Announcement no. 18/2008
To the Nasdaq OMX Nordic Exchange Copenhagen Copenhagen, November 21,
2008
The Board of Directors recommend a liquidation of the Company
In the light of the development on the financial markets and not least the huge
decline in the valuation of listed biotech companies, the Board of Directors in
Curalogic has decided to recommend a liquidation of Curalogic, and that the
assets are returned to its shareholders. The Board of Directors will as soon as
possible call for an Extraordinary General Meeting where the proposal of
liquidation will be put forward.
In January 2008, Curalogic initiated a search process to identify new
development projects, and since then Management has been in dialog with a large
number of Danish and foreign biotech companies. Based on a detailed evaluation,
7 of these companies were deemed to fulfil the search criteria set up and
previously communicated by Curalogic. These companies have been the object of a
detailed scientific and business analysis as well as negotiation process but the
Board of Directors was unable to come to terms in any transaction.
In light of this and the very difficult financial markets, the Board of
Directors in Curalogic has decided to recommend a liquidation of Curalogic to
the shareholders, and that the remaining cash and cash equivalents will be
returned to its shareholders. The Board of Directors will as soon as possible
call for an Extraordinary General Meeting where the proposal of liquidation will
be put forward.
The proposal from the Board of Directors will imply that the company is placed
in solvent liquidation, and in this situation the proceeds per share is at
present estimated to be in the interval DKK 4.60 - 4.80 under the assumption
that a) the liquidation will be initiated by the end of December 2008 with
estimated cash and cash equivalents of approximately DKK 281 million, b)
3,246,976 warrants will be exercised (warrants with an exercise price below the
present share price) against payment of DKK 6.1 million to the Company, c) the
costs of termination and liquidation will be approximately DKK 6 to 8 million,
and that no unforeseen events will influence the achievements thereof.
Estimate of proceeds in a liquidation event in Curalogic A/S
The Company's cash and cash equivalents are estimated to be approximately DKK
281 million by the end of 2008. A liquidation of Curalogic will involve a number
of costs such as costs until expiry of various contracts including costs of
being a listed company, salaries to staff during the period of notice, costs to
legal advisors and accountants etc. Management believes that the aggregated
termination and liquidation costs will be approximately DKK 6 to 8 million. This
will result in estimated liquidation proceeds from a liquidation of Curalogic of
approximately DKK 273 - 275 million.
As of September 30, 2008, the share capital comprised of 56,480,149 shares with
a nominal value of DKK 0.5 each. Nordic Biotech holds 2,846,976 warrants, which
are expected to be exercised in the event of a liquidation of Curalogic, as the
exercise price for these warrants are approximately DKK 1.9 (see annexes 3 and 4
to Curalogic's articles of association). These warrants were granted to Nordic
Biotech before the IPO of Curalogic in connection with Nordic Biotech's
financing of the Company. To this should be added 400,000 warrants granted to
two members of the Board of Directors and one employee in 2005, and for which
the exercise price is approximately DKK 1.5 (see annex 2 to Curalogic's articles
of association). Management believes that the aggregate number of warrants that
would be exercised in the event of a liquidation of Curalogic would be 3,246,976
warrants, meaning that fully diluted number of shares would increase to
59,727,125 shares.
In the event of the exercise of the 3,246,976 warrants, the Company would
receive proceeds totaling approximately DKK 6.1 million. If this amount is added
to the Company's expected cash and cash equivalents less the expected
liquidation costs, Management estimates that the liquidation proceeds at
liquidation during the spring 2009 will be approximately DKK 279 - 281 million,
which will result in liquidation proceeds in the interval of DKK 4.60 - 4.80 per
share.
Curalogic has an unused tax loss carried forward. The value of the accumulated
tax losses carried forward in Curalogic, which totaled DKK 66 million as of
December 31, 2007 (see note 13 to the 2007 annual report), would be lost in the
event of a liquidation of Curalogic since the use of it will require that it can
be set off against revenue from activities in Curalogic A/S. Hence, the value of
the tax loss carried forward is DKK 0 in the liquidation event.
Process of a solvency liquidation event in Curalogic A/S
The holding of an Extraordinary General Meeting will be the first step in the
process towards a solvent liquidation of Curalogic A/S. If the liquidation is
passed on at the General Meeting, the Company's Board of Directors and
Management Board will step down immediately after the General Meeting. After
this there will be a notice of 3 months for creditors. When the period of notice
for creditors is due the statement of liquidation is terminated and a final
General Meeting will be held. After this the cash and cash equivalent can be
paid out to the shareholders and Curalogic will be delisted from Nasdaq OMX the
Nordic Exchange Copenhagen.
Copenhagen, November 21, 2008
Curalogic A/S
For additional information, please contact:
Jakob Schmidt, Chairman Tel. +45 20 22 68 60
Helle Busck Fensvig, EVP and CFO Tel. +45 99 99 24 03
This announcement contains forward-looking statements regarding the Company's
future financial development and performance and other statements which are not
historical facts. Such statements are made on the basis of assumptions and
expectations which, to the best of the Company's knowledge and belief, are
reasonable, at this time, but may prove to be erroneous in the future.
