Acquisition of Brown Duke AG
On 5 December 2005, Gable announced that it had conditionally agreed to acquire the entire issued share capital of Brown Duke AG (”Brown Duke”) through the issue of 31,000,000 new Ordinary Shares. Brown Duke is a company incorporated in Liechtenstein which, upon receipt of Insurance Authorisation from the FMA, will undertake insurance business in Liechtenstein. In addition, Gabl announced that it was seeking to raise £4.75 million before expenses through the Placing. An Extraordinary General Meeting to approve, inter alia, the Acquisition and Placing is to be held at 11.00am (GMT) on 22 December 2005. Completion of the Acquisition, receipt of proceeds pursuant to the Placing and admission of the enlarged share capital of Gable to trading on AIM is expected to occur on 23 December 2005.
The net proceeds of the Placing are to be applied in part to satisfy the requirement for Brown Duke to satisfy the Minimum Solvency Capital prior to the grant of the Insurance Authorisation by the FMA. The FMA was due to meet in the week commencing 26 December 2005 to grant the Insurance Authorisation to enable Brown Duke to commence writing insurance business by the year end, when a significant amount of insurance business is typically undertaken. Brown Duke has been notified by the FMA that the FMA will now meet on 23 December 2005 to formally grant th Insurance Authorisation, requiring the Minimum Solvency Capital to be in place on 22 December 2005, in advance of the intended receipt of the proceeds of the Placing.
In order to satisfy the Minimum Solvency Requirement prior to 23 December 2005, Corvus Capita Inc. has agreed to provide a short term loan to Gable in an amount of up to £4.3 million (the “Loan”) which Gable has undertaken to apply to satisfy the Minimum Solvency Requirement, following approval of the Acquisition at the EGM. Brown Duke will then capitalise the Loan and issue new shares to Gable. Gable will acquire the balance of the share capital of Brown Duke conditional upon Admission on 23 December 2005. The Loan is interest free save in the event of default and Gable will pay a fee of 2.5 per cent. of the value of the Loan to Corvus for the provision of the Loan, which Gable has undertaken to repay on the earlier of Admission or 13 January 2006.
Corvus is interested in 33.02 per cent. of the current issued share capital of Gable. Accordingly the Loan is a related party transaction for each of Gable and Corvus under the AIM Rules. The Independent Directors of Gable and Corvus (being those directors who are not ,or have not been in the last 12 months, directors of both Gable and Corvus), having consulted with Strand Partners Limited, consider the terms of the Loan to be fair and reasonable in so far as shareholders of Gable and Corvus respectively are concerned.
Definitions in this announcement have the same meaning as defined in the circular to shareholders dated 5 December 2005.
Enquiries: John Bick
t: 020 7451 9800
m: 07917 649362
Strand Partners, which is regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser for Gable and no one else in connection with the Proposals and will not be responsible to anyone other than Gable for providing the protections afforded to customers of Strand Partners, or for providing advice in relation to the Proposals.