Restoration of Listing

RNS Number : 1340V

Screen Technology Group plc

23 May 2008

 



23 May 2008

Screen Technology Group plc

('Screen' or the 'Company')

Working Capital update and restoration of the Company's shares to trading

Placing of up to 133,757,617 New Ordinary Shares and
Open Offer of up to 32,909,049 New Ordinary Shares at 0.66 pence per New Ordinary Share
on the basis of 12 Offer Shares for every 13 Existing Ordinary Shares

Issue of £200,000 of Loan Notes

Capital Reorganisation

Waiver from Provisions of Rule 9 of the Takeover Code

Screen Technology Group plc, today update investors regarding the Company's working capital position following the announcement of a proposed Placing, Open Offer and Loan Note issue to raise up to £1.3 million (before expenses) Following this announcement the trading in the Company's shares will be restored.

Summary

• Major new active investor Scaent Holdings Cooperatie UA

• £1.3 million of additional funding for the business 

• Restoration of the Company's shares to trading on AIM

• Opportunity for existing shareholders to take part in the Open Offer. 

• Potential access to various new international markets

Tom Jarman, Chief Executive, commented:

 'This is a very important step forward for the Company and I am delighted to welcome Scaent as a major Shareholder and partner. It is clear that Scaent have great ambitions for the Group and the resources to support the business as it achieves success; this can provide the Company with the stability and backing to capitalize on its global opportunities albeit over longer timescale than originally envisaged. Finally, we have been able to maintain good relationships with a number of international marketing and manufacturing partners and are well positioned to implement our highly scaleable business model over the coming year.'

Enquiries: 

Screen Technology Group plc Tom Jarman	Tel:  [phone]
Charles Stanley Securities  Nominated Adviser Russell Cook / Carl Holmes	Tel: [phone]

Working Capital update and restoration of the Company's shares to trading

Placing of up to 133,757,617 New Ordinary Shares and
Open Offer of up to 32,909,049 New Ordinary Shares at 0.66 pence per New Ordinary Share
on the basis of 12 Offer Shares for every 13 Existing Ordinary Shares

Issue of £200,000 of Loan Notes

Capital Reorganisation

Waiver from Provisions of Rule 9 of the Takeover Code

The Board has today announced details of a proposed Placing, Open Offer and Loan Note issue to raise up to £1.3 million (before expenses) which, if approved by Shareholders, will improve the Company's working capital position enabling restoration of the Company's shares to trading.  

The Board is pleased to confirm that Scaent, an Amsterdam based conglomerate, together with certain Directors and officers of Scaent, have agreed to subscribe for 121.2 million Placing Shares at the Placing Price of 0.66 pence per share to raise up to £800,000. Scaent has also invested a further £200,000 through subscription for the Loan Notes.  

A further 12.5 million Placing Shares have been placed with certain of the Directors, and other institutional investors, at the Placing Price to raise in aggregate £82,800 and an Open Offer has been announced under which up to 32,909,049 New Ordinary Shares will be issued, also at 0.66p per share, on the basis of 12 New Ordinary Shares for every 13 Shares held to raise up to a further £217,200  

Details of the Placing, Open Offer, Loan Note Issue and related matters are contained in a circular which is being sent to Shareholders today.

1.    Background to the Placing and Open Offer

The Company announced on 28 September 2007, that the Board considered a further fundraising was necessary to support the Company through its early adoption phase.  The Board has faced various challenges in securing this funding and announced on 25 February 2008 that it was proceeding with a proposed Company Voluntary Arrangement ('CVA') for STL, the Company's trading subsidiary, which received the necessary court approval on 14 March 2008.  Trading in the Company's shares on AIM was suspended on 25 February 2008 and remains suspended.  Trading in the Company's Ordinary Shares will be restored following the issue of this announcement and the Circular being sent to Shareholders.

Details of the Open Offer are set out in paragraph 2 below. Qualifying Shareholders may also subscribe for shares above their basic entitlement under the Open Offer if they so wish under an excess application facility. Further details of the excess application facility are described in paragraph 3 of this announcement. 

