We have advised CMR Fuel Cells plc on a restructuring that involved a reduction of capital and the return of almost £4 million to shareholders.
Together with CMR's board of directors and other advisers, we devised a transaction structure that gave CMR's shareholders an opportunity to extract a significant amount of cash from CMR while ensuring its long-term survival. The arrangements involved Investec Investment Banking (as financial adviser and nominated adviser to CMR) making an offer to acquire all the outstanding share capital of CMR following which all shares tendered for purchase by Investec were bought back by CMR. All shares that were not tendered for purchase by Investec were then entitled to receive a special dividend.
Through this innovative structure, approximately 50 per cent of CMR's shareholders exited the company. In parallel with the restructuring, the board of CMR took the opportunity to rationalise CMR's business including through the cancellation of the company's admission to trading on AIM.
Our team was led by corporate finance partner Claire Clarke assisted by associate Stephen Hamilton and solicitors Rupert Finch and Jonathan Greenwood. Tax advice was provided by partner Christopher Townsend and employment advice was provided by partner David Mills.
Claire Clarke commented: "It was a pleasure to assist CMR through what was a complicated and novel process. The transaction included many stakeholders with competing objectives and therefore it is particularly pleasing to have implemented a structure which gave each stakeholder the opportunity to pursue its own investment objectives."
John Halfpenny, Chief Executive of CMR said: "Mills & Reeve's advice in relation to our restructuring was instrumental in achieving a successful completion. Claire's team demonstrated their ability to devise and implement complex transaction for listed companies."
CMR is a UK-based designer and developer of compact Direct Methanol Fuel Cell (DMFC) stacks and systems for portable and small stationary power generation applications ranging from media players and games consoles through to laptop computers and remote monitoring devices. The company's fuel cell stacks are not yet in production but the company collaborates with a number of system integrators and original equipment manufacturers who have plans to introduce fuel cell products.
Investec Investment Banking acted as financial adviser and nominated adviser to CMR. Grant Thornton and Staffords LLP provided accounting advice.