. In these circumstances, application monies received by the Receiving Agent in respect of Open Offer Shares will be returned (at the applicant's sole risk), without payment of interest, as soon as reasonably practicable thereafter.

The Directors have given consideration as to the best way to structure the proposed Fundraising, having regard to current market conditions, the composition of the Company's Shareholder Register, the level of the Company's share price and the importance of pre-emption rights to Shareholders.  After considering these factors, the Directors have concluded the structure of the Fundraising by way of a Firm Placing and Placing and Open Offer is the most suitable option available to the Company and its Shareholders as a whole. The Open Offer will provide an opportunity for all Qualifying Shareholders to participate in the Fundraising by acquiring Open Shares pro rata to their current holding of Existing Ordinary Shares.

Settlement and dealings

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM. It is expected that such Admission will become effective and that dealings will commence at 8.00 a.m. on 30 December 2013.

Overseas Shareholders

Certain Overseas Shareholders may not be permitted to subscribe for Open Offer Shares pursuant to the Open Offer. Further details are set out in the circular to Shareholders.

Qualifying CREST Shareholders

Application has been made for the Open Offer Entitlements of Qualifying CREST Shareholders to be admitted to CREST. It is expected that the Open Offer Entitlements will be admitted to CREST on 4 December 2013. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

7.         Related Party transaction

Pursuant to the terms of the Firm Placing and entry into the PCM Agreement David Ciclitira (Chairman) and his associated parties which form the Concert Party, and Oryx (of which Christopher Mills, a 10.17 per cent. Shareholder in Parallel Media, is a director and the investment manager and of which Harwood Capital is the manager and investment adviser. Timothy Sturm, who is a Shareholder and non-executive director of Parallel Media, is also a partner of Harwood Capital) have subscribed for 320,513 and 320,513 New Shares, respectively, at the Issue Price. Due to David Ciclitira's and Oryx's participation in the Firm Placing, both David Ciclitira and Christopher Mills have undertaken to not take up their entitlement under the Open Offer and these shares (amounting to 142,272 New Shares) have been placed by Sanlam Securities with Oryx. The remainder of the Open Offer Shares have also been conditionally placed with Oryx subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer. The placing of these New Shares is not being underwritten by Sanlam Securities or any other person.

David and Serenella Ciclitira, as members of the Concert Party (which holds an interest in 34.20 per cent. of the Existing Ordinary Shares) are classified as related parties of the Company for the purposes of the AIM Rules, by virtue of them having a substantial shareholding (as defined by the AIM Rules) in the Company and by virtue of them being Directors. David Ciclitira has agreed to subscribe for New Shares as part of the Firm Placing and has entered into the PCM Agreement with the Company and such subscription and the entry into the PCM Agreement constitute related party transactions under the AIM Rules.

In addition, Oryx has agreed to subscribe for New Sharesas part of both the Firm Placing and the Placing. Accordingly, due to Christopher Mills, a substantial Shareholder in the Company, being a director of Oryx, its participation constitutes a related party transaction under the AIM Rules. In addition, Timothy Sturm is a partner of Harwood Capital, which is the manager and investment adviser to Oryx.

Ranjit Murugason, acting as independent director in relation to the Firm Placing, the Placing and the entry into the PCM Agreement, considers, having consulted with Sanlam Securities, the Company's nominated adviser, that the terms of the Firm Placing and the Placing, and the Concert Party and Oryx (as applicable) participation therein, and the entry into the PCM Agreement are fair and reasonable insofar as Shareholders are concerned.

8.         Current trading and prospects

Since the publication of the Company's half-yearly results, as announced on 30 September 2013, the Company has held two further events, being the Kazakhstan Open and an AIA sponsored pop concert staring Justin Bieber in Seoul, South Korea, in partnership with AEG Live, both of which were well received. The Company continues to make progress with negotiations of the sponsorship of the 2014 Championship tournament and is currently in discussions for several new events in the entertainment sector for next year. The Directors believe that the overall improvement in the global economy should result in increased demand for events in both the sports and music markets which they are optimistic will lead to a buoyant future for the Company.

9.         Circular and General Meeting

The circular to shareholders and notice of General Meeting will be posted later today and will be available from the Company's website, www.parallelmediagroup.com.  The General Meeting of the Company has been convened for 10.30 a.m. on 27 December 2013 at the offices of Sanlam Securities UK Limited, 10 King William Street, London EC4N 7TW.