The net proceeds of the Placing and Open Offer and the issue of the Loan Notes are expected to be up to £1,147,500 (assuming full take up under the Open Offer). The proceeds of the Placing, Open Offer and Loan Notes, together with the implementation of the CVA and arrangements with Investec, MTI and TSC detailed below, will strengthen the Company's balance sheet, and the Directors believe will provide the Company with sufficient resources to pursue its current business plan, and provide general working capital for the Company. However, the Board are unable to confirm that the Company will have sufficient working capital for at least the next 12 months. 

The business has in the past experienced delays and difficulties which have impacted on working capital and the business continues to be cash consumptive. The Directors believe, having made due and careful enquiry, that the working capital available to the Company from the time of Admission, taking account of the proceeds of the Loan Notes and the Placing only will be sufficient to fund the Company's costs to at least 31 December 2008 assuming that the Company makes no new sales before 31 December 2008.  Beyond 31 December 2008 the business will need additional funding through the Open Offer, further investment or new sales which the Directors anticipate will be forthcoming. 

Following the Placing and Open Offer, the Scaent Concert Party will own 121,212,121 New Ordinary Shares, which will represent approximately 55.74 per cent. of the Enlarged Share Capital. Shareholders holding approximately 65.53 per cent. of the Existing Ordinary Shares have confirmed to the Panel that they will vote in favour of the Resolutions and the Panel has therefore granted a waiver from the obligation for the Scaent Concert Party to make an offer for the Company as required by Rule 9 of the Takeover Code. 

The Placing and Open Offer and the issue of the Loan Notes are conditional, inter alia, upon Shareholders passing the Resolutions set out in the notice convening the General Meeting, which is set out at the end of the Circular, posted to Shareholders today, and upon Admission. 

2.     Details of the Placing and the Open Offer 

The Company has entered into a Placing Agreement with Charles Stanley under the terms of which the Placees will subscribe for up to 133,757,617 Placing Shares at a price of 0.66 pence per Placing Share. 

In addition, Qualifying Shareholders are invited to apply for Offer Shares under the Open Offer at a price of 0.66 pence per Offer Share, payable in full on application and free of all expenses, pro rata to their existing shareholdings on the basis of: 

12 New Ordinary Shares for every 13 Existing Ordinary Shares

held at the Open Offer Record Date in proportion for any other number of Existing Ordinary  Shares then held. Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Offer Shares. Fractional entitlements which would have otherwise arisen will not be issued. 

The Open Offer is subject, inter alia, to the satisfaction of the following conditions on or before 17 June 2008 (or such later date being not later than 1 July 2008, as the Company may decide): 

(i)     the passing without amendment of the Resolutions; 

(ii)    the Placing provisions in the Placing Agreement being unconditional in all respects and not having been terminated in accordance with their terms; and 

(iii)    Admission becoming effective by 8.00 am on 18 June 2008 (or such later time or date not being later than 8.00 am on 1 July 2008 as the Company may decide). 

The Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission. 

The Open Offer has been structured so as to allow Qualifying Shareholders to subscribe for Ordinary Shares at the Open Offer price pro rata to their existing holdings. Qualifying Shareholders may, in addition, make applications in excess of their pro rata initial entitlement. Once subscriptions under the initial Open Offer entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether to meet any excess applications in full or in part. To the extent that Offer Shares are not subscribed by existing Shareholders, Open Offer entitlements will lapse. 

3.    Excess Application Facility 

Shareholders may apply for additional Offer Shares over and above their entitlement under the Open Offer, up to a maximum of 32,909,049 Offer Shares.  In the event that other Shareholders do not wish to apply for their entitlement under the Open Offer, excess applications will be satisfied at the absolute discretion of the Company up to the maximum number of Offer Shares available. 

Monies will be returned for any Excess Application that is not successful within five days following the closing of the Open Offer.  No interest will be paid in respect of monies returned. 

4.    Settlement and dealings 

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 such Admission will become effective and that dealings will commence on 18 June 2008.

The Offer Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared following Admission. 

