Placing 06.12.11

Westside Acquisitions plc / Ticker: WST.L / Index: AIM / Sector: Investment 6 December 2011

Westside Acquisitions plc (‘Westside’) Proposed Placing Of 500,000,000 New Ordinary Shares Proposed Loan Note Capitalisation
Proposed Capital Reorganisation
Proposed Capital Cancellation
Proposed Adoption of New Articles Of Association Proposed Change of Name To Westside Investments Plc And
Notice of General Meeting

Westside Acquisitions plc, the AIM listed investment vehicle, is pleased to announce that it has conditionally raised £500,000 in a placing at 0.1p per new ordinary share (‘the Placing Price’) with existing and new shareholders. In addition it has been agreed with the Loan Noteholders that the Company will capitalise the £500,000 of Loan Notes owed to them by the Company into New Ordinary Shares, at the Placing Price per share.

A circular relating to the above and convening a General Meeting, which will take place at the offices of Finers Stephens Innocent LLP, 180 Great Portland Street, London W1W 5QZ at 10.00 a.m. on 29 December 2011, has been sent to shareholders.

Richard Owen, Executive Chairman, commented, “The implementation of the proposals outlined within this announcement will have highly positive effects on Westside’s financials. The Company’s net assets will be strengthened by £1 million through the elimination of our existing debt of £500,000 and increasing our cash balances by a further £500,000. With this in mind, we are confident that both our Investment division and Sports division will derive significant benefit going forward.”

Further details of the proposals are set out below. Capitalised terms used in this announcement are as defined in the circular to shareholders.

** ENDS **

For further information please visit www.westsideacquisitions.com or contact:

Geoffrey Simmonds Westside Acquisitions Plc
Tel: 020 7935 0823
Mark Percy Seymour Pierce Limited Tel: 020 7107 8000
Catherine Leftley Seymour Pierce Limited Tel: 020 7107 8000
Elisabeth Cowell St Brides Media & Finance Ltd  Tel: 020 7236 1177

 

1. Introduction

The Company is pleased to announce the conditional placing of 500,000,000 New Ordinary Shares raising gross funds of £500,000 (of which certain of the Directors, being David Coldbeck and David Hillel have agreed to subscribe, in aggregate, £7,500 in the Placing). In addition it has been agreed with the Loan Noteholders that the Company will capitalise the £500,000 of Loan Notes owed to them by the Company into New Ordinary Shares, at the Placing Price per share. The Company wishes to undertake the Capital Reorganisation and Capital Cancellation in order to strengthen its balance sheet. In addition, in light of current market conditions, the Board believes, having undertaken a strategic review of the Group's activities, that there is benefit in refocusing the Company's structure and direction to take into account the new priorities of the Company and the new trends in investment structures, as detailed further below. To reflect better the Company's change in strategic direction it is also proposed that the Company change its name to Westside Investments Plc.

Accordingly, the Directors have convened the General Meeting at which Shareholders will consider, and if thought fit, approve, inter alia, the Capital Reorganisation and Capital Cancellation, the allotment of the Placing Shares and the Loan Note Capitalisation Shares, the granting of further allotment authorities, the adoption of new articles of association of the Company, the removal of the statement of the authorised share capital of the Company as contained in the Company's memorandum of association and the change of name of the Company. Notice of the GM, which is convened for 10.00 a.m. on 29 December 2011, is set out at the end of this document.

2. The Group's new strategy

Westside was established to acquire companies, or interests in companies, which the Board believed to have high prospects of returns and substantial growth. These companies may be at a stage of development where they require the injection of further capital and strategic guidance.

To date, Westside has focused its investment activities through two distinct subsidiaries, Reverse Take-Over Investments Plc (“RTI”) and Pantheon Leisure Plc (“Pantheon”).

Since 2008, the Board made the conscious decision to focus effort and resources on the Group's existing portfolio, in particular Pantheon, rather than invest in new opportunities. This included disposing of certain of the Group's investments. The Board now believes that whilst market conditions continue to be difficult this also provides many new opportunities for investments. The Board is satisfied that each of its underlying portfolio investments are now in a position of strength but not

necessarily mature enough in value to reflect their full potential and these will be realised at the appropriate time.

The Board has seen an increasing number of new interesting investment opportunities where companies are having difficulty raising new capital and feels that it is now the right time to consider new investments. The Board believes, having undertaken a strategic review of its activities, that there is a benefit in refocusing the Group's structure and direction to take into account the new priorities of Westside and the new trends in investment structures. Accordingly the Board has decided upon the following course of action:

(i) To refocus RTI with a private equity emphasis.

