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Ceres Power HoldingsAnnouncement

06/09/2014 14:43

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RNS Number : 0418M
Ceres Power Holdings plc
10 July 2014 
 
THIS ANNOUNCEMENT IS RESTRICTED AND IT IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA OR NEW
ZEALAND OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL 
 
11 July 2014 
 
CERES POWER HOLDINGS PLC 
 
Proposed £20 Million Placing 
 
Ceres Power Holdings plc ("Ceres" or the "Company"), a world-leading developer
of low cost, next generation fuel cell technology for use in distributed
generation and other applications, today announces its intention to raise
approximately £20.0 million (approximately £19.6 million net of expenses) by
way of an oversubscribed placing. 
 
Highlights 
 
·      Proposed Placing to raise approximately £20.0 million through the issue
of 235,705,868 Placing Shares 
 
·      Issue price for the Placing of 8.5 pence per Placing Share 
 
·      The Placing was to existing and new institutional investors and certain
Directors and was oversubscribed 
 
The Placing is conditional upon, inter alia, the passing of Resolutions by the
Shareholders of the Company at a general meeting.  If the Resolutions are
passed, the Placing Shares will be allotted after the General Meeting with
Admission of the Placing Shares expected to occur at 8.00 a.m. on 30 July
2014. 
 
N+1 Singer Advisory LLP acted as Nominated Adviser and sole Broker to the
Company. 
 
General Meeting 
 
A Circular, extracts of which are set out below, and a notice of General
Meeting will be posted to Shareholders today to explain the background to the
Placing, to set out the reasons why the Board believes it to be in the best
interests of the Company and its Shareholders and to seek Shareholder approval
for the Resolutions at the General Meeting, which will be held at the offices
of IP Group plc, First Floor, 24 Cornhill, London, EC3V 3ND at 11.00 a.m. on
29 July 2014. 
 
Commenting on the Placing, Alan Aubrey, Chairman of Ceres, said: "This level
of funding recognises the significant progress the Company has made over the
past year and is an endorsement of the management team and its strategy for
the Company. We are especially delighted with the quality of investors that we
have attracted to the register." 
 
Phil Caldwell, Chief Executive of Ceres, commented: "We believe that fuel
cells are a technology whose time has come and the Company is now well
positioned to be one of the leaders in this rapidly growing industry. This
funding will enable the Company to advance the development and
commercialisation of our low cost Steel Cell technology across different
markets and applications, with our world class partners." 
 
Unless otherwise defined, all capitalised terms in this announcement are
defined at the end of this announcement. 
 
Enquiries: 
 
 Ceres Power Holdings plc                               Phil Caldwell, Chief Executive OfficerRichard Preston, Finance Director  Tel. +44 (0)1403 273 463   
 N+1 Singer  (Nominated Adviser and Broker)Andrew Craig / Ben Wright / Alex Wright                                               Tel: +44 (0)20 7496 3000   
 Tavistock CommunicationsMike Bartlett / James Collins                                                                           Tel: +44 (0) 20 7920 3150  
 
 
Notes to editors: 
 
Ceres Power (www.cerespower.com) is a world leading developer of low cost,
next generation fuel cell technology for use in decentralised energy products
that reduce operating costs, lower CO2 emissions, increase efficiency and
improve energy security.  The Ceres unique patented Steel Cell technology
operates on mains natural gas and is manufactured using standard manufacturing
processes and conventional materials such as steel, meaning that it can be
mass produced at an affordable price for domestic and business use. 
 
www.cerespower.com 
 
Cautionary note regarding forward looking statements: 
 
