Desicions of the extraordinary general meeting of Westend ICT Plc
04.05.2010 00:00
Westend ICT Plc Stock Exchange Release May 4, 2010, at 13:00 Finnish time
The Extraordinary General Meeting of Westend ICT Plc on 4 May 2010 has made the following decisions:
1. Accepted the financing arrangement agreement signed by the company and Tuomo Tilman on 9 April 2010;
2. Accepted the financing arrangement agreement signed by the company and Jyrki Salminen on 9 April 2010; and
3. Decided on the share issue directed to Tuomo Tilman and Jyrki Salminen.
51.14 percent of the Company's share capital and votes were present in the General Meeting. The decisions of the meeting were made unanimously.
The minutes of the meeting will be displayed for view of the shareholders at the head offices of the company on 18 May 2010, at the latest.
Financing arrangement agreements
The main points of the agreements are as follows:
(i) Loan installment; the company will pay, as installments of the convertible loan, EUR 250,000.00 to Tuomo Tilman and EUR 250,000.00 to Jyrki Salminen;
(ii) Sale of shares; the company will sell to Tuomo Tilman 999,678 shares and to Jyrki Salminen 999,679 shares of the GROUP Business Software AG shares in its possession at the price of EUR 0.60 per share. The total sale price of EUR 1,199,614.20 will be set off against receivable from the company;
(iii) Converting the convertible loan decided by the General Meeting on 27 March 2003 and including its changes; Tuomo Tilman and Jyrki Salminen will each convert to company shares 1,178 promissory notes in accordance with the company's convertible loan and valued at EUR 1,000.00 each, each of which entitles to 6,400 new shares of the company. Thus, Tilman will get 7,539,200 new shares and Salminen 7,539,200 new shares of the company at the rate of about EUR 0.156 per share. The remainder of the loan will be paid in cash, EUR 843.40 to Tuomo Tilman and EUR 842.80 to Jyrki Salminen; and
(iv) Share issue; the company will direct to Tuomo Tilman and Jyrki Salminen a share issue in which Tilman and Salminen are each offered 16,000,000 new shares of the company at the subscription price of EUR 0.05 per share. The total subscription price of EUR 1,600,000.00 will be set off against receivable from the company.
The acceptance of the General Meeting set as the prerequisite for the agreements to become valid has thus been fulfilled and the actions in accordance with the agreements will be made on 5 May 2010 at the latest. After the arrangements, the company will no longer have interest-bearing debts.
Directed share issue
The Extraordinary General Meeting also decided on the directed share issue in which 32,000,000 new shares of the company will be offered, deviating from the subscription rights of shareholders, to be subscribed at the subscription price of EUR 0.05 in such a manner that Tuomo Tilman will be offered 16,000,000 new shares for subscription and Jyrki Salminen will be offered 16,000,000 new shares for subscription. The subscription price will be set off against receivable from the company. All the offered shares were subscribed to in the General Meeting.
Effects of the arrangement on the company's equity
After the financing arrangement agreements accepted by the General Meeting have been implemented and the share issue has been executed, the company’s equity according to the approved financial statement of 31 December 2009 will be directly strengthened by EUR 3,956,000.00 and by EUR 319,897.12 through sales profit from the Group Business Software AG shares via returns, i.e. by a total of EUR 4,275,897.12. After this, the company's equity will be 3,122,635.12.
Effects of the arrangement on the company shares
As part of the arrangement, the company will issue 15,078,400 new shares based on the conversion of convertible bonds and 32,000,000 new shares based on the directed issue. Thus, a total of 47,078,400 new shares will be issued. When the new shares have been registered, the total number of shares in the company will be 175,571,096. The share of Tuomo Tilman and his authorized company is after the arrangement 57.735.570 shares or approximately 32.88% and Jyrki Salminen’s share is 54.949.856 shares or approximately 31.30%.
Effects of the arrangement on the operational preconditions of the company
CEO Hannu Jokela at the Extraordinary General Meeting:
"The company's goal in the recent years has been to improve the net sales and especially the operating result compared to previous years. In 2009, we reached these goals.
The goal set for 2010 is to increase the net sales compared to the previous year and to achieve a positive operating result on an annual level. Additionally, a goal was set to improve the financing position of the company in such a way that also growth by corporate arrangements would be possible.
On 20 April 2010, the company published the interim report for 1 January–30 March 2010. Although the net sales for the first quarter was EUR 200,000 less than during the same period in the previous year and the operating result was slightly negative, the company believes that the goals concerning net sales and operating profit set for 2010 can be reached.
Our business strategy includes striving for growth through corporate arrangements during this year and the following years. Part of creating the prerequisites for this is the financing arrangement to be confirmed, after which the balance sheet is in order and the company is free of debt. However, in order for us to be successful in corporate arrangements, our financing position needs to be strengthened further.
The company has surveyed fields of business in which there is potential for future development. These possibilities will be utilized both in developing existing business operations and in mapping potential targets for corporate arrangements.
In public administration, the goal is to strengthen our position among existing customers, especially in municipal administration and its interest groups. Our competitiveness in state administration projects needs to be improved. The market views in public administration are fairly good, because the company's current product selection helps in making operations more effective as resources are decreasing.
We also strive to improve our position within the corporate customer group, especially in mid-sized companies. The company's current product selection must be expanded and developed to include services that are easy to buy, install and use and that will provide added value for customers immediately. However, the development of the general financial situation affects significantly the investment decisions in the corporate sector.
Changes in operating methods, development of technology and changes in customers' buying practices happen fast in the company's field of business. For this reason, the development is moving from traditional selling of licenses, maintenance and related services to using service-based operating models. The company needs to develop its know-how in the field of open source code and to explore the possibilities offered by solutions used in mobile phones and other terminals using wireless connections.
Geographically, the focus is primarily on the Finnish market and secondarily in the markets of adjacent areas.
In future corporate arrangements, special attention needs to be paid to risk management. The company will continue to use the operating model in which the operative functions have been centralized into the subsidiaries.
Favorable development of the general financial situation and especially of the stock markets is a prerequisite for success in corporate arrangements and achieving the growth goals."
Westend ICT Plc
Hannu Jokela
CEO
Tel. +358 207 91 6700
Distribution:
NASDAQ OMX Ltd Helsinki
Main media
www.westendict.com