5.    Overseas Shareholders 

Certain Overseas Shareholders may not be permitted to subscribe for Offer Shares pursuant to the Open Offer. In particular, the Offer Shares have not been registered under the United States Securities Act of 1933 (as amended) or the relevant Canadian or Australian securities legislation and therefore the Offer Shares may not be offered, sold, transferred or delivered directly or indirectly in the United States of America, Canada, Australia New Zealand, Japan or their respective territories and possessions. No application form will be accepted from any Shareholder who is unable to give the warranty set out in the Application Form or who the Company or its agent has reason to believe is ineligible to apply.

6.    Balance sheet restructuring 

In order to secure further investment into the Company it has been necessary to reach agreements with a number of its creditors to reduce the Group's liabilities. 

On 14 March 2008 STL, the wholly owned subsidiary of the Company, entered into a CVA under which all unsecured creditors of STL agreed to accept that amounts owing to them up to that date would be settled by a distribution of dividends from an aggregate fixed sum of £75,000 lodged with the supervisor of the CVA. 

Under the terms of the CVA, STL must pay to the CVA Supervisor, for the benefit of creditors, a further amount equal to 50 per cent. of the profits made by STL in the period from 14 March 2008 to 31 August 2008. In the event that STL defaults on any obligations under the CVA and/or fails to remedy these after 30 days of being required to do so by the Supervisor, either by fully meeting all outstanding obligations or by agreeing terms of variation with Creditors, the Supervisor shall petition for a winding up order. 

On 19 May 2008 the Company entered into a settlement agreement with Investec under which Investec agreed, inter alia, to accept the issue to it of 14,393,939 New Ordinary Shares with a value of £95,000 at the Placing Price in full and final settlement of all amounts due under the lease of a high speed manufacturing machine from Investec ('the Investec Lease'). On 16 May 2008 the Company entered into a settlement agreement with MTI and TSC under which MTI and TSC agreed, inter alia, to accept the issue to them of an aggregate of 757,576 New Ordinary Shares with a value of £5,000 at the Placing Price in return for them waiving their rights against the Company in respect of arrangements in connection with the Investec Lease under which MTI and TSC provided a guarantee of £450,000 to Investec. Both agreements are conditional upon completion of the Placing and Open Offer. 

In conjunction with these arrangements the Board anticipates that it will be appropriate to write down certain assets. Details of any write downs required will be announced when the Group announces its results for the year ended 31 December 2007 on or before 30 June 2008. 

The Company announced its unaudited interim results to 30 June 2007 on 28 September 2007. As at 30 June 2007 the Company had total net assets of £1.6 million.  As a result of the continuing trading losses and the anticipated write down of some of the Company's assets, the Company's net assets have been significantly reduced.  However, following the CVA and the agreements with Investec, MTI and TSC, and with the Proceeds of the Placing and Open Offer, the Board anticipates that the Company's net asset position will be improved, although net assets will be significantly lower than as at 30 June 2007. 

7.     Introduction to Scaent 

The Scaent Group is an Amsterdam based conglomerate that conducts business in more than 12 countries and across two continents.  Scaent currently employs over 2,600 personnel in various locations across the world.  Its core business is conducted within the energy industry and includes; electricity trading, generation and distribution, analytical and forecasting provision, coal exploitation and trading. 

Following five years of growth with a focus on the energy sector Scaent is now seeing to diversify its activities through various investment projects Scaent is pursing opportunities in various sectors including energy, construction, property, IT industry, utilities and public services, construction materials, mineral and mining exploration, consumer goods and retailing, telecommunications and manufacturing. 

As part of this investment initiative Scaent believes that it will be able to introduce appropriate acquisition and investment opportunities to the Company to broaden and diversify the Company's current activities for the benefit of both the Company and Shareholders. Scaent has no specific proposals at this time but will work closely with the Company's management, in pursuing such opportunities. 

8.    Interim Loan from Scaent 

To enable the Company to continue to trade through what has been a very difficult period, Scaent, through its subsidiary, Scaent Corporate Finance Limited, on 2 April 2008 provided the Company with an interim loan of €325,000, and up to €425,000 subject to further short term funding from Scaent.  This loan, which will be repaid as part of these proposals, is repayable on 31 May 2008, or such later date as the Lender may agree in writing, and secured by way of a fixed and floating charge over the assets and undertaking of the Company. 