This announcement includes certain ''forward-looking statements'' with respect
to the business, strategy and plans of the Company and its current goals and
expectations relating to its future financial condition and performance.
Statements that are not historical facts, including statements about the
Company's or the Directors' and/or management's beliefs and expectations are
forward looking statements. Words such as ''believes'', ''anticipates'',
''estimates'', ''expects'', ''intends'', ''aims'', ''potential'', ''will'',
''would'', ''could'', ''considered'', ''likely'', ''estimate'' and variations
of these words and similar future or conditional expressions are intended to
identify forward-looking statements but are not the exclusive means of
identifying such statements. By their nature, forward looking statements
involve risk and uncertainty because they relate to events and depend upon
circumstances that will occur in the future. A number of important factors
could cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements. These factors include, but are
not limited to, those discussed in the Circular. Neither the Company nor any
member of its group undertake any obligation publicly to update or revise any
of the forward-looking statements, whether as a result of new information,
future events or otherwise, save in respect of any requirement under
applicable laws, the Prospectus Rules, the Disclosure and Transparency Rules
and other applicable regulations. 
 
Introduction 
 
It is widely recognised that energy is one of the biggest issues facing the
global economy today.  Countries worldwide are experiencing rising energy
prices at a time when the reliability and security of their energy supplies is
under great pressure. Furthermore, with increasing reserves coming on-stream
in the US and continuing dependency on liquefied natural gas ("LNG") to power
the Asian economies, natural gas is set to remain a key part of the global
energy mix for the foreseeable future. The Directors therefore believe that
the way power is generated and distributed needs to change and that these
global economic drivers have created a significant opportunity for
technologies that enable a shift away from centralised electricity generation
towards a more resilient and efficient distributed model where power is
generated at the point of use. Fuel cells are broadly acknowledged as the most
efficient way to generate electricity from natural gas and are expected to
enable this change to distributed power generation for both the home and
business markets. 
 
Countries such as the US, Japan and Korea are finally engaging in the
commercialisation of fuel cells with some of the world's leading technology
companies. This follows years of investment and prolonged development
supported by forward looking energy policies and government support.
Panasonic, Toshiba and Toyota are now selling fuel cells for the home and
Google, e-Bay and Apple are now powering critical business applications using
fuel cells. However, to date, the high cost of fuel cells has restricted
widespread adoption without government subsidies. 
 
The Directors believe that the Ceres Steel Cell technology provides the step
change in cost that fuel cells need for widespread adoption and that it
therefore has the potential to transform the way that power is produced.  The
Group's next generation Steel Cell technology operates on mains natural gas
and the Directors believe that it has the capability of being able to be mass
produced at an affordable price for both domestic and business use. 
 
Since the change in strategy just over a year ago, and since Phil Caldwell
joined the Group as CEO in September 2013, the Group has made very good
progress, both commercially and technically.  The Board has been especially
pleased with the high levels of customer engagement and on-going validation of
the Group's technology by its Korean and Japanese partners and also by the
potential opportunities for the Group in the higher power product markets, as
demonstrated by the recent announcement of our partnership with Cummins Power
Generation ("Cummins"). 
 
Given these opportunities, the Board wishes to ensure, by way of the proposed
Placing, that the Group is well capitalised with sufficient funds to: (i)
fulfil the next stages of its technology development roadmap, maintaining its
competitive advantage in this area and supporting the growing number of
original equipment manufacturer ("OEM") engagements for the residential market
which will be jointly funded by partners; (ii) provide growth capital to
respond to the demand for new higher power opportunities, enabling the Group
to access the rapidly growing business market and to seek to create a step
change in value beyond the original business plan; and (iii) provide the Group
with the flexibility to increase manufacturing volumes in the facility in
Horsham, as driven by commercial engagements. 
 
As such, the Board believes that the Placing is in the best interests of all
Shareholders as it will allow the Group to maintain the technical advantage it
has established over the past ten years of development and to concentrate on
delivering its current contracts, as well as securing new commercial contracts
and opening up new markets.  Furthermore it will provide those OEM parties
with which it is in commercial discussions the reassurance that the Group is
financially secure and enable the business to negotiate from a position of
strength. 
 
