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Osprey Comms. (OSPY)

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Wednesday 06 September, 2000

Osprey Comms.

Disposals, etc

Osprey Communications PLC
6 September 2000



  OSPREY COMMUNICATIONS PLC ('Osprey' or the 'Company')
                            
Disposal of Osprey London Limited and Osprey Future Image
                Limited ('the Disposals')

This  announcement relates to the Disposals and  the  re-
listing  of  the  Company's shares.  The  shares  of  the
Company  to  be  re-listed on 6 September  2000  and  the
Directors expect to release the financial results for the
18 months ended 29 March 2000 by 29 September 2000.

The  Company  announces that it has today  completed  the
disposal  of  the  business and assets of  Osprey  London
Limited ('Osprey London').

Osprey  London, an advertising agency, has been  sold  to
Sevco  1156 Limited ('Interfocus'), a new company  formed
to  acquire  Interfocus  Group Limited  (a  London  based
communications group) by its management.  Interfocus  has
been  established for over ten years and has no  previous
relationship with Osprey London.

In  the nine months to 30 June 2000 Osprey London made  a
profit  of  £36,786  and  as at  30  June  2000  had  net
liabilities of £522,977.

The  cash  consideration for the  acquisition  of  Osprey
London  is  based  on 80p for every £1  of  gross  profit
earned  from  the revenue generated from  Osprey  clients
transferred  to  Interfocus in the  12  months  following
completion.   The  consideration will  be  paid  in  four
tranches:

-     £750,000 payable on completion;
-     £210,000  payable  when gross profit  reaches  £1.2
      million, provided this is within the 12 months following
      completion;
-     £240,000  payable  when gross profit  reaches  £1.5
      million, provided this is within the 12 months following
      completion;
-     a balance payable should the gross profit for the 12
      months following completion exceed £1.5 million based on
      an auditor's certificate on gross profit  for  the  12
      months subject to a maximum amount of £2.0 million.

Following completion of the sale of Osprey London,  Chris
Still,  Chief  Executive, and Lester  Corney,  Operations
Director have resigned from the Board of the Company  and
all  Group  subsidiaries.  Both of  them  have  taken  up
positions with Interfocus and following completion of the
sale, Chris Still will join its board.

Jack Rubins, formerly non-Executive Chairman, has resumed
executive  responsibility  for  the  management  of   the
continuing business.

Ralph  Davies resigned as Group Company Secretary  on  31
August  2000  to take up another appointment  and  Cargil
Management  Services Limited have been appointed  in  his
place.

The  business,  assets and liabilities of  Osprey  Future
Image  Limited  ('Future Image') has  been  sold  to  its
management, comprising the two executive directors  Sally
Gardiner  and  Rosemary  Hamilton,  which  is  the   only
available  option  in  the current  circumstances.   This
company  is engaged in the provision of public  relations
services.   In  the  nine months to 30 June  2000  Future
Image made a profit of £6,891 and as at 30 June 2000  had
net liabilities of £213,865.

The  cash  consideration for the  acquisition  of  Future
Image is £115,000 payable in two tranches:
-    £50,000 payable on completion;
-    £65,000  payable within 5 days following 12  months
     after completion.

The  Company  is also currently in negotiations  for  the
sale of Osprey Advertising Scotland Limited, a subsidiary
engaged  in  the provision of advertising  and  marketing
services,  to  an  unconnected third party.  However  the
terms  of  such  a  disposal have yet to  be  agreed.   A
further announcement will be made in due course.

In  the  year to 30 September 1999 Osprey made a loss  of
£958,000 on a turnover of £18.7 million and at that  date
had a net assets deficit of £2.1 million.

In  normal circumstances a disposal of the size of Osprey
London  would  be  classified as Class 1  under  the  FSA
Listing  Rules and consequently a circular would need  to
be  sent to shareholders to seek their approval prior  to
completion of the transaction.

As  Future  Image  is being sold to its management,  this
disposal  is  classified as a related  party  transaction
under  the  Listing  Rules and  it  also  would  normally
require a circular and prior shareholder approval.

However,  due to the severe financial difficulty  of  the
Company,  the  UK  Listing  Authority  ('UKLA')  on  this
occasion has agreed that these requirements will not need
to be met for the following reasons.

The Company confirms that Osprey is currently trading  at
the  limit of its overdraft facility and with the support
of  its  bankers, National Westminster Bank  ('NatWest').
NatWest have requested Osprey to reduce its overdraft  by
£800,000 by 5 September 2000 and have declined to provide
the  Company with an increase in its overdraft  facility.
Consequently the Company confirms that it does  not  have
the funds for the production of the circular nor the time
to  seek shareholder approval prior to completion of  the
Disposals.   The  Company confirms that  all  alternative
methods of financing the debt have been exhausted and the
only option remaining is to dispose of a substantial part
of  the  Company's  business.  The negotiations  for  the
Disposals could not have been entered into earlier  since
the directors were in negotiations for a reverse takeover
of  the  Company,  however due to the volatility  in  the
stock market, it was not possible to complete the reverse
takeover. The directors have confirmed that the  disposal
of  Future Image to its management is fair and reasonable
so  far as shareholders of the Company are concerned  and
have  been  so  advised by Grant Thornton.  The  disposal
proceeds will be used to reduce bank debt.

Beeson  Gregory, the Company's sponsor, has confirmed  to
the   UKLA  that  the  Company  is  in  severe  financial
difficulty  and  will not be in a position  to  meet  its
obligations  as  they fall due unless the Disposals  take
place.   In addition, NatWest have also confirmed to  the
UKLA  that  further facilities will not be made available
to  the Company.  Unless the Disposals are effected by  5
September 2000 and in absence of satisfactory alternative
proposals,  NatWest will withdraw the banking  facilities
and  appoint Administrative Receivers.  Consequently,  if
the  Disposals are not effected immediately and the  bank
demand immediate repayment of the Company overdraft,  the
directors  will have no option but to place  the  Company
into administrative receivership.

The   directors  confirm  that  they  believe  that   the
Disposals are in the best interest of the Company and its
shareholders as a whole.

Following the Disposals, the Group will comprise  of  the
Company  and one trading subsidiary, Osprey RMA  Limited.
In  the  nine  months to 30 June 2000 Osprey RMA  Limited
made a profit of £208,739 and as at 30 June 2000 had  net
assets of £647,580.

However  the current trading and financial prospects  for
the Group remain uncertain and in the directors' opinion,
following the Disposals, the working capital available to
the  continuing Group is not sufficient for  its  present
requirements,  that is for at least 12  months  from  the
date  of  this announcement. The directors are therefore,
considering a number of options available to them at  the
current   time  including  the  sale  of  the   remaining
businesses  in  the  Group  and/or  a  potential  reverse
takeover of Osprey.  The directors believe that either of
these  options would lead to a resolution of the  working
capital position of the Group, and an application for the
re-listing of the shares. If the remaining businesses  in
the Group are sold, then the Group will effectively be  a
shell company with no trading business.

However  currently  the  Group  will  continue  to  trade
through Osprey RMA Limited and Osprey Scotland Limited.

Following  the reduction of the bank overdraft  from  the
proceeds  of  the Disposals, NatWest have indicated  that
they   will   remain   supportive   of   Osprey   pending
satisfactory proposals for dealing with the residual debt
exposure.

The  Directors  have requested that the Company's  shares
are  re-listed  on  6 September 2000.   In  addition  the
Company expects to release its financial results for  the
18 months ended 29 March 2000 by 29 September 2000.


6 September 2000



                        

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