9.     Details of the Loan Notes 

The Company has entered into an agreement with Scaent under which Scaent will provide a loan of £200,000 pursuant to the terms of the Loan Note Instrument.  The principal terms of the Loan Notes comprise: 

-    annual interest rate of 12 per cent.; 

-    repayment in the event of default by the Company or by mutual agreement between the Company and Scaent, at a premium of 180 per cent., that is for a capital value of £360,000 plus accrued interest; 

-    as an alternative to repayment of capital the Loan Notes may be converted in accordance with the terms of the Loan Note Instrument in whole or in part into 54,545,455 New Ordinary Shares; and 

-    fixed and floating charge over the assets of Screen Technology.

10.     Details of warrants to creditors 

In conjunction with the CVA and the Placing and Open Offer, the Company has agreed with Tom Swan that outstanding directors fees owed to him will be waived. Instead Mr. Swan will be compensated by the grant to him of a warrant over 1,000,000 New Ordinary Shares at an exercise price of 0.66 pence per Ordinary Share. 

Icon Corporate Finance, the adviser who introduced Scaent to Screen Technology Group plc (of which Kevin Gate is an associate), and Charles Stanley have also agreed to payment of part of their fee in relation to this transaction to be paid through the issue of warrants over 2,174,696 and 500,000 New Ordinary Shares, respectively at an exercise price of 0.66 pence. 

All of the above warrants remain exercisable at any time during the next five years. 

11.     Share Options/warrants for Directors and key management 

As mentioned above, the Company has taken severe measures to preserve its limited financial resources, culminating in the reorganisation and CVA.  During recent months the Directors and several members of staff have agreed to significant salary reductions and in several cases have sacrificed salary altogether.  In recognition of the commitment and support demonstrated by management and staff during this time the Board intends to grant options or warrants over a total of 56,253,788 New Ordinary Shares all at a price of 0.66 pence per share to certain Directors, management staff, and other key contractors. 

The options will be capable of exercise from periods of between three months and three years (as the case may be) from the date of the Placing.  The period up to which all options may be exercised is five years from the date of the Placing.

Included in the total are options/warrants to be granted to the following Directors: 

Tom Jarman     19,136,364 

Peter Smyth       5,893,939 

                         25,030,303 

12.    Directors' Interests 

The interests of both the Directors and proposed Directors (and their immediate families and or persons connected with them), as at the date of this document and on completion of the Proposals, in the issued share capital of the Company are as follows: 

	Existing Holding		Following completion of the Placing and Open Offer*
Name	Number	%	Number	%
Tom Jarman	140,000	0.39	3,170,303	1.46
Peter Smyth	57,142	0.16	814,717	0.37
Thomas Swan	56,666	0.16	56,666	0.03
Ernie Richardson	-	-	-	-
Derek McLennan	-	-	15,151,515	6.97
Kevin Gate	-	-	15,151,515	6.97

*    assuming that no director will take up their entitlement under the Open Offer.  

Tom Swan is further interested in the share capital of Screen Technology Group Plc as a result of his interest in Thomas Swan &Co Ltd. which owns 5,751,285 (the equivalent of 16.13 per cent.) of the Existing Ordinary Shares in the Company. Following completion of the Placing and Open Offer, assuming no take up under the Open Offer, Thomas Swan & Co. Ltd. will own 5,845,982 Ordinary Shares, the equivalent of 2.69 per cent. of the Enlarged Share Capital in the Company. 

Tom Jarman and Ernie Richardson have an interest in MTI which currently owns 17,554,484 (the equivalent of 49.24 per cent.) of the Existing Ordinary Shares in the Company. Following completion of the Placing and Open Offer, assuming no take up under the Open Offer, MTI will own 18,217,363 Ordinary Shares, the equivalent of 8.38 per cent. of the Enlarged Share Capital in the Company. 

13.    Use of proceeds 

On 28 September 2007 the Company announced its interim statement for the six months to 30 June 2007. Over that six month period, the Company reported a loss after tax of £1.5 million. Since then the cost base of the business has been significantly reduced and steps have been taken to reduce the business's indebtedness. The net proceeds of the Loan Notes, the Placing and the Open Offer are expected to be up to £1,147,500 (assuming full take up under the Open Offer). 