Background to and reasons for the Placing 
 
Background 
 
Since Phil Caldwell became Chief Executive Officer of the Company in September
2013, he has focused on engaging with customers in order to drive the business
forward, both commercially and technically, and the level of commercial
interest the Group has seen has exceeded the Board's expectations. The Group
has continued to demonstrate that it can deliver technology to the high
standards expected by the world-leading companies with whom it has
relationships and the Ceres Steel Cell technology continues to exceed the
Group's internal technical milestones.  The Directors believe that this places
the Group in a good position for developing these relationships further. 
 
These customer engagements not only provide the Group and its shareholders
with validation of the potential of the Ceres Steel Cell technology, but also
increase the size of the potential opportunities available as such customers
look at different applications for the technology. In order to fully
capitalise on these wider opportunities and extend its product portfolio, the
Group will need to capture further intellectual property relating to these
different applications. 
 
As noted in the Group's last set of financial statements, the Directors
anticipated the need for additional funding to bring the Ceres Steel Cell
technology closer to market. Accordingly, the Board has decided to take the
opportunity presented by existing and new investors to seek to raise funds
through the Placing which, if successful, will allow the Group to take
advantage of business opportunities and will enable the Board to better
concentrate on delivering the Group's strategy as further detailed below. 
 
Commercial progress 
 
Since the Group's restructure in late 2012, the Group has made tangible
progress in its key target markets, Korea, Japan and the USA, with development
agreements in place and successful customer testing of its technology both on
customer sites and in the Group's facilities. 
 
The Group continues to work closely with its first customer, KD Navien, the
largest boiler company in South Korea, with the Ceres Steel Cell technology
currently undergoing extensive testing in Seoul.  The Group continues to
explore a move to the next phase of this programme to jointly develop a
product for the Korean and international markets based on the Ceres Steel Cell
technology. 
 
In Japan, the Group has had several global OEMs testing the Steel Cell
technology as a follow on to successful testing conducted previously in the
UK.  These partners are exploring different market applications for the
Group's technology, including residential at 1kW level and generator sets. 
 
In April 2014, the Group opened a commercial office in Kyoto, Japan to service
its existing partners and is in the process of generating a healthy pipeline
of new leads in the Japanese and Asian markets. The Group continues to explore
the possibility of next stage agreements with these customers. 
 
The Group's most recent announced commercial progress, in March 2014, was a
joint development agreement with Cummins, a global provider of power
generation systems based in the US.  The purpose of the collaboration is to
explore the joint development and commercialisation of the Ceres Steel Cell
technology for products in Cummins' existing markets.  These include the data
centre and back-up power markets, which have been driven by the recent
adoption of fuel cells in the US by large data centre operators. 
 
The Directors believe that this commercial progress with some of the most
experienced engineering companies in the world validates the Board's
confidence in the Ceres Steel Cell technology.  The Directors also believe
that the opportunities provided by such companies can provide the Group with
access to significant new markets and thereby create additional value to the
Group in addition to Ceres Power's first application for its technology in
residential micro CHP.  The Directors expect to move ahead to a next stage
agreement with at least one of these partners later this year. 
 
Technology progress 
 
The Directors consider that the Group has made strong progress against its
technology roadmap.  The Group's current focus is on improving the
manufacturability of its technology, as well as validating and improving
performance under different operating conditions for different applications. 
 
Specifically, as stated in the Group's interim financial statements to 31
December 2013, the Group has focused on improving the efficiency of the Ceres
Steel Cell as well as improving efficiency of the system.  The Directors
remain confident that the Ceres Steel Cell technology can meet the residential
CHP target of 45% net electrical efficiency with overall net efficiency of up
to 90%.  Furthermore, the Directors believe that the Group can increase net
electrical efficiency to more than 50% with the appropriate level of system
engineering. This efficiency level is considered to be the main requirement
for prime power applications, where the emphasis is on the electrical power
output rather than heat, and it opens up a number of new markets for the
Group. 
 
In order to more fully capture value in the higher power applications, the
Group will need to generate and protect intellectual property to include an
increase in scale and improvements in efficiency beyond the current 1kW
residential application platform.  The Directors envisage that this additional
work will be financed partly through customer programmes and partly through
growth capital raised through the Placing.  The Directors believe that such
improvements should accelerate the Group's customers' routes to market. 
 