RTI has historically invested seed capital in new companies which then acquired companies by way of a share exchange and obtained a quote for its shares on AIM. The Directors believe that market conditions no longer favour this business model at present but are aware that there are many investors looking for opportunities to invest in early stage companies. Accordingly, the Directors believe that RTI would be better placed to continue its investment activities in partnership with other investors and accordingly propose to re-orientate RTI with an emphasis on private equity participation.

RTI retains an interest in two AIM listed companies:

    •   Cheerful Scout Plc – RTI has 300,000 shares (3.8%) in this AIM listed multimedia specialist company which creates screen media and interactive events that bring to life new ideas, initiatives and products;
    •   Messaging International Plc ("Messaging") – RTI has 23,000,000 shares (9.7%) in this AIM listed company which is a provider of innovative mobile messaging services. Messaging reported for its year to 31st December 2010, revenue growth of 27.6% with turnover of £2.9 million and a maiden profit of £357,000. In its interim results for the 6 months to 30 June 2011, announced on 27 September 2011, Messaging reported pre and post-tax profit of £170,401 (2010: loss £25,628).

(ii) To strengthen and develop Pantheon's two wholly owned subsidiaries, Sport in Schools Limited and Football Partners Ltd.

Pantheon was established in 2005 to take advantage of opportunities in the sports and leisure sectors and now has two trading companies operating under its wholly-owned subsidiary, The Elms Group Limited being The Elms Sport in Schools (‘ESS’) and The Elms Small Sided Football (‘ESSF’). In August 2010 Pantheon undertook a

tender offer and de-listed from AIM in September 2010. Westside now holds an interest in 85.87% of the issued share capital of Pantheon.

    •   ESS - The business of ESS has developed strongly in the last 5 years and it now works with 110 schools in the London area with 12,000 children enrolled in its programmes. ESS income has increased from a total of £629,000 in 2009 to £863,000 in 2010. ESS has generated growth of 14.6% in turnover for the half year to 30 June 2011 and contributed a divisional profit of some £96,000 representing an increase of 15.8% as compared with the same period last year and in the first 6 months of the year showed an increase of over 1,500 children per week engaged in the ESS programme. ESS is embarking on an expansion programme to increase the density of existing coverage within London and The Home Counties with emphasis on expansion into the South East of England.
    •   ESSF is one of London's leading 5/6/7-a-side football organisations which organises leagues for men and women in Greater London. The business of ESSF has developed a strong brand in the Greater London area since its formation in 1991. The turnover of ESSF exceeds £500,000 per annum and contributes a gross income of approximately 50%. 30 leagues are run weekly in and around London with over 4,000 Londoners a week participating. Barbara Moss, joint Managing Director of The Elms Group Limited, received the ‘Special Partnership of the Year’ award at the London FA Annual Awards 2011.

    In addition, Pantheon holds 6,254,000 ordinary shares (4.8%) in Fitbug Holdings plc (‘Fitbug’), an AIM listed provider of online personal health and well-being services. Fitbug recently announced its half year results for the 6 months ended 30 June 2011 where highlights included a reduced pre-tax loss of £189,000. In July 2011, Fitbug raised £770,000 by placing 19,250,000 new ordinary shares at a price of 4p per share.

(iii) To change the name of the Company.

The Board consider changing the Company's name to "Westside Investments plc" will better reflect the new strategy.

(iv) To strengthen the Company's balance sheet.

The Company's balance sheet is to be strengthened through the Placing to raise £500,000, the Loan Note Capitalisation and the Capital Reorganisation and Capital Cancellation.

3. The Placing

The Company is proposing to raise £500,000 (before expenses) pursuant to the Placing by the allotment and issue of 500,000,000 Placing Shares at the Placing Price per share. David Coldbeck and David Hillel are subscribing in aggregate 7,500,000 of the Placing Shares. The Directors have examined a number of suitable fund-raising opportunities for the Company and believe that the Placing is the most suitable opportunity available to the Company and that the Placing is in the best interests of the Shareholders as a whole.

Under the terms of the Placing Agreement, Seymour Pierce has agreed to process the applications for the Placing Shares and to deal with Admission. The terms of the Placing Agreement are conditional upon, inter alia, the passing of the Resolutions and Admission. The Placing Shares being placed pursuant to the Placing will represent approximately 45% per cent of the Enlarged Share Capital. On Admission, at the Placing Price, the Company will have a market capitalisation of approximately £1.1 million. The Placing Shares will rank pari passu with the New Ordinary Shares including the right to all dividends and other distributions, paid or made after the date of issue.

