Venture Finance Gain
09 January 2007
General Capital Group plc (AiM: GENC), the asset and venture finance specialists, today announces the achievement of an exceptional gain of approximately £1.8 million as a result of the successful IPO of Sabien Technology Group plc ("Sabien”).
Sabien
Sabien is a UK company that owns the commercial rights to a system that is proven to help reduce energy consumption by up to 35% in commercial and industrial boilers.
Sabien’s product, M2G, helps commercial clients save up to 35% on their energy consumption, making their boilers more efficient, as well as reducing harmful carbon emissions. M2G can generally be installed in around 90 minutes per boiler, once on site, with no disruption to the boiler operations. Payback usually occurs within six to 24 months.
Flotation of Sabien
Sabien shares were admitted to trading on AiM on 20 December 2006 at 52p and are currently trading at a premium of approximately 10%.
Sabien raised £4 million in a fund raising conducted by Bell Lawrie, comprising a £3.2 million equity placing at 52 pence per share and £0.8 million through the issue of Loan Notes. At the placing price, Sabien has a market capitalisation of approximately £13.8 million. The purpose of the fund raising was principally to enable Sabien to increase the scale of its UK operations, to expand into European markets and to further its product development.
General Capital Venture Finance
General Capital provided a Debenture Secured Loan facility of £0.5 million to Sabien in September 2005. As a condition of the loan facility, General Capital received a Warrant to subscribe (at par) for 17.5% of the share capital of Sabien. This warrant was exercised in October 2006.
Following admission, General Capital has agreed to provide Sabien with a further debenture secured term loan facility of £0.8 million of which £0.5 million will be utilised to redeem the original General Capital loan. The remaining £0.3 million will be available to Sabien, along with the placing proceeds, to provide the development and working capital facilities to enable Sabien to execute on its already profitable expansion objectives.
This new facility is wholly convertible at any time at the option of General Capital, into a maximum of a further 1,538,462 ordinary shares in Sabien at the AIM placing price.
Jonathan Hill (Executive Deputy Chairman of General Capital) has been a non-executive director of Sabien since 2005.
Exceptional Gain
These arrangements have in aggregate created an exceptional gain for General Capital of approximately £1.8 million. The calculation of the gain is based on the placing price of Sabien shares, is currently unrealised, and will be recognised in the General Capital financial statements for the year ended 31st December, 2006.
Commenting on the transaction, Jonathan Hill, Executive Deputy Chairman of General Capital, said: "Sabien is a high quality business; it has an exceptional offering and is under first class management. These are the key attributes we look for in businesses that we support. We have worked closely with Sabien and its advisors over the past six months and congratulate them on achieving admission to AiM”. He went on to note, "In similar circumstances we will generally look for a complete exit – both as debt providers and in respect of equity positions. However, because the Sabien business model is already proven – both in terms of profit and cash generation – we have made the decision to remain involved with the business for the foreseeable future.”
David Hickey, Non-executive Chairman of General Capital, commented: This transaction further evidences the success and robustness of the General Capital Venture Debt Finance model; even in the most challenging environment AiM has experienced for many years. Underpinning the General Capital business is its core asset and property finance activities where we are making continued progress in developing the overall loan portfolio mix of asset, property and venture finance receivables."
For Further Information:
| General Capital | |
| Mark Edworthy, Managing Director | Tel: +44 (0) 1603 610 610 |
| mark.edworthy@generalcapital.co.uk | |
| Daniel Stewart | |
| Jonny Franklin-Adams | Tel: +44 (0) 20 7776 6579 |
| jonny.franklin-adams@danielstewart.co.uk |
Media Enquiries:
| Abchurch Communications | |
| Heather Salmond / Laura Riascos | Tel: +44 (0) 20 7398 7700 |
| heather.salmond@abchurch-group.com | www.abchurch-group.com |
Notes to Editors:
About General Capital
General Capital is an independent asset and venture finance specialist established in 1991. It has developed a strong niche in an under-serviced and growing market, providing a range of lending solutions to UK SME’s. Its three core focuses are commercial asset finance, property development and bridging and venture finance.
General Capital’s financing methods provide intelligently structured bespoke solutions for each client. It is experienced in supporting businesses through all stages of development; well backed start-ups, growth situations, turnaround projects, acquisitions, and management buy outs and buy ins. General Capital also has specific and growing experience in providing finance to companies on track for AIM flotations.
In September 2006, General Capital floated on AiM by way of a reverse take-over of Clan Homes plc and is currently capitalised at approximately £20 million.