Business strategy 
 
The Directors believe that the Ceres Steel Cell technology could have a
compelling business case for larger power consumers, as well as for
residential customers, as, by using the Ceres technology, the Directors
consider that such consumers would have the ability to generate power securely
in their home or business at an overall lower cost than existing
alternatives. 
 
The Group's business strategy remains consistent with its previous financial
statements for the year ended 30 June 2013.  The Directors continue to seek
long-term partnerships with the world's largest OEMs, leveraging their
expertise and balance sheets in order to seek to embed the Ceres Steel Cell
technology in their products and gain licence fees in advance of, and
subsequently royalties from, the sale of their products.  The Group's
intention is to seek separate licence streams from both the right to develop
and use the Ceres Steel Cell technology, as well as the right to manufacture
Ceres Steel Cells. The ability to manufacture the Ceres Steel Cell from low
cost steel and ceramics is the foundation of the Group's intellectual property
portfolio and, the Directors believe, a key part of the Group's value. 
 
The one addition to the Group's strategy since 30 June 2013 is the potential
expansion to higher power markets, which the Directors believe could open up
significant new revenue streams and which the Group is currently exploring
with Cummins.  Although the Directors would expect customers to co-fund
development work in these new markets, it is the Directors' view that it is in
the best interests of Shareholders for the Group to do part of this work in
advance in order to maximise the value of this opportunity. 
 
The success of the Group meeting its strategy should be measured by its
progress over different stages of customer engagement, from technology
evaluation, where it is currently at with its Korean, Japanese and North
American customers, through to product development, field trials and licensing
prior to commercial launch and product sales. 
 
Reasons for the Placing 
 
The purpose of the Placing is to provide the Group with sufficient working
capital funding to (i) respond to the commercial interest it has generated
until the next stage commercial agreements are in place and to progress the
Ceres Steel Cell technology and manufacturing roadmaps in order to maintain
the Group's technology advantage; (ii) provide enough growth capital funding
to allow the Group to explore and capture more value in higher power
applications; and (iii) provide the Group with the flexibility to increase
manufacturing volumes, as driven by commercial engagements. 
 
The Board believes that completion of the Placing will also provide the
Group's partners with reassurance of the Group's financial security for the
medium term and will allow the Group to concentrate on delivering commercial
and technological progress. 
 
Use of proceeds 
 
The Directors believe that the net proceeds of this Placing, being
approximately £19.6 million (net of expenses), coupled with the cash and cash
equivalents which the Group holds, will provide sufficient capital for the
Group to make substantial commercial and technical progress well into 2016. 
By this time, the Directors believe that the Group should have secured several
second stage development agreements for the residential market and validated
the potential of the Ceres Steel Cell technology to address higher power
applications for the business market. 
 
Placing, Placing Agreement and Settlement 
 
Placing 
 
The Company is proposing to raise approximately £20.0 million, before
expenses, by way of the conditional placing of 235,705,868 Placing Shares at
the Issue Price with existing and new institutional investors and certain
Directors.  The Issue Price represents a discount of 11.6 per cent. to the
mid-market closing price on 10 July 2014 (being the last practicable date
prior to the publication of the Circular). The Placing is conditional on
(amongst other things) Admission and has not been underwritten.  The Directors
are participating in the Placing, as disclosed in paragraph 9 of the
Circular. 
 
IP2IPO Limited ("IP2IPO") has agreed to subscribe for 47,058,822 Placing
Shares at the Issue Price.  The 47,058,822 Placing Shares which will be held
by IP2IPO following Admission will, together with its 132,500,000 Existing
Ordinary Shares, represent 23.2 per cent. of the Enlarged Issued Share
Capital.  IP2IPO has also irrevocably undertaken to vote its 132,500,000
Existing Ordinary Shares, representing 24.7 per cent of the Existing Ordinary
Shares, in favour of the Resolutions. 
 
