CMS intends to use the proceeds of the Proposed Placing primarily to accelerate the roll-out of the Company's proprietary modular software system Transactional Data Interface ("TDI"). As part of its expansion, CMS is to launch a sales and customer support operation in Chicago, USA. TDI powers the collection, processing and distribution of live prices and news. Following its successful implementation at the London Metal Exchange, TDI has already been adopted by two key futures exchanges in North America, the Chicago Mercantile Exchange and the Chicago Board of Trade.
The Company also intends to use some of the proceeds from the new fundraising to achieve increased income in the traditional quote vendor market sector from its wholesale Digital Data Feed ("DDF") product.
Earlier this year, the Company won the exclusive UK rights to market ProphetX, a market display system for energy and commodity traders, which has already secured 15 corporate customers in the UK. Again, CMS intends to use some of the new funds raised to increase the sales and marketing resources for this product.
The New Shares have been conditionally placed with institutional and other investors pursuant to a placing agreement entered into between the Company and its broker, Corporate Synergy Plc. The Proposed Placing, which was oversubscribed, is not underwritten and is conditional, inter alia, on:
(i) shareholders approving resolutions at an extraordinary general meeting of the Company on 22 December 2003 ("the EGM") authorising, inter alia, the directors of CMS ("the Directors") to issue and allot the New Shares for cash on a non pre-emptive basis pursuant to the Proposed Placing; and
(ii) admission of the New Shares to the Alternative Investment Market of the London Stock Exchange plc.
The Directors have indicated that they shall be voting in favour of the resolutions being proposed at the EGM in respect of their aggregate beneficial holdings of 26,080,000 ordinary shares, representing 47.4% of the existing issued share capital of CMS. The New Shares were not offered to existing shareholders generally and, accordingly, the Directors are not subscribing for any of the New Shares.
If the Proposed Placing is completed:
(a) the New Shares shall represent 31.25% of the enlarged share capital of the Company;
(b) in aggregate, the Directors shall hold 32.6% of the enlarged share capital of the Company;
(c) the following existing significant shareholders shall be diluted to the levels below:
Bob Antell 17.8%
Keith Young 13.4%
Application shall be made for the New Shares to be admitted to trading on AIM. It is expected that such admission shall become effective on or before 23 December 2003. The New Shares shall, when issued, rank pari passu in all respects with existing ordinary shares of 0.2p each in the capital of the Company.
Bob Antell, Chief Executive of CMS, commented:
"This Proposed Placing is a crucial step in the Company's development. The proceeds will provide us with additional firepower to execute our ambitious marketing and sales plans that build on successes we have already achieved, notably in the USA and London.
"Moreover, we are delighted to welcome the new institutional investors to our existing shareholder base. We believe that the mixture of private and institutional shareholders which we will have following the Proposed Placing should give the Company's shares liquidity at the same time as being a potential source of raising additional funds in due course, if appropriate.
"Through the Proposed Placing, we will have quickly raised significant new funds for the Company, which, in addition to its existing cash reserves, should enable us to carry out our 2004 marketing objectives and to have the balance sheet strength to take advantage of additional opportunities which may arise.
"The institutions' investments are a clear sign of their confidence in the potential of CMS, our staff and the board. The next two years should be very exciting for the Company."
