Manroy PLC Production Expansion (5438X)
13 Gennaio 2014 - 5:44PM
UK Regulatory
TIDMMAN
RNS Number : 5438X
Manroy PLC
13 January 2014
13 January 2014
MANROY PLC ("Manroy" or the "Company")
PRODUCTION EXPANSION, ASSOCIATED FUNDING FROM A RELATED
PARTY
AND REVIEW OF STRATEGIC OPTIONS RELATING TO MANROY USA
Manroy, the AIM listed UK Defence Contractor, is pleased to
announce that it is expanding production capacity at its Slade
Green facility to enable construction of military rifles. The total
capital expenditure and working capital required for this expansion
is estimated at GBP0.75m.
Funding for this expansion has been provided by Caledonian
Heritable Limited ("Caledonian"), a 23.1% shareholder in Manroy,
pursuant to a loan agreement entered into on 28 November 2013 (the
"Loan Agreement"). This funding and associated interest totalling
GBP0.35m is structured to be repaid by 28 November 2014 from the
cashflow receivable by Manroy on sales of the resultant products to
an existing customer. Orders for these sales were announced on 25
March 2013 and originally envisaged an intra-group order of
approximately GBP5.0m to Manroy USA ("MUSA"). However, the new
production capacity will enable these to be manufactured entirely
by Manroy in the UK, thereby significantly increasing the profit
earned by the Group from these sales. UK Government export licences
for these products have already been obtained by Manroy.
Given Caledonian's shareholding in the Company, entry into the
Loan Agreement by the Company is considered to be a related party
transaction pursuant to Rule 13 of the AIM Rules for Companies (the
"Transaction"). The Company's directors, having consulted with the
Company's nominated adviser, Allenby Capital Limited, consider that
the terms of the Transaction are fair and reasonable insofar as the
Company's shareholders are concerned.
On 20 December 2013 theCompany announced that in accordance with
Rule 2.6(a) of the Code, each of Herstal SA ("Herstal") and Beretta
Holding S.p.A ("Beretta") must, by not later than 5.00 p.m. on 14
February 2014, either announce a firm intention to make an offer
for the Company in accordance with Rule 2.7 of the Code or announce
that it does not intend to make an offer, in which case the
announcement will be treated as a statement to which Rule 2.8 of
the Code applies. The Company also announced that it could approach
the Panel for an additional extension to this deadline in due
course in accordance with Rule 2.6(c) of the Code. Further to that
announcement, Manroy confirms today that it is considering
strategic options relating to its 49% shareholding in MUSA.
Glyn Bottomley, Manroy's Chief Executive, said: "This increase
in production capacity, and its associated funding, are expected to
produce significantly increased profitability on this contract than
previously because major components will now be manufactured
in-house rather than being sourced externally. The additional
review of strategic options for our investment in MUSA is planned
to enhance value for our shareholders."
ENDS
For further information please contact:
Manroy Plc Tel: 01252 874177
Glyn Bottomley, Chief Executive
Opus Corporate Finance Tel: 020 7025 3600
(Financial Adviser and Rule 3 Adviser)
Malcolm Strang / John McElroy
Allenby Capital Tel: 020 3328 5656
(Nomad & Corporate Broker)
Mark Connelly/ Alex Price
Bankside Tel: 020 7367 8888
(PR Adviser)
Richard Pearson/ Simon Rothschild
Notes to Editors:
1. Manroy is a UK based defence contractor specialising in the
supply of weapon systems for land, air and maritime
applications.
2. A key UK Ministry of Defence supplier for 26 years, Manroy
designs, manufactures, supplies and supports:
-- the 12.7mm M2 Heavy Machine Gun ("HMG"), also known as the 0.50" calibre HMG;
-- the 7.62mm General Purpose Machine Gun ("GPMG");
-- HMG Quick Change Barrel kits;
-- a range of turret products for armoured fighting vehicles; and
-- weapon tripods and weapon mounting systems
3. Production of the HMG, along with support and spares, is
Manroy's core area of operation. In recent years Manroy has
increasingly focused on the export market and diversification of
its customer base into new territories.
4. Manroy owns 49% of North Carolina based MUSA, a defence
supplier to both military and civilian law enforcement
agencies.
5. MUSA manufactures a range of weapons systems and ancillary products, including:
-- The M2 HMG;
-- HMG Quick Change Barrel kits;
-- Barrel manufacturing for both the military and commercial markets;
-- M16 and M4 military rifles;
-- Electronic boresights;
-- Mounting systems; and
-- Commercial rifle barrels and spares.
The Group adheres strictly to UK legislation concerning the sale
of weapons to foreign countries. Manroy's overseas sales are
undertaken in adherence to UK Government regulations and approvals.
Such sales are only undertaken after all appropriate UK Government
licenses have been granted.
DISCLAIMER
Opus Corporate Finance LLP ("Opus"), which is regulated in the
United Kingdom by The Financial Conduct Authority, is acting for
the Company in relation to the matters described in this
announcement and is not advising any other person, and accordingly
will not be responsible to anyone other than the Company for
providing the protections afforded to customers of Opus or for
providing advice in relation to the matters described in this
announcement.
Allenby Capital Limited ("Allenby Capital") which is regulated
in the United Kingdom by The Financial Conduct Authority is acting
for the Company in relation to the matters described in this
announcement and is not advising any other person, and accordingly
will not be responsible to anyone other than the Company for
providing the protections afforded to customers of Allenby Capital
or for providing advice in relation to the matters described in
this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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