Further update on Investment in Ve Interactive Limited

04 May 2017

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

In March of this year, we reported that a new management consortium had been introduced to Ve Interactive Limited ("Ve") with the primary objectives of stabilising the business and executing a programme of solvent restructure. At this time, the on-going viability of the business was dependent upon the new management consortium securing the necessary funding to recapitalise its balance sheet and re-structure a number of onerous debt obligations entered in to by the former founding management team.

On 15 March, management communicated their intention to secure a minimum of £20m in new funding, from a combination of both existing share and debt holders together with new identified parties.  On 7 April 2017, HMRC served a second winding up petition on the Company, the first having been satisfied by the injection of funds introduced to the business by the new management consortium a month earlier. Throughout this time, the new management team continued to actively engage with the existing share and debt holder base in order to provide greater insight in to their future plans for Ve, and assist the diligence process of all interested parties wishing to evaluate the proposed new funding arrangements. By the time of the second winding up petition, the management had secured a maximum of £13.1m in conditional new funding.

As a result of this action, the timetable afforded the new management team in concluding its fundraising was accelerated and in the absence of having secured the necessary funding required to meet the short term needs of the business going forward, Smith and Williamson were formally engaged by Ve on 13 April 2017 in preparation for an insolvency appointment over Ve.

On 24 April 2017, an application to the Leeds District Registry of the High Court, to be heard the following day, was made by a creditor seeking to place Ve into Administration. On 25 April 2017, Smith and Williamson were appointed as administrators to the company. Later that same day, as part of a pre-packaged arrangement, the business and assets of Ve were sold to Rowchester Limited for a cash consideration of £2m, payable in instalments over a 12 month period ending April 2018.  The directors of Rowchester Limited comprise members of the incoming Ve management consortium.

The Board of Concha is deeply disappointed by the recent events and circumstances of the last few months, particularly the actions of both the founder management team and their advisors. We together with other former shareholders in Ve, which in combination have advanced more than £50m in equity funding since the company began trading in 2009, will continue to investigate the actions of those responsible for its demise and indeed any opportunity to participate in the assets and business of Ve going forward, however at this time there can be no guarantees of any such involvement.

The impact of these recent events has eliminated any residual carrying value in Concha's former investment in Ve. In the event that this situation changes and Concha is either able to secure a participation in the new business going forward or recover value from its former investment it will communicate details at the appropriate time.  In the meantime, your Board will continue to review new investment opportunities in order to restore value for its shareholder base.

 

For further information, please contact:

Concha PLC
Chris Akers, Chairman
chris.akers@srgplc.com
   
SPARK Advisory Partners Limited (Nominated Adviser)
Sean Wyndham-Quin/Mark Brady
+44 (0) 203 368 3550

 

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