announcement out

MEDIA RELEASE 25 January 2011
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES
Company announces restructure to non‐renounceable entitlement offer
Neptune Marine Services Limited (ASX: NMS, Neptune or the Company) announces an update
regarding its foreshadowed non‐renounceable entitlement offer (Offer) following outcomes of the
extensive restructuring process currently underway in conjunction with PricewaterhouseCoopers.
Initiatives underway as a result of the review are expected to result in annual overhead savings of
approximately $9.5 million and a further $2 ? $4 million in annual savings from the rationalisation
and/or restructuring of businesses and assets. Further details regarding these savings will be
included in the prospectus and investor presentation to be lodged with ASX on 31 January 2011.
These savings, in conjunction with the balance sheet restructuring initiatives, set the platform for
continued improvement in underlying profitability and set a platform for earnings growth in FY12
and beyond.
As part of the restructure, Neptune has conducted a comprehensive review of balance sheet
carrying values of its assets and has undertaken write downs totalling $99.5 million. The write
downs will be included in the result for the half year ended 31 December 2010.
Following the outcome of the review, the pricing of the $80.6 million capital raising announced in
December 2010 has been adjusted to $0.05 per share from $0.06 as previously advised.
The new pricing of $0.05 per share has been set to align with the post capital raising pro forma net
tangible assets (NTA) per share which was finalised following the balance sheet write downs
undertaken by the Board. Following discussions with large institutional investors and the joint lead
managers to the Offer (Euroz Securities Limited and Patersons Securities Limited), it was agreed that
alignment of price and NTA provided the best opportunity for success of the capital raising.
The capital raising remains a pro‐rata entitlement offer, however the ratio has been adjusted to 3.6
for 1 to reflect the new pricing.
Summary of key terms of Offer:
New structure Previous structure
Ratio 3.6:1 3:1
Price 5 cents 6 cents
Minimum raising $60 million $60 million
Maximum raising $80.6 million $80.6 million
Minimum number of new shares 1,200,000,000 1,000,000,000
Maximum number of new shares 1,612,678,760 1,343,898,972
The consequences of this change in the structure of the Offer are as follows.
ASX waiver
ASX issued a waiver to the Company on 8 December 2010 in relation to the Offer as previously
structured. Due to the revised structure of the Offer, the Company no longer has the benefit of that
waiver. Accordingly, in order to proceed with the Offer (as restructured) the Company has applied
to ASX for a revised waiver on the same terms as that previously provided by ASX, but with respect
to the Offer proceeding on the basis of a 3.6 for 1 pro‐rata entitlement offer at an issue price of 5
cents per new share.
Shareholders meeting
The Company has given notice of a general meeting to approve the Offer to be held on 10 February
2011. Due to the restructure of the Offer it is necessary to cancel that meeting and give notice of a
new meeting at which shareholders will be asked to approve the terms of the Offer, as restructured.
Subject to ASX approval, it is expected that that new notice of meeting is expected to be dispatched
to shareholders on Monday 31 January 2011 with an intended meeting date of 4 March 2011.
Shareholders who have already submitted a proxy for the 10 February 2011 meeting will need to
complete and submit the new proxy form attached to the notice of meeting to be dispatched on
Monday 31 January 2011.
Timetable
The Company announced on 19 January 2011 that it would need to revise the timetable that it
previously issued in relation to the Offer. Attached as Annexure A to this announcement is the
revised timetable for the Offer. This timetable is subject to approval by ASX, including ASX granting
the waiver referred to above. Shareholders are encouraged to read the revised timetable carefully,
and to note all important dates. In particular it should be noted that the back end of the Offer
timetable has had to be extended as a result of the restructuring of the Offer, and the consequent
need to apply for a new ASX waiver and to seek revised shareholder approval to the terms of the
Offer. It is now expected that the Company?s shares will return to trading on ASX on 14 March 2011.
Investor presentation
The Company also proposes to release on Monday 31 January 2011 an investor presentation which
details the key elements of the restructure plan for the Company and its impact together with the
impact of the entitlement offer on the operations of the Company. Once announced shareholders
are encouraged to review this investor presentation carefully. The investor presentation will be
made available on the Company?s website, and will also be mailed to shareholders together with the
prospectus.
Continuing suspension
Subject to ASX approval, the Company?s shares will remain suspended from trading until completion
of the entitlement offer. The Company?s ability to remain financially viable and meet its obligations
remains uncertain until the entitlement offer has been completed. The directors are of the opinion
that if the Company?s shares do not remain in suspension throughout this period, the entitlement
offer will not be successful and the Company?s ability to remain financially viable will be uncertain.
Until the minimum subscription is received, Neptune is reliant on the continued support of the NAB
to remain financially viable, together with the support from vendors in relation to their deferred
earn out payments. If the entitlement offer is not successful and the Company is unable to source
sufficient funds elsewhere, there is a real risk that the Company may default on its debt obligations.
In those circumstances, the Company?s lenders may wish to enforce their security over the
Company?s assets and sell those assets.
The Company appreciates that the capital raising process, including the delays that have arisen in
that process, have been a source of frustration for shareholders. The Company remains mindful of
the desire of shareholders to see the Offer completed and the Company?s securities reinstated to
trading on the ASX as soon as possible.
‐ ENDS ‐
Further information:
Investor Relations: Media Contact:
Rod Evans Shaun Duffy
Director, Strategy & Development FD
Neptune Marine Services Ltd Phone: +61 8 9386 1233
Phone: +61 8 9424 1111 Mobile: 0404 094 384
Annexure A - Timetable
Lodgement of Prospectus for the Offer (and announcement of
Investor Presentation)
Monday, 31 January 2011
Notice of Entitlement Offer sent to Option holders Monday, 31 January 2011
Updated notice of general meeting dispatched Monday, 31 January 2011
?Ex date? Thursday, 3 February 2011
Record Date 5.00pm (WST) Wednesday, 9 February 2011
Dispatch of Prospectus Thursday, 10 February 2011
Opening Date Thursday, 10 February 2011
General Meeting to approve Entitlement Offer Friday, 4 March 2011
Closing Date 5.00pm (WST) Friday, 11 March 2011
Suspension ends (securities quoted on a deferred settlement
basis)
Monday, 14 March 2011
ASX notified of any under subscriptions Wednesday, 16 March 2011
Dispatch of holding statements for Entitlement Offer (deferred
settlement trading ends)
Monday, 21 March 2011
Shortfall Offer Closing Date 5.00pm (WST) Tuesday, 6 June 2011
Last day to issue New Shares under the Shortfall Offer Friday, 10 June 2011
The Company reserves the right to amend the Timetable without prior written notice