Richard Griffiths, and his controlled undertakings (Blake Holdings Limited and
Oak Trust Limited)("Richard Griffiths") has agreed to subscribe for 29,411,764
Placing Shares at the Issue Price.  The 29,411,764 Placing Shares which will
be held by Richard Griffiths following Admission will, together with his
134,871,126 Existing Ordinary Shares, represent 21.3 per cent. of the Enlarged
Issued Share Capital.  Richard Griffiths has also irrevocably undertaken to
vote his 134,871,126 Existing Ordinary Shares, representing 25.1 per cent of
the Existing Ordinary Shares, in favour of the Resolutions. 
 
Henderson Global Investors("Henderson"), has agreed to subscribe for 8,823,528
Placing Shares at the Issue Price.  The 8,823,528 Placing Shares which will be
held by Henderson following Admission will, together with its 54,587,203
Existing Ordinary Shares, represent 8.2 per cent. of the Enlarged Issued Share
Capital. 
 
Placing Agreement 
 
On 11 July 2014, the Company entered into the Placing Agreement with N+1
Singer pursuant to which N+1 Singer agreed to use its reasonable endeavours to
place the Placing Shares at the Issue Price. Under the Placing Agreement, the
Company has given N+1 Singer customary warranties and an indemnity. N+1 Singer
also has customary termination rights. 
 
Settlement 
 
Application will be made to the London Stock Exchange for the Placing Shares
to be admitted to trading on AIM. Subject to, amongst other things, the
Resolutions being passed by the requisite majority at the General Meeting, it
is expected that Admission will become effective and that dealings will
commence at 8.00 a.m. on 30 July 2014. 
 
Effect of the Placing 
 
235,705,868 Placing Shares will be issued pursuant to the Placing. All the
Placing Shares will, when issued and fully paid, rank pari passu with the
Existing Ordinary Shares, including the right to receive all dividends and
other distributions declared, made or paid after the date of Admission. No
temporary documents of title will be issued. 
 
The Resolutions set out in the Notice of General Meeting must be passed at the
General Meeting in order for the Placing to proceed. 
 
Upon completion of the Placing, the Placing Shares will in aggregate represent
approximately 30.5 per cent. of the Enlarged Issued Share Capital and the
Existing Ordinary Shares will represent approximately 69.5 per cent. of the
Enlarged Issued Share Capital. 
 
General Meeting 
 
For the purposes of effecting the Placing, the Resolutions will be proposed at
the General Meeting.  At page 13 of the Circular, you will find the notice
convening the General Meeting to be held at the offices of IP Group plc, First
Floor, 24 Cornhill. London, EC3V 3ND at 11.00 a.m. on 29 July 2014. The full
texts of the Resolutions which will be proposed at the General Meeting are set
out in that notice, but set out below is a summary: 
 
l   Resolution 1 (to be proposed as an ordinary resolution): without prejudice
to the authority conferred on the Directors at the last annual general meeting
of the Company on 7 November 2013, to authorise the Directors under section
551 of the Act to allot shares up to an aggregate nominal amount of
£2,357,058.68 for the purposes of the Placing. 
 
l   Resolution 2 (to be proposed as a special resolution): without prejudice
to the authority conferred on the Directors at the last annual general meeting
of the Company on 7 November 2013, to disapply the pre-emption rights pursuant
to the provisions of sections 570 and 573 of the Act in respect of the
allotment of equity securities pursuant to the Placing. 
 
Related Party Transactions 
 
Richard Griffiths, IP2IPO and Henderson, substantial shareholders in the
Company (as defined by the AIM Rules), have conditionally agreed to subscribe
for 29,411,764, 47,058,822 and 8,823,528 Placing Shares, respectively,
pursuant to the Placing at the Issue Price. The respective participation of
Richard Griffiths, IP2IPO and Henderson in the Placing represents related
party transactions for the purposes of the AIM Rules. Accordingly, by reason
of their connection with IP2IPO, none of Alan Aubrey or Robert Trezona are
independent directors for the purpose of the related party statement below. 
 
