RNS Number : 4497Z
NetScientific PLC
18 September 2015
 

NetScientific plc

 

Divestment of shareholding in Frontier BioSciences
and realignment of resources towards our primary portfolio

 

 

London, UK - 18 September 2015 - NetScientific plc ("NetScientific" or "the Company", AIM: NSCI), the transatlantic biomedical and healthcare technology group, has agreed to sell NetScientific UK Limited's ("NS UK") 49.9% holding in Frontier BioSciences Limited ("FrontierBio") to Zahra Holdings Limited ("Zahra") for £24,999 in cash ("Disposal") as part of its ongoing portfolio review. NS UK is a wholly-owned subsidiary of NetScientific.

 

FrontierBio will also repay £725,001 of NS UK's loan ("Loan") of £875,001 and NS UK will write off the balance of the Loan of £150,000. FrontierBio will pay NS UK approximately £420,000 on completion, with the balance of £330,000 to be paid by no later than 30 November 2015.

 

This strategic decision was made as NetScientific continues to re-align its portfolio to focus on three core areas in healthcare technologies - digital health, diagnostics and therapeutics. The funds received from FrontierBio will be re-directed to NetScientific's primary portfolio to accelerate growth.  

 

Francois Martelet, CEO of NetScientific, said: "We are committed to having a smaller, focused healthcare portfolio of breakthrough technologies that have the potential to shift the paradigm of care in chronic diseases. These funds will help accelerate our five primary portfolio companies - Wanda, Vortex, ProAxsis, Glucosense and Glycotest towards commercialisation and delivery on value adding milestones."

 

Zahra is wholly-owned by the family trusts (the "Trusts") of NetScientific's former Chief Executive Officer, Farad Azima. Through Zahra and two other companies controlled by the Trusts, the Trusts now hold 29.8% of the shares in the Company following the recent sale by Zahra of 250,000 shares in the Company.

 

At the time of the Company's IPO on AIM, the Trusts held 47% of the shares in the Company through its wholly-owned companies (including Zahra).  Accordingly, the Company entered into a relationship agreement with the Trusts at the time of the IPO.  However, by virtue of the Trusts' interest now falling below 30% of the shares in the Company, the relationship agreement has now terminated in accordance with its terms (which provide, among other things, that the agreement terminates automatically when the Trusts cease to hold 30% or more of the shares in the Company).

 

As a result of the Trusts' interest in the Company's shares falling below 30%, the Trusts are now only entitled under the Company's articles of association to appoint one director to the Company's board, rather than two.

 

FrontierBio's estimated losses since it commenced business in March 2015 to 17 September 2015 are £884,000. NetScientific will report its interest in these losses as "Share of loss of associates - £442,000". For accounting purposes NetScientific will report a non-cash gain on disposal of its investment in FrontierBio estimated to be £292,000, being the difference between the aggregate of the Disposal price and part repayment of the Loan and the carrying values of the investment and Loan.

 

As Zahra, Farad Azima and the Trusts are related parties under the AIM Rules for Companies, the Company's directors (other than Jonathan Paisner, who has abstained by virtue of him being appointed a director on the nomination of the Trusts) consider, having consulted with Investec in its capacity as the Company's nominated adviser, that the Disposal and part repayment of the Loan are fair and reasonable insofar as the Company's shareholders are concerned.

-Ends-

 

 

About NetScientific

 

NetScientific is a biomedical and healthcare technology group that funds and develops technologies that offer transformative benefits to people's lives and society through improved diagnosis, prognosis and treatment. For more information, please visit the website at www.netscientific.net. 

 

Contact Details

 

NetScientific

Francois Martelet

Peter Thoms, CFO

 

Tel: +44 (0) 20 3514 1800

Investec

Gary Clarence / Daniel Adams

Tel: +44 (0)20 7597 4000

Instinctif Partners

Melanie Toyne-Sewell / Jayne Crook

Tel: +44 (0)20 7457 2020 Email: netscientific@instinctif.com

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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