Open Offer

RNS Number : 3031Q

Rangers Int. Football Club PLC

29 August 2014

 



29 August 2014

Rangers International Football Club plc

("Rangers" the "Club" or the "Company")

Open Offer of up to 19,864,918 New Ordinary Shares

Further to the announcements on 25 April and 6 August 2014, the Board of Rangers is pleased to announce an Open Offer of up to 19,864,918 new Ordinary Shares at 20p each ("New Ordinary Shares") to raise up to GBP3.97m before expenses. Qualifying Shareholders are entitled to subscribe for New Ordinary Shares on the basis of 0.30185 New Ordinary Shares for each existing Ordinary Share in the Company held on the Record Date.  In addition Qualifying Shareholders subscribing for their full entitlement under the Open Offer may also request additional New Ordinary Shares through the Excess Application Facility. The Open Offer is subject to an aggregate minimum subscription of 15,000,000 New Ordinary Shares.

The Issue Price of 20 pence per New Ordinary Share represents a discount of approximately 21.6 per cent. to the closing middle market price of 25.5 pence for each existing Ordinary Share in the Company on 28 August 2014.

Private Shareholders whose existing ordinary shares are held by a nominee company should get in touch with their custodian to ensure that they are given the opportunity to participate in the Open Offer.  A circular (the "Circular") setting out details of and the terms relating to the Open Offer will be posted today and made available on the Company's website, http://www.rangersinternationalfootballclub.com

For further information please contact:

Rangers International Football Club plc               

Graham Wallace/ Paul Tyrell                                                                      Tel: [phone]

Daniel Stewart & Company plc                                                                  Tel: [phone]

Paul Shackleton / David Coffman            

Newgate Threadneedle                                                                                Tel: [phone]

Roddy Watt / John Coles             

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for entitlement to participate in the Open Offer	5.00 p.m. on 28 August 2014
Announcement of the Open Offer and dispatch of the Circular and, to certain Qualifying Non-CREST Shareholders, the Application Form	29 August 2014
Expected ex-entitlement date for the Open Offer	8.00 a.m. on 29 August 2014
Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	as soon as practicable after 8.00 a.m. on 1 September 2014
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 8 September 2014
Latest time for depositing Open Offer Entitlements into CREST	3.00 p.m. on 9 September August 2014
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 10 September 2014
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 11 September 2014
Allotment of New Ordinary Shares	8.00 a.m. on 12 September 2014
Admission of the New Ordinary Shares to trading on AIM	8.00 a.m. on 18 September 2014
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)	as soon as practicable after 8.00 a.m. on 18 September 2014
Expected date of dispatch of definitive share certificates for the New Ordinary Shares in certificated form (certificated holders only)	by 29 September 2014

OPEN OFFER STATISTICS

Issue Price per New Ordinary Share	20 pence
Closing Price per Existing Ordinary Share on the Latest Practicable Date	25.5 pence
Discount to Closing Price of an Existing Ordinary Share on the Latest Practicable Date	21.6 per cent.
Open Offer Entitlement of Qualifying Shareholders under the Open Offer	0.30185 of an Open Offer Share for every Existing Ordinary Share
Number of Existing Ordinary Shares	65,810,341
Maximum number of New Ordinary Shares to be issued by the Company pursuant to the Open Offer	19,864,918
Maximum gross proceeds of the Open Offer (assuming full subscription)	£3.97million
Number of Ordinary Shares in issue immediately following Admission (assuming full subscription)	85,675,259
New Ordinary Shares as a percentage of the Enlarged Share Capital (assuming full subscription)	23.2 per cent.
Estimated net cash proceeds of the Open Offer (assuming full subscription)	£3.6 million
ISIN Code for Open Offer entitlements	GB00BQ15SB20
ISIN Code for Excess Open Offer Entitlements	GB00BQ15SC37

Open Offer of up to 19,864,918 New Ordinary Shares

Introduction

The Company announces that it will raise up to £4 million (before fees and expenses) through an Open Offer by way of the issue of New Ordinary Shares at an Issue Price of 20 pence per New Ordinary Share. The Issue Price represents an approximate 21.6 per cent. discount to the Closing Price of 25.5 pence per existing Ordinary Share on the Latest Practicable Date. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will occur on 18 September 2014.