The Independent Directors (being all those Directors other than Alan Aubrey
and Robert Trezona), having consulted with the Company's Nominated Adviser,
N+1 Singer, consider the terms of Richard Griffiths', IP2IPO's and Henderson's
participation in the Placing to be fair and reasonable insofar as Shareholders
are concerned.  In providing advice to the Independent Directors, N+1 Singer
has taken into account the commercial assessment of the Independent
Directors. 
 
The AIM Rules do not prohibit related parties from exercising the voting
rights attached to their respective Ordinary Shares at the General Meeting. 
 
Directors' Participation 
 
The Directors are participating in the Placing, amounting to an aggregate
subscription for 1,588,232 Placing Shares or approximately 0.7 per cent of the
Placing.  Following the Placing, the Directors will beneficially own, in
aggregate, 0.6 per cent. of the Enlarged Issued Share Capital. 
 
Directors' Participation 
 
                  Number of Ordinary Shares held prior to the Placing  Number of Placing Shares subscribed for  Total number of Ordinary Shares held following the Placing*  Percentage of Enlarged Issued Share Capital*  
                                                                                                                                                                                                                           
 Steve Callaghan  2,723,298                                            882,352                                  3,605,650                                                    0.47%                                         
 Mike Lloyd       312,500                                              470,588                                  783,088                                                      0.10%                                         
 Phil Caldwell    nil                                                  117,646                                  117,646                                                      0.02%                                         
 Robert Trezona   6,898                                                117,646                                  124,544                                                      0.02%                                         
 
 
*Assuming the Resolutions are passed at the GM 
 
Recommendation and Irrevocable Undertakings 
 
The Directors consider the Placing and the passing of the Resolutions to be in
the best interests of the Shareholders and the Company as a whole.
Accordingly, the Directors recommend that Shareholders vote in favour of the
Resolutions as they have irrevocably undertaken to do in respect of their
beneficial holdings of an aggregate of 3,265,341 Existing Ordinary Shares,
representing approximately 0.6 per cent of the Existing Ordinary Shares. 
 
In addition to the Directors, certain other Shareholders have irrevocably
undertaken to vote in favour of the Resolutions in respect of the Existing
Ordinary Shares in which they are interested, amounting in aggregate to
267,371,126 Existing Ordinary Shares, representing approximately 49.8 per cent
of the Existing Ordinary Shares. 
 
Copies of the Circular will be available free of charge from the Company's
website (www.cerespower.com) and at the offices of N+1 Singer, One Bartholomew
Lane, London, EC2N 2AX during normal business hours on any weekday (public
holidays excepted) up to and including 29 July 2014. 
 
Expected Timetable of Principal Events 
 
  
 
 Event                                                                               Time and/or Date                                 
                                                                                                                                      
 Announcement of the Placing                                                         11 July 2014                                     
 Publication of Circular                                                             11 July 2014                                     
 Latest time and date for receipt of General Meeting Forms of Proxy                  11.00 a.m. 25 July 2014                          
 Latest time for settlement of relevant CREST instructions (as appropriate)          11.00 a.m. 28 July 2014                          
 General Meeting                                                                     11.00 a.m. 29 July 2014                          
 Admission and commencement of dealings in Placing Shares                            8.00 a.m. 30 July 2014                           
 Placing Shares in uncertificated form expected to be credited to accounts in CREST  As soon as possibleafter 8.00 a.m. 30 July 2014  
 Despatch of definitive share certificates for Placing Shares in certificated form   By 6 August 2014                                 
 
 
  
 
  
 
  
 
  
 
Definitions 
 
The following definitions apply throughout this announcement unless the
context requires otherwise: 
 
"Act"                                                the Companies Act 2006 
 
"Admission"                                      the admission of the Placing
Shares to trading on AIM becoming effective in accordance with the AIM Rules 
 