Part of the proceeds will be used to repay the interim loan from Scaent Corporate Finance Limited which is repayable on or before 31 May 2008.  The remainder of the proceeds will be used to strengthen the Company's balance sheet and to satisfy the general working capital requirements of the Company. 

14.     Current trading and future prospects 

The business continues to be cash consumptive with only a limited number of small value sales to date. However, the Board is encouraged by the level of interest expressed in the ITrans® product by potential customers and remains confident of making further progress during 2008. 

As referred to above Scaent has indicated to Screen that it will continue to support Screen in the ongoing development of the Company's business plan. In addition, Scaent will use its extensive network to facilitate the introduction of the Company to various new international markets and will guide the Company's entry into same.  Scaent has not presented any specific proposals at this time but will work closely with the Screen's management to implement suitable opportunities when they become available.  Scaent also believes that it will be able to introduce appropriate acquisition and investment opportunities to Screen to broaden and diversify its current activities for the benefit of the Company and Shareholders. 

15.     Capital Reorganisation 

The New Ordinary Shares to be issued pursuant to the Placing and Open Offer are all being issued at the Placing Price of 0.66 pence per share.  This represents a discount of 52 per cent. to the 1.375 pence closing mid-market price of the Company's Ordinary Shares on 24 February 2008, being the last day of trading prior to suspension of the Company's Ordinary Shares from trading on AIM. 

The Company's Ordinary Shares currently have a nominal value of 5 pence each. The Act provides that a company may only lawfully issue new shares for a subscription price at or above the nominal value of those shares.  In order that the Company may issue the New Ordinary Shares pursuant to the Proposals, the Company proposes that each share in the capital of the Company currently having a nominal value of 5 pence each, be sub-divided so that every existing Ordinary Share in issue be subdivided and reclassified into one Ordinary Share having a nominal value of 0.01 pence and one Deferred Share with a nominal value of 4.99 pence.  The Deferred Shares will have no practical economic value, will not be listed, will be non-voting, will carry no right to a dividend and will be subject to eventual redemption by the Company for a nominal amount.

The proposed Capital Reorganisation will not affect the rights attaching to the Existing Ordinary Shares, other than to alter their nominal value.  The proposed Capital Reorganisation will not affect the voting rights of the holders of Existing Ordinary Shares and will be made by reference to holdings of Existing Ordinary Shares on the register of members as at the close of business on 22 May 2008. 

Certificates will not be issued for the Deferred Shares and the Company may, for administrative purposes register the Deferred Shares in the name of a nominee for the Shareholders. 

Replacement certificates will not be sent out in relation to the newly nominated Ordinary Shares. Existing share certificates will remain valid in relation to the number of Ordinary Shares that each shareholder is entitled to following the Capital Reorganisation.  New share certificates will only be sent out in relation to trades or transfer of Ordinary Shares effected on or after 18 June 2008. 

Shareholders who hold their Existing Ordinary Shares in uncertificated form will have their CREST accounts credited with the newly nominated Ordinary Shares following their admission to AIM, which is expected to take place on 17 June 2008.  The registration of uncertificated holdings in respect of the Existing Ordinary Shares will be 'disabled' at close of business on 18 June 2008. The Deferred Shares will not be eligible for settlement through CREST. 

16.     Directors and proposed Directors 

Subject to approval at the General Meeting, Derek McLennan and Kevin Gate will be appointed as Directors. 

Derek Crawford McLennan, age 40, proposed Non-Executive Director 

After serving in the Armed Forces and a period of further education in 1994 Mr McLennan joined TBA Ltd as Operations Director, a software development company, which won several national business awards. In 1999 he was appointed Managing Director of Steel Monkeys Ltd, a video games company, where he successfully negotiated several licensed deals and contracts with BBC Worldwide, MGM, General Motors, Take Two Inc., Electronic Arts Inc. and West McLaren Mercedes Racing. This company won several national and international awards for its products. Between 2004 and 2005 Mr. McLennan held various positions within the Unitrade Group, including General Manager, General Director and Managing Director. During this time he also served as an Executive Director on the Board of Scaent AB. In 2005 he was appointed to the global position of Executive Vice President and Board Member of the Scaent Group and was tasked with the complete global restructuring of the Group companies and projects. This was completed successfully in late 2007 and contributed greatly to the Group's 500 per cent. increase in turnover over the three year period. Mr. McLennan sits on the boards of many Scaent Group subsidiary companies and has a BBA Degree in Business Administration. He is also a Member of the United Kingdom Institute of Directors. 

