JEC Group have brought together the international community of composites leaders and executives in our Composites Circle as an unique networking opportunity to meet with both peers and future partners.
The Australian company has announced on the 27th of April 2011 it has entered into a funding agreement for the issue of convertible notes to the value of US$15 million (approximately AU$14.0 million on current exchange rates) to US-based small-cap financier, La Jolla Cove Investors, Inc. along with a share placement to sophisticated and professional investors of AU$3.3 million at AU$0.32 per share, including La Jolla and Washington H Soul Pattinson & Co, its largest shareholder.
Quickstep’s existing eligible shareholders will be given the opportunity to participate in the capital raising through a Share Purchase Plan (“SPP”) at AU$0.32, the details of which are attached in Appendix 1.
La Jolla is an experienced financier of financing small-cap, publicly traded companies having signed over US$400 million of financing for companies on leading world exchanges since establishing in 1995.
Under the Funding Agreement between the Company and La Jolla, La Jolla has committed to participate in the share placement for AU$600,000 (on the same terms as other investors). The Company will also be able to access up to a further US$15 million through the issue of convertible notes; being an initial issue of US$7.5 million with an option, at the Company’s discretion, to issue a further US$7.5 million. These funds, together with expected funding assistance from the Australian Federal and State Governments, should see access to additional capital of in excess of AU$30 million by the end of 2012, in an efficient mix of short term equity, medium term equity, loans and grants.
Mr Mark Jenkins, Quickstep’s Chairman, said that “the Company believes that it needs a mixture of short, medium and long term facilities to meet its financing needs. We have therefore raised AU$3.3 million in immediate equity; US$15 million in medium term equity, to be drawn down over a period of time; and we are currently negotiating a debt facility to support the ongoing needs of our JSF production project. In addition, the NSW Government has, as previously announced, agreed to provide a grant to the Company to assist us to set up our new facility in that State.
The Convertible Note Facility with La Jolla represents an excellent funding package, due to the timing of draw-down which will suit Quickstep’s needs and the certainty of commitment from La Jolla.
As we have done in the past, the Board is pleased to offer eligible shareholders participation in this funding round through participation in an SPP at the same AU$0.32 per share price as the institutional placement, details of which are set out in Appendix 1.”he concluded.
The funds are slated for the completion of the move to Boeing’s former Bankstown facility; preparation and start of production under the Memorandum of Understanding signed in November 2009 with Northrop Grumman/Lockheed Martin and Marand/Bae Systems, covering 22 years and some AU$700 million of production and commercialisation; and further development of the Quickstep Process for use in the global automotive and aerospace industries.
Managing Director of Quickstep, Mr Philippe Odouard, added “We are confident that our position as the largest independent aerospace composite manufacturer in Australia puts us in an outstanding position to win further substantial defence contracts as demonstrated by the recent signing of the Memorandum of Understanding with Sikorsky.
On the Quickstep Process, we continue to have confidence that the Quickstep Process will play an important and profitable role in the aerospace industry, where we continue to work with leading global aerospace companies to demonstrate and introduce the benefits of the Quickstep Process.
Additionally the automotive industry has recently come into clear focus for Quickstep, as rising fuel prices and global warming concerns push governments to enforce strict fuel consumption targets for future car designs. Just recently President Obama demonstrated this with his decree that by 2017 the manufacture of vehicles in the United States will need to meet fuel consumption rates of no more than 6.5 litres per 100 km. The Company and several leading global automotive manufacturers believe that reduction in vehicle mass is the most effective way of achieving this in the short term. Quickstep has patented solutions to meet the challenge in a cost effective way that will continue to be developed with this funding package. “
More information : www.quickstep.com.au
Appendix 1 – Terms of Placement and SPP (all amounts in AU$)
The Placement to institutional and sophisticated investors of 10,277,500 fully paid ordinary shares in Quickstep (“Shares”) (including the 1,875,000 Shares to be issued to La Jolla) was marketed chiefly within Australia and raised $3.3 million before costs.
RBS Morgans Corporate Limited acted as Lead Manager to the Placement and State One Stockbroking Ltd acted as a broker to the Placement.
