FOR IMMEDIATE RELEASE 8 March 2010
China Gateway International PLC
("CGI" or "the Company")
Issue of Equity
CGI is pleased to announce that it has issued 2,142,858 new ordinary shares ("the Shares") at a price of 14 p per Share, that price being a 20 % discount to the last reported deal in the Company's shares, which was 17.5p on 22 February 2010. The subscription will raise £300,000 in cash before expenses. This amount will be used primarily to pay interest due on the Company's loan facility from Israel Discount Bank with the balance to be used for general working capital purposes.
The issue is wholly to three related parties, with equal amounts of £100,000 (714,286 Shares) being subscribed by Omega Properties Limited, a company associated with Ken Wills, a director of the Company, which owns 28.21% of the Company's issued share capital, by Blenheim Limited, a company associated with Christopher Seymour Prosser, a director of the Company, which owns 28.2% of the Company's issued share capital and by Laxey Partners Limited, which holds 22.92% of the Company's issued share capital and accordingly the subscription constitutes a "related party" transaction under the AIM Rules.
The Directors with the exception of Ken Wills and Christopher Seymour Prosser who as described above are involved in the transaction, having consulted with the Company's Nominated Adviser, consider that the terms of the subscription are fair and reasonable insofar as its shareholders are concerned.
Application will be made for the new ordinary shares, which will rank, pari passu with all existing ordinary shares, to be admitted to trading on AIM. Trading is expected to commence on or around 15 March 2010.
Following the subscription the interests of the subscribers and the Directors involved in the transaction will be as follows:
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Name
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Related Party
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Participation
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Resulting holding
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Laxey Partners
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Substantial shareholder
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714,286
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5,887,520 (23.82%)
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Omega Properties Limited *
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Directors' interests
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714,286
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7,083,579 (28.66%)
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Blenheim Limited **
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Directors' interests
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714,286
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7,083,579 (28.66%)
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* The shares in Omega Properties Limited are registered in the name of F&A Services Limited, a company incorporated in Malta, which holds them on discretionary trust for a class of beneficiaries which includes Ken Wills, Director and CEO of CGI.
** The shares in Blenheim Limited are registered in the name of F&A Services Limited, a company incorporated in Malta, which holds them on discretionary trust for a class of beneficiaries which includes Chris Seymour-Prosser, the Managing Director of CGI.
Following the issue of Shares, Ken Wills will have interests in 7,083,579 shares or 28.66% of the share capital (including the shares held by Heritage Building Limited) in the Company, and Chris Seymour-Prosser will have interests in 8,776,524 shares, or 35.51% of the share capital in the Company
Commenting on the subscription, Robin Bolton, CGI's chairman, said "This subscription is in accordance with an agreement with Israel Discount Bank to enable the Company to pay interest and, in conjunction with the recently announced sale of the Dover Properties, reduce its total indebtedness. I am grateful to both IDB and the subscribers for their continued support for CGI".
Ends
For further information, please contact:
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China Gateway International PLC
Ken Wills
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+44 (0) 1843 822444
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Beaumont Cornish Limited
Roland Cornish
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+44 (0) 20 7628 3396
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