The Board intends to use the proceeds of the Placing to:

  1. (a)  provide funds to participate in private equity investments through RTI;

  2. (b)  promote the further development of The Elms Group Limited;

  3. (c)  provide working capital for the Group; and

  4. (d)  meet the costs of the Placing, the Capital Reorganisation and the Capital

    Cancellation.

Authority for the Directors to allot the Placing Shares will be sought at the GM.

4. The Loan Note Capitalisation

Under the terms of the Loan Note Instrument, the Company currently owes the Loan Noteholders the aggregate amount of £500,000. The Loan Notes currently mature on 11 February 2014 and carry interest at the rate of 7.5%. The Loan Noteholders have agreed for all of the amounts owing to them, save for the accrued interest which will be paid in cash immediately following Admission, to be satisfied through the allotment and issue of the Loan Note Capitalisation Shares. It is proposed that the following outstanding amounts due under the terms of the Loan Notes be satisfied by the allotment and issue of the Loan Note Capitalisation Shares (credited as fully paid at the Placing Price per share):

Name Amount to be capitalised No. of Loan Note Capitalisaion Shares
Marshmate Holdings Limited £25,000 25,000,000
David Turner Settlement 2005 £25,000 25,000,000
Avonlaw Limited (1) £100,000 100,000,000
United Trading Corporation Limited (2) £100,000 100,000,000
John Zucker £25,000 25,000,000
William Weston (3) £150,000 150,000,000
B Jacobs £35,000 35,000,000
The Executors of the Estate of M Jacobs (Deceased)
£40,000 40,000,000

 

Note: (1) Avonlaw Limited is a company in which Geoffrey Simmonds is a director and substantial shareholder.
Note: (2) United Trading Corporation Limited is a company in which Richard Owen is a director and substantial shareholder.

Note: (3) William Weston is a director and substantial shareholder of Gailfield Limited. Gailfield Limited is a company which holds £50,000 of the Loan Notes and whose holding is shown in the table above under William Weston.

Authority for the Directors to allot and issue the Loan Note Capitalisation Shares will be sought at the GM.

Under AIM Rule 13 the arrangements concerning Geoffrey Simmonds (by virtue of his being interested in the holding of Avonlaw Limited), Richard Owen (by virtue of his being interested in the holding of United Trading Corporation Limited) and John Zucker (as they are Directors of the Company) and the allotment and issue to them of their proportionate number of Loan Note Capitalisation Shares are related party transactions. In addition, under AIM Rule 13 the arrangements concerning William Weston (as he is a substantial shareholder within the meaning of the AIM Rules) and the allotment and issue to him of its proportionate number of Loan Note Capitalisation Shares is also a related party transaction.

David Coldbeck and David Hillel being the only directors of the Company not party to the Loan Note Capitalisation, consider, having consulted with Seymour Pierce, that the terms of the Loan Note Capitalisation and the allotment and issue of the Loan Note Capitalisation Shares are fair and reasonable in so far as the Shareholders are concerned.

5. The Capital Reorganisation and the Capital Cancellation

(a) The Capital Reorganisation

The Board is proposing to undertake a reorganisation of the capital structure of the Company. Currently the Company has one class of shares, being the Ordinary Shares. The number of Ordinary Shares currently in issue is 111,488,845. In order to allow the Proposals to proceed at an appropriate pricing, it is proposed to carry out the following Capital Reorganisation.

(i) Subdivision

The Directors propose to subdivide each issued Ordinary Share into 1 New Ordinary Share of 0.1p and 1 Deferred Share of 0.9p. The rights attaching to the Deferred Shares are set out in detail below. The authority for the Company to undertake the

Subdivision is contained in Resolution 1, which will be proposed as an ordinary resolution.
The Subdivision above would result in a then issued share capital of 111,488,845 New Ordinary Shares of 0.1 pence each and 111,488,845 Deferred Shares of 0.9 pence each.

It is proposed that the issued Deferred Shares be cancelled as detailed further below. Shares to be issued under existing options and warrants will reflect the Capital Reorganisation.

(ii) Rights attaching to the New Ordinary Shares

The rights attaching to the New Ordinary Shares shall be identical to the rights attaching to the Ordinary Shares. The Deferred Shares will be cancelled shortly following their issue as part of the Capital Cancellation.

