BULLETIN FROM THE EXTRAORDINARY GENERAL MEETING: PAYNOVA’S EXTRAORDINARY GENERAL MEETING APPROVED STRUCTURE AGREEMENT WITH XPONSE, BASED IN INDIA AND THE USA
(NGM: PAY)
Paynova’s extraordinary general meeting has decided to approve the Business Management and Restructuring Agreement with Xponse IT Services (P) Ltd, based in India and the USA, which was concluded during August. The meeting also decided to authorise the board to implement the offset issue of shares directed at Xponse as proposed by the board. The activities of Paynova Operations AB, the wholly-owned subsidiary currently under formation, can thus be initiated immediately. Per Sunnemark, previously CEO of Jobline Monster, has been appointed CEO and operational manager of the subsidiary and the partnership with Xponse.
President and CEO of Paynova AB, Lars Ekstedt, gave a presentation on the company’s activities and current status to illustrate the background. Chairman of the Board Lars Guldstrand then introduced the agreement entered into with Xponse IT Services (P) Ltd., and provided a look ahead at how Paynova’s status and potential will be strengthened through the partnership.
The extraordinary general meeting then decided, in accordance with the board’s proposal, to approve the Business Management and Restructuring Agreement signed with the Indian company Xponse IT Services (P) Ltd on 24 August 2006. The agreement was conditional on the approval of the meeting. The significance of the partnership is described in the Paynova press release of 25 August 2006, which is available at www.paynova.com
The aim is for Xponse to add Paynova services within the following areas: Operational Management Services, Strategic Advice, Execution of the Restructuring Plan, Software Support and Development, Marketing Management Services and other Management Services. The agreed value of these services amounts to MSEK 74.85.
In addition, Xponse undertakes to pay Paynova regular cost recovery contributions of
MSEK 1 per month for 12 months and to guarantee Paynova access to a Credit Facility of MSEK 15.
The total value of the agreed services and contributions amounts to MSEK 89.85.
The common objective is to achieve a continuously positive cash flow during the period January-June 2007, upon which a Performance Premium of MSEK 12 will be added to the value of the services.
As compensation for these services and contributions, Paynova must pay a purchase sum in the form of new shares in Paynova at a value corresponding to a maximum total of MSEK 101.85. Payment will be made through offset issue of shares on five occasions within a twelve-month period (two during 2006 and three during 2007) as Paynova’s business develops and services are supplied in accordance with the agreement.
These issues will be at an issue price corresponding to the average stock exchange rate (SEK 11.80) for 10 days before signing of the agreement on 24 August 2006. This means that a maximum of around 8,650,000 shares can be issued. Xponse’s share in Paynova, or dilution for the shareholders, may amount to a maximum of around 23 percent, given the additional compensation mentioned above, following completion of the deal.
The extraordinary general meeting also decided, in accordance with the board’s proposal, to authorise the board to make decisions on offset issues of shares directed at Xponse IT Services (P) Ltd. The decision was taken with the necessary majority, as more than two thirds of both the votes cast and the shares represented at the meeting voted for the proposal of the board.
The decision on authorisation of offset issues was as follows:
“The general meeting authorises the board, on one or more occasions, until the next general meeting and with deviation from shareholders’ preferential rights, to make decisions on new issues of shares directed at Xponse IT Services (P) Ltd., or to any group company or other associated company that Xponse IT Services (P) Ltd. indicates. The authorisation will include the right of the board to make decisions on such share issues with provision concerning whether the shares are to be subscribed to with the rights of the share subscriber to pay issue funds through off-setting against claims which the share subscriber has against Paynova AB as a result of the services supplied by Paynova AB under the Business Management and Restructuring Agreement which Paynova AB signed with Xponse IT Services (P) Ltd. on 24 August 2006. The maximum number of shares that can be issued under the provisions of this authorisation is 8,650,000.
“The basis for the issue price will be the market value of the share for 10 days before the signing of the above-named agreement, which was SEK 11.80. The reason for the deviation from the shareholders’ preferential rights is to facilitate payment through offset issue of the services and other contributions supplied by the Paynova group as per the above agreement.”
Per Sunnemark, who has been appointed CEO of the wholly-owned subsidiary Paynova Operations AB currently being created, was previously CEO with responsibility for Nordic activities within the world’s leading internet recruitment company, Jobline Monster. Born in 1963, he holds a degree in engineering from the Swedish Royal Institute of Technology, with a focus on industrial finance and organisation. Per will have immediate operational responsibility for the subsidiary and the partnership with Xponse in the development and restructuring of Paynova’s activities. Per has previous experience as CEO, sales manager, marketing manager, business support manager and system salesperson at companies such as Mindmark Learning, MFS WorldCom, Generic Systems, Telia and MacGruppen.
Stockholm, September 2006
The Board
FOR FURTHER INFORMATION, PLEASE CONTACT:
Lars Guldstrand, Chairman of the Board
Telephone: +46 (0)70-528 81 81
Lars Ekstedt, CEO and Group President
Telephone: +46 (0)70-374 27 37
ABOUT PAYNOVA
Paynova offers an international, account-based payment service via the Internet. With Paynova as the only counterpart, e-retailers get a payment guarantee for around twenty payment options in 10 languages with 8 currencies in a security-certified interface (PCI). Consumers can open an account, a Paynova wallet, for free on the Internet to make purchases simpler and more secure, as well as look after transfers between family members, friends and acquaintances.
Paynova has agreements with around 1,000 e-retailers. Most are found in the following prioritised segments: travel, retailing and media/network games. The company has been listed on NGM Equity since February 2004. For more information: www.paynova.com