"AIM"                                                the market of that name
operated by the London Stock Exchange 
 
"AIM Rules"                                      the provisions of the London
Stock Exchange entitled "AIM Rules for Companies" as amended or reissued from
time to time governing, amongst other things, admission to AIM and the
continuing obligations of AIM companies 
 
"Board"                                             the board of directors of
the Company as at the date of the Circular 
 
"Circular"                                          the circular, dated 11
July 2014 
 
"Company"                                        Ceres Power Holdings plc 
 
"CREST"                                           the relevant system (as
defined in the CREST Regulations) for the paperless settlement of share
transfers and the holding of shares in uncertificated form in respect of which
Euroclear is the operator (as defined in the CREST Regulations) 
 
"CREST Regulations" or                     the Uncertificated Securities
Regulations 2001 (S.I. 2001/3755), 
 
"Regulations"                                    as amended from time to time 
 
"Directors"                                        the Directors of the
Company as at the date of the Circular, whose names are set out on page 5 of
the Circular 
 
"Enlarged Issued Share Capital"          the issued share capital of the
Company immediately following Admission which is expected to consist of
772,537,841 Ordinary Shares 
 
"Euroclear"                                        Euroclear UK & Ireland
Limited, the operator of CREST 
 
"Existing Ordinary Shares"                 the Ordinary Shares in issue as at
the date of the Circular 
 
"FCA"                                               the Financial Conduct
Authority 
 
"Form of Proxy"                                 the form of proxy accompanying
the Circular for use in connection with the General Meeting 
 
"FSMA"                                            Financial Services and
Markets Act 2000 (as amended) 
 
"General Meeting" or "GM"                  the general meeting of the Company
convened for 11.00 a.m. on 29 July 2014, notice of which is set out in the
Circular, and any adjournment thereof 
 
"Group"                                             the Company and its
subsidiaries from time to time 
 
"Independent Directors"                      the Directors other than Alan
Aubrey and Robert Trezona 
 
"Issue Price"                                     8.5 pence per Placing Share 
 
"London Stock Exchange"                  London Stock Exchange plc 
 
"N+1 Singer"                                     Nplus1 Singer Advisory LLP
and its affiliates, nominated adviser and broker to the Company 
 
"Notice of General Meeting"                the notice convening the General
Meeting set out on page 13 of the Circular 
 
"Ordinary Shares"                              ordinary shares of 1p each in
the capital of the Company 
 
"Placing Share(s)"                             the 235,705,868 new Ordinary
Shares which are the subject of the Placing 
 
"Placing"                                           the conditional placing of
the Placing Shares, details of which are set out in paragraph 4 of the Letter
from the Chairman 
 
"Placing Agreement"                          the conditional placing agreement
dated 11 July 2014 between the Company and N+1 Singer Advisory LLP and
relating to the Placing, details of which are set out in paragraph 4 of the
Letter from the Chairman contained in the Circular 
 
"Prospectus Rules"                            the rules made for the purposes
of Part V of the FSMA in relation to offers of securities to the public and
admission of securities to trading on a regulated market 
 
"Record Date"                                   close of business on 25 July
2014 
 
"Resolutions"                                    the resolutions to be
proposed at the General Meeting as set out in the Notice of General Meeting 
 
"Restricted Jurisdiction"                     each and any of Australia,
Canada, Japan, the Republic of South Africa, New Zealand and the United
States 
 
"Securities Act"                                 the US Securities Act of
1933, as amended 
 
"Shareholders"                                  holders of Ordinary Shares 
 
"UK" or "United Kingdom"                   the United Kingdom of Great Britain
and Northern Ireland 
 
"UK Listing Authority"                        the UK Listing Authority, being
the FCA acting as competent authority for the purposes of Part VI of the FSMA 
 
"US", "USA" or "United States"            the United States of America, each
state thereof (including the district of Columbia), its territories,
possessions and all areas subject to its jurisdiction 
 
This information is provided by RNS
The company news service from the London Stock Exchange