Kevin Gate, age 56, proposed Non-Executive Director 

In 1985 Mr. Gate became founder Director of Avon Leisure (Bath) Limited and transformed the company from a small proprietary business to a charter boat business well known in the West Country. Between 1994 and 1996 he negotiated the purchase of Anglo Welsh Waterways Holiday business from Barclaycard and brought the company back into profitability within one year. From 1999 he embarked on a career as a corporate finance adviser with Icon Corporate Finance and since 2004 has continued as an independent consultant for the company 'Gate Minds Ltd'. Mr. Gate has over 25 years experience of running companies from start up to pre-IPO and exit, and approximately seven years of corporate finance advice leading and closing around 30 transactions in the technology sector. Additionally, he has hands on experience of change management in the Leisure, Telecommunications and IT sectors and an impressive track record of maximising shareholder value, often in very difficult circumstances. Mr. Gate joined the Scaent Group in 2007 in a global role as Group Chief Financial Officer. 

In conjunction with the new appointments to the Company's Board and reflecting the fact that the shareholding of MTI in the business will be significantly reduced by the Placing and Open Offer, Ernie Richardson will resign as a Non-Executive Director of the Company.  The Board would like to thank Ernie for his contribution and support to both the Board and the Company. 

17.     Dispensation from Rule 9 of the Takeover Code 

Shareholders should be aware that, if approved at the General Meeting, the issue of Placing Shares to the Scaent Concert Party will result in the Scaent Concert Party holding 55.74 per cent. of the then issued share capital (or 64.61 per cent. of the then issued share capital of the Company if the Loan Notes were converted immediately after the issue of the Placing Shares). MTI and TSC who together own 23,305,769 Ordinary Shares representing 65.37 per cent. of the current issued share capital, have confirmed that, having considered the Proposals, they will each vote in favour of the Resolutions resulting in the Scaent Concert Party holding up to 55.74 per cent. of the Enlarged Share Capital. 

Under Rule 9 ('Rule 9') of the Code, any person, or group of persons acting in concert, which acquires an interest in shares which, when taken together with an interest in shares already held by him or an interest in shares held or acquired by persons acting in concert with him, carry 30 per cent. or more of the voting rights of a company which is subject to the Code, that person is normally obliged to make a general offer in cash to all shareholders at the highest price paid by him or any person acting in concert with him within the preceding 12 months. 

Rule 9 provides, inter alia, that, where any person, together with persons acting in concert with him is interested in shares which in the aggregate carry not less than 30 per cent. but does not hold shares carrying more than 50 per cent. of the voting rights of a company which is subject to the Code, and such person, or any other person acting in concert with him acquires an interest in any other shares which increases the percentage of shares carrying voting rights in such company in which he is interested, that person is normally obliged to make a general offer to all shareholders, at the highest price paid by him or any person acting in concert with him, within the preceding 12 months. 

The Panel will normally waive the requirement for a general offer to be made in accordance with Rule 9 if the shareholders of the company, excluding any persons connected in any way with the offeror or any associated company (the 'Independent Shareholders'), pass an ordinary resolution on a poll (a 'Whitewash Resolution') approving such a waiver. The Panel has the power to waive the requirement for a Whitewash Resolution to be put to the shareholders of the company at a general meeting where Independent Shareholders holding more than 50 per cent. of the Company's shares capable of being voted on such a resolution confirm in writing that they would vote in favour of a Whitewash Resolution were one to be put to the shareholders of the company at a general meeting. 

Given the undertakings from MTI and TSC to vote in favour of the Resolutions in respect of their entire Shareholdings which represent 65.37 per cent. of the current issued share capital, the Panel has waived the requirement for a Whitewash Resolution to be put to Shareholders.  Accordingly, by voting in favour of the Resolutions, the Placing will be effected without the requirement for the Scaent Concert Party to make a general offer and the Shareholders' shareholdings will, therefore, be diluted. 

