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2009-09-22 09:00:00 CEST 2009-09-22 09:00:01 CEST REGULATED INFORMATION Tiimari Oyj Abp - Company AnnouncementTIIMARI STRENGTHENS ITS CAPITAL FUNDING AND BOARD OR DIRECTORS IN ORDER TO ENABLE QUICK IMPLEMENTATION OF THE RENEWED STRATEGYTiimari Plc STOCK EXCHANGE RELEASE 22 September 2009 at 10.00 TIIMARI STRENGTHENS ITS CAPITAL FUNDING AND BOARD OF DIRECTORS IN ORDER TO ENABLE QUICK IMPLEMENTATION OF THE RENEWED STRATEGY The Board of Directors at Tiimari Oyj Abp has decided to accelerate the development of the Tiimari and Gallerix business operations by investing more than previously planned in activities that enable an increase in customer flows and sales growth. The company has in its strategy defined arts & crafts and party organising as focus points. The company has decided to accelerate the launch of new product categories and branded products to support the focus points and expand the amount of shops, in which the products are to be introduced. New product categories, such as CDs, pocket books, children's toys and leading Finnish brands have already been tested in shops during the autumn with great success. Simultaneously, the company increases its efforts in logistics and operations management as well as in the development of in-shop information technology systems in order to increase operational efficiency and profitability. The aims of these actions are to increase the operational cash flow and balance out its fluctuation during the calendar year. Due to initiated and planned actions the company's seasonal working capital needs during the latter part of the year will be higher than expected, especially because of new product launches and preparations for the Christmas sales period. The need for external funding has also increased through the discounted sales period in the summer, which has resulted in a third quarter gross margin development that is weaker than expected. In addition to covering the seasonal funding need the Board has established a need to improve the financial position of the company and increase the flexibility of long-term funding. CEO Hannu Krook “In our second quarterly report we announced that this year we are going to focus on developing our competitive edge in our retail concepts by improving our activities within the profit improvement programme and introducing new product categories and branded products. In the prevailing economic climate the execution of these activities still needs to be improved in order to reach our full year targets. In terms of the operative efficiency of the profit improvement programme, cost and inventory reductions and investment management, the aforementioned actions have proceeded according to plan. Although the gross margin percentage has improved its effect on profit has not reached the target as the sales volume is lagging behind expectations. The intention of the sales improving activities is to grow the sales towards year-end and accelerating these is therefore of special importance. The additional funding enables a broader and faster introduction of the new product categories in our shop network and stabilises the long-term funding significantly.” Due to the aforementioned and the general economic downturn, the Board of Tiimari Oyj Abp has decided to call for an additional general meeting in order to decide on releasing a 4.98 million euro (maximum) convertible capital loan, which will mainly be offered for subscription to professional and institutional investors, empowering the Board to decide on the share issue and any special rights related to the offering as well as decide on the change in board size and composition. The terms of the loan and invitation to the general meeting will be published in full in a separate release. The company has received separate commitments from its biggest owner Atine Group Oy's parent company Virala Oy Ab, Assetman Oy and Baltiska Handels A.B, in which the aforementioned parties have according to proposed loan terms and under the assumption that the general meeting will release a convertible capital loan to subscribe a total of 3.540.000 euro of the loan amount. The prepayments from the parties who have given the subscription commitment will be netted off against the subscription costs of the convertible capital loan. In connection with the corporate finance preparations, the company has also agreed with its financing bank new absolute profitability related loan terms concerning the Tiimari and Gallerix business operations to stabilise the financial position of the group. In the additional general meeting a proposition will also be made to increase the board size by one member and that the member to be chosen to the Board would be Mr. Markku Pelkonen (b. 1962). Mr. Pelkonen has worked as Senior Vice President , kiosk operations for Rautakirja Oy from 2001 to June 2009 and in other sales and marketing positions from 1992 onwards. The Board has also agreed that after the general meeting the Board will choose the current vice-chairman Mr. Hannu Ryöppönen as chairman of the board and the current chairman Mr. Peter Seligson as vice-chairman. The essential terms of the convertible capital loan agreement to be proposed to the Annual General Meeting: Loan amount 4.980.000 euro Emission rate 100% Subscription period 20th - 21st October 2010 Interest rate 8.0% p.a. Due date for loan 29th March 2013 Conversion period for shares 30th October 2009 - 15th March 2013 Conversion rate shall be the weighted average price of the share in trading Nasdaq OMX Helsinki Plc during 22 nd September - 7 th October 2009 increased by 5 percent but at least 1.30 euro and at maximum 1.50 euro/ share. Tiimari Plc Hannu Krook CEO Further information: CEO Hannu Krook tel. + 358 (0)3 812911, e-mail hannu.krook@tiimari.fi Distribution: NASDAQ OMX Helsinki important news media www.tiimari.com Tiimari Plc is a listed company. The group consists of two retail shop concepts: Tiimari and Gallerix. These two concepts do business in seven countries within the Baltic Sea region and there are altogether nearly 300 shops. All three concepts belong to the forerunners of their market segment. In the corporation there is also a company called Tiimore Oy which specialises in corporate gifts and sales promotion solutions. |
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