Expected timetable of principal events
	2013
Record Date	6.00 p.m. on 29 November
Announcement of Fundraising	7.00 a.m. on 3 December
Existing Ordinary Shares marked 'ex-entitlement' by the London Stock Exchange	8.00 a.m. on 3 December
Publication and posting of the circular to Shareholders, the Application Form (where relevant) and the Form of Proxy	3 December
Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders	8.00 a.m. on 4 December
Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 18 December
Latest time for depositing Open Offer Entitlements into CREST	3.00 p.m. on 19 December
Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 20 December
Latest time and date for return of Forms of Proxy	10.30 a.m. on 23 December
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)	11.00 a.m. on 24 December
General Meeting	10.30 a.m. on 27 December
Record date for the Capital Reorganisation and final date of trading for Existing Ordinary Shares	6.00 p.m. on  27 December
Admission and commencement of dealings in Enlarged Share Capital	8.00 a.m. on 30 December
New Ordinary Shares credited to CREST stock accounts in respect of such shares in uncertificated form	30 December
Despatch of definitive share certificates for New Ordinary Shares in certificated form	By 6 January 2014

Notes:

(1)      References to times in this announcement are to London, UK time (unless otherwise stated).

(2)      The timing of the events in the above timetable is indicative only. If any of the above times and/or dates are adjusted by the Company (with the agreement of Sanlam Securities), the revised times and/or dates will be notified to the London Stock Exchange by an announcement via an RIS and, where appropriate, to Shareholders.

Definitions
The following definitions apply throughout this announcement unless the context requires otherwise:
"Act"	the Companies Act 2006 (as amended)
"Admission"	the admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules
"AIM"	the AIM Market operated by the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies published by the London Stock Exchange, as amended from time to time
"Application Form"	the personalised application form accompanying circular to Shareholders on which Qualifying non-CREST Shareholders (other than certain Overseas Shareholders) may apply for Open Offer Shares under the Open Offer
"Australia"	the Commonwealth of Australia, its states, territories and possessions
"Canada"	Canada, its provinces and territories and all areas subject to its jurisdiction and any political sub-divisions thereof
"Capital Reorganisation"	the proposed reorganisation to be effected by consolidating every 24 Existing Ordinary Shares into one ordinary share of 52.8p and then dividing each ordinary share of 52.8p each into one New Ordinary Share and one New Deferred Share
"certificated" or "certificated form"	not in uncertificated form
"Closing Price"	the closing middle market quotation of a share as derived from the AIM Appendix to the Daily Official List of the London Stock Exchange
"Code" or "Takeover Code"	The City Code on Takeovers and Mergers
"Concert Party"	(i) David Ciclitira; (ii) Serenella Ciclitira (aka Maria Serena Papi); (iii) Barclays Wealth Trustees (Jersey) Limited; (iv) Luna Trading Limited; and (v) Lynchwood Nominees
"Company" or "Parallel Media"	Parallel Media Group plc, a company incorporated and registered in England and Wales with registered number 00630968
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations) which facilitates the transfer of title to shares in the uncertificated form