Following the completion of the Proposals the members of the Concert Party will between them hold more than 50 per cent. of the Company's issued share capital and for so long as they continue to be treated as acting in concert may accordingly increase their aggregate interests in shares without incurring any obligation under Rule 9 to make a general offer, although individual members of the Concert Party will not be able to increase their percentage interests in shards through or between a Rule 9 threshold without Panel consent, other than in relation to the Loan Notes as referred to below. 

As part of the Proposals, Scaent is also investing £200,000 through a subscription for the Loan Notes, which can be converted in accordance with the terms of the Loan Note Instrument into a maximum of 54,545,455 New Ordinary Shares. In the event that Scaent converts the Loan Notes into New Ordinary Shares then its shareholding in the Company would increase from 27.87 per cent. of the Enlarged Share Capital to 42.33 per cent. as further increased by the conversion of the Loan Notes.

Upon such conversion, Scaent would normally be obliged to make a general offer in cash to all shareholders at the highest price paid by it or any person acting in concert with it within the preceding 12 months.

MTI and TSC have confirmed that, having considered the Proposals, they will each vote in favour of the Resolutions resulting in Scaent holding up to 42.33 per cent. of the Enlarged Share Capital, as further increased by the conversion of the Loan Notes. The Panel has therefore similarly waived the requirement for a Whitewash Resolution to be put to Shareholders. Upon conversion of the Loan Notes, Scaent will not be obliged to make a general offer and the Shareholders' shareholdings will be further diluted.

18.     General Meeting 

The proposals set out in this announcement and the Circular to Shareholders posted today require Shareholder approval which will be sought at a General Meeting of the Company to be held at the offices of Charles Stanley Securities, 25 Luke Street, London EC2A 4AR at 11.00 a.m. on 17 June 2008.

19.     Irrevocable undertakings

The Company has received irrevocable undertakings to vote in favour of the Resolutions to be proposed at the General Meeting from each of the Shareholder Directors and certain other Shareholders holding in aggregate 23,559,577 Existing Ordinary Shares representing approximately 66.08 per cent. of the Company's existing issued ordinary share capital.

20.    Recommendation 

The Directors consider the Proposals to be in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting.  

EXPECTED TIMETABLE OF EVENTS

                                                                                                                                          2008

Open Offer Record Date                                                                                              22 May

Dispatch of this document                                                                                           23 May

Open Offer entitlements credited to CREST stock
accounts of Qualifying CREST Shareholders                                                             26 May

Latest time for depositing Open Offer acceptances

into CREST                                                                                           11.00 am on 11 June

Latest time for splitting Application forms                                             11.00 am on 12 June

Latest time and date for receipt of Forms of Proxy

for the General Meeting                                                                          11.00 am on 13 May

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 am on 16 June

General Meeting                                                                                   11.00 am on 17 June

Admission effective and dealings commence on AIM                           8.00 am on 18 June

CREST accounts credited                                                                                        18 June

Share certificates dispatched by                                                                               25 June

