Dear fellow shareholders,
Please find enclosed a circular that has been sent to all
shareholders which contains details of the plan to raise
additional funds for Electric Word by issuing new shares
which we announced on 17 August 2012, together with our
interim results for the half year to 31st May
2012.
The circular contains important information which
shareholders should read and any investment decisions should
be made on the basis of that document alone. However I
thought it would be useful to summarise the key points.
Electric Word has faced some difficult conditions in our
public sector markets over the last couple of years which
reduced our profits in the Education division in 2011 in
particular. We decided that despite the difficult conditions
we would take the opportunity while the market was weak to
redevelop our portfolio of professional development products
with the aim of putting all of our businesses in the best
possible position to benefit when more stable economic
conditions prevail.
We have therefore been engaged in a programme of product
development and investment for much of the last year. We have
already seen the benefits of that with the development of a
new online publishing platform which launched in January
2012. Our Interim results also show the Education market
stabilising with that division returning to profit in the
first half of this year.
We now plan to accelerate that programme of investment,
including developing further digital products and
strengthening the central functions that enable us to drive
value and growth in the Group's different businesses. We are
making these investments in order to grow shareholder value
by maximising the potential of each division.
In order to make these investments we are raising additional
equity finance, which will be used to directly fund the next
phase of investment, to improve the working capital available
to the business and to further reduce our bank
borrowings.
The equity fundraising is in two parts. First, there is a
placing of shares and I'm pleased to report that all of the
Company's three largest shareholders, as well as myself as
Chief Executive, are participating in the Placing. Secondly,
there is an Open Offer of shares to all shareholders, save
for some certain overseas investors who we are unfortunately
unable to include. This gives shareholders the opportunity to
increase their shareholding at the same price as investors
participating in the Placing. Your allocation under the open
offer is one new share for every nine shares you already
hold, but if you wish to apply for additional shares there is
the facility to do that also, subject to certain overall
limits.
www.
ElectricW ordplc .com 33-41 Dallington E C1V Street, London EC 1V 0BB T: 020 7954 3443 F: 0845 450 6405Incorporated in England and W ales. Registration no. 3934419, Registered Office: 33 -41 Dallington Street, London 0BB
The Directors believe that the new shares, including those
available under the open offer, should be eligible (subject
to the circumstances of investors) for tax reliefs under the
Enterprise Investment Scheme ("EIS") and for investment by
VCTs. Full details are set out in part 7 of Part 1 of the
enclosed circular. Naturally, investors should seek their own
tax advice if they plan to make use of this scheme.
Approval from shareholders will be sought for the equity
fundraising at a general meeting which will take place on 6
September 2012.
The Directors believe that the equity fundraising and the
passing of the shareholder resolutions at a general meeting
are in the best interests of the Company and shareholders,
taken as a whole. The Directors unanimously recommend the
shareholders to vote in favour of the shareholder resolutions
and to complete and return the Form of Proxy enclosed with
this letter.
Thank you very much for reading this letter. Yours
sincerely,
Julian Turner
www.
ElectricW ordplc .com 33-41 Dallington E C1V Street, London EC 1V 0BB T: 020 7954 3443 F: 0845 450 6405Incorporated in England and W ales. Registration no. 3934419, Registered Office: 33 -41 Dallington Street, London 0BB
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