(iii) Rights attaching to the Deferred Shares

The rights attaching to the Deferred Shares, which will be set out in the New Articles, will be as follows:

(A) income – the right as a class to receive 0.1p for each £999.999 of dividends or other distributions resolved to be distributed out of the profits of the Company available for distribution, the same to be distributed amongst the holders of the Deferred Shares in proportion to the amounts paid up or credited as paid up thereon;

(B) as regards capital – in the event of the winding up of the Company or other return of capital, the Deferred Shares shall confer upon the holders thereof as a class the right to received 0.1p for each £999.999 of the assets of the Company available for distribution amongst the members, the same to be distributed amongst the holders of the Deferred Shares in proportion to the amounts paid up or credited as paid up thereon; and

(C) as regards voting – the Deferred Shares shall not at any time confer on the holders thereof any right to attend or vote at any general meeting of the Company or to receive notice thereof.

(iv) Cancellation of Deferred Shares


It is proposed as part of the Capital Cancellation that the 111,488,845 Deferred Shares arising on the Capital Reorganisation be cancelled, further details of which are set out below. No share certificates will be issued in respect of the Deferred Shares and these shares will be cancelled as part of the Capital Cancellation shortly following their issue.

(b) The Capital Cancellation

 

As at 30 June 2011, the Company had an accumulated deficit on its unaudited profit and loss account of £1,111,726 and accordingly was, and currently remains, unable to pay dividends or to purchase its own shares. The Act imposes limitations on the use of a company’s capital reserves, including its share premium account. A company may cancel its share premium account if, inter alia, it is permitted to do so by its articles of association, it obtains the approval of its shareholders by the passing of a special resolution at a general meeting and such cancellation is confirmed by the Court and is registered at Companies House.

The Capital Cancellation will comprise:

  1. (A)  the cancellation of the amount standing to the credit of the share premium account of the Company as it shall be following Admission, being the sum of £307,252;

  2. (B)  the cancellation of 111,488,845 Deferred Shares which will have been created as a result of the Capital Reorganisation, which will result in a reduction of capital of £1,003,399.60;

  3. (C)  the cancellation of the amount standing to the credit of the capital redemption reserve, being the sum of £182,512, which will result in the creation of a new reserve of £1,493,163.60 against which the Company expects to then credit its profit and loss account, subject to any undertakings given to the High Court for the purpose of protecting the Company's creditors at the date of the Capital Cancellation.

Prior to approving the proposed Capital Cancellation, the High Court will need to be satisfied that the interests of the Company's creditors are not adversely affected. The Company will put into place such form of creditor protection as the High Court shall require. Authority for the Capital Cancellation will be sought at the GM. The Directors of the Company reserve the right to abandon or discontinue any application to the High Court if they believe that the terms required to obtain confirmation as unsatisfactory to the Company. Once the Capital Cancellation has been completed and any undertakings given to the High Court have also been satisfied, the Company, once it has an accumulated surplus on its profit and loss account, would then be in a position to pay dividends thereafter.

The Capital Cancellation does not affect the voting or dividend rights of Shareholders.

6. Issued ordinary share capital on Admission

The Company's current issued share capital is 111,488,845 Ordinary Shares.

Following Admission, the Company's issued ordinary share capital will be 1,111,488,845 New Ordinary Shares

7. The New Articles and changes to the Memorandum of Association

The New Articles reflect the changes brought about by the Act and legislation relating to the use of electronic communications and CREST, remove reference to the Company having an authorised share capital (as further detailed below), introduce a requirement for the directors of the Company to retire by rotation, reduce the notice period for the calling of a general meeting from 21 days to 14 days in circumstances where a special resolution is proposed and include the rights attaching to the Deferred Shares.

The Act has abolished the requirement for a company to have an authorised share capital, which the New Articles reflect. Therefore an ordinary resolution will be proposed at the General Meeting to amend the Company’s memorandum, being deemed to form part of the New Articles, to delete the statement of the authorised share capital of the Company contained in paragraph 6 thereof.

8. Admission

Application will be made to the London Stock Exchange Plc for the Enlarged Share Capital to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the Enlarged Share Capital will commence on 30 December 2011.

Share certificates in respect of the Placing Shares and the Loan Note Capitalisation Shares will reflect the Capital Reorganisation. Share certificates for Ordinary Shares will remain valid.