  DEFINITIONS

“1985 Act”	the Companies Act 1985 (as amended)
“2006 Act”	the Companies Act 2006, to the extent in force and applicable
“Admission”	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules
“AIM”	a market operated by the London Stock Exchange
“AIM Rules”	the rules published by the London Stock Exchange governing admission to, and the operation of, AIM
“Application Form”	the application form to be used by Qualifying non-CREST Shareholders in connection with the Open Offer
“Computershare Investor Services”	a trading name of Computershare Investor Services Limited
“certificated” or “in certificated form”	an Ordinary Share which is not in uncertificated form
“Charles Stanley”	Charles Stanley Securities, a division of Charles Stanley & Co. Limited, Screen Technology’s nominated adviser and broker, a member of the London Stock Exchange and authorised and regulated by the Financial Services Authority
“Code”	the City Code on Takeovers and Mergers, as amended from time to time
“Company”  or “Screen Technology”	Screen Technology Group plc
“Current Articles”	the articles of association of the Company in existence as at the date of this document
“CREST Regulations”	the Uncertificated Securities Regulations 2001
“CREST”	the computerised settlement system operated by CRESTCo Limited to facilitate the transfer of title to shares in uncertificated form. The Relevant System (as defined in the CREST Regulations) in respect of which CRESTCo Limited is the Operator (as defined in the CREST Regulations)
“CREST Excess Application Form”	the application form to be used by Qualifying CREST Shareholders in connection with the Open Offer
“CVA”	Company Voluntary Arrangement
“Director”	a director of the Company
“Enlarged Share Capital”	the 217,469,652 Ordinary Shares in issue on Admission, assuming full subscription under the Open Offer
“Excess Application Facility”	the facility to Shareholders to enable them to apply for New Ordinary Shares under the Open Offer, in excess of their entitlement under the Open Offer
“Excluded Territories”	being, USA, Canada, South Africa, New Zealand, Australia and Japan
“Existing Ordinary Shares”	the Ordinary Shares of Screen Technology Group in issue at the date of this announcement
“General Meeting”	the general meeting of Screen convened for 17 June 2008, notice of which is referred to in paragraph 18 of this announcement, and any adjournment thereof
“Form of Proxy”	the form of proxy which accompanies the Circular to Shareholders, for use at the General Meeting
“FSA”	the UK Financial Services Authority
“FSMA”	the UK Financial Services and Markets Act 2000 (as amended)
“Investec”	Investec Bank (UK) Limited
“Loan Notes”	the convertible loan notes to be issued by the Company and Scaent,
“London Stock Exchange”	London Stock Exchange plc
“Loan Note Instrument”	instrument constituting up to £200,000 secured convertible loan notes 2008 of Screen Technology Group Plc
“MTI”	MTI Partners Limited, MTI Managers Limited, MTI4 Limited Partnership and MTI4 “B” Limited Partnership
“New Articles”	the new articles of association of the Company to be adopted at the General Meeting
“New Ordinary Shares”	the Ordinary Shares in the Company to be issued pursuant to the Placing and the Open Offer
“Notice”	the notice convening the General Meeting “Offer Shares”
“Official List”	the Official List of the UK Listing Authority
“Open Offer”	the conditional offer to Qualifying Shareholders to subscribe for the Offer Shares at the Open Offer Price
“Open Offer Entitlements”	entitlements to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer
“Open Offer Record Date”	the close of business on 22 May 2008
“Ordinary Shares”	ordinary shares of 5 pence each in the capital of Screen, to become ordinary shares of 0.01 pence following approval by Shareholders at the General Meeting
“Overseas Shareholders”	Shareholders resident in, or citizens of, jurisdictions outside the United Kingdom
“Panel”	the Panel on Takeovers and Mergers
“Placees”	the Scaent Concert Party, certain Directors and management of Scaent and certain other institutional investors
“Placing”	the conditional subscription for 133,757,617 Placing Shares by the Placees
“Placing Shares”	133,757,617New Ordinary Shares
“Placing Price” or “Open Offer Price”	0.66 pence per New Ordinary Share
“Proposals”	the proposals set out in this document including the Placing and Open Offer
“Prospectus Rules”	the Prospectus Rules published by the Financial Services Authority
“Qualifying CREST Shareholders”	Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Open Offer Record Date are held in uncertificated form
“Qualifying non-CREST Shareholders”	Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Open Offer Record Date are held in certificated form
“Qualifying Shareholders”	holders of Existing Ordinary Shares at the Open Offer Record Date
“Resolutions”	the resolutions to be proposed at the General Meeting as set out in the Notice
“RIS”	Regulated Information Service
“Scaent”	Scaent Holdings Cooperatie UA
“Scaent Concert Party”	Scaent together with Germans Citrons, Jonas Garbaravicius and Derek McLennan (Directors of Scaent) and Kevin Gate (Chief Financial Officer of Scaent)
“Shareholder”	a holder of Ordinary Shares from time to time
“STL”	Star Trek Limited, the trading subsidiary of the Company
“TSC”	Thomas Swan & Company Limited
“UK”	the United Kingdom of England, Scotland, Wales and Northern Ireland
“UKLA”	the UK Listing Authority
“US”, “USA” or “United States”	the United States of America, each State thereof (including the District of Columbia), its territories, possessions and all areas subject to its jurisdiction

 

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