Settlement of the Placement is scheduled for Wednesday, 4 May 2011 and the Placement Shares are expected to be allotted and issued the trading day after settlement (Thursday, 5 May 2011). The Placement Shares will rank equally with existing Shares on issue.
The issue price under the Placement and SPP (32 cents) represents a 10.22% discount to the volume weighted average price for the five day period up to and including 14 April 2011 (the trading day prior to the Company going into trading halt while it conducted the capital raising) of 36 cents.
The SPP will consist of an offer to existing eligible shareholders of Quickstep of up to $15,000 of Shares per eligible shareholder.
Participation in the SPP is optional and will be open to shareholders who were holders of Shares as at 5.00pm (Perth time) on the record date for the SPP, which was Thursday, 21 April 2011, and whose registered address is in Australia or New Zealand. Each eligible shareholder will be able to acquire up to 46,875 Shares under the SPP.
The SPP offer will open, and SPP offer documents will be despatched to eligible shareholders, on or about Thursday, 5 May 2011. The SPP is currently expected to close at 5.00pm (Perth time) on Friday, 3 June 2011. The SPP Shares are anticipated to be tradeable on Monday, 13 June 2011 and will rank equally with existing Shares on issue.
The SPP will not be underwritten. The Company reserves the right to scale back applications if it determines that the applications received under the SPP exceed its needs for further funding. An appropriate scale-back policy will be applied if the Company decides to scale back applications under the SPP.
The SPP is non-renounceable. This means that eligible Quickstep shareholders who do not take up their entitlement to participate in the SPP will not be able to transfer or receive any value for those entitlements.
The Placement and SPP will not require shareholder approval. However, Quickstep will likely seek shareholder approval at a general meeting to ratify the issue of Shares under the Placement so as to reinstate its capacity to issue Shares pursuant to the ASX Listing Rules.
Indicative key dates (which are subject to change) in relation to the Placement and SPP are as follows:
Key dates - Placement
Trading halt : Friday, 15 April 2011
Completion of Placement announced: Pre-market open, Wednesday, 27 April 2011
Quickstep shares re-commence trading: Wednesday, 27 April 2011
Placement settlement date: Wednesday, 4 May 2011
New Placement shares commence trading: Thursday, 5 May 2011
Key dates – SPP
Record date for determining entitlement to participate in SPP: Thursday, 21 April 2011
Announcement of SPP: Pre-market open, Wednesday, 27 April 2011
SPP offer opens and SPP offer materials despatched to eligible shareholders: Thursday, 5 May 2011
SPP offer closes: Friday, 3 June 2011
New SPP shares commence trading: Monday, 13 June 2011
Annexure 2 –Funding Agreement terms and conditions
The key terms and conditions of the Funding Agreement are as follows:
(i) an Initial Note to be issued on the Initial Closing Date being ten business days following the execution date (24 April 2011), or such earlier date on which the Company is ready to issue a cleansing statement in relation to the issue of the Initial Note pursuant to ASIC Class Order [CO 10/322]; and
(ii) a Subsequent Note, to be issued at Quickstep’s option which is exercisable during the period commencing on the date that the Purchase Price for the Initial Note has been fully paid and ending 90 days thereafter.
(i) AU$0.90 (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalisations or the like); and
(ii) 80% of the average of the Volume Weighted Average Prices during the ten (10) trading days prior to La Jolla’s election to convert.
(i) require the Company to prepay a Convertible Note for cash at one hundred five percent (105%) of the principal amount, together with all accrued and unpaid interest payable to the date of prepayment;
(ii) convert the Convertible Note (in whole or in part); or
(iii) require the Company to use its best endeavours to procure the Company or such successor resulting or purchasing corporation, as the case may be, to, without benefit of any additional consideration, execute and deliver to La Jolla a convertible note with substantially identical rights, privileges, powers, restrictions and other terms as a Convertible Note in an amount equal to the principal amount immediately prior to such Fundamental Corporate Change (in exchange for the transfer of the Convertible Note back to the Company for no consideration).