The funding will be used to allow the Company to start implementing the strategy to re-build and re-establish Rangers as a stable, sustainable and successful business to deliver both shareholder value and footballing success. The proposals allow both existing private shareholders and institutional investors to participate in the fund raising to raise equity for the 2014/15 football season in a cost effective manner.

Reasons for the Open Offer

At the AGM in December 2013 Graham Wallace announced that the Board would undertake a strategic review of the Company. A summary of the Business Review was published on 25 April 2014. The Business Review highlighted issues relating to the Club's financial position and outlined steps the Board intended to take in the following months to improve the financial position of the Club.

On 23 February 2014, the Company announced that it had entered into two secured short term credit facilities for an aggregate amount of up to £1.5 million. These credit facilities are due for repayment on 1 September 2014 and the Board is in discussions with the providers in relation to their repayment, part of which will come from the proceeds of the Open Offer.

The Board has developed and approved a strategic plan as part of the Business Review to re-build and re-establish the Club, to return it to the top of the domestic game within three seasons, and to thereafter be competitive in UEFA competition. This will require continued investment in the playing squad over the next three years and beyond to drive on-field success.

In order to achieve this, the Company will need to raise capital over the next three years. It expects to raise between £20 million and £30 million. The Open Offer is an important planned part of this fund raising strategy and will provide the Club with working capital and part of the repayment to George Letham and Alexander Easdale of the £1.5 million drawn down from the credit facilities provided by them to the Company

The Board acknowledges the importance of supporters as Shareholders as well as its institutional investors; the Open Offer gives smaller Shareholders the opportunity to participate in the fund raising.

Accordingly, the Directors believe that an Open Offer of New Ordinary Shares is in the best interests of the Company and Shareholders as the funds raised should enable the Company to progress the issues identified in the Business Review.

Current trading and outlook

Having won the title to Scottish Professional Football League One at the end of the 2013/14 football season, the Club is now, for the 2014/15 football season, competing in the Scottish Championship, the second tier of the Scottish Professional Football League. The Club has increased most season ticket and matchday prices for the 2014/15 season by between 15 per cent. and 25 per cent. and has sold approximately 23,000 season tickets.

If the Club continues to progress to the top flight of Scottish football it will have the opportunity to benefit from increased attendances, increased ticket prices, access to prize monies from European competition and new commercial partnerships.

Following the operational and organisational changes identified in the Business Review, cost management initiatives have been implemented resulting in business practices being tightened and discretionary expenditure minimised.

The cash position today requires careful monitoring but has improved since the beginning of April 2014 with the sale of season tickets, improved commercial relationships, and cost management initiatives identified by the Business Review. The Company had an unaudited cash balance of £4.258 million at 30 June 2014. Included in this unaudited cash balance is £2.72 million relating to Rangers Retail Limited, which is not immediately available as working capital to the Group as a whole. Trading since the announcement of the interim results for the six months ended 31 December 2013 has been in line with expectations.

Assuming full subscription, the Company will require additional external funding in the latter half of the current financial year in order to meet working capital requirements as a result of the cyclical nature of its business.  At the minimum level of subscription additional working capital will be required towards the end of the current calendar year.  This funding, could be sourced from lines of credit, other forms of short term finance or as a component of a further equity raise, in line with the strategy identified in the Business Review to re-build and re-establish Rangers as a stable, sustainable and successful business. There can be no certainty that such funding will be available on commercial terms or at all. Failure to secure such funding would be damaging to the business and may impair the value of the Ordinary Shares.   The Open Offer is not underwritten. There can be no certainty as to the aggregate level of subscription for New Ordinary Shares. If the aggregate level of subscription is less than 15,000,000 New Ordinary Shares the Open Offer will not proceed and subscription monies will be returned to applicants.  Should this occur, the Company will be unable to pay its creditors as they fall due and the future of the Company will be uncertain; The Directors will immediately have to seek emergency financing which may or may not be available.

