Samarkand Group plc (SMK) Samarkand Group plc : Proposed Open
Offer 05-Sep-2022 / 10:28 GMT/BST Dissemination of a Regulatory
Announcement, transmitted by EQS Group. The issuer is solely
responsible for the content of this announcement.
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THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS INSIDE
INFORMATION FOR
THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS
RESTRICTED AND IT
IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY
OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, THE
REPUBLIC OF
SOUTH AFRICA OR AUSTRALIA OR ANY OTHER STATE OR JURISDICTION IN
WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL
5 September 2022
Samarkand Group plc
("Samarkand", the "Company" or together with its subsidiaries
the "Group")
Proposed Open Offer of up to 5,476,058 New Ordinary Shares at 55
pence per share
Samarkand Group plc (AQSE:SMK), the cross-border eCommerce
technology, services and consumer brand group, is pleased to
announce its intention to raise up to GBP3.0 million (before
expenses) pursuant to the launch of an Open Offer of New Ordinary
Shares to all Qualifying Shareholders. This will provide Qualifying
Shareholders with an opportunity to subscribe for an aggregate of
5,476,058 Open Offer Shares, on the basis of 1 Open Offer Share for
every 10 Existing Ordinary Shares held on 2 September 2022, the
Record Date, at 55 pence per Ordinary Share (the "Issue Price").
The Issue Price of 55 pence represents a discount of 12 per cent.
to the closing middle market price of 62.5 pence per Ordinary Share
on 2 September 2022, the last practicable date prior to the
announcement of the Open Offer.
The Company's strategic shareholder, Global Smollan Holdings,
has confirmed to the Company that it intends to take up in full its
basic Open Offer Entitlement of 808,753 New Ordinary Shares at the
Issue Price totalling a sum of approximately GBP444,814 and apply
for an additional GBP755,186 under the Excess Open Offer Facility.
This confirms their intention to subscribe for approximately
GBP1.2m in New Ordinary Shares. However, no assurance can be given
that any application made by Global Smollan Holdings under the
Excess Open Offer Facility will be met in full or at all if other
Qualifying Shareholders take-up their respective Open Offer
Entitlements in full and/or make applications under the Excess Open
Offer Facility.
In addition, the three Executive Directors of the Company have
confirmed to the Company that they each intend to take up their
respective basic entitlements up to an aggregate amount of
approximately GBP300,000. Further details on this are below.
Qualifying Shareholders subscribing for their full entitlement
under the Open Offer may also request additional New Ordinary
Shares through the Excess Application Facility. Any allotment of
New Ordinary Shares pursuant to the Excess Application Facility
will be at the sole discretion of the Board. In the event that the
Open Offer is not fully subscribed, it is intended that the Board
will reserve the right to request the Company's broker, VSA
Capital, to use reasonable endeavours to place the excess shares
available under the Open Offer with interested parties, at not less
than the Issue Price, in order to raise up to the maximum proceeds
under the Open Offer.
The Open Offer Shares will represent approximately 9.1 per cent.
of the Company's issued ordinary share capital immediately
following their Admission (assuming Open Offer Shares are taken-up
in full or the Placing Option is taken-up in full).
The terms and conditions of the Open Offer, including the Excess
Application Facility, will be set out in the circular to
Shareholders. The circular to Shareholders will set out the reasons
for the Open Offer and provide further information on the Open
Offer. It is expected that the circular to Shareholders will be
posted on or around 5 September 2022 and will also be available at
this time on the Group's website, www.samarkand.global. Terms used
in this announcement have the same meanings as set out in the Open
Offer circular unless otherwise defined herein.
Reasons for the Open Offer and Use of Proceeds
The Company intends to deploy funds raised in the Open Offer to
promote existing strategic priorities; to scale its eCommerce
technology and services and accelerate growth in our owned
brands.
This announcement and other information about the Company and
our recent activities, including our regulatory announcement,
investor presentations and financial reports, are available at the
Company's website, www.samarkand.global.
The Open Offer provides an opportunity for all Qualifying
Shareholders to participate in the fundraising by subscribing for
Open Offer Shares pro rata to their current holding of Ordinary
Shares.
The proceeds raised as part of the commitment by Global Smollan
Holdings and the Executive Directors to apply for a total of
approx. GBP1.5m will provide the Company with funds to progress the
Company's current strategy and current working capital which will
ensure greater financial flexibility.
Current Trading and Outlook
On 5 September 2022, the Group published its annual accounts
which provides a snapshot of the Company's financial position.
The current market environment is the most challenging the Group
has experienced since its incorporation in 2016. The Group has had
to navigate unprecedented external market forces, in particular the
zero tolerance approach to COVID in mainland China, which has
generated a high degree of disruption in the operations across the
Group.
Despite these disruptions, the underlying trends on which the
Group was founded endure - Chinese consumers' appetite for
international brands and international merchants' desire to make
their brands available to Chinese consumers. The eCommerce sector
in which the Group operates remains vibrant globally and China is
the world's largest eCommerce market, accounting for 50% of all
eCommerce sales in the world and an even bigger share of the
growth.[1]
Last year, the Group acquired Zita West and Napiers, both of
which have performed strongly since their acquisition and the Group
is excited about their future potential. The Group's portfolio of
premium health and wellness brands, including Probio7, is well
positioned to take advantage popular consumer trends such as
digestive health, fertility and natural herbal products.
Furthermore, as UK focused brands they are less dependent on the
Chinese market for future growth.
The Group is fortunate to work with a range of premium,
independent beauty, health and wellness brands as their China
partner, enabling their growth and development in the Chinese
market. Strengthening the Group's expertise in new and emerging
eCommerce channels such as Douyin (TikTok in China) has given the
Group the opportunity to further develop its clients' brands in the
fast-moving China eCommerce market.
The Group's China Checkout solution gained traction in the year
in the form of partnerships with large enterprise and SME merchants
and logistics providers such as FedEx and its shareholder SF
Express. Enabling international merchants to make China part of
their DTC strategy is a significant opportunity for the Group and
the Board sees strong growth potential as many brands prioritise
their DTC strategies.
The year ahead holds many exciting opportunities for the Group
linked to the continued growth of eCommerce, the increasing
importance of the direct-to-consumer business model as well as the
positive trends driving the health, wellness and beauty
sectors.
The past year has prepared the Group to navigate accordingly to
the unexpected and the Group has demonstrated resilience, agility
and flexibility in the face of a challenging environment and is
well placed to continue to make progress.
Directors' proposed participation in the Open Offer
The Executive Directors have confirmed to the Company that they
intend to take up their basic Open Offer Entitlements totalling
545,454 New Ordinary Shares at the Issue Price in the following
proportions:
Director Amount (GBP) Open Offer Shares
David Hampstead 99,999.90 181,818
Simon Smiley 99,999.90 181,818
Philip Smiley 99,999.90 181,818
Expected Timetable of Events
2022
Record Date and time for entitlements under the Open Offer 5.00 p.m. on 2
September
Announcement of the Open Offer 5 September
Posting of this Document, and to Qualifying Non-CREST Shareholders only, the Application Form 5 September
Existing Ordinary Shares marked 'ex' by AQSE 8.00 a.m. on 6
September
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts in as soon as
CREST of Qualifying CREST Shareholders practicable on 7
September
Recommended latest time for requesting withdrawal of CREST Open Offer Entitlements from CREST 4.30 p.m. on 14
September
Recommended latest time for depositing CREST Open Offer Entitlements into CREST 3.00 p.m. on 16
Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only) 3.00 p.m. on 16
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