Placing to raise £3.9million

RNS Number : 7051V

Tristel PLC

05 November 2010

 



TRISTEL plc

("Tristel" or the "Company ")

Placing to raise £3.9 million

Tristel plc (AIM: TSTL), the manufacturer of infection control, contamination control and hygiene products, announces that it has raised £3.9 million (before expenses) by the issue of 6,842,105 new ordinary shares of 1 pence each ("New Ordinary Shares") at a price of 57 pence per share ("the Placing Price") ("the Placing"). The New Ordinary Shares have been placed by finnCap conditional on, inter alia, the passing of the resolutions and admission to trading on AIM ("Admission").

It is expected that Admission in respect of the New Ordinary Shares will become effective and dealings will commence on 23 November 2010.

A circular setting out details and background to the Placing along with a notice convening the General Meeting, to be held at the offices of finnCap, 60 New Broad Street, London EC2M 1JJ at 10.00 a.m. on 22 November 2010 has been sent to shareholders today.

Background and Reasons for the Placing

The Board are looking to grow Tristel through a combination of new products, new markets and global expansion. The recent results show export sales increased by 58 per cent. in the year to 30 June 2010, albeit from a fairly modest base.

The Company currently pays a royalty in perpetuity on certain of its products that incorporate its  proprietary chlorine dioxide chemistry. These royalties are currently payable at a rate of 5 per cent. of the value of net sales made and are paid to the inventor of the technology, Bruce Green, who is a director of the Company. The Company has reached agreement to halve the royalty rate, introduce a fixed term for the contract and eliminate all consultancy fees due to Bruce Green, for a one-off payment of £700,000, payable in cash (the "Royalty Restructuring"). As the Royalty Restructuring involves a payment to Bruce Green, a director of the Company, it constitutes a related party transaction for the purposes of the AIM Rules.

The Independent Directors (being all directors of the Company save for Bruce Green), who have been so advised by finnCap, consider the terms of the Royalty Restructuring to be fair and reasonable in so far as shareholders are concerned and in the best interests of the Company and its Independent Shareholders (being all shareholders of the Company save for Bruce Green) as a whole. In reaching this conclusion, finnCap has relied on the Independent Directors' commercial assessment.

The Company's  expansion plans are to double capacity at Snailwell, Cambridgeshire and provide facilities to manufacture sterile packed products for use in clean room environments. The Company also plans to expand into the Pharmaceutical, Cosmetics and Toiletries ("PCT") market having recruited a sales team focused on this market earlier in 2010.

Thus the net proceeds of the Placing will be utilised to reduce bank borrowings, restructure the royalty payments and fund the expansion of the business. This will incorporate expansion into the PCT market and a roll out of products into Europe and Asia.

Directors' Interests

The Directors have in aggregate subscribed for 221,670 new ordinary shares at the Placing Price.

	Existing Ordinary Shares	Placing Shares	Upon Admission Ordinary Shares	% of the Enlarged Share Capital
F Soler	7,197,277	164,200	7,361,477	18.4%
P Stephens	1,095,681	32,840	1,128,521	2.8%
P Barnes	556,260	16,420	572,680	1.4%
A Soler	-	8,210	8,210	0.0%
Total	8,849,218	221,670	9,070,888	22.6%

Timetable

Latest time and date for receipt of Forms of Proxy for the General Meeting	10.00 am on 20 November 2010
Date and time of General Meeting	10.00 am on 22 November 2010
Admission and commencement of dealings in New Ordinary Shares	8.00am on 23 November 2010
CREST accounts credited with New Ordinary Shares	23 November 2010
Despatch of definitive share certificates for Second Placing Shares	By 7 December 2010

Paul Swinney, Chief Executive of Tristel plc, said:

"We were encouraged by investors to undertake this placing, with the funds raised ensuring the business is debt free going forward, our expansion plans are well supported and Tristel plc is in good shape in order to drive future growth.  It is also a very positive reflection on the strength of the business that the placing was heavily oversubscribed."

For further information, please contact:     

Tristel PLC
Paul Swinney, Chief Executive	Tel: [phone]
Walbrook PR Ltd	Tel: [phone]
Paul McManus	Mob: [phone] [e-mail]
Paul Cornelius	Mob: [phone]  [e-mail]
finnCap
Geoff  Nash/Charlotte Stranner (Corporate Finance)	Tel: [phone]
Simon Starr (Corporate Broking)

 

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