The Directors intend that further funding will be raised to continue to implement the strategy identified in the Business Review to re-build and re-establish Rangers as a stable, sustainable and successful business. As such the Directors will seek annual authorities from Shareholders at the Annual General Meeting of the Company in the Autumn of 2014 as are suitable for an AIM listed company in order to issue new Ordinary Shares and for statutory pre-emption rights to be disapplied.

Information on the Open Offer

Fundraising Structure

The Directors have given careful consideration as to the structure of the proposed fundraising and have concluded that the Open Offer is the most suitable option available to the Company and its Shareholders at this time having regard to the importance of pre-emption rights to Shareholders, the composition of the Company's register of members and the Company's current share price.  Subject to applications being received for an aggregate subscription of at least 15,000,000 New Ordinary Shares, up to 19,864,918 New Ordinary Shares will be issued through the Open Offer at 20 pence per New Ordinary Share to raise gross proceeds of up to £4 million.

Principal terms of the Open Offer

The allotment of New Ordinary Shares by way of the Open Offer shall take place pursuant to the shareholder authorities granted at the Company's Annual General Meeting on 18 December 2013. As such the Open Offer is being conducted in accordance with statutory pre-emption provisions as set out in section 561 of the Act.

Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to subscribe for 0.30185 of an Open Offer Share for every Existing Ordinary Share held on the Record Date at the Issue Price of 20 pence.

The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising pro rata to their current holdings of Existing Ordinary Shares with the option for subscribing for more pursuant to the Excess Application Facility subject to scaling down by the Company in the event that the Open Offer becomes oversubscribed. Any fractional entitlements to Open Offer Shares shall be aggregated and made available as part of the Excess Application Facility.

The Excess Application Facility being made available as part of the Open Offer enables Shareholders who so wish to apply for Open Offer Shares in excess of their Open Offer Entitlement in the event that certain other Shareholders do not wish to take up their Open Offer Entitlements and with respect to any fractional entitlements.

It should be noted that the Open Offer is not a rights issue. The Application Form is not a document of title and cannot be traded, The Open Offer is limited to a maximum aggregate amount of not more than €5 million, in order to take advantage of the exemption of the Prospectus Directive 2003/71/EC which avoids the Company incurring the cost of publishing a prospectus.

If a Qualifying Shareholder does not take up any of his or her Open Offer Entitlement, his or her proportionate ownership and voting rights in the Company will be diluted by 23.2 per cent. by the issue of the New Ordinary Shares. The Issue Price of 20 pence represents a 21.6 per cent. discount to the Closing Price of 25.5 pence per Ordinary Share on the Latest Practicable Date.

The latest date and time for acceptance and payment in full under the Open Offer is 11.00 a.m. on 12 September 2014. Full details of the terms and conditions of the Open Offer and how to apply are set out in Part II of the Circular.

The Open Offer Shares will when issued be credited as fully paid and will rank equally in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares.

Application procedure under the Open Offer

The procedure for application and payment is set out in the Circular and, where relevant, on the Application Form which will be dispatched to Qualifying Shareholders today.

Application for Admission

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will occur and trading in the New Ordinary Shares will commence at 8.00 a.m. on 18 September 2014. No temporary documents of title will be issued.

The New Ordinary Shares will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares in issue at the date of this announcement and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

Important notice

Qualifying Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike with a rights issue, any Open Offer Shares not applied for by Qualifying Shareholders under their Open Offer Entitlements will not be sold in the market on behalf of, or otherwise placed for the benefit of those Qualifying Shareholders who did not apply for their Open Offer Entitlements but will be made available to Shareholders as part of the Excess Application Facility.

Qualifying Shareholders are being invited to participate in the Open Offer and (subject to certain exceptions) will have received an Application Form with the Circular.

In issuing the Circular and structuring the Open Offer in this manner, the Company is relying on the exemption from issuing a prospectus in section 85(5) and paragraph 9 of Schedule 11A of FSMA.

Any Qualifying Shareholder who has sold or transferred all or part of his registered holding(s) of Existing Ordinary Shares prior to the date on which the shares are marked 'ex-entitlement' is advised to consult his stockbroker, bank or other agent through or to whom the sale or transfer was effected as soon as possible since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from him by the purchasers under the rules of the London Stock Exchange.

