Restructuring - Sopheon

Sopheon plc (“Sopheon” or “the Group”) issues an update on certain corporate matters.

The Group’s capital restructuring was initiated earlier this year following shareholder approval in June, and was made up of two elements; a capital reorganization followed by a capital reduction.

The capital reorganization comprised a share consolidation implemented through a two-step process involving a 10,000:1 share consolidation, followed by a 1:500 share subdivision one week later. This procedure reduced the number of shares in issue by a ratio of 20. It also reduced the number of shareholders on the Company’s UK share register from approximately 4,000 to just over 200. By the same token shareholders in the Dutch system were expected to fall from over 7,000 to under 2,000. However, as previously noted, we understand that the reduction was not correctly processed by certain brokers in the Netherlands. We believe this means the Dutch shareholder count may have reduced to around 5,000. We have made enquiries and representations in the Netherlands but the board has found the responses unsatisfactory. Accordingly, the board is actively considering the possibility of seeking shareholder approval for a fresh 500:1 consolidation during the first quarter of 2014. We will continue to assess the alternatives, and will update shareholders in due course.

The second element of the restructuring, the capital reduction had the objective of reducing the deficit on the Group’s accumulated reserves. This has now been approved by the court, and a certificate has been issued by the Registrar of Companies.

Chairman Barry Mence said: “It’s good to see the capital reduction concluded, a further milestone in the corporate changes that we started with last year’s transfer from Euronext to Alternext. We will continue to assess how to handle the apparent misprocessing of the consolidation procedure by in the Netherlands system, and will revert to shareholders once we have decided our approach”

Financing

As we have indicated in previous announcements, the Group’s facilities with BlueCrest Capital (“BlueCrest”) will expire on maturity of the term loan in March 2014. The balances outstanding on the medium-term debt and revolving credit facility are currently $0.36m and $0.40m respectively. The term debt is being paid down monthly and the revolving facility is used to manage short term currency requirements. BlueCrest is winding down its lending business, and therefore these facilities will not be renewed. The board has been exploring replacement facilities and has signed a provisional term sheet in this regard with a major US bank. We will announce further details as and when they become formalized.

In addition, the Company has agreed terms with GEM Global Yield Fund Limited ("GEM") to extend the Group’s equity line of credit facility for a further two year period up to 23 December 2015. This is the fifth such extension, and the terms of the facility are otherwise unchanged. Sopheon retains full control of the amount and timing of any subscription under the equity line and will be under no obligation to use the facility at any point. Since inception, the facility has been used to raise working capital on one occasion in March 2004, leaving approximately 90% of the original €10m facility available under the extended agreement.

CFO Arif Karimjee said: “We have a long standing relationship with GEM, and the equity line is an important component of Sopheon’s financing structure. We have no immediate intention of using the facility, however we are delighted to be extending for an additional two years.”

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About Sopheon
Sopheon (LSE: SPE) partners with customers to provide complete Enterprise Innovation Performance solutions including software, expertise, and best-practices to achieve exceptional long-term revenue growth and profitability. Sopheon’s Accolade® solution provides unique, fully-integrated coverage for the entire innovation management and new product development lifecycle. For the first time, businesses can access a single source of the truth across strategic innovation planning, roadmapping, idea and concept development, process and project management, portfolio management and resource planning. Sopheon’s solutions have been implemented by over 200 customers with over 60,000 users in over 50 countries. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Alternext Exchange in the Netherlands.

About GEM
Global Emerging Markets Limited was founded in 1991. GEM is a $3.4b investment group having completed 305 transactions in 65 countries. The firm is an alternative investment group that manages a diverse set of investment vehicles across the world. GEM’s funds include: CITIC/GEM Fund; VC Bank/GEM Mena Fund*; Kinderhook; GEM Global Yield Fund; GEM India Advisors, BLOM GEM Opportunities Fund and GEM Brazil PE Fund (*GEM exited both its LP and GP stakes in Q1 2010). For more information, please visit www.gemny.com.