"Directors" or "the Board"	the directors of the Company
"Enlarged Share Capital"	the 3,009,233 New Ordinary Shares in issue immediately following completion of the Capital Reorganisation and the Fundraising assuming the Fundraising is fully subscribed
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST
"Ex-entitlement Date"	3 December 2013
"Existing Options" or "Existing Share Options"	the existing options held by David Ciclitira to acquire 44,935 Ordinary Shares, which following the Capital Reorganisation will become options to acquire 1,872 New Ordinary Shares
"Existing Ordinary Shares"	the 49,140,569 ordinary shares of 2.2 pence each in the capital of the Company in issue at the date of this announcement
"Firm Placing"	the conditional placing by Sanlam Securities (as agent of and on behalf of the Company) of the Firm Placing Shares to certain Placees at the Issue Price, as further described in this announcement and on the terms and subject to the conditions contained in the Placing Agreement
"Firm Placing Shares"	up to 641,026 New Ordinary Shares to be issued pursuant to the Firm Placing
"Form of Proxy"	the form of proxy accompanying the circular to Shareholders for use in connection with the General Meeting
"FCA"	the Financial Conduct Authority
"Fundraising"	together, the Firm Placing and the Placing and Open Offer
"FSMA"	the Financial Services and Markets Act 2000
"GM" or "General Meeting"	the General Meeting of the Company convened for 10.30 a.m. on 27 December 2013
"Group"	the Company and its Subsidiaries and Subsidiary Undertakings
"Harwood Capital"	Harwood Capital LLP, a limited liability partnership registered in England and Wales with registered number OC304213
"Independent Director"	Ranjit Murugason who is deemed independent for the purposes of the Code
"Independent Shareholders"	the Shareholders, other than the Concert Party, Christopher Mills and Timothy Sturm
"ISIN"	International Securities Identification Number
"Issue Price"	156 pence per New Share
"London Stock Exchange"	London Stock Exchange plc
"New Options"	the options granted to David Ciclitira to acquire up to 320,512 New Ordinary Shares pursuant to the PCM Agreement
"New Ordinary Shares"	the new ordinary shares of 1p each in the capital of the Company following the Capital Reorganisation
"New Shares"	the Firm Placing Shares and the Open Offer Shares
"Notice of GM"	the notice convening the General Meeting
"Official List"	the Official List of the UK Listing Authority
"Open Offer"	the conditional invitation made by the Company to Qualifying Shareholders to subscribe for the Open Offer Shares at the Issue Price on the terms and conditions set out in this announcement and, where relevant, in the Application Form
"Open Offer Entitlements"	the pro rata entitlement of Qualifying Shareholders to apply to subscribe for 13 Open Offer Shares for every 1,992 Existing Ordinary Shares registered in their name as at the Record Date
"Open Offer Shares"	the 320,684 New Ordinary Shares to be offered to Qualifying Shareholders by the Company pursuant to the Open Offer, 178,412 of which have been conditionally placed (subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer) pursuant to the Placing and 142,272 of which have been placed firm as a result of undertakings having been received from David Ciclitira and his associated parties which form the Concert Party and Christopher Mills not to take up their entitlements under the Open Offer
"Ordinary Shares"	the ordinary shares of 2.2 pence each in the capital of the Company
"Oryx"	Oryx International Growth Fund Limited, a closed-ended investment company incorporated in Guernsey as a company limited by shares which are admitted to the Official List and to trading on the main market of the London Stock Exchange whose registered office is at BNP Paribas House, 1 St Julian's Avenue, St Peter Port, Guernsey GY1 1WA, with registered number 28917
"Overseas Shareholders"	Shareholders with registered addresses outside of the United Kingdom or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the United Kingdom
"Panel" or "Takeover Panel"	the Panel on Takeovers and Mergers
"PCM"	Parallel Contemporary Music Limited a company incorporated in England and Wales, which is wholly owned by Luna Trading Limited, which is owned and controlled by David Ciclitira and is a member of the Concert Party
"PCM Agreement"	the conditional agreement dated 3 December 2013 between the Company, PCM, Luna Trading Limited and David Ciclitira, relating to the arrangements between those entities
"PCM Option Date"	the date on which the revenues received by Parallel Media pursuant to the PCM Agreement are equal to or exceed £500,000, or the date the Company elects to exercise the option to acquire the PCM shares under the PCM Agreement, whichever is the earlier
"Placees"	investors who are participating in the Firm Placing, and/or the Placing (as the case may be)
"Placing"	the conditional placing by Sanlam Securities (as agent of and on behalf of the Company) of the Open Offer Shares to certain Placees at the Issue Price, as further described in this announcement and on the terms and subject to the conditions contained in the Placing Agreement
"Placing Agreement"	the conditional agreement dated 3 December 2013 between the Company and Sanlam Securities, relating to the Fundraising
"PMGA"	Parallel Media Group Asia Limited a company incorporated in Singapore
"Proposals"	together the Fundraising, the Capital Reorganisation and the Rule 9 Waiver
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares which, on the register of members of the Company on the Record Date, are in uncertificated form
"Qualifying non-CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares which, on the register of members of the Company on the Record Date, are in certificated form
"Qualifying Shareholders"	holders of Existing Ordinary Shares on the register of members of the Company on the Record Date other than certain Overseas Shareholders
"Receiving Agent"	Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU
"Record Date"	the record date for the Open Offer, being 6.00 p.m. on 29 November  2013
"Resolutions"	the resolutions set out in the Notice of GM (and reference to "Resolution" followed by "1", "2", "3","4" or "5" shall refer to the numbered Resolutions in the Notice of GM)
"Restricted Jurisdictions"	the United States, Australia, Canada, Japan, the Republic of South Africa and any other jurisdiction where the extension or availability of the Open Offer would breach any applicable law
"Rule 9 Waiver"	the agreement of the Panel to waive the obligation on the Concert Party, which would otherwise arise upon the issuance of Firm Placing Shares and the grant to and exercise of the New Options  by the Concert Party, to make a general offer to all Shareholders pursuant to Rule 9 of the Takeover Code, conditional upon the approval of Resolution 1 at the General Meeting
"Sanlam Securities"	Sanlam Securities UK Limited, nominated adviser and broker to the Company
"Shareholders"	a holder of Existing Ordinary Shares
"stock account"	an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited
"Subsidiary"	a subsidiary of the Company as that term is defined in Section 1159 and schedule 6 of the Act
"Subsidiary Undertaking"	a subsidiary undertaking of the Company as that term is defined in Section 1162 and Schedule 7 of the Act
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland its territories and dependencies
"uncertificated" or "uncertificated form"	recorded on the relevant register or other record of the share or other security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by way of CREST
"US" or "United States"	the United States of America, its territories and possessions, any state of the United States and the District of Columbia

All references in this announcement to "£" or "p" are to the lawful currency of the United Kingdom.

 

END

 

 

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