Overseas Shareholders

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Ordinary Shares for the benefit of such persons (including, without limitation, subject to certain exceptions, custodians, nominees, trustees and agents), or who have a contractual or other legal obligation to forward the Circular or (if applicable) an Application Form to such persons, is drawn to the information which appears in paragraph 6 of Part II of the Circular.

In particular, Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including, without limitation, the United States or any other Restricted  Jurisdiction)  should  consult  their  professional  advisers  as  to  whether  they  require  any governmental or other consents or need to observe any other formalities to enable them to take up their Open Offer Entitlements.

Taxation

Shareholders who are in any doubt as to their tax position, or who are subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser immediately.

Further Information

Your attention is drawn to the further information set out in Parts II to V of the Circular. Shareholders should read the whole of the Circular and not rely solely on the information set out in this announcement. In particular, you should consider the risk factors set out in Part III of the Circular.

Intentions of the Directors in relation to the Open Offer

The Directors intend to take up their Open Offer Entitlements in full and subscribe for an aggregate of 194,131 Open Offer Shares as set out below:

Directors	Number of Open Offer Shares
David Somers	14,186
Norman Crighton	18,111
James Easdale	107,803
Philip Nash	54,031

The Directors, in aggregate together with their immediate families or persons connected with them (within the meaning of Section 252 of the Act) hold 643,143 Existing Ordinary Shares, representing approximately 1.0 per cent. of the Existing Ordinary Shares in issue at the Latest Practicable Date.

An announcement will be released to the market in due course notifying the market of the acceptance by Directors and their families or connected persons of any Open Offer Entitlements and Excess Open Offer Entitlements and the effect on their subsequent shareholdings in the Company.

Recommendation

The board of directors of the Company has resolved that the Open Offer is in the best interest of

Shareholders as a whole. The Directors are not making a recommendation to Qualifying Shareholders as to whether they should take up their entitlement under the Open Offer, such decision will depend on each Qualifying Shareholder's individual circumstance. Accordingly, the Board of Directors of the Company strongly recommends that Qualifying Shareholders take their own independent financial advice before making a decision as to whether or not to take up their entitlement under the Open Offer. The Directors intend to take up their aggregate maximum entitlement of 194,131 New Ordinary Shares under the Open Offer in respect of a total of 643,143 Ordinary Shares held by them representing 1.0 per cent of the existing issued share capital of the Company.

