Business
Placing to raise £3.9million
Placing to raise £3.9million.
About this update from Tristel Plc
[{"type":"text","content":"\n RNS Number : 7051V Tristel PLC 05 November 2010 \n \n\n \n \n \n \nTRISTEL plc\n(\"Tristel\" or the \"Company \")\n \nPlacing to raise £3.9 million\n \nTristel 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\").\nIt is expected that Admission in respect of the New Ordinary Shares will become effective and dealings will commence on 23 November 2010.\nA 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.\nBackground and Reasons for the Placing\nThe 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.\nThe 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.\nThe 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 t...