9. Irrevocable undertakings

The Company has received an irrevocable undertaking to vote in favour of the Resolutions from William Weston, who has a beneficial interest in 16,550,000 Ordinary Shares representing approximately 14.88 per cent. of the Issued Share Capital.

In addition, the Directors have also undertaken to vote in favour of the Resolutions in respect of their aggregate beneficial holdings of 36,649,314 Ordinary Shares representing approximately 32.87 per cent. of the Issued Share Capital.
In aggregate, irrevocable undertakings to vote in favour of the Resolutions have been received by the Company in respect of 53,199,314 Ordinary Shares representing approximately 47.72 per cent. of the Issued Share Capital.

10. Current Trading

The following is an extract of the Chairman's statement from the Company's interim results for the six months ended 30 June 2011 which were released by the Company on 28 September 2011.

"Chairman’s Statement and Chief Executive’s Review

The component parts of Westside are beginning to provide grounds for optimism although general economic conditions remain challenging.

Financial Results

For the six months ended 30 June 2011, we are reporting total comprehensive income attributable to the owners of the company of £34,654 (2010: Loss £438,580). As is customary we are not recommending the payment of a dividend. Pantheon Leisure Plc (‘Pantheon’) for the 6 months ended 30 June 2011 made an operating profit of £66,814 (2010: £8,156).

We are pleased to report progress in the trading performance of The Elms Group which is a wholly owned subsidiary of Pantheon Leisure Plc and in the underlying investment portfolio of Reverse Take-Over Investments Plc (‘RTI’).

Pantheon Leisure

Westside holds 85.87% of the issued share capital of Pantheon which in turn wholly owns the operating businesses of the Elms Group, Pantheon’s sports and leisure division. The Elms Group comprises two trading companies, The Elms Sport in Schools (‘ESS’) and The Elms Small Sided Football (‘ESSF’). ESS has generated growth of 14.6% in turnover for the half year and contributed a divisional profit of some £96,000 representing an increase of 15.8% as compared with the same period last year.

As previously announced, James Vaughan (aged 32) has been appointed joint managing director of ESS; Jason O’Connor (aged 25) has been appointed director of coaching and Angela Wilcox (aged 35) has been appointed director of administration. Their contribution will be highly significant as we increase the number of participants in our Sport in Schools programmes.

Although the turnover of the 5-a-side football activities decreased by some 10% in the half year the margins at ESSF have improved and a profit of some £9,600 was returned.

Pantheon holds 6,254,000 ordinary shares in Fitbug Holdings plc (‘Fitbug’) which represents a 4.8% interest in the enlarged share capital of that company. In July 2011, Fitbug raised £770,000 by placing 19,250,000 new ordinary shares at a price of 4p per share.

At the time of the placing, Fergus Key, executive Chairman of Fitbug and former managing director of BUPA, announced that “Fitbug is now entering a very

interesting period in its development” Mr Kee holds 16.25% of the enlarged share capital of Fitbug.

RTI

Cheerful Scout plc (‘Cheerful’) is a multimedia specialist company and in August 2011 the Company announced that Mike Hale was to be appointed non executive chairman on 6 September 2011. Mike Hale has an interest in 1,650,000 shares in Cheerful at a price of 10p per share representing an interest of 21.05% held through Gailforce Marketing and PR PTY Limited, a company in which Mr Hale owns shares and is a director. As part of this transaction RTI sold 500,000 shares – to realise £50,000 before expenses. RTI retains 300,000 shares in Cheerful which represents 3.8% of the issued share capital.

Messaging International Plc (‘Messaging’) is a provider of innovative mobile messaging services. Messaging reported strong revenue growth of 27.6% for its year to 31st December 2010 with turnover of £2.9 million and a maiden profit of £357,000. In his June 2011 statement, Horatio Furman, the Chairman of Messaging, said “the future was viewed with confidence and the Company will be able to deliver value to its shareholders as a result of its flow of new products, healthy new business pipeline and excellent relationships with major telecom operators”.

Outlook

We are looking forward to continued progress at Pantheon and in particular its sports tuition activities which continue to expand. The potential at Fitbug, Messaging and Cheerful has improved either from changes in management, better trading and/or new financing undertaken in 2011. As a consequence, we endorse the recent views expressed by the management of those companies. We look forward to updating shareholders on progress."

There is no further trading update to be added to the above extract.

11. The General Meeting

The General Meeting of the Company is to be held at the offices of Finers Stephens Innocent LLP at 180 Great Portland Street, London W1W 5QZ on 29 December 2011 at 10.00 a.m.

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