Acquisition and Placing
11 August 2006
REVERSE TAKEOVER
Clan Homes plc ("the Company"), the AIM quoted cash shell owning one property, has conditionally agreed to acquire the entire issued ordinary and A ordinary share capital of General Capital Group plc ("the Group") by way of a reverse takeover, for a total consideration of approximately £13 million. The consideration will be satisfied by the allotment and issue of shares in the Company representing approximately 80 per cent of the issued share capital as enlarged. An additional £2.16 million (before expenses) is being raised by way of the Placing Shares (the "Placing"), and it is also proposed that the Company name be changed to General Capital Group plc. These proposals are subject to approval of the Company's shareholders.
GENERAL CAPITAL GROUP
The Group is a well established and profitable financial services business specialising in the provision of asset based leasing, hire purchase, commercial and mezzanine loan facilities to the UK SME sector. It provides lending solutions designed to meet financing needs, typically involving advances of between £10,000 and £0.5 million - which the directors of the Company believe is an attractive and profitable market place which is not currently adequately serviced by main stream lenders. The Group has a diverse loan portfolio, with its lending activities organised into three divisions: asset finance, venture finance and property finance.
Since 1990, the Group has grown significantly both in terms of its turnover and profit. In the year ended 31 December 2005, turnover increased to £6.2 million and profit before tax and dividends increased to £1.0 million. Furthermore, the Group has generated a high level of return on capital employed, achieving a gross return on its loan portfolio of approximately 20 per cent for each of the last three financial years ended 31 December 2005.
On completion of the Acquisition, the Placing Shares will represent approximately 14 per cent. of the issued share capital of the Company as enlarged. The proceeds of the Placing, in addition to approximately £1 million of cash currently within the Company, and an increase in the Group's debt facilities to £30 million, will together provide significant additional working capital to enable the enlarged group to implement its growth strategy.
EXTRAORDINARY GENERAL MEETING
The Acquisition constitutes a reverse takeover under the AIM Rules because, inter alia, of the size of the transaction and the proposed change in board control and is therefore subject to the approval of the Shareholders. Accordingly an EGM has been convened for 10am on 13th September, 2006, at the offices of Daniel Stewart & Company plc, Becket House, Old Jewry, London, EC2R 8DD.
COMMENT
Mark Edworthy, Managing Director of the Group and proposed Managing Director of the Company, said: "I am confident that this transaction will enhance General Capital's already well established position as a successful provider of asset and venture finance for UK SMEs. The enlarged group will provide the working capital necessary to implement our exciting, ongoing organic and acquisitive growth strategy."
David Hickey, director proposed Chairman of the Company said: "This transaction fits the criteria previously laid out by the Company's board and the Directors believe it is in the best interest of the Company's shareholders. General Capital Group plc is highly regarded within the industry and has a strong and experienced management team. It has been consistently profitable, with a lengthy and solid track record of successful investments in a diverse portfolio."
Further details concerning the background to and the reasons for the acquisition, details on the two companies, the proposed board of directors and the Placing, Admission to AIM and capital reorganization are set out below.
For Further Information:
| General Capital | |
| Mark Edworthy, Managing Director | Tel: +44 (0) 1473 252 565 |
| mark.edworthy@generalcapital.co.uk | |
| Clan Homes plc | |
| David Hickey | Tel: +44 (0) 207 065 5646 |
| 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 |