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

"Act"	the Companies Act 2006;
"Admission"	the admission of the New Ordinary Shares to trading on AIM and such admission 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;
"Application Form"	the application form accompanying the Circular to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer;
"Business Day"	any day on which banks are generally open in England and Wales for the transaction of business, other than a Saturday, Sunday or public holiday;
"Business Review"	means the business review and strategic plan update published by the Company on 25 April 2014;
"certificated" or "in certificated form"	the description of a share or other security which is not in uncertificated form (that is not in CREST);
"Closing Price"	the closing middle market quotation of an Ordinary Share as derived from the AIM Appendix to the Daily Official list of the London Stock Exchange;
"Club"	Rangers Football Club;
"Company" or "Rangers"	Rangers International Football Club plc;
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations);
"CREST Manual	the compendium of documents entitled "CREST Manual" issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, the CREST Rules (including CREST Rule 8), the CCSS Operating Manual and the CREST Glossary of Terms;
"CREST member"	a person who has been admitted by Euroclear as a system member (as defined in the CREST Regulations);
"CREST participant"	a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended from time to time;
"CREST sponsor"	a CREST participant admitted to CREST as a CREST sponsor; "CREST sponsored member" a CREST member admitted to CREST as a sponsored member;
"Daniel Stewart"	Daniel Stewart & Company plc;
"Directors" or "Board"	the existing directors of the Company
"Enlarged Share Capital"	the 85,675,259 Ordinary Shares in issue immediately following Admission (on the basis that the Open Offer Shares are allotted but assuming no other Ordinary Shares are issued between the date of the Circular and Admission);
"Excess Application Facility"	the terms and conditions of the Open Offer pursuant to which Qualifying Shareholders may apply for additional Offer Shares in excess of their Open Offer Entitlement in accordance with the terms and conditions of the Open Offer;
"Excess Open Offer Entitlements"	in respect of each Qualifying Shareholder, the entitlement to apply (in addition to his Open Offer Entitlement) for Excess Offer Shares pursuant to the Excess Application Facility which is conditional upon such Qualifying Shareholder taking up his Open Offer Entitlement in full;
"Excess Shares"	Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility;
"Euroclear"	Euroclear UK & Ireland Limited;
"Excluded Overseas Shareholders"	other than as agreed by the Company and Daniel Stewart or as permitted by applicable law, Shareholders who are located or have registered addresses in a Restricted Jurisdiction or any other jurisdiction where to do so might constitute a violation of local securities laws or regulations;
"Existing Ordinary Shares"	the 65,810,341 Ordinary Shares in issue at the date of the Circular;
"FIFA"	Federation Internationale de Football Association, the governing body of worldwide football;
"Group"	the Company and its subsidiaries and subsidiary undertakings;
"HMRC"	Her Majesty's Revenue & Customs;
"Issue Price"	20 pence per New Ordinary Share;
"Latest Practicable Date"	means 28 August 2014 being the latest practicable date prior to the publication of the Circular;
"London Stock Exchange"	London Stock Exchange plc;
"Money Laundering Regulations"	Money Laundering Regulations 2007 (as amended and supplemented);
"New Ordinary Shares"	up to 19,864,918 new Ordinary Shares to be issued by the Company pursuant to the Open Offer;
"Open Offer"	the conditional invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Circular and in the case of the Qualifying Non-CREST Shareholders only, the Application Form;
"Open Offer Agreement"	the agreement dated 10 July 2014 between the Company and Daniel Stewart relating to the Open Offer, details of which are set out in paragraph 5 of Part V of the Circular;
"Open Offer Entitlement"	the Open Offer Shares which a Qualifying Shareholder is entitled to subscribe for under the Open Offer calculated on the basis of 0.30185 of an Open Offer Share for every Existing Ordinary Share held by that Qualifying Shareholder as at the Record Date;
"Open Offer Shares"	the 19,864,918 New Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer;
"Ordinary Shares"	ordinary shares of £0.01 each in the share capital of the Company;
"Overseas Shareholders"	Shareholders with registered addresses outside the UK or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the UK;
"Participant ID"	the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant;
"Prospectus Directive"	Directive 2001/34 of the European Parliament on the prospectus to be published when securities are offered to the public or admitted to trading and as amended by Directive 2003/71/EC and 2010/73/EU;
"Qualifying CREST Shareholders"	Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in certificated form;
"Qualifying Non-CREST Shareholders"	Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are in uncertificated form;
"Qualifying Shareholders"	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date with the exception (subject to certain exceptions) of Excluded Overseas Shareholders;
"Record Date"	5.00 p.m. on 28 August 2014;
"Registrars" or "Receiving Agent"	Capita Registrars Limited;
"Regulatory Information Service"	the regulatory information services approved by the London Stock Exchange for the distribution of AIM announcements;
"Restricted Jurisdictions"	each of Australia, New Zealand, Canada, Japan, the Republic of Ireland, the Republic of South Africa and the United States;
"Scottish Championship"	the second tier of the Scottish Professional Football League established in July 2013;
"Scottish Professional Football League"	the football league system in Scotland as established with effect from the 2013/2014 football season;
"Securities Act"	the US Securities Act of 1933, as amended;
"SFA"	Scottish Football Association, the governing body of Scottish football;
"Shareholders"	the holders of Ordinary Shares from time to time;
"UEFA"	Union des Associations Europeenes de Football, the governing body of European football;
"uncertificated"	recorded on a register of securities maintained by Euroclear in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland;
"United States", "UnitedAmerica" or "US"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all areas subject to its jurisdiction;
"USE"	unmatched stock event.
"£" or "Sterling" or "pence"	the lawful currency from time to time of the United Kingdom; and
"€"	Euros, the lawful currency of the 18 member states of the European Union who have entered into an Economic and Monetary Union.

 

END

 

 

IOEPPMJTMBJTTTI